Teacher Loan Forgiveness: Key Aspects that You Should Consider

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teacher loan forgiveness

Teachers are not making that much money, and in fact, most of them are working on part-time jobs, completing freelance tasks to make ends meet. If you ask them about the priority of being a teacher, they would tell you that the love for teaching and children is the key, and money is not the motivation for choosing this profession. Obviously, after graduation, it is becoming harder for teachers to cope with loan debt, and that is the primary reason why we decided to cover teacher loan forgiveness to make sure that everything is clear. 

The US Census Bureau pointed out the statistics about the highest and lowest paying jobs in America in 2018. Among the top 10 of the lowest paying university majors, teaching made this list. On the contrary, the average student loan debt for graduates, regardless of their major, is around 37.000 dollars. That leads us to the conclusion that, most of those graduates who enrolled in teaching jobs are among the ones who are dealing with massive loan debt.

Teacher’s salary is low, which is the main reason why teacher loan forgiveness is such a crucial topic. If you are a teacher that has been working in the education industry for years now, these facts would not surprise you. However, before losing any hope of achieving your goals and getting rid of the loan debt, you need to consider the available options. In this post, we will cover those teacher loan forgiveness opportunities and see who can benefit from them. Without further ado, let’s get into it.

Is Teacher Loan Forgiveness Beneficial?

There are several options that you can choose when it comes to teacher loan forgiveness. Though, only one of those options is specifically referring to the teachers. It is essential to know what you are doing and expect realistic results when it comes to loan forgiveness. Whipping out the debt is a crucial step that can make your life so much easier. To get loan forgiveness, you need to understand the guidelines, qualification criteria, and so on. Before getting into the details, it is better to address common issues concerning teacher loan forgiveness. To find the right program that meets your needs, you need to know that the criteria for acceptance depends on various aspects. For instance;

  • the amount of debt
  • your future life, professional goals
  • employment opportunities on a specific subject
  • tax implications

And others mainly determine the results.

Is it the best option?

Before exploring other loan forgiveness options, let’s focus on the pros and cons of teacher loan forgiveness. That will help us determine whether it is the best option for you to handle the loan debt. 

Benefits of the Teacher Loan Forgiveness-Are they enough?

The Federal Loan Forgiveness for Teachers has become very common in recent years. Most people do not have enough information about the specific requirements that this program has. We will discuss them later, but for now, let’s look at the benefits. In the ideal case, you can get around 17.000 dollars loan forgiveness from the Federal Government. To be eligible for the highest loan forgiveness amount, you need to have at least five years of academic teaching career consequently, work in low-income schools, etc. For those of you who had issues with qualifying for this, there is a chance for getting 5000 dollars with the same program. So, let’s see who is eligible and define terms regarding the teacher loan forgiveness process. 

Who is Eligible?

teacher loan forgiveness

Here you can find the eligibility requirements for the Teacher Loan Forgiveness program:

  • The candidate should have completed five consecutive years of academic teaching. At least one of those five years should be recorded after the academic year of 1997 to 1998.
  • The candidate should be a qualified teacher and work in a qualified institution.
  • The student loan that the candidate took, should be made before the five years of academic teaching.

These criteria are creating some controversies. So, applicants do not fully understand who is considered a qualified teacher in this case. Let’s define that. A qualified teacher is the one who:

  • graduated from university with a teaching degree
  • has a bachelor’s diploma on that course
  • got full certification regarding the teaching from the state where they work
  • and does not have any waivers concerning the certifications or licensing.

For getting the complete 17.000 packages, the candidate should be a qualified teacher who is teaching science or mathematics at the elementary or secondary level. Teachers of other subjects are unable to get this package, and they should consider 5000 dollar loan forgiveness. This is one of the lacking aspects of this program. They only provide full benefits for specific branches and consider the number of teachers who have a degree in other subjects, which is an unfair process.

What if you could not complete a full academic year of teaching during a five years span? 

You might work for five consecutive years as a qualified teacher, and in either one of those years, you had issues and could not complete the full years. What will happen then? Would it affect your chances of getting the loan forgiveness or not? Excusable reasons for this type of incidents are:

  • The teacher had health issues that are under the FMLA act of 1993
  • called to the military for active duty
  • Or decided to study post-secondary education and enrolled in programs that are related to enhancements of teaching methods, etc

For those of you who fall under this category, the five years would be count as acceptable, and you would manage to apply for teacher loan forgiveness

On the other hand, there are additional requirements. For instance, if you could not manage to complete at least 50 percent of the academic program, you would not be eligible. That one year would be eliminated from the five-year plan. Besides that, if your employer feels like you failed to fulfill the contract requirements, this will also eliminate that year from the overall plan.  

One of the criteria for getting Teacher Loan Forgiveness is to work in low-income schools. So, which schools fall under that category? How to know if you are teaching in a low-income service agency or not? We will answer this question in the next passage. 

Follow TCLI Directory Updates

The Teacher Cancellation Low Income Directory is a document that the Department of Education publishes annually. By analyzing the available data that DoE has published on low-income schools, you can see whether your school was in the low-income category during a particular time frame. If the teacher cannot access this directory or some of the years are missing, they can use the previous year instead of the exact one.

Every state has an education agency that works on these aspects, and if you have any questions or concerns, you need to approach the local agency where you are working or were working during those five years. It is not a must to work for five consecutive years for the school that has been considered a low-income school every one of those years. If your school is included at least once in the TCLI Directory in any of those five years, you can apply and get loan forgiveness. 

