Teachers have the most student loan forgiveness options compared to other professions. If you're a teacher, you have access to three main programs that can waive your student loans, as well as some state-sponsored repayment assistance options. The best teacher loan forgiveness program for you will depend on the type of loans you took out, how much debt you have and how long you’ve taught at a school. Here's what you need to know about student loan forgiveness for educators.
Federal Student Loan Forgiveness for Teachers
Student loan forgiveness for teachers is a helpful tool for educators bogged down by their student loans. To help find a forgiveness program that works for you, we've summarized the federal and state options available for teachers.
To qualify as a teacher, you will have to provide direct classroom teaching or classroom teaching in nonclassroom setting, which includes Special Education teachers. You have to be staffed at an elementary, middle or high school–typically teaching in universities or professional classes does not meet the requirements for teacher student loan forgiveness. Similarly, personnel, such as administrators or supervisors, do not generally qualify for school loan forgiveness for teachers.
|Program||Teacher Loan Forgiveness||Perkins Loan Cancellation||PSLF|
|Amount forgiven||Up to $17,500||100% of balance||100% of balance|
|Type of loans||Standard Direct and Stafford Loans||Perkins Loan||Direct Loans*|
|Time taught||5 years of full-time teaching||1 year full-time teaching||10 years|
|Certifications||Certified or licensed||If Special Ed Teacher, licensed||Not specified|
|School Subject||Not specified|
*If you consolidate loans that generally don't qualify, like Perkins and Federal Family Education Loan (FFEL) Program loans, you may be eligible for forgiveness.
Teacher Loan Forgiveness Program
The Teacher Loan Forgiveness program offers student loan forgiveness for educators that teach full-time for five consecutive years in a low-income school, including Title I and Bureau of Indian Education (BIE) schools, or an educational service agency. Compared to the 100% student loan balance forgiveness from the Public Service Loan Forgiveness (PSLF) program, teacher loan forgiveness provides less but you qualify in half the time. If you teach math, science or special education, you can be eligible for up to $17,500. Any other subject would get you $5,000 forgiven at most. There is no student loan forgiveness tax for this program, meaning that your forgiven balance will be tax-free.
To apply: After you’ve hit five years of service teaching at an eligible elementary, middle or high school, fill out and send this teacher loan forgiveness application to your servicer. The chief administrative officer at your school will have to certify your employment. That means if you've taught in several schools in the past five years, you'll have to get the CAO at each of those school to sign off that you taught at their school to qualify for BIE or Title I school loan forgiveness.
Perkins Loan Cancellation for Teachers
The Perkins Loan program forgives your student debt little by little each year until you hit 100% of your balance in your fifth year of teaching full-time. Perkins loans have a lifetime maximum of $27,500 for undergraduates, and up to $60,000 for grad students, in case you have any advanced education masters or Ph.D. degrees. Similar to the other programs, teachers in Title I and BIE schools qualify. But, unlike the other options, Perkins is the only program that allows teachers working at private schools to qualify for Perkins Loan cancellation, as long as the school is a nonprofit registered with the IRS.
- Year 1: 15%
- Year 2: 15%; cumulative total of 30%
- Year 3: 20%; cumulative total of 50%
- Year 4: 20%; cumulative total of 70%
- Year 5: 30%; cumulative total of 100%
It's important to note that librarians and guidance counselors can qualify to get their Perkins loans canceled, but supervisors or researchers are not eligible. Educators also have to teach in understaffed subjects, which usually includes math, science and foreign languages.
To apply: Since your university (or its servicer) is considered your loan manager, head to the business or student loan office of your school, and ask them for their cancellation form. You'll then need your employer to certify your service and your school or servicer may have other specific instructions for you to qualify for Perkins Loan cancellation.
Public Service Loan Forgiveness for Teachers (PSLF)
The Public Service Loan Forgiveness program has the most flexibility compared to the other two programs—with the trade-off of requiring the most amount of time spent teaching at an eligible school. On top of standard direct loans, Direct PLUS and Direct Consolidation Loans are also eligible. And this student loan forgiveness program recognizes a broader set of eligible schools, including early education programs, such as Head Start and state-sponsored pre-K, and non-Title I public schools. The biggest benefit with PSLF is that 100% of your remaining balance gets forgiven after 10 years of teaching.
To apply: Once you reach 120 qualifying monthly payments, you can apply for PSLF. Only payments made after October 2007 are eligible. Each year, or when you change employers, you should complete and submit the Employment Certification form. It is not required, but it will help you determine if you are on the right track to qualifying for PSLF. And when you do eventually apply for forgiveness, you will have to submit the form for each employer you worked while making the qualifying payments. And if you are eligible, your loans will be moved to FedLoan Servicing, if they aren't serviced by them already.
State-Sponsored Teacher Loan Forgiveness and Assistance Programs
If you are unable to qualify for these programs or want other options, many states offer loan repayment assistance for teachers, especially for those who work in low-income areas. The American Federation of Teachers provides a database to help you find the state and local forgiveness or repayment assistance options that you can qualify for. Some states that provide assistance are Illinois for teachers and child care providers, Tennessee for math and science teachers and Virginia for teaching students in at least their junior year of college.
To apply: The requirements for each program may differ but, similar to the other forgiveness options, many require educators to teach in low-income areas and teach understaffed subjects. Be sure that you can certify your employment and that you meet the teaching requirements to qualify.
Strategies for Teachers to Reduce Loans
If your goal is to teach for the duration of the term required by the teacher loan forgiveness programs, we'd recommend look at your monthly payment plan options. Since up to 100% of your student loan balance can be forgiven in exchange for your public service, you'll save the most by reducing your monthly payments. Check your loan's policies or call your servicer, and see if you can switch to a repayment plan with lower monthly payments.
For example, the Revised Pay as You Earn plan doesn't have any income requirements; you simply pay 10% of your discretionary income divided over 12 months. Meanwhile, other plans require you meet some kind of financial hardship threshold. Let's assume a Direct Unconsolidated Loan of $20,000 with a 2018 interest rate of 5.05% for a single teacher earning $40,000 per year. Monthly payments, assuming no raises, would be:
|Plan||Monthly Payment||120 Total Payments|
|Revised Pay as You Earn||$183||$19,881|
Be careful here though, because the Revised Pay as You Earn plan scales with any raises you get. At some point, you'll likely get a raise, and when you recertify your income, your monthly payment will rise too. Be on the lookout for when the Revised Pay as You Earn amount grows more than the standard so that you can switch back, or re-evaluate your options.