It’s hard to keep track of all the alternative forgiveness options available to student loan borrowers. Many exist based on occupation, state and type of loan. The nuances of each program are confusing, especially when it comes to federal teacher loan forgiveness.
To qualify, you need to:
- have Direct or FFEL student loans
- be a “highly qualified teacher” in a school or agency categorized as low-income or Title I
- teach for five consecutive years
Up to $17,500 will be forgiven after five years depending on the subject taught and the type of schooling (secondary vs. elementary).
- You can’t overlap Public Service Loan Forgiveness and Teacher Loan Forgiveness
- PLUS loans and Perkins aren’t eligible, even if consolidated
If a borrower elects to do both PSLF and Teacher forgiveness, it will take 15 years to complete the program from start to finish.
When is this program useful?
Teacher Loan Forgiveness is a game changer in a number of cases:
- Teachers who don’t want to teach for more than five years in a PSLF-eligible employer
- Teachers who have a small amount of loans (less than $17k)
- Teachers in the Standard, Extended or Graduated plans
- Teachers whose Adjusted Gross Income is higher than their debt burden.
As an example, let’s take a look at Clint — a science teacher working in a low-income middle school in Arizona. He makes $75k / year, has $40k in Direct loans and started teaching in late 2016.
He’s on the Extended Repayment Plan, which will take 25 years to pay off and cost him $79,283.63 in the process.
With Teacher Loan Forgiveness, Clint will have $17,500 of his loans forgiven June, 2021, saving him $32,410.60 compared to his original payment plan. That is a massive difference!
Running Clint’s numbers on Payitoff
We’ve made it dead simple to determine eligibility and savings for the Teacher Loan Forgiveness program.
Navigate to “Forgiveness Programs” and enter the teaching history. You can also search for the school to confirm that it’s eligible for the program:
We’ll determine the teaching requirements for that state, which of their loans are eligible, and how much will be forgiven.
You’ll automatically see the savings once you generate a report:
Applying for Teacher Loan Forgiveness
After five consecutive academic years, fill out this form to apply for the Teacher Loan Forgiveness program.
Make sure you specify which loans you want forgiven, otherwise the servicer will choose for you. On Payitoff, our forecasts apply forgiveness to eligible loans starting with the highest interest rate unless you specify a different order.
If you are applying for forgiveness of loans that are with different loan servicers, you must submit a separate form to each of them.
We hope this feature set helps you save time when determining the tradeoffs of Teacher Loan Forgiveness. If you have questions or product ideas, feel free to shoot us an email! We love love love feedback. 😃
Thanks to Nicolle Matson