Application Process for Teacher Loan Forgiveness

To apply for the TLF program, teachers need to submit their loan forgiveness application to their student loan servicers. Remember that, without completing the full five years of academic teaching, you cannot apply yet. You need to approach the local educational service agency or administrative office of the school where you teach and ask them to complete the certification process for you. For those of you who took multiple loans from various services, it is a must to have a separate application form while applying for teacher loan forgiveness. 

PSLF for Teachers

As we stated before, there are many options that you can utilize to acquire loan forgiveness on student loan debt. Teachers can also get the best out of the Public Service Loan Forgiveness program. The main advantage that you will have with PSLF is that the requirements are not specific. For instance, the teacher loan forgiveness asked for low-income school teachers, highly qualified teachers, five consecutive years of a teaching career, etc. However, you do not need to fit in that category to benefit from the PSLF program. The Department of Education stated on many occasions that the PSLF is a program that both private and public elementary or secondary school teachers can apply to. Employment requirements for this program are a full-time teacher at mentioned educational levels. Let’s look at those requirements in detail.

  • The school teacher should
  • Involve in any of the income-driven repayment plans
  • Make at least 120 consecutive payments until they apply for PSLF
  • Pay those 120-month annual debt amount while working in a public or nonprofit school

If you have done all these three major requirements, you can apply for the Public Service Loan Forgiveness Program. 

Which Repayment plans do/don’t qualify for this program?

As you probably know, the most popular and highly used income-driven repayment plans are categorized into four.  All four plans are qualifying for PSLF. What are those?

  • Income-Contingent Repayment
  • Pay As You Earn
  • Revised PAYE
  • And Income-Based Repayment

The Programs that are not qualifying for PSLF are

  • Alternative
  • Graduated
  • And Extended Repayment Plans

Another key here is direct loans. The Public Service Loan Forgiveness program asks only for direct loans, and if your student loan is non-direct federal, you would not be able to take advantage of this opportunity. However, do not lose your hope yet because by consolidating those non-direct loans into a direct consolidation loan, you can achieve the same result. One of the major reasons why so many teachers are leaning towards this program is about taxation. Unlike other student loan forgiveness programs, Public Service Loan Forgiveness is not taxable. This allows the teacher to have the financial freedom to support themselves and their family after getting rid of the loan debt. 

How to select the right program?

To get financial freedom, it is very critical for teachers to acquire any loan forgiveness programs. There are some issues with any of them, and most of the time, teachers cannot determine which one is the right program for them. The main problem with the TLF is about the alternative 5000 dollars for those of you who could not get the 17000 dollar package.

$5000 is not enough for teachers who have more than 10-20 thousand dollars left in their repayment plan. The lacking aspect of the PSLF is that it requires you to teach at least ten years prior to the application process. However, the teacher might decide to change his/her career path during that time, and in that case, they would lose the chance to eliminate student loan debt. You need to analyze the options carefully and choose the one that makes the process easier for you. 

Can you get both PSLF and Teacher Loan Forgiveness at the same time?

It is one of the most critical questions that come up to mind when the topic is about loan debt. As we mentioned earlier, the salary of the teachers is low, and by enrolling in only one program, there is a high chance that you would not be able to compensate for that. The short answer is yes. Teachers can apply and get benefits from both of these programs. The requirements for getting benefits are interrelated. If you pay at least 120 months of direct loans under the TLF program, you will be eligible to get the Public Service Loan Forgiveness program. Besides that, keep in mind that if your account balance is on default, you would not be able to benefit from either option.

Other options to eliminate student loan debt

student loan interest rate

There are more options than only TLF and PSLF. These two are mostly used and effective ones. However, if you cannot qualify for these programs, you still have a variety of chances. One of them is the Federal Perkins Loan. With this program, teachers can get rid of 100 percent of their loan debt. To qualify for Perkins Loan Cancellation, you need to follow these requirements.

  • The teacher should work in low-income schools. The classification for this one defines the low-income schools as the place where students who are coming from financially unstable families/communities are studying.
  • You need to work as a special education teacher. This means that the ones who are teaching kids with disabilities, special medical conditions fall under this category.
  • The third requirement is about a profession or the subject that you are teaching in school. If there is a shortage of highly qualified teachers in specific subjects where you work, this can enhance your chances. Rather than that, foreign language and math teachers have higher chances.

If you are qualified, you need to apply for this program. Keep in mind that, the 100 percent loan cancellation can happen as a form of cycle. For instance, in the first two years, 15 percent of your loan would be canceled while in the next two years, another 20 percent would be canceled, and so on.

For more information about this program, you need to search for Perkins Loan Servicers and ask them about your eligibility, possible benefits, etc.

State-Based Student Loan Forgiveness

As federal student loan forgiveness programs, some state programs can help teachers get rid of student loan debt. There are some differences between those programs, and to help you understand it better, we will take a look at two various state-based loan forgiveness programs for teachers.

Illinois TLR program

It is one of the great opportunities that elementary/secondary school teachers from Illinois can benefit from. The program allows them to eliminate 5000 dollars from the initial student loan debt. This program’s requirements are similar to regular teacher loan consolidation programs because they are also asking for at least five consecutive years of academic teaching in a particular state.

Tennessee State Loan Forgiveness Program

If you are a math or science teacher that works in Tennessee State, you can benefit from this great opportunity. This teacher loan forgiveness program helps you to gradually eliminate the loan debt. It provides 2000 dollars for every academic year that you worked in a particular public school in Tennessee. You can get a maximum of 10.000 dollars worth loan reduction. American Federation of Teachers provides a list regarding these schools and programs that are classified per state. So, if you would like to learn more, you can check their official website.