Last Updated on May 4, 2022
No one chooses a career in education for the money. You do it for the joy of teaching and the sense of purpose that comes with helping younger generations reach their potential.
Unfortunately, the student loan burden that comes with a degree in education is not cheap. That’s why so many teachers choose the student loan forgiveness route.
There are two education-specific loan forgiveness options – the Federal Student Loan Forgiveness Program and State Sponsored Student Loan Repayment Assistance (LRAPS). Teachers who do not qualify for these programs have several alternatives. Teacher student loan forgiveness options include:
- Public Service Loan Forgiveness (PSLF)
- Teacher Loan Forgiveness Program
- Perkins Loan Cancellation for Teachers
- Combining Student Loan Forgiveness Programs
- State-Based Loan Repayment Assistance Programs (LRAP) for Teachers
Let’s take a closer look at these loan forgiveness options, so you can get a better idea of which one might be right for you.
Public Service Loan Forgiveness (PSLF)
Public Service Loan Forgiveness (PSLF) is the most popular loan forgiveness option for teachers. Borrowers need to make 120 payments before their remaining loan balance is forgiven, and they will not have to pay taxes on the forgiven balance.
Only borrowers who work for a qualifying nonprofit or government organization are eligible for PSLF. Almost all teachers will qualify for PSLF if they work for a public or private school.
When working toward PSLF, borrowers should switch to an income-driven repayment (IDR) plan. These plans calculate your monthly payment as a percentage of your income. Payments on an IDR plan are usually lower than on the standard plan, so teachers will pay less every month.
The following types of IDR plans are eligible for PSLF:
- Income-Based Repayment (IBR)
- Pay As You Earn Repayment (PAYE)
- Revised Pay As You Earn (REPAYE)
- Income Contingent Repayment (ICR)
These plans are not eligible for PSLF:
- Standard Repayment Plan
- Graduated Repayment Plan
- Extended Repayment Plan
- Alternative Repayment Plan
PSLF Eligible Student Loans
Only certain types of federal student loans are eligible for PSLF. These include:
- Direct Subsidized Loan
- Direct Unsubsidized Loan
- Subsidized Federal Stafford Loans
- Unsubsidized Federal Stafford Loans
- Parent PLUS loans
- Direct PLUS loan
- Direct Consolidation Loan
FFEL and Perkins loans do not qualify for PSLF unless you consolidate them into a Direct Consolidation Loan. However, teachers may qualify for Perkins loan forgiveness, so borrowers with Perkins loans should explore this option before consolidating.
PSLF Eligibility Requirements
Working at a private or public school will count toward PSLF. If you switch from teaching to working in administration, you will still generally remain eligible.
Teachers must work full-time or have multiple part-time jobs that add up to full-time hours. The 120 months do not have to be made consecutively. You can remain eligible for PSLF if you take time off, but it may take you longer to reach the 120-payment requirement.
How to Apply for PSLF
Teachers should submit an employer certification form every year. This form will ask for your employer’s contact information and your loan details. The government will use this information to determine how many eligible payments you’ve made.
Teachers should do this every year or every time they switch jobs, whichever is more frequent. If you procrastinate, it may be harder for the government to verify your employment.
Once you’ve made 120 eligible payments, you can apply here to have the remaining balance forgiven. Go here to see how many payments you’ve made.
Teacher Loan Forgiveness Program
The Teacher Loan Forgiveness program provides partial loan forgiveness to teachers who work for a qualifying school for five years. Teachers must work for a low-income school or educational service agency (ESA) to be eligible for this specific program.
Teachers may be eligible for up to $17,500 in loan forgiveness if they are a highly-qualified full-time:
- Special education teacher for elementary or secondary school children with disabilities
- Mathematics teacher for secondary school students
- Science teacher for secondary school students
Teachers may be eligible for up to $5,000 in loan forgiveness if they are a highly-qualified full-time:
- Secondary education teacher
- Elementary education teacher
Highly qualified teachers must have a Bachelor’s degree and a state license or certificate.
Teacher Loan Forgiveness Program Eligible Student Loans
Like the PSLF program, not all federal loans qualify for Teacher Loan Forgiveness. Here are the eligible loan types:
- Direct Subsidized Loan
- Direct Unsubsidized Loan
- Subsidized Federal Stafford Loan
- Unsubsidized Federal Stafford Loan
Teacher Loan Forgiveness Program Eligibility Requirements
You must meet the following requirements to be eligible for this program:
- Have a Bachelor’s degree
- Have a state license or certificate
- Work five consecutive years in a qualifying school or ESA
- Work full-time
- Student loans must have been disbursed before your five years of teaching
To find out if your school or ESA counts for this program, visit the Teacher Cancellation Low Income (TCLI) Directory.
