With reporting by Hannah Rounds and Brittney Laryea
Becoming a schoolteacher is heralded as a rewarding profession but not one that often comes with a large paycheck. Starting salaries for public school teachers range from $27,000 to $48,000, according to the National Education Association. And yet, teachers who graduate with a Master in Education carry an average of $50,000 in student loan debt.
With salaries like these, it’s no wonder teachers can struggle to afford their student loan payments. Thankfully, classroom teachers qualify for many debt forgiveness programs. These programs can help give teachers an extra boost to help them pay down debt while working.
These are the most important student loan forgiveness programs for teachers, which we’ll review in detail in this guide.
To skip ahead to the program you’re interested in, just click the links below.
Public Service Loan Forgiveness
Public Service Loan Forgiveness is a 2007 program that originally promised to forgive federal student loans for any employees of nonprofit or public sector companies. That, of course, includes teachers. Under the program, borrowers who made 120 on-time payments would ultimately qualify for loan forgiveness.
However, the program’s future is now uncertain. A proposed education budget from the White House appears to eliminate the program, and it is not yet clear whether or not enrolled workers will have their loans forgiven as promised. Any budget will have to receive Congressional approval, which means we may not have a certain answer for months to come.
How do l know if I’m eligible?
Teachers at nonprofit schools are eligible for Public Service Loan Forgiveness. This includes public and private nonprofit schools. To qualify, teachers must make 120 on-time payments while working full time in a public service role.
The 120 payments do not have to be consecutive. However, you must pay the full amount listed on your bill. Additionally, your loans must be in good standing when you make the payment.
IMPORTANT: You can only qualify for loan forgiveness if you are enrolled in a qualified income-driven repayment option. Learn more about income-driven repayment plans here.
Also, payments only count toward forgiveness if your loan is in active status. That means any payments made while loans are in the six-month grace period, deferment, forbearance, or default do not count toward forgiveness.
How can I be sure my employer is covered by PSLF?
There has been a lot of confusion about which employers are considered nonprofit or public service organizations. To be sure your employer is eligible, you should submit an employment certification form to FedLoan Servicing.
Although the future of the loan forgiveness program remains uncertain, borrowers may still want to prepare for a positive outcome and enroll in hopes that the program will continue.
How much of my loan will be forgiven?
After 120 payments, the government will cancel 100% of the remaining balance and interest on your Direct Federal Loans.
Direct Federal Loans include: Direct Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans.
Will I have to pay taxes?
Public Service Loan Forgiveness (PSLF) is completely tax-free. You will not see an increased tax bill the year your loans are forgiven.
How to claim Public Student Loan Forgiveness
As the program launched in 2007 and requires 10 years of on-time payments, the first group of graduates who could be eligible for PSLF will begin submitting their applications in 2017.
But don’t expect it to happen automatically. Even if you qualify for loan forgiveness, the government will not automatically discharge your loans. You need to submit the PSLF application to receive loan forgiveness.
The applications for loan forgiveness are not yet available. The U.S. Department of Education will make them available before October 2017.
What if I have a Parent Plus, Perkins or FFEL loan?
As it stands, some types of federal student loans — such as Parent PLUS, Perkins and Federal Family Education Loans — are not included under the PSLF program. One way to get around this is by consolidating those loans through the federal direct consolidation program. If you take this route, the entire consolidation loan will be forgiven.
PSLF works best in conjunction with an income-based repayment plan. These plans lower your monthly payments.
Since you will qualify for loan forgiveness, this means more money in your pocket. Just remember, you must keep your loans in good standing — making 120 on-time consecutive payments — to qualify for forgiveness.
Federal Teacher Loan Forgiveness
The Federal Teacher Loan Forgiveness program encourages teachers to work in the neediest areas of the country. Teachers who qualify can have up to $17,500 in federal loans forgiven after five years.
How do I know if I’m eligible for Federal Teacher Loan Forgiveness?
Teachers must complete five consecutive years of teaching at a low-income (Title I) school. If your school transitions off the list after your first year of teaching, your work in that school still counts toward forgiveness.
Direct Subsidized and Unsubsidized Loans and Subsidized and Unsubsidized Stafford Loans can be forgiven. Loans must have originated after October 1, 1998. This is important for anyone who hasn’t paid off loans and wants to consider teaching as a second career.
Your loans may not be in default at the end of your five years of teaching. The only exception includes loans that are set up in a repayment arrangement.
You qualify for teacher loan forgiveness as long as you are on a qualified repayment option. These include the standard 10 year repayment plans or the payments required by an income-based repayment plan. If your loan goes into a default, a repayment arrangement works with this program.
