What Teachers Should Know About Loan Forgiveness Programs

Last year, students loans made up the highest delinquency rate of any kind of household debt. It is safe to say that many graduates are struggling to pay back their school loans. But if you’re a teacher, you might be in luck! The Teacher Student Loan Forgiveness program may allow you to have some of your student loan debt forgiven—but there are specific rules and strict repayment schedules you will need to follow. Today’s blog post takes a look at loan forgiveness rules for educators in New Jersey.

 

In order to take advantage of the Teacher Student Loan Forgiveness program, you need to have one of these loans: a Subsidized Federal Stafford Loan, an Unsubsidized Federal Stafford Loan, or a Federal Direct Consolidation Loan. It’s also important to note that you cannot qualify for loan forgiveness if you are in default on your loan unless you have previously made arrangements with you loan provider for a repayment plan going forward. Under the Teacher Student Loan Forgiveness program, administrative staff, school counselors, librarians, and other school staff are not considered “teachers” and therefore are not eligible for loan forgiveness.

 

However, even if you meet all of the above criteria, you must have worked as a full-time teacher at a low-income school for five academic years consecutively after the 1997-1998 school year to qualify for the program. (Did you catch all that?) The award amount you will receive depends on the subject you teach, how long you have been teaching, and what level of qualifications you have. The maximum award for science, math, and special education is $17,500, while all other subject educators can receive a maximum of $5,000. You can apply online at ifap.ed.gov.

 

Considering not many teachers will qualify for the Teacher Student Loan Forgiveness program, and those that do may still have a lot of debt left, it is a good idea to look into alternatives for teacher loan forgiveness. Luckily, you can stack loan forgiveness programs, but typically you cannot apply for more than one loan simultaneously. Take the time to look over all of your options to ensure that you are choosing the right loan forgiveness program or programs for you. Here are some of the more common loan forgiveness programs for teachers:

 

Perkins Loan Teacher Cancellation: This forgiveness program is specifically designed for teachers with Perkins loans. While the Perkins Loan Program ended in 2017, if you have outstanding Perkins loans, you could qualify to have 100% of the loan canceled over a period of time. You must teach at either a low-income school or within the following subjects: math, science, foreign languages, special education, or a subject that is experiencing a shortage of qualified teachers in your state. To apply, you will need to contact your alma mater for the specific rules of the Perkins Loan.

Public Service Loan Forgiveness: With only 1% of applicants getting accepted to the program, there is a very specific criteria that must be met for Public Service Loan Forgiveness. While teachers are not limited to specific schools or subjects, there are four major criteria that must be met.

1. Your loans must be federal direct loans.

2. You must have an income-driven repayment plan.

3. You must be employed by a qualifying employer, AND

4. You must have already made at least 120 payments (or 10 years of monthly payments). The online Public Service Loan Forgiveness tool will help you determine if you qualify and allow you to apply if you meet all qualifying criteria.

State and School Forgiveness Programs: Every state has at least one student loan forgiveness program for those who work in public service fields. Colleges and universities also sometimes provide teacher loan forgiveness programs. Reach out to your alma mater’s financial aid or alumni office to find out if they sponsor and loan forgiveness programs.

If you are a teacher struggling to pay back your student loans, these forgiveness programs can help you get ahead of your debt. If you have student loans that do not qualify for these forgiveness programs, Veitengruber Law can help. Our debt resolution team offers individualized advice and comprehensive debt solutions to get you back on the road to financial health.