Loan Forgiveness for Teachers

There are several loan forgiveness programs for teachers.

  • The Direct Subsidized and Unsubsidized Loans Program offers up to $17,500 in Teacher Loan Forgiveness for borrowers who teach full-time for five consecutive years in an eligible low-income elementary or secondary school or at an elementary or secondary school that is operated by the Bureau of Indian Education (BIE). Service at an eligible educational service agency may also qualify, if performed after the 2007-2008 academic year. The borrower must be a new borrower as of October 1, 1998 (i.e., no loans prior to that date) to qualify. Time spent teaching in an AmeriCorps program does not qualify. Special education teachers who teach special needs children at a low-income elementary or secondary school and secondary school mathematics and science teachers may receive up to $17,500 in loan forgiveness. Other elementary and secondary school teachers may receive up to $5,000 in loan forgiveness. Teachers whose service began on or after October 30, 2004 must be “highly qualified” teachers who have obtained full state certification or a license to teach in the state. Such teachers must hold at least a Bachelor’s degree and have passed a rigorous state test in the relevant subject matter. To apply for loan forgiveness, the borrower must file the Teacher Loan Forgiveness Application with his or her loan servicer.
  • The Perkins Loan Program offers loan forgiveness for students who become full-time teachers at elementary and secondary schools that serve low-income students. Borrowers may also qualify by working full-time as a special education teacher who teaches disabled children or by teaching full-time in a designated subject shortage area (e.g., science, mathematics, foreign languages, bilingual education or in a field that has been designated by the state as a shortage area). Teaching service through Job Corps does not qualify unless the teaching service is performed in an elementary or secondary school. The loan forgiveness program forgives 15 percent of the borrower’s Federal Perkins loans each year (including accrued interest) during the first and second years of service, 20 percent during the third and fourth years and 30 percent during the fifth year.
  • The Teacher Education Assistance for College and Higher Education (TEACH) Grant is effectively a forgivable loan. Students who plan on pursuing a career in teaching may obtain a TEACH Grant of up to $4,000 per year, if they maintain at least a 3.25 GPA or score above the 75th percentile on a college admissions test. In exchange, the student must agree to serve in a high-need field at an elementary or secondary school or educational service agency that serves low-income students for at least four complete academic years within eight years of graduation. (A single four-year period satisfies the service requirements for both undergraduate and graduate TEACH Grants.) High-need fields include mathematics, science, reading specialists, bilingual education, foreign languages, special education and other fields that have been identified as a teacher shortage area by a local education agency or the federal or state government and included in the Teacher Shortage Area Nationwide Listing. If the student does not complete the service requirement, the TEACH Grant will retroactively be converted to a Direct Unsubsidized Loan with interest accruing from the date the grant was disbursed. TEACH Grant recipients are required to undergo TEACH Grant Initial and Subsequent Counseling and sign a TEACH Grant Agreement to Serve.

Each of these programs requires service in an elementary or secondary school that serves low-income students (e.g., the school is in a Title I district and more than 30 percent of the school’s students qualify for Title I services). Eligible schools are listed in the Annual Directory of Designated Low-Income Schools for Teacher Cancellation Benefits. If a school was listed in the directory when the teacher began teaching at the school, subsequent years of service at the school still qualify even if the school is no longer listed in the directory.

Teacher loan forgiveness is not available for Grad PLUS and Parent PLUS Loans. These loans may, however, be eligible for public service loan forgiveness.

The American Federation of Teachers (AFT) publishes a funding database that includes information about loan forgiveness programs for teachers. Select "Loan Forgiveness" from the "Funding Type" menu. Most of the loan forgiveness programs are restricted to specific states or school districts or students studying at particular colleges and universities.

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Have you been employed for at least 2 years?
Do you currently have a credit score of at least 680?
Have you defaulted on your current loans?*

* Default = 270 days late/missed payment on a federal loan and typically 90 days late/missed payment on a private loan (contact your lender for exact definition of default).

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