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How to Know If Teacher Loan Forgiveness Is Worth It

As an educator, you have several options to get teacher loan forgiveness. Having your student loan debt wiped out seems like a good thing, but you need to know what you’re getting into when you pursue loan forgiveness.

Each federal loan forgiveness program has different qualifications and guidelines. The right program for you depends largely on your total amount of debt, current and future employment and life goals. Certain tax implications could even affect whether a forgiveness option is right for you.

Is teacher loan forgiveness even the best option to handle your student loan debt? Read on to learn about student loan forgiveness for teachers and other options to pay off your student loans.

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Teacher Loan Forgiveness has narrow benefits

The federal Teacher Loan Forgiveness Program is popular among teachers looking for relief from their student loan debt. However, it's designed to encourage borrowers in the teaching profession to work in areas with a shortage of qualified teachers. So, the program has strict requirements.

You can qualify for up to $17,500 in loan forgiveness after working five consecutive academic years as a full-time teacher in a low-income qualifying school or educational service agency if you meet additional eligibility requirements.

For teachers outside of those requirements, you might still qualify for loan forgiveness help but only up to $5,000.

Are you eligible for the Teacher Loan Forgiveness program?

Here are the main requirements for Teacher Loan Forgiveness, according to Student Federal Aid, an Office of the U.S. Department of Education:

  • You must have taught full time for five complete and consecutive years. One of those years must have been after the 1997-98 academic year.
  • You must be a highly qualified teacher at a qualifying school. Use this Teacher Cancellation Low Income (TCLI) directory to search for your school or agency.
  • Your loan(s) must be from before the end of your five-year period of qualifying teaching service.

Who is considered a highly qualified teacher? A highly qualified teacher is one who:

  • Has received a bachelor’s degree
  • Maintains full state certification in the state where they teach
  • Hasn't had any licensing or certification requirements waived for any reason

If you are a highly qualified special education teacher at the elementary or secondary education level or a secondary mathematics or science teacher, you may qualify for up to $17,500 in forgiveness.

Other teachers of any grade level can receive up to $5,000 in loan forgiveness.

Teachers can apply for loan forgiveness after completing the five-year period teaching requirement. Note that PLUS loans and Perkins loans are not eligible for the Teacher Loan Forgiveness program. 

For more detailed information on this particular type of student loan forgiveness for public and private school teachers, visit the Federal Student Aid website.

If you’ve confirmed your eligibility, you need to fill out the Teacher Loan Forgiveness Application. Be aware that one of your school administrators (e.g. superintendent or human resources staff) will need to complete a section of the form. If you have qualified full-time employment at multiple qualifying schools, you'll need the “chief administrative officer” of each site to complete the section.

Public Service Loan Forgiveness for teachers

Teachers looking for student loan forgiveness options also can look into Public Service Loan Forgiveness (PSLF). According to the Department of Education, PSLF “has the broadest employment qualification requirements of the federal programs listed — it doesn’t require that you teach at a low-income a public school or even be a teacher. Most full-time public and private elementary and secondary school teachers will meet the employment requirements.”

PSLF is a federal student loan forgiveness open to anyone with qualifying Federal Direct Subsidized or Unsubsidized Loans and who meets all the program requirements. Those requirements are:

  • Have student loans through any federal income-driven repayment programs.
  • Make 120 qualifying payments on your student loan. A qualifying payment is one that is paid on time and in full. The 120 payments do not need to be consecutive.
  • Work for a government or qualifying employer while making qualifying payments, as well as during the application process.

Which repayment plans qualify for PSLF?

All four income-driven repayment (IDR) plans qualify for PSLF, including Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), Income-Based Repayment (IBR) and Income-Contingent Repayment (ICR).

Technically, the standard 10-year payment plan qualifies for PSLF as well. However, your student loan payments aren’t lowered within the Standard Repayment Plan. So, your student loan debt would be paid off by the time you reached 120 payments.

