Teachers have a lot of challenges to overcome aside from educating the next generation. Most deal with a serious lack of funding, and their yearly pay is often low in comparison to the workload. And increasingly, many teachers are dealing with crushing student loan debt.
On average, tuition continues to rise every year. At the same time, the starting salary for teachers just out of school is far below the national average for a college graduate. The average starting salary for a college graduate with a bachelor’s degree is $50,359, according to a 2017 survey by the National Association of Colleges and Employers. Meanwhile, the average starting salary for a public school teacher is $38,617, according to the National Education Association.
This starting salary is complicated by the fact that 70 percent of college graduates have some type of student loan debt, USA Today reported. A teacher attempting to pay off a $30,100 in student loan debt on a 10-year loan with 6 percent interest would pay about $334 a month.
This would eat up about 13.3 percent of a teacher’s starting salary. But for teachers who take on higher amounts of debt pursuing advanced degrees, this debt-to-income ratio can be much higher.
And many teachers are not done with school once they receive their bachelor’s degree. To continue to advance in their career, additional education is encouraged and sometimes required.
These are usually out-of-pocket expenses for the individual. It is not uncommon to find teachers with over $100,000 in student loan debt as a result of pursuing a master’s degree and other certifications.
For teachers who are struggling with unmanageable student loan debt, there are several loan forgiveness programs available. The Teacher Loan Forgiveness Program is available to full-time teachers who spend five consecutive years working in a low-income school district. Eligible teachers can receive $5,000 to $17,500 in forgiveness on Direct or Federal Stafford Loans.
Teachers who teach in a low-income school district, teach special education, or teach in a field that has a shortage of teachers might be eligible for the Federal Perkins Loan cancellation (so long as they have Perkins Loans). Teachers who teach full-time for one full academic year could be eligible to have part of their loans forgiven.
And then there is the Public Service Loan Forgiveness Program (PSLF) which gives loan forgiveness to public service employees who make 120 qualified payments. The Department of Education recommends that teachers apply for an income-driven repayment plan, which will cap the monthly payments at a percentage of their income.
PSLF is an attractive option for many public servants with large amounts of student loan debt, but the program is not without its challenges.
Many borrowers have signed up and began monthly making payments, only to learn at a later date that the plan they signed up for doesn’t qualify. And while 7,500 people have applied for loan forgiveness, the Department of Education only expects 1,000 to qualify, CNNMoney reported.
And many borrowers are unsure if the program will even last; House Republicans are trying to pass the PROSPER Act, which would eliminate PSLF. In the meantime, however, the government issued a $350 million one-time expansion that might help some borrowers who were eligible but missed out due to following erroneous information from loan servicers.
Teachers who are interested in using a loan forgiveness program should research all of their options first. It is important to follow up with their student loan servicer and verify that all eligibility requirements have been met.
Author: Dave Rathmanner
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