How to Apply for Teacher Loan Forgiveness
Once you’ve worked for five consecutive years at an eligible institution, you can apply for partial loan forgiveness. Use the Teacher Loan Forgiveness Application to submit your request. You’ll be required to provide information about your school and the type of loans you have.
Perkins Loan Cancellation for Teachers
Perkins Loan Cancellation forgives a percentage of a teacher’s loans for each year of service. For the first and second years of service, 15% will be canceled for each year. For the third and fourth years, 20% will be canceled each year. For the fifth year, 30% will be canceled.
The amount discharged will not be treated as taxable income.
You must meet one of the following criteria to apply:
- Work in a school that serves low-income students
- Be a special education teacher
- Teach mathematics, science, foreign language or bilingual education
- Teach in a subject that has a shortage of teachers in your state
Librarians and guidance counselors may also be eligible for Perkins loan cancellation, but school administrators are not.
How to Apply Perkins Loan Cancellation
Perkins loans come directly from the college. Once you’re ready to submit for loan cancellation, you can contact your alma mater’s financial aid department for further instructions on how to apply.
Combining Student Loan Forgiveness Programs
Because teachers are eligible for several different forgiveness programs, they can often combine them to minimize their loan payments. However, some rules prohibit using multiple forgiveness programs at the same time.
For example, if you’re a teacher and have made five years of payments, you could apply for Teacher Loan Forgiveness. If you were also working toward PSLF, those five years would no longer qualify for PSLF, and the clock will restart on your 120 payments.
Here’s another example. Let’s say you have Perkins loans and Direct loans. After teaching for five years, you could apply for Perkins Loan Cancellation, which would erase your Perkins loans completely. As far as your Direct Loans, you would still have credit for five years of payments made toward PSLF. In another five years, you could apply for loan forgiveness through the PSLF program.
Student Loan Forgiveness Alternatives for Teachers
Teachers with private student loans are not eligible for federal student loan forgiveness. If you have private student loans and are struggling to make payments, consider looking into deferment or forbearance. You’ll get a temporary reprieve from payments, but it’s important to remember that interest will continue to accrue during this time.
If you have federal student loans and still don’t qualify for loan forgiveness, you can also seek a federal deferment or forbearance program. Interest may or may not accrue, depending on the type of loan you have and which program you choose.
State-Based Loan Repayment Assistance Programs (LRAP) for Teachers
Some states offer specific loan forgiveness programs for teachers who work in that state for a certain number of years. These states include:
Not all states offer state-based student loan repayment assistance programs for teachers (LRAP). If you want loan forgiveness, you can consider getting student loan forgiveness by moving.
Income-Driven Repayment Plans
IDR plans offer loan forgiveness after either 20 or 25 years of payments, depending on the specific plan and the type of loans you have.
The following IDR plans offer loan forgiveness:
- Revised Pay As You Earn Repayment (REPAYE) Plan
- Pay As You Earn Repayment (PAYE) Plan
- Income-Based Repayment (IBR) Plan
- Income-Contingent Repayment (ICR) Plan
The main difference between IDR loan forgiveness and the other options on this list is that borrowers may have to pay taxes on the forgiven amount. However, Congress passed a law in 2021 eliminating taxes on forgiven IDR loans until 2025. Some student loan experts think this may be the first step to making all IDR loan forgiveness tax-free.
Student Loan Refinancing
Teachers with private student loans or those who aren’t eligible for loan forgiveness programs can look into student loan refinancing. Refinancing means converting your previous loan into a new loan with a different provider. Borrowers typically receive a lower interest rate when they refinance.
Student loan refinancing benefits include:
- Lower monthly payment
- Less total interest paid over the life of the loan
- Different repayment terms to choose from
- Can remove a cosigner from the loan
- Can consolidate multiple student loans into one loan
For more information about student loan refinancing, explore our blog featuring PSLF vs. student loan refinancing.
Refinance Your Student Loans With ELFI
ELFI offers student loan refinancing to teachers and other professionals.* When you sign up with ELFI, you’ll have a personal loan advisor to guide you through the refinancing process. They’ll be your main point of contact throughout the life of your loan.
Use the student loan refinancing calculator to see how much you could save by refinancing. Get pre-qualified quickly – with no negative impact on your credit score – and apply for student loan refinancing today.
