Teacher Student Loan Forgiveness: A Complete Guide

Teachers open the gateway to learning, support kids in their discovery of the world, and provide them with the necessary tools to succeed in life. The educational system cannot function properly without dedicated and well-prepared teachers, so investing in their professional preparation is a moral duty of every state.

This is one of the reasons for which the Council decided to create the Teacher Loan Forgiveness Program which offers the teachers a possibility to get exempted from repaying their student loans. In fact, there are more programs which can be accessed in order to obtain teacher student loan forgiveness. But before digging in all the options, let’s take a look at the situations which have led to teachers’ impossibility to repay their loans.

Students who completed their undergraduate courses in 2008 with a major in education reported an average loan duty of $16,500. Students who finished the same courses four years later, in 2012, reported a loan duty of over $22,000. And, according to our statistics, the average undergraduate accrues over $27,000 in student debt.

Similarly, the costs of education for students who graduated a master’s program increased from $34,000 in 2008 to $51,000 in 2012). This means that the cost of education for teachers has increased by one third in just four years. The bad news is that the price for college education is continually growing, which makes it harder for students to find financial resources for sustainment.

This increase, correlated with the fact that the recent economic crisis brought salary costs and job reductions, contributed to teachers’ impossibility to make ends meet. But, as mentioned above, no educational system can work without teachers, so federal and state institutions have come up with different teacher loan forgiveness plans meant to support existent teachers and attract more highly prepared individuals in the public education system.

Federal Teacher Student Loan Forgiveness

Especially designed to offer assistance to teachers, the Federal Teacher Loan Forgiveness program encourages individuals to become teachers and supports existent teachers. The program ensures a forgiveness rate of up to $17,500. The sum does not always cover the entire loan, but it reduces considerably the amount of money which is to be repaid to the state, making it easy for teachers to make ends meet.

The program is somehow restrictive, since it is mainly directed towards professionals who teach high-need subjects (math, sciences, bilingual education, etc.) or who work in special needs units. These categories get the best forgiveness rate ($17,500), but teachers of other specialties working in low income can receive only $5,000 forgiveness. Even so, in 2013 over 31,000 teachers benefited from forgiveness plans which totaled $215 million. Therefore, it is certainly worth trying. Here are some of the major selection criteria for candidates:

• Teachers must be teaching full-time for at least 5 consecutive years before being eligible for loan forgiveness;
• ​At least one of the 5 teaching years must have been after 1997-1998 academic year;
• ​The loans for which the candidate asks forgiveness must be contracted before the five years working as a teacher;
• ​The school where the candidate teaches must be part of the qualifying schools approved by the government and be included in the annual list issued by the government. Please note that the Bureau of Indian Education (BIE) are low-income schools and teachers working in these institutions qualify for the teaching loan forgiveness program;
• ​The school where the candidate works must be located in a district eligible for Title I funding;
• At least 30% of the school enrollment is made up of students which qualify for Title I funding;

If the school, where the candidate teaches, meets the required criteria for one year, but not for the other four, they may still be counted to the five obligatory teaching years. Starting with the 2007-2008 academic year, teachers working in an educational service agency are also eligible for a Federal Teachers Loan Forgiveness.

If the candidate has worked for 4 consecutive years and the 5th is not complete, it can count as complete if the candidate has worked at least half of the academic year or the employer considers the candidate has completed all tasks and duties for the academic year for the purpose of retirement, salary increase and/or tenure or the candidate was unable to complete the year because of medical condition, the candidate was called to active duty status for more than 30 days or the candidate started post-secondary education.

Federal Public Service Teacher Student Loan Forgiveness (PSLF)

Established in 2007, the Federal Public Service Loan Forgiveness (PSLF) is eligible for public school teachers. The program states that after 10 years of payments, the student can be forgiven for the remaining loan amount. Taking into consideration the fact that the payments for student loans are usually 10 to 15 percent of the teacher’s income (which varies from an average of $34,000 in the first year to $56,000 in 10th year), they may get a considerable part of the loan and the added interest forgiven. In fact, the higher the initial loan is, the higher the teacher’s student loan forgiveness is. This is a good program for students who have finished in the last years, since, as discussed above, the costs with education are getting higher and higher. Also, students who take masters classes may find good financial support with this program.

Federal Perkins Loan Cancellation Program

The Perkins Loan Cancellation program enables a 100% forgiveness of the teacher student loan. The program spans over a period of 5 years, while the teacher must work full-time in a qualified institution. During the first and second year, the teacher will receive a cancellation of 15% per year from the total debt. In the 2nd and 3rd year, the cancellation rate goes up at 20% per year, while in the 5th year the remaining 30% of the debt is cancelled. The good thing is that the candidate can stay within the program for one year and receive a 15% cancellation. Similarly, the candidates who have been teaching for 3 years in a row, will benefit as 50% of the debt can be cancelled. The debt cancelled also includes the interest for the contracted loan, so that the beneficiary may remain with $0 debt if they stick to the plan for the entire period of five years. Cumulate that with the moral reward and the teacher job becomes one of the best one could ever have.

In order to qualify for this program, the candidate must comply with one of these requirements:

• Teach a highly demanded subject (math, sciences, certain foreign languages, bilingual education or any other course for which the state decided there are not too many teachers available)
• ​Teach toddlers, infants or children with special needs
• ​Work in a school where children from low-income families are enrolled
• Teach in a non-profit private school

State and City Sponsored Teacher Student Loan Forgiveness Programs

The local authorities have come up with different tools in order to help, support and attract teachers. These include grants, loan forgiveness programs, classroom donations and cancellations programs. The good news is that there are lots of such incentives in every state, with some of them offering over 50% teacher student forgiveness. The even better news is that they can be all found on the American Federation of Teachers’ website. Teachers from all over the country can access their data base and refine their search by state and subject for easy browsing through all the available offers.

The rewards for programs can be accessed individually as well as in combination of more than one program. So, if a candidate qualifies for two or more programs he/she can mix them in order to get the most benefits out of them. Therefore, if you feel that you could benefit from a state facility and a teacher loan forgiveness program, apply for both. Once you are accepted, you will go through all the steps with an official, so that you can make the most out of your forgiveness plans.

While waiting for a response regarding student teacher loan forgiveness, it is wise to talk with an expert in order to help you optimize your payments. This will help you on short term, by eliminating the immediate financial stress, as well as on long term, helping you be on term with all the payments and remain eligible for the Federal Public Service Loan Forgiveness program.

Teachers help us build a healthier and more successful generation of people, so it is essential that they do not struggle financially. These plans are meant to encourage and support teachers so that more and more highly trained persons take up a teaching career. If you feel you can work well with the kids and have the necessary qualifications, it is certainly worth a try! Even if your initial drive is obtaining loan forgiveness, the experience may change your life and your career trajectory for good.