Teachers with federal student loans have four loan forgiveness program options: Public Service Loan Forgiveness, Teacher Loan Forgiveness, Perkins Loan cancellation for teachers, and state-sponsored student loan forgiveness programs. Read on to learn which ones you may be eligible for and tips for weighing the options.
1
Public Service Loan Forgiveness (PSLF) Program
PSLF forgives the remaining balance on your federal Direct Loans after 120 qualifying payments (estimated over10 years).
Unlike other programs, PSLF does not require you teach at a low-income public school. Instead, PSLF requires that you work for qualifying employer. This includes government organizations at any level (U.S. federal, state, local, or tribal), not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code, or other not-for-profit organizations that provide certain types of qualifying public services.
You must have Direct Loans. If you have other types of federal loans, like FFEL or Perkins Loans,you must consolidatein order for those loans to qualify. Visit your dashboard to check which types of loans you have.
You should repay your loans on an income-driven repayment (IDR) plan if you want to get the most value out of the program. You canapply for an IDR plan online.
In order for payments to count toward the 120 needed to get forgiveness,you must meet specific requirements. Loan amounts forgiven under PSLF are not considered taxable by the IRS.
View complete program details atStudentAid.gov/publicservice.
Use the PSLF Help Tool to confirmwhether you qualify for the programand check if your previous payments have counted.
2
Teacher Loan Forgiveness (TLF)
TLF forgives up to $17,500 of your Direct or Federal Stafford Loans after 5 complete and consecutive years of teaching at a qualifying school.
To qualify for TLF,
- you must have been employed as a full-time teacher at aneligible schoolfor five complete and consecutive academic years, and
- at least one of those years must have been after the 1997–98 academic year.
Certain highly qualified special education and secondary mathematics or science teachers can qualify for up to $17,500 in forgiveness. Other eligible teachers can qualify for up to $5,000.
PLUS Loans and Perkins Loans are not eligible to be forgiven through this program.
Any time you spent teaching to receive benefits through AmeriCorps cannot be counted toward your required five years of teaching for TLF.
To maximize your forgiveness amount, you canapplyfor aTeacher Loan Forgiveness Forbearance,which means you will not have to makemonthlyloan payments(however,interest will still accrue).Borrowers who have a loan balance that is greater than theTLFamount they are applying (either 17,5000 or $5,000) for are not eligible for this forbearance type.
For example, Jane teaches special education at an eligible low-income school, and her loan balance is $10,500.She is planning on qualifying for Teacher Loan Forgiveness in 5 years to pay off her loan balance. But she doesn’t want to make payments in the meantime because lowering her loan balance will reduce her loan forgiveness amount. Jane decides to apply for aTLFForbearanceso she doesn’t have to make payments on her loans and so she can receive as much loan forgiveness as possible.
Youapply forTLFafteryou have completed the five-year teaching requirement. Learn more about the TLF Program.
For example, say Ally Hernandez teaches at a low-income school as a science teacher with a biology degree. She’s been teaching 6 years full time and her current loan balance is $17,500. She’ll benefit most from the Teacher Loan Forgiveness Program. On the other hand, Josh Collins teaches at a public school as a media teacher with an education degree and a Masters in English. He’s spent two years teaching full time, and his current loan balance is $60,000. His ideal option is the PSLF Program.
3
Perkins Loan Cancellation for Teachers
This program forgives up to 100% ofyour Federal Perkins Loan(s) if you teach full-time at a low-income school or if you teach certain subjects.
This program can only forgive your Federal Perkins Loans. Visit your dashboard to check if you have Perkins Loans.
If you are eligible for this program, up to 100% of the loan may be canceled for teaching service, in the following increments:
- 15% canceled per year for the first and second years of service
- 20% canceled for the third and fourth years
- 30% canceled for the fifth year
- Each amount canceled per year includes the interest that accrued during the year.
To find out if a school is classified as a low-income school, check ouronline databasefor the year(s) you’ve been employed as a teacher.
Even if you don’t teach at a low-income school, you may qualify if you teach mathematics, science, foreign languages, bilingual or special education, or a different subject determined by your state education agency to have a shortage of qualified teachers in your state.
Private school teachers can qualify if
- the school has established its nonprofit status with the Internal Revenue Service (IRS) and
- the school is providing elementary and/or secondary education according to state law.
Learn more about Perkins Loan cancellation. To apply for Perkins Loan cancellation, contactholder of your Perkins Loanfor next steps.
4
State-Sponsored Student Loan Forgiveness Programs
Many states offer loan forgiveness programs for teachers—especially if you teach in a high need area. Reach out to your state’s education agency for more details.
How-to Weigh Your Forgiveness Options
See a text-only version the image above, “Two Loan Forgiveness Options for Teachers.”
Trying to decide whether to pursue PSLF or TLF first? Compare the total amount you’d pay over the life of the loan under each program by usingLoan Simulator.
You can alsoconsult your federal loan servicer. Your servicer can give you advice based on your specific situation and finalize any changes you need to make to your repayment plan.
If You Qualify for More Than One Program
You may qualify for more than one of the federal forgiveness programs above. But in some instances, your decision to take advantage of one program may impact your ability to take advantage of another. So be sure you look at them all carefully.
You must have Direct Loans in order to qualify for PSLF. If you have any Perkins Loans, you may be tempted to consolidate them into the Direct Loan Program in order to make them eligible for PSLF. However, if you do that, you’ll no longer qualify for Perkins Loan cancellation. You may be better off leaving your Perkins Loans out of the consolidation loan so you can take advantage of both programs.
You may not receive a benefit under both the TLF Program and the PSLF Program for the same period of teaching service. For example, if you make payments on your loans during your five years of qualifying employment for TLF and then receive loan forgiveness for that service, the payments you made during that five year period will not count toward PSLF.
Some people could benefit from both PSLF and TLF. For example, receiving TLF after 5 years and PSLF after 15 years. This is a rare situation that is ideal for a borrower with a higher loan balance and a lower annual gross income (AGI).
Make sure you consider your unique situation as you decide what forgiveness program to pursue!