Other repayment plans that do not qualify for PSLF include the:

  • Graduated Repayment Plan
  • Extended Repayment Plan
  • Alternative Repayment Plan

PSLF requires you to have Direct loans. If your student loans are non-Direct federal student loans, you’d need to first consolidate them into a Direct Consolidation Loan. If you have both types of loans, it's best to only consolidate your non-Direct loans. Any payments made on your Direct loans prior to consolidating would no longer count toward your 120-loan-payment count.

Although some student loan forgiveness programs are taxable, PSLF is not. Forgiven loans aren’t considered income by the Internal Revenue Service.

To apply for PSLF, you need to fill out and submit the PSLF Application for Forgiveness. Another important step in qualifying for PSLF is submitting the Employment Certification Form annually, as well as any time you change employers.

Teacher Loan Forgiveness vs. PSLF

Any teacher with student loans would love an easy way to wipe out that debt and create more financial freedom. Debt elimination would not only remove a giant stress in your life but also free up money for other life goals like buying a home, starting a family and saving for retirement.

Federal teacher loan forgiveness has strict requirements to be eligible for the full $17,500 in loan forgiveness. The alternative $5,000 option is helpful. But if you have over $25,000 in student loan debt, you'll still have a hefty remaining balance to pay off.

Another potential issue is not picking the right program and sabotaging your chances for more funds. Technically, you can receive loan forgiveness through the Teacher Loan Forgiveness Program as well as PSLF. But there is a catch.

According to the Federal Student Aid website, “you can potentially receive forgiveness under both the Teacher Loan Forgiveness Program and the Public Service Loan Forgiveness Program, but not for the same period of teaching service.”

In other words, if you work for five qualifying years to receive Teacher Loan Forgiveness, you can’t count any of the payments made during that time period toward your required 120 qualifying payments for PSLF. This rule adds five more years of payments to your financial strategy if you wanted to pursue both programs.

How to choose between loan forgiveness options

Considering the rule that payments made for the Teacher Loan Forgiveness Program can’t also count as PSLF payments, it would make more sense to just start out pursuing PSLF instead of Teacher Loan Forgiveness. PSLF is less strict in regard to teaching qualifications. But it also would wipe out your entire student loan debt, not just a portion of it.

A drawback to PSLF, though, is that you need to make 10 years of qualifying payments in order to be eligible. What if your career goals change or you decide to stop teaching? A lot can change in the life of a teacher in 10 years.

Related: Teacher Loan Forgiveness vs. Public Service Loan Forgiveness for Teachers: Which Is Better?

Why PSLF is usually better than Teacher Loan Forgiveness

Imagine you're a teacher with $50,000 in student debt. You're a highly qualified math teacher at the high school level. You could get $17,500 in total forgiveness.

You earn $40,000 per year, have two kids and a spouse who earns about the same amount of money as you do. Your spouse has no student debt.

You could go for the Teacher Loan Forgiveness Program and earn $17,500 forgiven in the first five years. Of course, you'd still have a $32,500 balance leftover. Then you'll need to make payments for an additional 10 years to have your loans forgiven through PSLF. You can't double-count service for both programs.

Pursue PSLF from the beginning

Instead, you could forgo Teacher Loan Forgiveness and just utilize PSLF from the start.

If you filed married filing separately for taxes and had inflation level raises on your $40,000 salary, your first Pay As You Earn (PAYE) payment as a teacher would be $74 a month.

Over 10 years, you'd pay a total of $10,123 under PSLF as a teacher.

By comparison, if you did Teacher Loan Forgiveness, you would have $17,500 wiped away, but you'd still owe your balance plus whatever interest had accrued.

You're better off paying $10,000 over 10 years toward PSLF than being left with $30,000 to $40,000 after Teacher Loan Forgiveness.

Hence, Teacher Loan Forgiveness is pretty useless if:

  • You plan on having a career in teaching.
  • You owe more than $30,000.
  • The debt you have is mostly federal student loans.

It's ironic the program named for teachers is useless for most teachers compared to the more generically named PSLF program.

PSLF and Teacher Loan Forgiveness are the most common programs for loan forgiveness. But teachers have other options, too. Picking the right option will depend on your specific situation, with each program having benefits for certain teachers.

