In obtaining their education, most aspiring teachers will rely on some combination of scholarships, student loans, and financial aid to cover the resulting expenses. Most will then enter into jobs that pay a low annual salary, require long hours, and grind for years to repay the debt and interest on their student loans. The average yearly cost for a full-time undergraduate (including tuition, fees, room, and board) for 2019-2020 is $21,950 at a public 4-year institution in-state. If you choose to attend university out-of-state the average yearly cost is $38,330.
With their certifications in hand, teachers begin their search for a job that will allow them to repay their debts. The pressure of debt often stops young teachers from applying to the low-budget, high-poverty-rate districts with the deepest and most urgent need for their services.
According to the Economic Policy Institute:
"Financial stress is greater for teachers in high-poverty schools. Relative to teachers in low-poverty schools, teachers in high-poverty schools are paid less ($53,300 vs. $58,900), receive a smaller amount from moonlighting ($4,000 vs. $4,300), and the moonlighting that they do is less likely to involve paid extracurricular or additional activities for the school system that generate extra pay but also help them grow professionally as teachers."
Higher-paying private schools and schools in well-funded public districts have a distinct advantage when recruiting new teachers. The financial instability facing young, indebted people entering an underpaid career path makes those schools especially attractive as employers.
As an attempt to counteract this prevailing trend, the U.S. government and a variety of states have developed programs to encourage teachers to work in underserved districts by offering loan forgiveness.
Loan Forgiveness Options
The U.S. federal government offers three loan forgiveness programs for teachers:
Teacher Loan Forgiveness: This program offers debt forgiveness of up to $17,500 toward Direct or Stafford Loans. Teachers must complete five consecutive academic years, teach at a low-income school, have no student loans originating before Oct. 1, 1998, and not be in default.
Teachers can receive up to $5,000 for working as a full-time elementary teacher or full-time secondary school teacher, and up to $17,500 if they're a full-time math or science teacher in an eligible secondary school.
Public Service Loan Forgiveness: This program offers to pay 100% of your Direct Loan balance after 10 years. To qualify, teachers must be in certain public sector jobs, employed full-time, have made 120 payments starting from Oct. 1, 2007, with payments made as part of certain repayment plans, and not be in default.
Federal Teacher Cancellation for Perkins Loans: This program expired in September 2017, but if a teacher borrowed money through the program they may still qualify for cancellation of up to 100% of a Federal Perkins Loan. Candidates must have served full-time in a public or nonprofit elementary or secondary school system as a:
- Teacher in a school serving students from low-income families
- Special education teacher for infants, toddlers, children, or young adults with disabilities
- Teacher in the fields of mathematics, science, foreign languages, or bilingual education, or in any other field of expertise determined by a state education agency to have a shortage of qualified teachers in that state
With the passage of the American Rescue Plan Act of 2021, all student loan forgiveness will be tax-free through the end of 2025.
The State of Arkansas Student Loan Programs
For teachers living and working in Arkansas, there are two dedicated financial aid programs for educators in qualified public schools throughout the state. Both programs are administered by the Arkansas Department of Higher Education:
Arkansas State Teacher Education Program (STEP)
STEP offers yearly grants intended to repay student loans to current educators in public schools in designated geographical areas or in certain subjects considered to be short on teachers and administrators.
The list of schools where educators are eligible to receive these grants changes from year to year, as does the list of subjects. Math and foreign language commonly appear on the list of subjects eligible for this program.
Educators who graduated college after April 1, 2004, and who have been Arkansas residents for at least 12 months are eligible to apply for the grants, which can total up to $4,000 per year and are paid directly to the student loan lender.
Licensed teachers can receive $3,000 per year for working in a specific geographic area or within a subject matter that’s currently experiencing a critical shortage of teachers. Licensed teachers who are members of a minority can receive an additional $1,000 per year in loan forgiveness for teaching within a district or subject matter defined by STEP.
Teachers are eligable to receive three years' worth of grants but must reapply every year. The annual application deadline for the program is June 1.
Arkansas Teacher Opportunity Program (TOP)
TOP is designed to help current Arkansas teachers and administrators further their abilities by reimbursing the costs of additional education.
Eligibility is open to teachers and administrators who have been residents of Arkansas for 12 months, are currently teaching in Arkansas schools, and have declared their intention to continue doing so into the future. Candidates must also be enrolled in an approved institution of higher education in Arkansas in a college level course(s) directly related to their employment.
Qualified teachers can apply to be reimbursed for out-of-pocket expenses for up to six credit hours, or $3,000. Tuition, mandatory college fees, books, and required supplies all are reimbursable expenses.
If funds in the program run short, the Arkansas Department of Higher Education will give priority to teachers who are taking classes in subject areas that currently are experiencing a shortage of teachers in the state.
Teachers must have at least a 2.5-grade point average in the classes reimbursed by the state. The annual application deadline for the program is June 1.