Teaching is a respected field, but it isn’t always thought of as the most lucrative. Nonetheless, it comes with benefits that other professions don’t have, such as student loan forgiveness.
If you’re a teacher, three programs can forgive some or all of your federal student debts:
- Public Service Loan Forgiveness (PSLF),
- Teacher Loan Forgiveness, and
- teacher cancellation for Perkins loans.
However, if you plan to rely on financial aid and become a teacher, you may want to reconsider. And that’s as only about 1% of applicants to the PSLF are granted student loan forgiveness.
But, both the federal and state governments offer student loan forgiveness to teachers. So, there’s still a chance to get your student loans forgiven. This guide will show you the options you have.
However, take note that these programs don’t cover private loans. If you have private student loans, find out about flexible repayment options with your lender.
With that said, let’s begin.
- Perkins Loan Cancellation
Teachers who work full-time in non-profit or public primary or secondary schools are ideal candidates. In addition, you can get up to 100% of your federal Perkins loans forgiveness.
You may be eligible to have your Perkins loans forgiven if you work full-time in a public or non-profit secondary or elementary school.
To be eligible, you must meet at least one of the following requirements:
- You teach science, math, bilingual education, foreign languages, or any other subject that has been identified as a shortage by a state education agency.
- You’re employed by a school that caters to low-income families.
- You work in special education.
For each year you teach, a percentage of your student loans will be forgiven:
15% of your debts are canceled each year for the first and second years of teaching. After that, 20% of the debt is canceled each year for the third and fourth years. Finally, 30% are canceled for the fifth year.
The interest that accrued during the year is included in the amount canceled each year. You can contact your loan servicer or the school that made the loans to apply for Perkins Loan Cancellation.
- Public Service Loan Forgiveness (PSLF)
It takes years of yearly paperwork and great foresight to guarantee that all requirements are satisfied to qualify for the Public Service Loan Forgiveness program. You must first work for an eligible employer, such as government agencies and certain types of non-profits.
Direct federal loans must be used, and they must be returned using an income-driven repayment plan. Before being eligible for forgiveness, You must make 120 qualifying payments for ten years.
The remaining sum of your debt will be forgiven if your application is approved.
But as said earlier, the PSLF is quite complex. So if you want to receive this type of forgiveness, you must be very careful to meet the qualifications laid forth by Congress.
The PSLF is ideal for teachers who have a lot of debt or want to change jobs without losing their loan forgiveness. A teacher, for example, could go into an administration position at another organization or their school and still be eligible for PSLF.
- Teacher Loan Forgiveness
Teachers with Federal Direct Loans will benefit from this student loan forgiveness program.
Your Direct Subsidized and Unsubsidized Loans are worth up to $17,500.
Teacher Loan Forgiveness may be available if you have Federal Direct Loans. After five complete and consecutive years of teaching, a part of your loans may be discharged.
The loans must have been issued before completing your five years of service at an elementary school, educational service agency, or secondary school that assists low-income children.
To receive the entire $17,500, you must be a highly qualified science, mathematics, or special education teacher.
You can teach other subjects and qualify for $5,000.
Fill out the Teacher Loan Forgiveness papers and submit them to your loan servicer after completing your five years of teaching.
Final Thoughts
Unfortunately, not every student will be eligible for loan forgiveness. And you may only get only a portion of your debt forgiven. If that’s the case, there are still options to better your student loan management.
Student debt refinancing is one of the most effective ways. If you have strong credit and a steady income, refinancing can save you a lot of money and even help you pay off your debt sooner.
So you can shop around and find the best lender that offers lower interest rates.