Other loan forgiveness options for teachers

Teachers looking for relief from student loans have other options available. Factors like what type of student loans you have and where you reside play a role in determining which programs are available to you.

Federal Perkins Loan cancellation

If you have Perkins loans, you can potentially have your loans canceled up to 100% through the Federal Perkins Loan Cancellation program. In order to qualify, you must be:

  • A teacher serving students of low-income families; or
  • A special education teacher (including teachers of infants, toddlers, children or youth with disabilities); or
  • A math, science, foreign language or bilingual education teacher or be a teacher in another field in one of your state's teacher shortage areas.

To find out if your school of employment is classified as a low-income school, check the federal TCLI directory.

Up to 100% of the loan may be canceled for full-time teaching service based on the number of years of service you have. Here are the tiers of service-based cancellation through the federal Perkins loan program:

  • 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

Any canceled amount includes interest accrued during that year of service.

For more information and to apply for Perkins Loan Cancellation, teachers need to contact the school that made the loan or to the school’s Perkins Loan servicer.

Income-driven repayment plans

If you are a teacher who doesn’t qualify for one of the other federal loan forgiveness options listed above, there is another way to get your loans forgiven. You would need to move your student loan payments to one of the four eligible income-driven repayment options.

Under an IDR plan, after making payments for 20 to 25 years, any remaining student loan debt is forgiven. The four IDR plans are:

  • Pay As You Earn (PAYE)
  • Revised Pay As You Earn (REPAYE)
  • Income-Based Repayment (IBR)
  • Income-Contingent Repayment (ICR)

The drawback to pursuing this type of loan forgiveness is that there are potential tax implications when your loans are forgiven. Because forgiven loan debt through IDR is considered taxable income, you might face a hefty tax liability — do your research and weigh the pros and cons before making any decision to pursue teacher loan forgiveness this way.

State-based loan repayment programs

In addition to federal loan forgiveness programs, certain individual states have teacher cancellation benefits to help educators pay off student loan debt. Programs vary from state to state. Here are two available state-based programs:

Illinois Teachers Loan Repayment Program

The Illinois Teachers Loan Repayment Program allows for teachers working in the state to receive up to $5,000 if they already received funds through the federal loan forgiveness program but still have a balance remaining on their loans. Teachers have to fulfill their five-year teaching obligation in an Illinois elementary or secondary school designated as a low-income school.

My family’s experience with loan forgiveness for teachers

My wife, Barb, is a public school teacher in Ohio who has been teaching for over 17 years. When she pursued her bachelor’s degree, she accumulated some undergraduate student loan debt. It wasn’t very much, and she paid it off quickly.

More recently she decided to pursue a master’s degree in special education. She needed to take classes in order to renew her teaching license in Ohio. She also wanted to expand her teaching options and move up a pay grade. After graduating from Baldwin Wallace University in Berea, Ohio, with her master’s in special education, she ended up with $19,270 in student loan debt.

Related: Are Advanced Degrees Worth It for Teachers?

At the time, neither of us was familiar with any options for student loan debt other than just paying it off through the Standard Repayment Plan. One of her colleagues told her about the federal Teacher Loan Forgiveness Program.

We tried pursuing the maximum forgiveness of $17,500, but she didn’t qualify because she wasn’t in a teaching role that lined up with her master’s degree. She did, however, qualify for $5,000 loan forgiveness through the program and was approved for forgiveness earlier this year. She’s now free of student loan debt.

While it’s great we're out from under those monthly student loan payments, we wish we were better informed about what was available. Most likely she would have qualified for PSLF, which would have lowered the amount we had been paying monthly and then wiped out all of her remaining student loan debt, not a portion of it.

Our lesson: It was our fault that we didn’t seek out help to not only understand our options but also determine the best repayment option for our situation.

What is the best option for paying off your student loan debt?

With all of the options available for teacher loan forgiveness, you have a lot of information to digest and decode in order to find the right fit for your situation. Just as teachers are experts at educating students, the consultants at Student Loan Planner® are experts at educating our clients and working with them to find the right payment options.

