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Student Loan Forgiveness for Teachers

By Elaine Rubin

November 10, 2021

ALERT: PSLF Time-Limited Waiver Opportunity

On Oct. 6, 2021, the U.S. Department of Education (ED) announced a time-limited waiver opportunity to its PSLF program rules. Under the time- limited waiver opportunity, borrowers could receive credit for past payments which would not have been previously classified as qualifying payments or instances in which payments were not made, specifically, servicemembers who were advised to put their loans in a deferment or forbearance status and did not make payments while on active duty. The months the borrower spent on active duty can be counted toward the PSLF.

Borrowers will need to submit a PSLF form—the single application used for a review of employment certification, payment counts, and processing of forgiveness—on or before October 31, 2022 to have previously ineligible payments counted.

The time- limited waiver essentially waives all requirements except the employment requirement. If you have Federal Family Education Loans (FFEL) or Perkins loans, you will still be required to consolidate your loan with a Direct Consolidation Loan by Oct. 31, 2022. However, any payments made on your federal student loans, under any repayment plan (partial, full, or late), on any FFEL, Perkins, or Direct Loan, will count towards your 120 qualifying payments.

Under the new time-limited waiver, you need to have been employed or are currently employed by an eligible employer (government, 501(c)(3) not-for-profit, or other not-for-profit organization which qualifies), and working full-time. You can still qualify for the full-time requirement if you are working multiple part-time jobs (that totals at least 30 hours per week) with eligible employers. For more information on which employers meet PSLF Program requirements visit the PSLF Help Tool.

Choosing to teach is a noble decision, unfortunately many teachers are not paid in accordance with their service to society. The debt accumulated to become a teacher when compared to the expected salary upon graduation could be worrisome but should not deter anyone from pursuing this profession.

There are several programs that can help make student loan debt for teachers more manageable, if not reduced or eliminated entirely. These programs are primarily from the U.S. government and are meant for federal student loans but there are also options available for students with private student loans too.

Read on to learn how your passion to teach can be assisted by student loan forgiveness or other programs to help make your student loan debt more manageable.

Teacher Loan Forgiveness (TLF)

Overview: Forgives up to $17,500 of your Direct or FFEL Loans after 5 complete and consecutive academic years teaching at a qualified school or educational service agency
Eligible loans must have been made before the end of your five years of qualifying teaching service, and they include:

Direct Unsubsidized Loans
Direct Subsidized Loans
FFEL Program Subsidized Loans
Portions of a Direct or FFEL Consolidation Loan used to repay an eligible Unsubsidized or Subsidized Loans

Note: Direct PLUS Loans, FFEL PLUS Loans, and Federal Perkins Loans are not eligible for this forgiveness program.

Eligibility:

You must be employed as a full-time, highly qualified teacher at an elementary school, secondary school, or educational service agency that service low-income students for five complete and consecutive years.
At least 1 of those 5-years must be after the 1997-1998 academic year.
You may be eligible to count a partial year as a complete year if you meet certain criteria
There are certain requirements you must meet to be considered a “highly qualified teacher”. The basics include, having at least a bachelor’s degree, receiving a full state certification as a teacher, and not had certification or licensure requirements waiving on an emergency, temporary, or provisional basis. Other requirements also exist, especially for teachers who are new to the profession.
AmeriCorps service cannot be counted toward your 5 years of teaching
Apply AFTER you have completed your 5 complete academic years of teaching for loans made before the end of those 5 years.
Your school or educational agency must be listed in the Teacher Cancellation Low Income (TCLI) Directory

For more information on Teacher Loan Forgiveness visit StudentAid.gov You must be a new borrower* as of Oct. 1, 1998.

Best For: Special Education, Mathematics and Science teachers

*New borrower as of Oct. 1, 1998 means, you must not have had an outstanding balance on a Direct Loan or FFEL Loan as of Oct. 1, 1998, or on the date you obtained a Direct Loan or FFEL Loan after Oct. 1, 1998.

Amount Forgiven: Up to either $5,000 or up to $17,500 on Direct of FFEL Subsidized and Unsubsidized loans.

Teachers eligible for $17,500, meet all the criteria and are:

Highly qualified mathematics or science teacher who teach at the secondary level are eligible
Highly qualified special education teachers, either at the elementary or secondary level who primarily provide special education to children with disabilities

All other teachers who are highly qualified elementary or secondary teachers who meet all the eligibility criteria (but not qualify for $17,500) are eligible for $5,000.