How much of my loan will be forgiven?
To receive the full $17,500 in forgiveness, you must meet one of two criteria: either work as a highly qualified math or science teacher in a secondary school, or work as a qualified special education teacher for children with disabilities.
Other highly qualified teachers can have up to $5,000 of loans forgiven if they work in Title I schools.
You’ll notice that all teachers must be “highly qualified.” To meet the highly qualified standard, you must be licensed in the state you work, hold a bachelor’s degree, and demonstrate competence in the subject(s) you teach. Do you need to check whether you’re highly qualified? The U.S. Department of Education explains qualification in detail.
Will I have to pay taxes?
The Federal Teacher Loan Forgiveness program forgives your loans and does not result in a taxable event.
How to apply
Qualified teachers must submit this application with administrative certification. Be sure you work with your school’s administration in advance.
Tips and tricks
Consider teaching at a Title I school directly after graduation. The loan forgiveness may help you achieve debt freedom within five years. Consider an income-based repayment program to lower your payments while you’re teaching.
Teacher Cancellation for Federal Perkins Loans
If you’re a teacher who took out a Federal Perkins Loan from your school, you may qualify for loan cancellation. Teachers can cancel up to 100% of their Perkins Loans after five years.
How do loans become eligible?
The teacher cancellation program for Perkins Loans is one the most lenient programs for loan forgiveness.
You will qualify to have loans forgiven if you meet any one of these three requirements:
- You work full time in a low-income (Title I) school.
- You work full time as a special education teacher.
- You work full time in a designated shortage area (such as math, science, foreign language, bilingual education, or any shortage area declared by your state).
If you work part time at multiple qualifying schools, you may qualify for loan cancellation.
Your loans may be in a grace period, deferment, or any qualified repayment plan at the time of discharge. They may not be in default.
Also, you must be enrolled in a qualified repayment option. Your payment plan could be the standard 10 year repayment plans or an income-based repayment plan. If you qualify for deferment, your loans may still be eligible for cancellation.
How much of my loan will be forgiven?
Over the course of five years, 100% of your Federal Perkins Loan will be forgiven. The discharge occurs at the end of each academic year. In years 1 and 2, the government discharges 15% of the principal balance of the loan. It cancels 20% of the loan in years 3 and 4 of service. The final year, the remaining 30% of your loan will be canceled.
In most cases, the five years of service do not have to be consecutive. However, this isn’t always the case. The university that issued your Perkins Loan administers the loan cancellation program. That means you need to check with your alma mater for complete details.
Will I have to pay taxes?
This program forgives your loans and does not result in a taxable event.
How to apply
You must request the appropriate forms from the university that holds the loans. If you don’t know the office that administers Perkins Loans, contact your university’s financial aid office.
Tips and tricks
If your Federal Perkins Loan qualifies for deferment, take advantage of this option. Under deferment, you don’t have to make any payments on the loan. At the same time, the government pays any accruing interest. Teachers who qualify for deferment can have 100% of their Perkins Loan forgiven without ever paying a dime.
The Teacher Education Assistance for College and Higher Education (TEACH) Grant isn’t like other loan cancellation programs. Under the terms of the program, you accept the money during your college years. Eligible students can receive a grant of up to $4,000 per year of education. After you graduate, you agree to work as a teacher for four years in a high-need field in schools that serve low-income families.
As long as you keep your end of the bargain, you don’t have to pay the money back. Otherwise, the grant transforms into a loan. If you’re planning to become a teacher, this can be a great opportunity. But you need to understand the details before you accept the grant.
How do I qualify for a TEACH Grant?
To qualify for a TEACH Grant, you must enroll in a teacher education program, complete the Free Application for Federal Student Aid, maintain a certain GPA (usually 3.25), and agree to a work requirement.
When you accept a TEACH Grant you agree to work as a teacher in a high-need field serving low-income families. You must complete four years of full-time teaching within eight years of graduation.
In this instance, you take the money first and agree to do the work later. That means that you’re taking on a risk.
You must complete a Free Application for Federal Student Aid form, and you must complete a training and counseling module from StudentAid.gov. Pay attention to the training; it will help you understand the risks of the TEACH Grant.
What happens if I change my mind?
If you don’t keep up your end of the bargain and meet all of the work requirements, the funds get converted into a Direct Unsubsidized Loan. What’s worse? The interest begins accruing from the point you received the grant. That means you’ll have the principal and interest to pay.
Don’t take a TEACH Grant unless you plan to meet the work requirements.
Will I have to pay taxes?
