If you are a teacher, no doubt you picked your profession based on your love of children and education and not for the money. Starting teacher salaries aren’t that high and if you’re also dealing with the burden of student loans, that salary may seem lower still. But there are some great programs teachers can use to get their loans forgiven or cancelled simply by doing their job. If you are a teacher, this is great news. And if you are a degreed professional suffering under the weight of student loans, this could be an inducement to consider a career change to teaching.
There are both federal and state programs that can help forgive and cancel out student loans and the great news is that many state programs allow you to double dip and utilize multiple avenues at once to maximize the amount of student loans you can unload in exchange for teaching. Without a great plan, student loans stand as little a chance of forgiveness as Lance Armstrong. Here are the four ways teachers can get student loans forgiven or cancelled:
1. Federal Public Service Loan Forgiveness (PSLF)
I’ll start with the worst of the programs… PSLF came online in 2007 as a way to encourage people to work in full-time public service jobs. This program forgives eligible federal student loans – by eligible they mean William D. Ford Direct Loans (including direct subsidized loans, direct unsubsidized loans, direct PLUS loans and direct consolidation loans). Though the program was implemented five years ago, not a single penny of student loan balances has been forgiven. Check out these PSLF eligibility requirements and you’ll quickly see why:
- - Before any of your loans will be forgiven, you must make 120 on-time, full amount, monthly payments on your direct loans.
- - Only payments made after 10/1/2007 qualify.
- - You must have been working full-time at a qualifying public service organization (schools count) when the payments were made.
That means you must have made 10 years worth of student loan payment while working in public service. And with a start date of October 2007, no forgiveness will start until October 2017. To my thinking, that’s not much of an inducement to work in public service. But if you are a teacher and still owe money come 2017, this could be a good program for you! You can access the PSLF certification form here.
2. Federal Teacher Loan Forgiveness
This program is aimed at encouraging people to become and remain teachers. If you work for consecutive full years in a qualifying school, you could have up to $17,500 of student loans forgiven. This program is good for loans established after 10/1/1998 but you can’t be in default. At least one of your five years of teaching must have been after the 1997-1998 academic year. Eligible loans include direct subsidized and unsubsidized student loans, Stafford subsidized and unsubsidized student loans. Here are the eligibility requirements for the teacher loan forgiveness program:
- - The school you teach at must be in a district that qualifies for Title I funding.
- - The school must have more than 30% of enrollment qualified for Title I services.
- - The school must be listed in a directory of qualifying schools published by the government.
- - If your school qualifies in one of the five years, but not the others, you are likely still eligible.
- - As an alternative, you can work at a qualifying educational service agency.
The amount of forgiveness varies. Most teachers can have $5,000 of loans forgiven. But you can have up to $17,500 of your student loans forgiven if you are a “highly qualified” math or science teacher at a secondary school or a “highly qualified” special education teacher working with disabled children in your area of specific training. You can get an application for the Teacher Loan Forgiveness program here.
3. Federal Perkins Loan Cancellation Program
The Federal Perkins loan cancellation program is much more lenient in how much of your student loans it will cancel out. You can have up to 100% of your Federal Perkins loan forgiven. Better yet, you only have to teach full time for one full academic year (or two consecutive half years within a 12 month period) to see some benefit. For the first two years, you can have 15% cancelled each year. For years three and four, you can have 20% cancelled each year. For year five, you can have the final 30% of your loans cancelled. Here are the eligibility requirements for the Perkins loan cancellation program:
- - You can teach in a school that serves low-income families; or
- - You can be a special education teacher (including infants and toddlers); or
- - You can teach in math, science, foreign language, bilingual education or any other field your state has determined is in shortage.
You can also qualify for teaching at a private school if it’s a nonprofit. You can qualify if you teach part-time at multiple schools so long as you meet the other requirements. Preschool and PreK teacher can qualify if the state you teach in considers these part of their elementary education program. To find out if your school qualifies as low-income, check this database. The amount cancelled each year also includes all interest that accrued that year. To get the application form for this program, contact the office at your alumni institute that administers the Federal Perkins Loan program.
4. State and City Sponsored Loan Forgiveness Programs
There are loads of state sponsored student loan forgiveness programs. In fact, there are way too many to list here. The good news is, the American Federation of Teachers (AFT) has compiled a searchable database of loan forgiveness programs, grants, awards and classroom donation programs. You can specify loan forgiveness, select your grade level, your subject area and state and you can see what student loan forgiveness and cancellation programs are available in your state. Your local school board should be able to provide you information on any county or city funded forgiveness programs. In the meantime, while you’re searching for forgiveness and cancellation programs, it’s wise to consult an expert to help you manage your student loans to optimize your debt.