Public Service Loan Forgiveness (PSLF)

Overview: Forgives the balance of your Direct Loans AFTER 120 qualifying payments in an eligible repayment plan, while working full-time at an eligible employer. Public school teachers are likely eligible for PSLF. When it comes to private school teachers, it will depend if the teacher works for a 501(c)(3) nonprofit school. Some private schools, and many private colleges are considered a 501(c)(3) nonprofit institution, however you will need to check with your school. Amount Forgiven: The remaining balance of your eligible loans at the time of forgiveness.

Eligibility:
Only Direct Loans are eligible for PSLF. Other loans such as FFEL and Perkins loans would not normally qualify, however with the Time-Limited PSLF Waiver mentioned above and a Direct Loan consolidation, you can apply for PSLF before October 31, 2022. That said, you can consolidate those loans into a Federal Direct student loan. If you choose to do this, please note, that you MUST consolidate before making the 120 qualifying payments. Payments made before the consolidation will not count towards the 120 needed. AND…
Work full-time (at least 30 hours) at an eligible employer. Eligible employers include federal, state, tribal governments, and 501(c)(3) not-for-profit employers. You can work with multiple eligible employers to qualify as full-time. AND….
Make 120 qualifying monthly payments in a qualified repayment plan. Monthly on-time payments made on or after Oct. 1, 2007, under a 10-year Standard Repayment Plan, or Income-driven Repayment Plan (like income-based, income-contingent, etc.) will count as qualifying payments. You can’t solely use a 10-year Standard Repayment Plan, because you will have paid off the loan and have nothing to forgive.
Parent PLUS Loan borrowers: Please note, these loans are not eligible for PSLF unless you consolidate them with a Direct Consolidation Loan and agree to repay the loan under an income-contingent repayment plan.

Details:

Most full-time public and private elementary and secondary school teachers will qualify. You must work for a not-for-profit organization, public schools and many private schools meet this qualification. The loan amount forgiven with the Public Student Loan Forgiveness program (PSLF) is not taxable.

Best For: All teachers planning to teach at a not-for-profit educational institution for at least 10 years.

Perkins Loan Federal Teacher Cancellation

Overview: Student Loan Forgiveness for up to 100% of your Federal Perkins Loan as long as you teach at a low-income school or teach qualifying subjects. To maximize the amount forgiven you will need to teach for at least 5-years within this program.*The Time-Limited PSLF Waiver program mentioned above would be a better choice if you consolidated into a Direct loan and apply before October 31, 2022.

Amount Forgiven: Up to 100% of your Federal Perkins loan only

Eligibility:

This program is ONLY for Federal Perkins Loans, for other federal loan consider the Teacher Loan Forgiveness or Public Service Loan Forgiveness programs

For those eligible, your loan could be forgiven (up to 100%) in the following increments (including accrued interest in the given year):

15% forgiven for your first and second years of service
20% forgiven for your third and fourth years of service
30% forgiven for your fifth year of service

If you aren’t teaching at a qualifying low-income school but you teach mathematics, science, foreign language, bilingual, special education, or a subject deemed to have a shortage in your state (check with state education agency to determine what these might be)

Private school teachers can qualify as long as the private school provides elementary and/or secondary education and has nonprofit status with the Internal Revenue Service (IRS).

Best For: Teachers with Federal Perkins Student Loans

Student Loan Forgiveness Programs by State

It’s not uncommon for states to provide their own student loan forgiveness programs for teachers. This is especially true for teachers who teach in high need areas. If any of the above programs are not the right fit for you, looking into student loan forgiveness at the state level might be the right approach. The American Federation of Teachers offers a database you peruse to see if there’s another program that is a better fit for you.

Combining Loan Forgiveness Programs

It might be tempting to apply for multiple programs if it turns out you qualify for more than one. You may not be able to do this and you need to make sure to strategize your plan appropriately.

When it comes to Teacher Loan Forgiveness and PSLF, you can’t double-dip for the same period of teaching service. Meaning, the five years you worked to qualify for Teacher Loan Forgiveness, any payments made to your loans will not count as a qualifying payment towards PSLF. Depending on your loan debt, you want to make sure you strategize that appropriately.

If you have a Federal Perkins Loan, you can qualify for Teacher Cancellation if you meet the criteria of that program, and still qualify for either Teacher Loan Forgiveness or PSLF on your other Direct Loans. If you have a Federal Perkins Loan, you might not want to consolidate it into a Federal Direct loan as that would eliminate the Perkins Loan Cancellation program for you.

