Teachers are dedicated to their craft, but that doesn’t mean they’re always paid as well as professionals with similar education. In fact, according to the National Education Association (NEA), the average teacher salary in 2017-18 was $60,477. However, salaries vary according to state, with some teachers only making $46,300. By contrast, the average income for all legal occupations in May 2017, to compare a profession with similar education requirements, was $107,370, according to the Bureau of Labor Statistics (BLS).
If you have student loans, a teacher’s salary can feel even smaller. The average cumulative debt for borrowers in 2017 was $28,500, according to the College Board, and student loan payments can be hefty, especially when you consider other living expenses.
For teachers, though, there are options to have loans forgiven. If you’re a teacher, here are some of the programs you can access.
1. Teacher Loan Forgiveness
You can receive forgiveness for up to $17,500 on your loans, depending on where you teach and whether you qualify. Teacher Loan Forgiveness is available after you have taught for five consecutive years. One of the benefits of Teacher Loan Forgiveness is that Federal Family Education Loan (FFEL) loans qualify, as well as those made under the Direct Loan program.
Some of the requirements include:
- Work at a qualifying school (low-income or under-served) for five consecutive years
- Years must be completed after the 1997-1998 school year.
- To receive up to $17,500, you must be a highly qualified secondary math or science teacher or teach special education.
- Others receive up to $5,000 in Teacher Loan Forgiveness
It’s possible to combine Teacher Loan Forgiveness with Public Service Loan Forgiveness (PSLF). That route works best if you still have FFEL loans, which don’t qualify for PSLF. Also, the teacher program works well if you don’t plan to work like this for 10 years to qualify for PSLF.
2. Public Service Loan Forgiveness
One of the best ways to get loan forgiveness is to apply for PSLF. With this program, your remaining balance—no matter how much you have left—is forgiven after you make 120 qualifying payments. Teaching at any school qualifies you for PSLF, unlike the Teacher Loan Forgiveness program, which has restrictions on where you can teach. Here are some of the criteria.
- Work full time for a qualifying employer, including schools, nonprofits, and government organizations
- Make 120 payments on your student loans while employed
- Have direct loans
- Be on a qualifying repayment plan, including the Standard plan, IBR, ICR, RePAYE, PAYE
Your best bet is to submit an employment form each year to the Department of Education so that you keep a good paper trail of your progress.
If you expect to be teaching for 10 years, it can make sense to get on a qualifying income-driven repayment plan so that you still have a balance to be forgiven after you make your 120 payments.
Going for PSLF can make more sense than choosing Teacher Loan Forgiveness because if you choose the teacher-specific program, your PSLF qualifying payments only count after you’ve done your five years of qualified teaching. So, combining them could mean it takes 15 years for forgiveness.
3. Perkins Teacher Loan Forgiveness
If you have Perkins Loans, you can have them canceled as a result of your teaching efforts. In order to have the full balance forgiven, you have to teach at a qualifying school for five years.
However, you can get partial cancellation, depending on how long you teach. For the first two years, you get 15% forgiveness each year, during the third and fourth years, you get 20% of your loans forgiven each year. Finally, after the fifth year, the final 30% is canceled. Here are the requirements you need to meet:
- Teach at a qualifying low-income school
- Teach qualifying subjects, including math, science, foreign language, and others considered at a shortage in your state
- Teach at qualified private, nonprofit school
One of the most important things to understand is that your Perkins Loan comes through your college or university. As a result, you’ll need to find out who your Perkins Loan servicer is and contact them before to get your loans forgiven.
4. State-Based Teacher Loan Forgiveness
In addition to federal programs for teacher loan forgiveness, many states provide help repaying student loans. Requirements vary by state, however. Many states have their own criteria for determining which subjects need to be taught, and which schools are underserved.
Visit your state’s education department website to find out what’s required. Also, note whether the repayment assistance program forgives your entire loan balance, or whether there’s a limit to how much forgiveness you can receive.
The American Federation of Teachers (AFT) keeps a database of loan forgiveness and other funding resources for teachers, which is searchable by state (and even district): Loan Forgiveness & Funding Opportunities.
Realize, too, that if you want PSLF, your 120 qualifying payments don’t start until after you complete your state-based program. Compare programs and how long you plan to teach to decide which is likely to make the most sense for you.
5. Income-Driven Repayment
If you don’t qualify for one of the other programs, for whatever reason, you can still get forgiveness, although it might take 20 or 25 years.
As a teacher, your income is likely low enough to qualify you for one of the income-driven plans. After 20 or 25 years, whatever balance you have left is discharged. It’s important to understand, though, that if you receive forgiveness this way, you could end up with a bigger tax bill.
If you’re having trouble making your payments, contact your servicer and ask to be put on an income-driven plan (don’t ask for deferment). Then, you’ll have a payment more suited to your budget and you might get forgiveness when the payment ends.
There are a lot of options for teacher loan forgiveness, including getting help from programs like AmeriCorps. Study your options and consider your financial situation, as well as how long you plan to teach. Moving forward with a plan can help you save money and manage your situation down the road.