Loan Forgiveness Programs for TeachersUpdated: November 3, 2020
Teachers, like veterans and currently serving military members, work in service of the American people. And like the military, teachers have certain educational benefits they can take advantage of to offset the cost of attending college to earn a teaching degree and get state-credentialed to teach grade school, high school, etc.
For teachers who have a military career in their personal history, the GI Bill is the most obvious choice. But not all teachers have the ability to use these VA benefits. Veteran, active duty, or not, those who successfully complete teaching programs and meet certain requirements may be eligible for student loan forgiveness.
Multiple Programs Including State-Run Options
There are several programs to choose from, and your state may also have teacher loan forgiveness options administered at the state level. For state programs, all teachers should search for state loan forgiveness programs in their area.
The state of Minnesota reported a whopping TEN programs. Not all of those are specifically for teachers, but they may be able to take advantage of the same programs if they meet the criteria. The following student loan relief programs are administered by the federal government.
Terms, conditions, relief amounts, and other details are subject to change year-to-year based on current legislation, program guidelines, and other variables.
Applying For Student Loan Forgiveness Programs For Teachers
The federal programs below have a variety of requirements that must be met. In most cases you will need to fill out the appropriate application paperwork, much of which is available from the government website Federal Student Aid.
You may be required to submit that paperwork to your student loan servicer, and it’s crucial to continue making payments on all student loans until you are officially notified that your loan or some portion of it has been forgiven.
Public Service Loan Forgiveness (PSLF) Program
This program is one of the most forgiving in terms of employment requirements. Student loan relief programs often have one or more employment rules such as being a teacher, veteran, or other public servant.
This is a federal program that proposes to forgive the “remaining balance” on a Federal Direct Loan after 120 “qualifying payments,” which usually averages out to paying on the loan for ten years.
PSLF is different than the other programs listed below as it does NOT require the applicant to teach at a qualifying school, it does not require you to have made 100% perfectly on-time payments, but you cannot have been more than 15 days late on any student loan payment and those payments have to be made after Oct. 1, 2007.
The loan relief program guidelines for PSLF do not focus so much on what your specific job might be for qualifying purposes, but rather who you do that work for and how. Direct employees of the following may qualify for this type of student loan relief:
- Governments (Federal, state, local, or tribal)
- Not-for-profit organizations legally tax-exempt under Section 501(c)(3)
- Full-time AmeriCorps employees
- Full-time Peace Corps volunteers
Some type of work does NOT qualify, to include those employed by:
- Labor unions
- Partisan organizations/political groups
- For-profit organizations
- For-profit government contractors
This program is only for Direct Loans. Those with other federal loans may be eligible IF they consolidate those loans. The federal government advises applicants to repay all student loans on an income-based repayment schedule to get the most out of PSLF. This type of loan forgiveness is not taxable by the IRS.
Teacher Loan Forgiveness
The federal Teacher Loan Forgiveness program offers up to a specified cap ($17,500 in FY 2020, other years may vary) for Direct Loans, FFEL Subsidized Loans or Unsubsidized Loans. Many teachers will not be eligible for that full amount. Those who teach Special Education, secondary math, or science are offered amounts up to the limit; others may only qualify for up to $5000 (in FY 2020).
These are referred to by the program as “highly qualified teachers” (see below). Some may qualify if they have a Direct Consolidation Loan or a Federal Consolidation Loan. You may be eligible for forgiveness of “the outstanding portion of the consolidation loan that repaid an eligible Direct Subsidized Loan, Direct Unsubsidized Loan, Subsidized Federal Stafford Loan, or Unsubsidized Federal Stafford Loan.”
There are specific employment requirements including the nature and duration of your work. These requirements include a minimum time-in-service (five years in FY 2020 of “complete and consecutive years” at a qualifying school. At least one of those years must occur after the 1997-1998 school year).
- PLUS Loans do not qualify for this program
- Perkins Loans do not qualify for this program
- Teaching experience via AmeriCorps “cannot be counted” for the five years of teaching experience requirement
- All applicants are directed to apply for teacher loan forgiveness only after meeting the five year rule for this type of student loan assistance
Only highly qualified teachers in certain subjects may be considered for the maximum benefit amount. What is needed to be approved for the full loan forgiveness package?
- The applicant must have a bachelor’s degree or higher
- The applicant has full state certification as a teacher
- Those who teach at charter schools may qualify if “you meet the requirements set forth in the state’s public charter school law”
- The applicant has not had certification or licensure requirements “waived on an emergency, temporary, or provisional basis”
Perkins Loan Cancellation for Teachers
Qualifying teachers may have up to 100% loan forgiveness for a Federal Perkins Loan if they teach full-time at a qualifying low-income school. Teachers may also qualify by teaching certain subject matter.
What are the qualifications for this program? Full-time employment at a public (or nonprofit) elementary or secondary school teacher in the following capacities:
- Teaching in a school serving students from low-income families
- Special education teachers
- Teachers working with infants, toddlers, or children with disabilities
- Those who teach mathematics, science, foreign languages, or bilingual education
- Those in “any other field of expertise determined by a state education agency” to be suffering from a lack of qualified teachers in that state
The loan forgiveness option for those who qualify goes in stages:
- 15% loan cancellation (each year) in the first and second years
- 20% canceled for the third and fourth years
- 30% percent canceled in year five
Loan forgiveness under this program includes accrued interest. Private school teachers may qualify for student loan forgiveness under this program “if the school has established its nonprofit status”with the IRS and offers elementary school/secondary school options that meet state requirements.
Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News