If you want help saving money and getting out from under your teacher student loan debt, book your student loan consultation today.

Has teacher student loan forgiveness been worth it for you?

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Comments

  1. Stacey April 17, 2019 at 1:52 PM
    Reply

    The information in this article is inaccurate/misleading in regard to qualifications for the teacher loan forgiveness program. One would need to be a Math, Science, or Special Ed teacher to get the 17,500 and all other subjects are eligible for 5,000.
    Regardless of what subject you teach, if you don’t/didn’t work in a building with high needs for 5 years you are not eligible no matter what.

    • Travis Hornsby April 17, 2019 at 6:41 PM
      Reply

      That’s a great point that you don’t even get all that much even if you are very specifically qualified. That’s our goal is to show people how PSLF in general is a far better option for the vast majority of teachers than the forgiveness program specifically named for teachers, which is really ironic.

      • TIM May 3, 2019 at 7:05 AM
        Reply

        PSLF IS NOT A BETTER OPTION AS 99% OF THE PEOPLE ARE DENIED.

        • Travis Hornsby May 3, 2019 at 10:58 AM
          Reply

          Tim I would suggest checking this article out: https://www.studentloanplanner.com/pslf-snowball-effect

          There are very technical reasons (FFEL loans, IBR created in 2009) why folks are getting denied right now that in no way relate to the long term future of the program.

  2. Lorraine June 3, 2019 at 4:09 PM
    Reply

    I have subsidized a nd unsubsidized loans do these need to be consolidated?

    • Travis Hornsby June 4, 2019 at 4:09 PM
      Reply

      Yes if you want it to be set up as easily as possible for PSLF

      • Lorraine York June 5, 2019 at 10:37 AM
        Reply

        Does this mean they have to be consolidated to apply PSLF.

        • Travis Hornsby June 6, 2019 at 11:12 AM
          Reply

          Not if theyre direct loans but if you’ve just graduated that’s the smartest thing to do

  3. Jennifer August 24, 2019 at 1:48 PM
    Reply

    So If I am a teacher with $33, 000 in student loans, I should file married separately and use my income of $50,000 as a basis for repayment. My payments are $380 now but should be greatly reduced and in 10 years the remainder will be forgiven.

    • Travis Hornsby August 26, 2019 at 6:52 PM
      Reply

      Correct as long as your spouse doesn’t make a lot of income, then your payment would be 211 a mo on PAYE and if you maxed retirement accounts (like your 403b), then your payment could be close to 50 a month.

  4. Brandi September 5, 2019 at 12:49 PM
    Reply

    Is there anything we can do to undo the acceptance of the teacher forgiveness loan because we didnt know and now our payments dont count toward pslf?

    • Ashley from Student Loan Planner September 6, 2019 at 11:41 AM
      Reply

      Hi Brandi,

      Have you already completed your five required years for Teacher Loan Forgiveness and had an amount of your loans forgiven? I don’t believe you can undo this acceptance, but you should be able to reach out to your loan servicer for more information. They may know if there’s more you can do.

      You should also able to continue with the PSLF program for your remaining balance: https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/teacher#both-tlf-pslf

  5. Courtney November 15, 2019 at 11:44 AM
    Reply

    https://www.npr.org/2019/10/29/774395247/23-senators-demand-investigation-into-mismanagement-of-student-loan-program
    What you have failed to mention is that the PSLF program is denying 99% of applicants in their 9th year of repayment. Read article above.

    • Travis at Student Loan Planner November 18, 2019 at 12:30 AM
      Reply

      That’s easy to explain away based on the structure of the program when it was created back in 2007. It’s not something that will affect borrowers with a few years to go now. https://www.studentloanplanner.com/pslf-snowball-effect/

    • Angela DeMuth June 28, 2020 at 8:43 PM
      Reply

      I’ve taught special education for 21 years, have continuously been denied. Reason #1: my student loans began repayment status in 1997 (missed the mark by 1 year to qualify for TLF).
      Reason #2: I was told to consolidate in 2003, so I did, yet, in 2013 found out I needed to start the PSLF with an IBR plan and pay religiously for 120 payments. After 7 of those 10 years, I was recently told that I wouldn’t qualify because my consolidation wasn’t made into DIRECT loans.