TEACH Grants are nontaxable education grants. However, you cannot claim a tax credit for education expenses paid by the grant.
Tips and tricks
The TEACH Grant offers a great way to graduate debt free, but you must commit to follow through. Don’t take the grant money unless you know that you can work as a teacher for at least four years.
Teacher Loan Forgiveness Programs by State
Several states offer generous loan forgiveness opportunities. You can use these programs in conjunction with the federal programs above. Qualified applicants might achieve debt freedom in a few years with these programs. These are some of the highlights of state loan forgiveness programs.
If your state isn’t listed, check out the database at the American Federation of Teachers. They keep track of most major scholarship and loan forgiveness opportunities for teachers.
Arkansas State Teachers Education Program
The Arkansas State Teachers Education Program (STEP) helps teachers with federal student loans pay back their loans. Teachers must work in geographical or subject areas with critical shortages.
Eligible teachers can receive up to $3,000 per year that they teach in critical shortage areas. There is no lifetime maximum of loan forgiveness. Licensed minority teachers can receive an additional $1,000 for every year that they qualify for STEP.
Arkansas Teacher Opportunity Program (TOP)
The Teacher Opportunity Program, or TOP, awards tuition reimbursement grants up to $3000 of out-of-pocket expenses to licensed Arkansas classroom teachers and administrators with the Arkansas Department of Education.
Arkansas classroom teachers and administrators who declare an intention to continue employment as a classroom teacher or administrator in Arkansas after completing their program are eligible for TOP. Applicants must also have at least a 2.5 cumulative GPA in the courses funded by the TOP grant when they apply.
Applicants who meet all requirements can receive reimbursement for out-of-pocket expenses up to $3000 for courses related to employment. The grant reimburses educators up to 6 college credit hours each academic year.
Delaware Critical Need Scholarships
The Critical Need Scholarship program reimburses Delaware teachers for all or part of tuition and registration fees paid for courses that contribute toward the completion of a Standard Certification.
Full-time employees of a Delaware school district or charter school who teach on an Emergency Certificate in a critical need area as defined by the Delaware Department of Education. Applicants must also have a minimum 2.0 GPA.
The scholarship forgives all or part of tuition and registration fees paid up to $1,443 for undergraduate coursework or up to the cost of three credits per term for graduate coursework, not to exceed the cost of three credits at the University of Delaware.Courses must contribute toward the completion of a Standard Certification.
Illinois Teacher Loan Repayment Program
The Illinois Teacher Loan Repayment Program offers up to $5,000 to Illinois teachers who teach in low-income schools in Illinois. This award is meant to encourage the best teachers to serve students in high-need areas.
The Illinois Teacher Loan Repayment Program is a unique loan forgiveness matching program. Teachers must meet every qualification to receive Federal Teacher Loan Forgiveness. In addition, teachers must have served all five years in a low-income Illinois school.
Teachers who meet all requirements can receive federal loan forgiveness up to $5,000. You must apply for Illinois loan repayment funds within six months of receiving federal loan forgiveness.
Iowa Teacher Shortage Forgivable Loan Program
Iowa offers student loan repayment assistance to state-certified teachers as an incentive for educators to teach in subjects with a shortage of instructors through the state’s Teacher Shortage Forgivable Loan Program.
Current Iowa teachers who began their first teaching position in Iowa after July 1, 2007 and are completing studies in a designated shortage subject area are eligible for the Teacher Shortage Forgivable Loan Program.
Teachers must have a balance on either a Direct Stafford Loan or Direct Consolidation Loan and agree to teach in the shortage subject area upon graduation. For 2016 graduates, the maximum award is $6,858.
Recipients are awarded up to 20% of their remaining loan balance annually, up to the average resident tuition rate for students attending Iowa’s Regent Universities the year following graduation.
Maryland Janet L. Hoffman Loan Assistance Repayment Program
Maryland offers loan repayment assistance to excellent teachers who teach STEM subjects or in low-income schools.
Only teachers who earned a degree from a college in Maryland or a resident teacher certificate from the Maryland State Department of Education qualify for this award. Additionally, qualified Maryland teachers must serve in low-income (Title I) schools or other schools designated for improvement. Alternatively, licensed teachers who work in designated subject areas such as STEM, foreign languages, or special education can qualify.
To qualify, you must earn less than $60,000 per year or $130,000 if married filing jointly.
