Teachers & Student Loans: A Guide to Understanding Your Options
**The Edvocate is pleased to publish guest posts as way to fuel important conversations surrounding a P-20 education in America. The opinions contained within guest posts are those of the authors and do not necessarily reflect the official opinion of The Edvocate or Dr. Matthew Lynch.**
Guest post By Andy Josuweit, CEO of Student Loan Hero
Thanks to the surging costs of higher education, today’s teachers must consider their jobs a very expensive labor of love.
As of 2014, the annual mean wage for elementary teachers was $56,830, yet the bottom 10 percent of earners brought in just $36,040. For elementary teachers, it was much of the same story, with an annual mean wage of $53,480 and the bottom 10 percent bringing in just $33,460.
Those who join this demanding profession need to hold a bachelor’s degree or a master’s degree, yet receive a pittance of the nation’s financial rewards – especially when you compare their salaries to other professions where graduate degrees are the norm.
Further, recent research on student loan debt has concluded that up to 40 percent of the $1.3 trillion owed nationally can be attributed to graduated studies, including the popular Master of Education degree.
Student Loan Forgiveness Programs for Teachers
Today’s teachers are working harder than ever, yet forking over more and more of their pay towards student loans that only seem to grow in size.
Fortunately, a handful of programs were created by the federal government to ease this burden, including some that offer complete forgiveness of loan balances in certain situations.
Federal Public Student Loan Forgiveness (PSLF)
PSLF was created in 2007 to incentivize the nation’s brightest workers into rooting their careers in the public sector.
Intended to forgive all William D. Ford Direct Loans, which include Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans, this program offers complete loan forgiveness after you make 120 on-time payments while working full-time for a qualifying public service organization.
Since schools count as public service organizations by and large, one would think this program provides the ultimate solution to cash-strapped and indebted teachers. However, the fact that these professionals must stay in a low-paying public service position for an entire 10 years before they receive a penny of forgiveness makes this program best suited for those who actually want to work in public service to begin with. After all, 10 years is a long time.
Federal Teacher Loan Forgiveness
Created to forgive loans that originated after October 1, 1998, the Federal Teacher Loan Forgiveness program offers easier guidelines and enough forgiveness to bring new teachers in.
Under this program, teachers who work in the profession full-time for five years in qualified elementary and secondary schools or educational service agencies that serve low-income families may be eligible for forgiveness on up to $17,500 of their student loans.
This program was created to provide forgiveness for Direct Subsidized and Unsubsidized Loans as well as Subsidized and Unsubsidized Federal Stafford Loans, but not intended to provide forgiveness for borrowers who have PLUS loans only.
To qualify, you must teach in an eligible school that qualifies for Title I Funding where 30 percent or more students participate. Meanwhile, you must teach at your post for five full and consecutive years, and have an outstanding loan balance that has never been in default.
The amount of loan forgiveness you receive depends on your specific role as a teacher, what you teach, and where you teach. Further, certain states will may match loan forgiveness for teachers who qualify. Iowa residents, for example, can receive 20 percent of their loans forgiven if they meet certain criteria. Illinois, on the other hand, will match up to $5,000 in federal loan forgiveness for teachers who follow certain guidelines.
Federal Perkins Loan Cancellation
The Federal Perkins Loan Cancellation program offers a tiered approach to student loan forgiveness for teachers.
Under this program, you may have up to 15 percent of your student loan debt cancelled for the first two consecutive years you teach, and another 20 percent of your loans cancelled during years three and four.
During your fifth year in a qualified teaching position, you may have the remaining 30 percent of your outstanding student loans forgiven.
To qualify, you must teach in a school that serves mostly low-income families, work as a special education teacher, or teach in a specified teaching shortage area as determined by your state.
Teacher Education Assistance for College and Higher Education (TEACH) Grant
Although the TEACH grant program can lead to loan forgiveness, it comes with special stipulations and several hoops to jump through along the way. The TEACH grant program provides up to $4,000 per year in forgiveness for teachers who agree to work in certain teaching disciplines in schools that serve low-income families. Meanwhile, candidates must also be enrolled in an undergraduate, postbaccalaureate, or graduate student at a school that participates in the TEACH Grant Program.
Certain other requirements apply, including minimum achievement and cumulative GPA requirements. The final caveat with this program, however, is that if you fail to meet these requirements, any grants you receive in the program will be converted into Direct Unsubsidized Loans you will have to pay back.
This final detail makes applying for the TEACH grant program a risky proposition for some students. If you don’t complete your program, you might end up with even more loans to pay back than you started with.
The Bottom Line
While teaching is the ideal profession for many of our nation’s brightest educators, the debts that follows can quickly turn the dream into a nightmare.
Student loan forgiveness programs for teachers were created to incentivize the best and brightest teachers to pursue their passion and stay the course while working towards freedom from their debts.
If you owe money on your student loans and aren’t sure where to turn, one of the programs listed above might forgive your loans if you meet certain criteria and commit to specific teaching positions in your area. While none of these programs are perfect, they offer the one thing indebted teachers need most these days – a way out.
With over 100k in student loan debt and no one to turn to, Andrew Josuweit took matters into his own hands and started studentloanhero.com, a website that helps borrowers find the best way to pay off their student loan debt. To find out more, check out their student loan forgiveness guide for teachers or add them on Twitter.