      I’m about to consolidate and keep paying, but I’m certain something else will come up to get me denied. I’m frustrated beyond belief.

      • Angela DeMuth June 28, 2020 at 8:45 PM
        Reply

        I just think it’s all a scam.

  6. rachael January 29, 2020 at 5:59 PM
    Reply

    Hi! I have 10K in FFEL and 70K in Direct Loans. I’m 5.5 years into the PSLF program, and I did not know I needed to consolidate (Navient said I was good every time I asked). As a public school speech therapist in a low income area, I now qualify for teacher loan forgiveness. Since I never consolidated, and the loans that would be forgiven by the TLF program will never be forgiven by the PSLF, will taking that loan forgiveness still restart my 120 qualifying payments, given that they’re for seperate types of loans? Or am I better off just paying them off? Thanks!

    • Travis at Student Loan Planner February 5, 2020 at 4:25 PM
      Reply

      I would go for teacher loan forgiveness for the FFEL debt as long as you are going for PSLF on the direct.

  7. Nicole March 12, 2020 at 12:47 PM
    Reply

    I have 15K in student loans and am just graduating college with a degree to become a secondary math teacher. Do I have to make monthly payments during the 5 years while I wait to receive teacher loan forgiveness or is the loan put into deferment?

    Thanks! I enjoyed your article.

    • Travis Hornsby March 13, 2020 at 8:35 PM
      Reply

      I think generally it puts the loan into deferment.

      • Elizabeth May 29, 2020 at 8:26 AM
        Reply

        You DO have to make monthly payments throughout those 5 years.

  8. Teacher Loan Forgiveness - Student Loan Options for Educators | Educator FI March 15, 2020 at 11:14 AM
    Reply

    […] by checking out How to Know if Teacher Loan Forgiveness is Worth It and you can read all their teacher specific student loan […]

  9. Elizabeth May 29, 2020 at 8:24 AM
    Reply

    I don’t think this is all correct. For PSLF, you MUST to be on an income driven repayment plan. Even though 5 years have passed, I still have a lot of loans left, but based on my income driven repayment plan, by the time I reach 10 years of paying my loans, I’ll only have about $1,000 left to be forgiven. Therefore, it makes way more sense for me to do the Teacher Loan Forgiveness. I’ll still have a lot to pay back after that….but at least $17,500 will be forgiven.

    • Travis Hornsby June 3, 2020 at 11:22 AM
      Reply

      If you have that little left to forgive bc you owe a modest balance you’re correct that Teacher loan forgiveness is better.

      • Emily June 15, 2020 at 10:29 AM
        Reply

        My husband and I are both public school teachers with 14+ years. We consolidated our loans to Nelnet and what is now AES over 15 years ago. We have been paying for 10 years, consecutively. We were both denied for the PSLF with no explanation, even though the other service providers were listed as acceptable on the website.

        • Amy at Student Loan Planner June 17, 2020 at 2:11 PM
          Reply

          That happens more often than it should. Try to get them to give you a reason why it was denied. Otherwise, contact the ombudsman group. You can find more info here: https://www.studentloanplanner.com/how-to-federal-student-loan-ombudsman-appeals/

          • Angela DeMuth June 28, 2020 at 8:26 PM

            I also have contacted the Ombudsman appeals group. They will listen. They will empathize. They will do nothing to help.