Qualified teachers can have up to $30,000 repaid over the course of three years. The repayment assistance you receive depends on your overall debt load.
|Total Debt||Overall Award Limit||Yearly Payment|
|$75,001 – Over||$30,000||$10,000|
|$40,001 – $75,000||$18,000||$6,000|
|$15,001 – $40,000||$9,000||$3,000|
|$15,000 – Below||$4,500||$1,500|
The Janet L. Hoffman Loan Assistance Repayment Program offers some of the most generous loan repayment terms. However, the program has stringent eligibility requirements. To find out more about your eligibility, visit the Maryland Higher Education Commission website.
Mississippi Graduate Teacher Forgivable Loan Program (GTS)
The Graduate Teacher and the Counseling and School Administration Forgivable Loan Program (GTS/CSA) was established to encourage classroom teachers at Mississippi’s public schools to pursue advanced education degrees.
Disclaimer: Due to budget constraints, only renewal applicants will be offered funds from the GTS program for the 2017-18 school year. No awards will be made to new applicants. It’s not clear whether the GTS program will resume offering funds to new applicants in the future.
Current full-time Mississippi public school teachers earning their first master’s degree and Class ‘AA’ educator’s license in an approved full-time program of study at a Mississippi college or university are eligible for the GTS program.
Selected applicants are awarded $125 per credit hour for up to 12 credit hours of eligible coursework.
Mississippi Teacher Loan Repayment Program (MTLR)
The Mississippi Teacher Loan Repayment Program, or MTLR program, helps teachers pay back undergraduate student loans for up to four years or $12,000.
Disclaimer: Due to budget constraints, only renewal applicants will be offered funds from the MTLR program for the 2017-18 school year. No awards will be made to new applicants. It’s not clear whether the MTLR program will resume offering funds to new applicants in the future.
Mississippi teachers who currently hold an Alternate Route Teaching License and teach in a Mississippi teacher critical shortage area or in any Mississippi public or charter school if teaching in a critical subject shortage area are eligible for the MTLR program. Perkins and Graduate-level loans are not eligible for repayment.
Recipients can receive a maximum $3000 annually toward their undergraduate loans for up to four years or $12,000.
Montana Quality Educator Loan Assistance Program
The Montana Quality Educator Loan Assistance Program encourages Montana teachers to serve in high-needs communities or in subject areas with critical shortages. The program provides direct loan repayment for teachers who meet the requirements.
Licensed Montana teachers who work in “impacted schools” in an academic area that has critical educator shortages. Impacted schools are more rural, have more economically disadvantaged students, or have trouble closing achievement gaps.
Montana will repay up to $3,000 a year for up to four years.
New York City Teach NYC
Teachers hired by the New York City Department of Education who work in specified shortage positions can receive up to $24,000 in loan forgiveness over the course of six consecutive years.
Teachers must work in a New York City school in one of the following designated shortage areas:
- Bilingual special education
- Bilingual school counselor
- Bilingual school psychology
- Bilingual school social worker
- Blind and visually impaired (monolingual and bilingual)
- Deaf and hard of hearing
- Speech and language disabilities (monolingual and bilingual)
The NYC Department of Education will forgive one-sixth of your total debt load, each year for up to six consecutive years. The maximum award in one year is $4,000. The maximum lifetime award is $24,000.
North Dakota Teacher Shortage Loan Forgiveness Program
The North Dakota Teacher Shortage Loan Forgiveness Program encourages North Dakota teachers to teach in grades or content levels that have teacher shortages.
The North Dakota Department of Public Instruction identifies grades and content areas with teacher shortages. Teachers who work full time as instructors in those grades and content areas in North Dakota can receive loan forgiveness.
Teachers can receive up to $1,000 per year that they teach in a shortage area. The maximum lifetime award is $3,000.
Oklahoma Teacher Shortage Employment Incentive Program
Oklahoma’s Teacher Shortage Employment Incentive Program, or TSEIP, is a legislative program carried out by the Oklahoma State Regents for Higher Education to help attract and keep mathematics and science teachers in the state.
Oklahoma state-certified classroom teachers who are not yet certified to teach math or science are eligible for TSEIP. Teachers must also agree to teach in an Oklahoma public secondary school for at least five years.
TSEIP reimburses eligible student loan expenses or a cash equivalent. The amount reimbursed varies from year to year.
Teachers can find more information on about the TSEIP on the Oklahoma State Regents for Higher Education website. Fill out and submit the Participation Agreement Form to your institution’s TSEIP coordinator no later than the date of your graduation from a four-year college or university in Oklahoma.
South Carolina: Teachers Loan Program
The South Carolina Teachers Loan awards forgivable student loans to students studying to become public school teachers. The program was created as an incentive for state residents to pursue teaching careers.
