Teachers may be eligible to cancel their student debt through several different student loan forgiveness programs, including Teacher Loan Forgiveness and Public Service Loan Forgiveness. Learn more about these types of programs and how to qualify and apply.
Student Loan Forgiveness Programs
There are three federal student loan forgiveness programs available to teachers:
- Teacher Loan Forgiveness. Teachers may qualify for loan forgiveness of up to $17,500 in Federal Stafford loans obtained through the Direct Loan and FFEL programs.
- Public Service Loan Forgiveness (PSLF). If a teacher repays his or her Federal Direct Stafford loans and Federal Direct Grad PLUS loans in an income-driven repayment plan, the PSLF program will forgive the remaining debt after 120 qualifying payments.
- Perkins Loan Cancellation. Teachers may qualify to have 100 percent of their Federal Perkins Loans cancelled. Federal Perkins Loans are no longer available.
There are also several state-sponsored loan forgiveness programs for teachers. The American Federation of Teachers maintains a list of loan forgiveness options searchable by employment position, grade level, subject area, district and state.
Because these loan forgiveness programs are restricted to a specific occupation and are part of the loan program, they are tax-free under current law.
Eligibility for federal student loan forgiveness programs depends on how long you have worked as a teacher and where you work. Each program has different eligibility requirements.
Teacher Loan Forgiveness
- Highly-qualified teacher. Teachers must be considered highly qualified, which requires at least a Bachelor’s degree and full state certification.
- Employment at a school serving low-income students. Teachers must work in an elementary or secondary school or an educational service agency that serves predominantly low-income students. Eligible schools and agencies are listed in the Low-Income School Directory.
- Duration of employment. The loan forgiveness occurs after five consecutive years of full-time employment.
- Subject area. To qualify for up to $17,500 in student loan forgiveness, the teacher must be a science, math or special education teacher. Other teachers are eligible for up to $5,000 in student loan forgiveness.
- Timing of the loans. Eligible teachers must have borrowed the loans before the end of their five consecutive years of teaching. The teacher must be a new borrower as of October 1, 1998, with no outstanding student loan balances prior to that date.
Public Service Loan Forgiveness
- Employer. Public service loan forgiveness is open to a broad selection of public service occupations, not just teaching. Teachers may work for a public school, a non-profit private school with tax-exempt 501(c)(3) status or a government agency.
- Full-time employment. The teacher must work full-time for a qualifying employer. Full-time employment requires at least 30 hours a week for a contract of at least 8 months if they are considered to be employed for the full year by their employer.
- Loan repayment. Public Service Loan Forgiveness forgives the remaining loan balance after 120 qualifying payments in an income-driven repayment or standard repayment plan. The payments do not need to be consecutive, meaning that forgiveness will occur at least a decade after your first qualifying payment.
Perkins Loan Cancellation
- Serving low-income families. Teachers who have worked full-time in a public or nonprofit elementary school or secondary school serving low-income families are eligible for Perkins Loan cancellation.
- Teaching in a field with a shortage of qualified teachers. Teachers can also qualify if they teach math, science, foreign languages or in subject areas considered to have a lack of qualified teachers in their state.
- Working as a special education teacher. Special education teachers who work with children and youths are also eligible for Perkins Loan cancellation.
- Timing of forgiveness. The forgiveness occurs over a period of five years, with 15% of the loans being cancelled during each of the first and second years of service, 20% cancelled in each of the third and fourth years of service, and 30% cancelled in the fifth year, for a total forgiveness of 100% of the Federal Perkins loans.
How to Apply for Student Loan Forgiveness as a Teacher
Teacher Loan Forgiveness Program
If you are applying for loan forgiveness through this program, you must wait until you have taught full-time for five consecutive years. After that time, you can fill out the Teacher Loan Forgiveness Application. You will need the head administrator of the school where you taught for those five years to provide certification on the application. Next, the application should be submitted to your loan servicer.
Public Service Loan Forgiveness
Once you have made 120 qualifying payments on your loan, you will need to complete a Public Service Loan Forgiveness Application. Your employer(s) will need to provide certification on the application. Applications are submitted to FedLoan Servicing, the federal contractor who manages the loan forgiveness program.
Perkins Loan Cancellation
To apply for Perkins Loan cancellation, contact the college or university that provided you with the Federal Perkins loan. They may refer you to the loan servicer that manages the Federal Perkins Loan program on behalf of the college. Each college will have its own procedures for Federal Perkins Loan cancellation.
If you are struggling with student loan debt, there are ways you can lower your student loan payments, including enrolling in an income-driven repayment plan, temporarily going on a deferment or refinancing student loans to lower your interest rate.
Keep in mind refinancing federal student loans means a loss in many benefits – income-driven repayment plans, any federal forgiveness programs, generous deferment options, and more.
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