Evaluate your options and decide what is the best course of action for you to maximize the amount of forgiveness you can receive.

Income Driven Repayment Plan Forgiveness

We recommended an income driven repayment plan if you are considering the Public Service Loan Forgiveness (PSLF) program. An income driven repayment plan is available for students with federal student loans and will base your monthly payment on a percentage of your income. However, if you are in income-driven repayment plan, and do not meet the qualifications for PSLF, you may still qualify for forgiveness. Depending on your income-driven repayment plan, after 20 or 25 years of payments (depending on your respective plan), you can qualify for student loan forgiveness of the remaining debt.

Even with a lower payment, many borrowers may not have a balance leftover after 20 or 25 years of payments to forgive. And if you are making lower payments and increasing your repayment term, it could cost you more money in interest. However, if you don’t qualify for any of the above programs but want some immediate relief for your federal student loans this might be an option for you.

Student Loan Refinance

For teachers with student loans that find they don’t qualify for any of the above programs for one reason or another, a Federal Direct Loan Consolidation to reduce the number of payments or a student loan refinance could be a way to reset your student loans. With a refinance you may be able to either lower your monthly payment or the interest being paid on your loan.
Student loan refinance as an option is great for students with private student loans taken to subsidize gaps in federal funding or for students with federal student loans looking to forego the benefits of federal student loans for a lower interest rate.

Whatever your reasons, student loan refinance is an excellent way lower your current interest rate (saving money over the length of the loan) or redefining your terms possibly extending the payments over a longer period of time in an effort to reduce the monthly payment to a more manageable one.

Private lenders offer the additional benefit of an interest rate reduction (typically between 0.25 – 0.5%) when enrolled in automatic debit payments.

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Variable as low as: 2.94% APR¹

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Variable rate range: 2.94% – 4.84% APR¹
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¹The 0.25% auto-pay interest rate reduction applies as long as the borrower or cosigner, if applicable, enrolls in auto-pay and authorizes our loan servicer to automatically deduct your monthly payments from a valid bank account via Automated Clearing House (“ACH”). The rate reduction applies for as long as the monthly payment amount is successfully deducted from the designated bank account and is suspended during periods of forbearance and certain deferments. Variable rates may increase after consummation.

²This informational repayment example uses typical loan terms for a refi borrower who selects the Full Principal & Interest Repayment Option with a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.

³$5,000 is the minimum requirement to refinance. The maximum loan amount is $250,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees.

Information advertised valid as of 11/10/2021. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.

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¹Visit DiscoverStudentLoans.com/AutoDebitReward for terms and conditions.

²Lowest APRs are available for the most creditworthy applicants who are approved and choose a shorter repayment term, and include Auto Debit Reward.

³The fixed interest rate is set at the time of application and does not change during the life of the loan unless you are no longer eligible for one or more discounts. The variable interest rate is calculated based on the 3-Month CME Term SOFR index plus the applicable margin percentage less any applicable discounts. The 3- Month CME Term SOFR index value for variable interest rate loans is 0.125% as of November 14, 2021. 3-Month CME Term SOFR is administered by CME Group and is published by CME Group on its website (cmegroup.com/termsofr). Discover Student Loans may adjust the variable interest rate quarterly on each January 1, April 1, July 1 and October 1 (each an “interest rate change date”), based on the 3-Month CME Term SOFR rate available for the day that is 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125), or 0%, whichever is greater. This may cause the monthly payments to increase, the number of payments to increase or both. If the 3-Month CME Term SOFR rate is less than zero percent, then the index will be deemed to be zero percent (as stated in the promissory note) for purposes of calculating your interest rate. Your variable interest rate (index + margin – applicable discounts) will not exceed 18%. Our lowest APRs are only available to applicants with the best credit. The APR will be determined after an application is submitted. It will be based on credit history, the selected repayment option and other factors, including a cosigner’s credit history (if applicable). If a student does not have an established credit history, the student may find it difficult to qualify for a private student loan on their own or receive the lowest advertised rate. Learn more about Discover Student Loans interest rates.

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¹Interest Rates

Fixed interest rates range from 2.30% APR (with auto debit discount) to 5.96% APR (without auto debit discount). Your interest rate will depend on your (and if applicable, your cosigner’s) credit qualifications. The fixed interest rate will remain the same for the life of the loan.

