Teacher Student Loan Forgiveness
Recent changes to the U.S. Department of Education’s Public Service Loan Forgiveness Program (PSLF) will help qualifying teachers reduce their student loans more quickly.
Paying down any debt we have with the goal of eliminating debt from our life altogether is one of the most essential steps in building a secure financial future. However, the debt elimination process can seem hopeless when we are working to pay down a really large debt such as a home mortgage or our student loans.
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How can teachers get rid of student loans?
On October 6, 2021, the U.S. Department of Education announced a temporary period during which borrowers who did not previously qualify for the PSLF or Temporary Expanded Public Service Loan Forgiveness (TEPSLF) programs may receive credit for payments that previously did not qualify. The dollar amount of student loan forgiveness educators can receive ranges from $5,000 to $17,500.
Who qualifies for teacher loan forgiveness under the program guidelines?
- You must have been employed full time for five complete and consecutive years, and at least one of these years must have been after the 1997-1998 academic year.
- You must have a bachelor’s degree and full state certification as a teacher. Your certification or licensure requirements cannot have been waived on an emergency, temporary, or provisional basis.
- You must have been employed at an elementary school, secondary school, or educational service agency that serves low-income students.
How do teachers know if they are teaching at a low-income school or educational service agency?
To qualify for loan forgiveness, the school or educational agency employing you must be listed in the U.S. Department of Education’s Teacher Cancellation Low Income Directory (TCLI). My experience in searching for different schools indicates two things.
- This directory can be a bit tricky to navigate, and entering the wrong search terms can result in a qualifying school not showing up in the results.
- Qualifying as a “low income” school is not as difficult as I thought it would be!
If you experience problems finding a particular school, try entering just the name of the city in which the school is located. Doing this will result in a longer list you will have to look through, but it should insure that a qualifying school is not eliminated due to an error in the search. For example:
This page on the U.S. Department of Education’s Federal Student Aid website provides an extensive explanation of all of the requirements related to teaching at a “low income” school.
How and when do teachers apply for teacher loan forgiveness?
After you complete the five consecutive years of qualifying teaching this program requires, you apply for teacher loan forgiveness by submitting a completed Teacher Loan Forgiveness Application. The certification section on the application will be completed by the principal at your school or the educational service agency where you completed your qualifying teaching service. If you working with more than one loan servicer, you must complete a separate application for each one.
Is teacher loan forgiveness taxable?
Information provided on the U.S. Department of Education’s website states that teacher loan forgiveness is not taxable. This, of course, is fabulous news because the lower our taxable income, the more money we have to put toward achieving our saving and investing goals!
How can teachers improve their chances of qualifying for student loan forgiveness?
Although the U.S. Department of Education’s changes to the PSLF program will increase the number of teachers who can qualify for loan forgiveness, errors in completing your application could disqualify you from receiving the help for which you qualify. This article on Forbes.com offers helpful advice on how you can improve your chances of qualifying for loan forgiveness.
Also, if you are a member of the National Education Association (NEA), you can receive one year’s worth of premium access to Savi, an online student debt navigator tool. Signing in allows you to receive personalized advice from student debt experts as well as to gain access to Savi’s e-filing function, which eliminates many common mistakes that keep applicants from receiving student loan forgiveness.
Are there other ways teachers can qualify for student loan forgiveness?
The American Federation of Teachers (AFT) offers a searchable database connecting educators with opportunities for loan forgiveness and other types of funding. Searching within the AFT’s database to see if you are eligible for forgiveness or other funding opportunities will only take you a few minutes and could save you a lot of money!
Conclusion
In The Beginner’s Guide to Managing Money, I include the elimination of debt as one of the essential steps you must take as you build financial stability and work toward financial independence. Getting some help with having part or all of your student loan debt paid off will bring you closer to living debt free and achieving all of your financial goals.
If you think you might qualify for student loan forgiveness under the Public Service Loan Forgiveness Program (PSLF), get started with the application process sooner rather than later. Similarly, be sure to check the American Federation of Teachers’ (AFT) searchable database for loan forgiveness and other types of funding opportunities as well.
Share this information about student debt forgiveness with all of your teacher friends! Given that teacher salaries are much lower than the value a teacher’s work contributes to a community as well as to society as a whole, they should be able to get help eliminating their student loan debt.
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