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Educators are among the most important and vital people in the world. They shape the spirit of youth and help us all become smarter people. But to become teachers, many Americans pile up thousands of dollars in student loan debt – and then go to work to earn less than they could in the private sector.
However, teachers have debt relief opportunities thanks to government assistance, including student loan cancellation programs. We’ll show you how teacher loan forgiveness works and how you can qualify for it.
Teacher Loan Programs
There are two types of teacher loan forgiveness: the teacher loan program and the public service loan program.
Forgiveness of teacher loans
Teacher Loan Forgiveness is a federal program for educators working in low-income schools that provides up to $ 17,500 in student loan forgiveness. You can qualify if:
- You have been a full-time teacher for at least five consecutive years.
- You work at a primary or secondary school or an agency that looks after low-income students.
- You have direct federal student loans or Stafford loans that are not in default.
This program is only available to “Highly Qualified Teachers”, who the Department of Education defines as those who have earned at least a bachelor’s degree, have received full state certification as a teacher, and have not waived any certification or license.
The entire $ 17,500 is reserved for highly skilled math or science teachers in secondary education or special education teachers. All other teachers who otherwise qualify may be waived loans of up to $ 5,000 under this program.
Granting of loans to the public service
Public Service Loan Forgiveness (PSLF) is a lending program for public service employees such as B. in government and non-profit sectors, as well as for teachers.
After you’ve made 120 monthly qualifying student loan payments – or payments for about 10 years – the government will waive the balance of your direct loans. To qualify, you must:
- Work full-time for a state (federal, state, municipal, tribal) agency or nonprofit organization
- Have qualifying direct loans that are on an income-oriented repayment plan (IDR)
- You have made at least 120 qualifying payments on your loans.
You will not be able to make qualifying loan payments if your loan has been deferred or deferred, you are currently enrolled in a school, or you are on the grace period of your loan. Your payments do not have to be consecutive to count towards PSLF, but you cannot pre-qualify for PSLF by making larger payments.
Can you get both award options?
Yes, you can receive both teacher loan allocation and government loan reimbursement if you qualify for both.
While you can qualify for both programs, you must have two separate class times. For example, if you apply for a teacher loan after five years and that money is given, you will not be able to use those five years in public service lending. To qualify for PSLF, you must make 120 additional qualifying payments after your teacher loan grant.
In general, you can expect to have about 15 years of payments to receive both types of forgiveness.
How to Apply for a Teacher Loan Program
To apply for a teacher loan, you must submit the teacher loan application to your loan service provider. Your school or education authority must vouch for your certification. If you have multiple loans from different service providers, you will need to fill out an application for each one.
Before submitting an application for public service loan waiver, you can verify your eligibility using the PSLF Help Tool and Certificate of Employment Form process. Both of these act as a guide to make sure you are on the right track. Rather than believing you’ve made enough payments or are working for the right employer, these tools confirm that you are doing it right.
When you’re ready, you can mail or fax your completed PSLF and Employer Certification to the U.S. Department of Education.
Government student loan allocation programs for teachers
If you don’t qualify for state forgiveness programs or seek additional help, you can qualify for state help.
Each state has different award programs and eligibility requirements. The American Federation of Teachers provides a searchable database to find award options in your state. You can search by subject area, grade level, educational position, and more.
It is important to read through all of your various country-level options. You can qualify for several different award programs, but you may not be eligible to apply for all of them. Talk to your loan service provider about which options are best for you based on the type of credit you have, how much you owe, and where you live.
Alternatives to the Student Loan Program
Not everyone is entitled to a teacher loan waiver. Whether you work at a different type of school or need a little more help, there are other ways you can reduce the burden of student loans.
Income-oriented repayment plans
Income-oriented repayment plans are available for federal student loan borrowers, and payments are made based on your household income and family size. How much you pay is between 10% and 20% of your disposable income. Your remaining balance after 20 or 25 years of payments – depending on the IDR plan – will be waived.
If you are applying for public service loans, you still need to put your loans on an income-based repayment plan. If something happens to your PSLF track – like when you quit working for a skilled employer – you may still get loan waivers, but it may not happen as quickly as it does with PSLF.
While refinancing your student loan won’t put you on a path of forgiveness, it could lower your monthly payments or interest rates, or it could allow you to pay off your loan sooner.
Refinance is when you take out a new loan to replace your old one and then make a monthly payment on your new loan. If you have great credit, you may be able to qualify for the lowest interest rate available from private lenders. Just keep in mind that if your interest rate is not lower than what you are currently paying on federal student loans, if you have to pay more in the long run, it may not be worth refinancing your loan.
Refinancing your loans also means losing the protection and options you would get with federal loans. For example, deferral and deferral are not offered by all private lenders. So, if you can’t afford to make payments, or need to pause payments for whatever reason without penalty, the only way to get these options is with federal student loans. When you refinance, your loans become private. Only refinance if it makes sense for your financial situation.