  10. Angela DeMuth June 28, 2020 at 8:22 PM
    Reply

    I have taught Special Education for 21 years. I graduated with my Bachelor’s in 1997 with about 30K in student loan debt. I don’t qualify for the Teacher Loan Forgiveness program because my loans were generated prior to 1998. So, I should have stayed in college another year in order to qualify for that one. I have paid what I could with a teacher’s salary as a single parent with two children. I’ve had to get forbearances over the years with incurred more debt with the capitalized interest. Seven years ago, I was told by Navient that under the Income Based Repayment Plan, I would qualify for the Public Service Loan Forgiveness program and that after 10 years (120 consistant payments), my loans would be completely forgiven. I have asked over the years “is this for real….will my loans really be forgiven if I stay the course?”. I was assured many times that, yes, after 120 consistent payments, my loans would be forgiven since I teach special education in a Title 1 school. Well, I have payed religiously and I JUST found out a week ago, that, NO, I don’t qualify for that program because my loans aren’t “DIRECT” loans, but I can start the “10 years” over if I reconsolidate. I cried and cried because I was 7 years into the IBR and, bow, have to start over. I am furious with Navient for misleading me. I know I’ve had at least 3 reps tell me over the years that I WOULD qualify. I’m back to square 1 and just want to make these loans go away!

    • Amy at Student Loan Planner June 30, 2020 at 8:17 AM
      Reply

      I’m sorry this happened to you. Unfortunately, your story is common. Loan servicers give bad advice all the time. You could benefit from a consult if you owe at least $20k, otherwise you might be better off to just refinance and pay off the debt.

      • Angela July 29, 2020 at 4:55 PM
        Reply

        Who would I contact? With all the interest over the years, now, I’m up to over $50K!

  11. Kathy July 2, 2020 at 4:41 PM
    Reply

    I have UNSTFD loans 1 loan servicer #1 totaling ~$14,000.
    I also have a Federal Unsubsidized Stafford Loan ~$12,000 and Direct Stafford Loans (subsidized & unsubsidized) ~$76,000 with loan servicer #2.
    I have taught for 5 years and should qualify for TLF.
    Can I:
    1) Direct the TLF towards loan servicer #1 and then use the same 5 years to qualify for PSLF with loan servicer #2?
    2) Direct the TLF towards the $12,000 Fed. Unsubsidized Stafford Loan and then use the same 5 years to qualify for PSLF on all the other loans?

    • Amy at Student Loan Planner July 15, 2020 at 9:08 AM
      Reply

      You can’t use the same qualifying payments for TLF and PSLF – it’s one or the other. Using your 5 years for TLF now would mean you have to start over with PSLF to get 10 years of payments. Most teachers get greater benefit from pursuing PSLF and skipping TLF altogether.

  12. Thomas Peera July 22, 2020 at 12:40 PM
    Reply

    Some one needs to put the Student Loans Department, and The Department of Education under Microscope to see how they are collecting and managing Billions of Dollars of Honest Tax Payers.
    Students loans should be forgiven.
    Education Should be Free.
    There thousands of people who are highly qualified serving low income families for decades, they don’t have to pay a penny back because they earned it. How many people in Washington DC are doing that? NONE.
    We the tax payers we don’t need to pay Trillions of Dollars to NASA to look for a drop of water somewhere 300,000 light years away, when we are turning oceans into acids. We can use that money for free education, free health care, forgive all student loans. Instead of seeing single parents teachers struggling with their bills, working hard every day, serving low income families, helping them achieve excellence, and making the difference in their lives.
    I am reading all your comments and it is breaking my heart to see all of you suffering for something that can be forgiven because you earned it.

  13. Morgan September 24, 2020 at 9:52 PM
    Reply

    Am I able to qualify for any of these repayment plans with 50k in private student loans? I’m a first year teacher looking for answers, and I can’t find any for private loans.

    • Amy at Student Loan Planner September 26, 2020 at 4:27 PM
      Reply

      Unfortunately, forgiveness programs like these only apply to federal student loans.

  14. Kari September 30, 2020 at 6:15 PM
    Reply

    I have been teaching special education for 8 years continuously at a Title 1 school and have decided to get my masters degree. I have a federal loan. I am confused by this statement “The loan(s) for which you are seeking forgiveness must have been made before the end of your five academic years of qualifying teaching service”. After I finish grad school would I quality for Teacher loan forgiveness? or have I been teaching too long?

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