South Carolina school teachers and residents enrolled at least half-time at an accredited institution. Students must already be enrolled in a teacher education program or express an intent to enroll in a teacher education program. If already certified, you must seek an initial certification in a different critical subject area.
Freshmen and sophomore recipients can borrow $2,500 for each year, all other recipients can borrow $5,000 each year, up to $20,000. Loans are forgiven only if teachers work in an area of critical need.
South Carolina Career Changers Loan
The South Carolina Career Changers Loan awards forgivable student loans state residents who wish to change careers to become public school teachers. The program was created as an incentive for state residents to pursue teaching careers.
South Carolina residents who meet all requirements for the Teachers Loan, and have had a baccalaureate degree for at least three years. In addition, you must have been employed full-time for at least three years.
Recipients can borrow up to $15,000 per year up to $60,000.
South Carolina PACE Loan
The South Carolina Program of Alternative Certification for Educators (PACE) loan reimburses individuals who have completed a PACE program. Those who are interested in teaching who have not completed a teacher education program may qualify to participate in the PACE program.
Teachers must be enrolled in the South Carolina Program of Alternative Certification for Educators (PACE) program and have received an Educator’s Certificate for the current year. You must be teaching full-time in a South Carolina public school.
Participants can borrow up to $750 per year, capped at $5,000.
Tennessee Math & Science Teachers Loan Forgiveness
The Tennessee Math & Science Teacher Loan Forgiveness Program is offered through the Tennessee Student Assistance Coalition. The program awards up to $10,000 of forgivable loans to public school teachers working toward an advanced degree in math or science or earning a certification to teach math or science.
Recipients are awarded $2,000 per academic year up to $10,000.
Teach for Texas Loan Repayment Assistance Program
The Teach for Texas Loan Repayment Assistance Program encourages Texas teachers to serve high-needs areas. Qualified teachers can receive up to $2,500 in loan repayment per year with no lifetime maximum.
Any Texas-based teacher with outstanding loans can apply for loan repayment assistance. However, funds are given out with priority to teachers who work in shortage subjects in schools with at least 75% economically disadvantaged students. Shortage subjects include ESL, math, special education, science, career education, and computer science.
If funds remain, they are given out in the following order:
- Teachers who work in areas with 75% or more economically disadvantaged students in nonshortage subjects.
- Teachers who work in shortage subjects in schools with 48.8%-75% economically disadvantaged students.
- Teachers who demonstrate financial need.
Eligible teachers can receive up to $2,500 in loan forgiveness each year with no lifetime maximum.
West Virginia Underwood-Smith Teacher Scholarship Loan Assistance Program
West Virginia teachers who work in critical need positions may qualify for the Underwood-Smith Teacher Scholarship Loan Assistance Program. This scholarship helps qualified teachers pay back student loans.
Teachers and school professionals who work in a designated critical position can qualify for the Underwood-Smith scholarship. Critical positions include all teachers in underserved districts and certain teachers who teach subjects with designated shortages.
Qualified teachers can receive up to $3,000 per year in federal loan forgiveness and up to $15,000 over their lifetime.
Pros & Cons of Student Loan Forgiveness
While some or all of a student loan balance magically disappearing is a dream for many Americans, student loan forgiveness programs aren’t always a walk in the park. Here are the pros and cons.
Pro: Poof! Your debt is gone.
A huge upside of student loan forgiveness is obvious: borrowers can get rid of a significant amount of student loan debt. Beware of caps on the total amount of debt that can be forgiven with some programs. For example, the federal government’s Teacher Loan Forgiveness Program caps loan forgiveness at $17,500.
It’s tough to first qualify and then remain eligible for student loan forgiveness. For example, teachers are eligible for the federal Teacher Loan Forgiveness program, but those who got teaching degrees before 2004, only qualify to have $5,000 worth of loans forgiven. To top that, borrowers must also remember to update their repayment plans each year or risk losing eligibility for the program.
Pro: No tax…sometimes.
The federal repayment plans don’t tax the forgiven amount as income, so you won’t need to pay taxes on the forgiven balance there. However, other programs may not grant the same pardon. If your loans are repaid through a different program, you might be required to count the money received towards your income and pay taxes on it. Look at the program carefully and prepare to set aside funds in case you do need to pay up.
Con: Limited job prospects
Loan forgiveness is give and take. You might be limited to teaching in a particular subject or geographic location for a period of time in order to get your loans forgiven. This could mean relocating your family or a long commute if you unable to live near the location. If you fall out of love with teaching, you might be stuck with the job, just to get your loans paid off.
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