Skip Navigation
After Navigation

Student Loan Forgiveness for Teachers

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.

Best Student Loan Refinance Lenders

Recommendation
Best for Student Loan Refinancing
Interest Rates

Variable as low as: 1.74% APR1

Fixed as low as: 2.49% APR1

Repayment Terms

5, 7, 10, 15, 20 years

Recommendation
Best for Student Loan Refinancing
Interest Rates

Variable as low as: 2.94% APR1

Fixed as low as: 2.99% APR1

Repayment Terms

5, 10, or 15 years2

Recommendation
Best for Student Loan Refinancing
Interest Rates

Variable: 1.99% APR - 5.74% APR2

Fixed: 2.99% APR - 6.74% APR2

Repayment Terms

10-yr/20-yr repayment term based on creditworthiness

Recommendation
Best for Student Loan Refinancing
Interest Rates

Variable as low as: 2.15% APR1

Fixed as low as: 2.99% APR1

Repayment Terms

5, 8, 12, or 15 years

Recommendation
Best for Student Loan Refinancing
Interest Rates

Variable Rates: Rates between 1.87% - 5.33 APR1

Fixed Rates:  Rates between 2.30% - 5.96% APR1

Repayment Terms

5, 10, 15, 20, 25 years

×
Find & Compare Private Student Loans for Your School:
Find Loans
Email This Article

Related Content


Could student loan refinancing save you money?
Compare Loans