Variable interest rates range from 1.87% APR (with auto debit discount) to 5.33% APR (without auto debit discount). Your interest rate will depend on your (and if applicable, your cosigner’s) credit qualifications. Variable rates may increase after consummation. The variable interest rate is equal to the One-Month London Interbank Offered Rate (“One-Month LIBOR”) plus a margin. The One-Month LIBOR in effect for each monthly period (from the first day of the month through and including the last day of the same month) will be the highest One-Month LIBOR published in The Wall Street Journal “Money Rates” table on the twenty-fifth (25th) day (or if such day is not a business day, the next business day thereafter) of the month immediately preceding such calendar month. The Annual Percentage Rate (APR) for a variable interest rate loan will change monthly on the first day of each month if the One-Month LIBOR index changes. This may result in higher monthly payments. The current One-Month LIBOR index is 0.09% as of December 1, 2021.

Auto Debit Interest rate reduction of .25% for automatically withdrawn payments from any designated bank account (“auto debit discount”). Auto debit discount applies when full payments (including both principal and interest) are automatically drafted from a bank account. The auto debit discount will continue to apply during periods of approved forbearance or deferment if the auto debit discount was in effect at the time of receiving the forbearance or deferment. Auto debit discount will remain on the account unless (1) the automatic deduction of payments is canceled or (2) there are three consecutive automatic deductions returned for insufficient funds at any time during the term of the loan.

The lowest rate for each loan type requires automatically withdrawn (“auto debit”) payment. The lowest rate is available only to the most creditworthy applicants. Not all borrowers will receive the lowest rate. The interest rate and Annual Percentage Rate (APR) may be higher depending upon (1) the credit history of the borrower and, if applicable, the cosigner, (2) the repayment option and loan term selected, (3) the loan type selected, and (4) the highest level of education attained. If approved, applicants will be notified of the rate qualified for within the stated range.

²Cosigner Release. A request for the cosigner to be released can be made by either the borrower or cosigner when each of the following conditions has been met:

The account must have been in full principal and interest repayment for at least 24 months.
Twenty-four consecutive, on-time principal and interest payments, or lump sum equivalent, must have been made. NOTE: A lump sum payment does not replace the requirement to have been in full principal and interest repayment for at least 24 months. Interest-only or fixed-pay payments while enrolled in school do not qualify towards the 24 consecutive on-time payments.
The loan must be current at the time of request.
The loan must not have been in deferment, hardship forbearance, or other alternative payment assistance plan within the past 24 months.
The loan must not have been permanently modified from its original terms in the credit agreement.
The primary borrower must be a U.S. citizen or have permanent residency in the United States.
The primary borrower must meet the age of majority requirement in their permanent state of residency.

Requirements are subject to change. If all of these conditions have been met, then an application for cosigner release may be submitted. The primary borrower is required to demonstrate they have the ability to assume sole responsibility for the loan(s) by providing proof of income, meeting debt-to-income requirements, and having a satisfactory credit history. (A credit report will be obtained during the review process).

³Refinance Loan Eligibility: You must be a U.S. citizen or permanent resident alien with a valid U.S. Social Security number, and be the legal age to enter into binding contracts in your state/territory of residency, or be at least 17 years of age and apply with a cosigner who is at least the age of majority in their state/territory. Non-residents can apply with an eligible cosigner who is a U.S. citizen or permanent resident alien with a valid U.S. Social Security number. The student loans you refinance must be in their grace or repayment period, and you can no longer be enrolled in school on a half-time or more basis. You must have at least $5,000 in student loans to refinance. You, or your eligible cosigner, must have an annual income of at least $36,000. Approval subject to credit review. Other credit criteria may apply.

Refinance Loan Limits:

Minimum loan amount: $5,000

Maximum student loan limits:

$125,000 for borrowers with an undergraduate degree.

$175,000 for borrowers with a graduate, MBA, or law degree.

$500,000 for borrowers with a graduate health professional degree.

Nelnet Bank, and any associated logos or design marks, are trademarks or service marks of Nelnet, Inc. All loan programs and terms are subject to change or may be discontinued at any time without notice. Certain restrictions and limitations may apply.

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Student Loan Forgiveness for Teachers

Teacher Loan Forgiveness (TLF)

Public Service Loan Forgiveness (PSLF)

Perkins Loan Federal Teacher Cancellation

Student Loan Forgiveness Programs by State

Combining Loan Forgiveness Programs

Income Driven Repayment Plan Forgiveness

Student Loan Refinance

Best Student Loan Refinance Lenders

SoFi Student Loans

College Ave Student Loans

Discover Private Consolidation Loan

PenFed Student Loans Powered by Purefy

You Put in the Work. Now Reap the Rewards.

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