If you're a teacher, we probably don't have to tell you that the pay is not usually equal to the work-and likely not enough to pay off those student loans you had to take in order to become a teacher in the first place! Sadly, that leads many good, qualified teachers to leave the profession and look for more lucrative work. But we need good teachers! So, in an effort to keep good teachers in the classroom-and especially in the classrooms where we need them most-the federal government (and some state governments) offer Teacher Loan Forgiveness . . . under certain conditions, of course!
In a nutshell, teacher loan forgiveness is a program that allows some teachers to earn forgiveness of their student loans in amounts of $5,000 or $17,500 (depending on qualifications) after five consecutive years of teaching in a qualified low-income school.And what's more, in some circumstances full loan forgiveness could be available after another ten years (when combined with the Public Service Loan Forgiveness program, available to many teachers as well). True, loan forgiveness is only available to teachers who qualify; but if you do, you could earn substantial loan forgiveness just by doing what you're doing already-and applying for the program, of course.
It's a good idea, at the outset, to understand a distinction between two ways in which a person may no longer be responsible for repayment of their student loans: discharge and forgiveness. Loan discharge occurs when certain drastic situations arise, making it impossible to repay the remainder of your loan-situations like death, permanent disability, your school closing before you complete your education, or certain kinds of bankruptcies, frauds, and disasters. In such cases, your circumstances may allow you to apply for a discharge, making the case in your application that your situation makes it impossible for you to repay the remainder of your loan.
By contrast, loan forgiveness is a program meant to incentivize people to take jobs that may not offer high pay, or that involve service in low-income areas. Along with Perkins Loan Forgiveness and Public Service Loan Forgiveness, Teacher Loan Forgiveness falls into this category.
Bear in mind, though: Whether by discharge or by forgiveness, if you are freed from the obligation of repaying all or a portion of the remainder of your loan, the amount of money you have discharged or forgiven may be considered income, subject to federal tax.
Depending upon your specific circumstances, as a teacher you may be eligible for forgiveness of $5,000 or $17,500 of your qualified student loans. If you also qualify for Public Service Loan Forgiveness (a separate program), you may even be eligible for forgiveness of 100% of your remaining loan after another ten years-but we'll deal with that in a separate article. For now, let's focus on the Teacher Loan Forgiveness Program-and what makes the difference between eligibility for $5,000 and eligibility for $17,500 in loan forgiveness.
Before October 30, 2004:
If you began your five consecutive years of teaching in a qualified low-income school before October 30, 2004, then you could be eligible for up to $17,500 in loan forgiveness if you were:
You could be eligible for up to $5,000 in loan forgiveness if you were:
After October 30, 2004:
If you began your five consecutive years of teaching in a qualified low-income school after October 30, 2004, then you could be eligible for up to $17,500 in loan forgiveness if you were:
You could be eligible for up to $5,000 in loan forgiveness if you were:
As you read these qualifications for Teacher Loan Forgiveness, two terms keep popping up: "qualified low-income school" and "highly qualified teacher." Since these two terms are obviously key to your eligibility for loan forgiveness under this program, let's have a closer look at what they mean.
This part is easy. Every year, the U.S. Department of Education publishes its Annual Directory of Designated Low-Income Schools for Teacher Cancellation Benefits. Simply visit the Low-Income School Directory at https://tcli.ed.gov and see if your school is on the list. If it is, you're eligible; if it's not, you're not.
If your school is on the list, be sure that you enter the name of your school exactly as it appears on the list; if you don't, your application will be rejected. Think of it like endorsing a check: You endorse a check exactly the way your name appears in the "Pay to the order of" section, otherwise the bank doesn't know you are the person for whom the check was intended. The same is true with entering the name of your school in the application. If you don't enter the schools name exactly as it appears in the Low-Income School Directory, then there's no way to be sure you're teaching in a school that has been designated for this purpose.
But what if your school was on the list during one of your five consecutive years of service, but not during the other four? Don't worry: As long as the school was listed in the Low-Income School Directory during your first year of teaching, your subsequent years of teaching in that school will count toward your eligibility, as well. NOTE that All elementary and secondary schools operated by the Bureau of Indian Education (BIE)-or operated on Indian reservations by Indian tribal groups under contract with BIE-qualify as schools serving low-income students, whether or not they were listed in the Low-Income School Directory.
The other key factor impacting your eligibility for Teacher Loan Forgiveness is your status as a highly-qualified teacher. This status has a set of basic requirements for all teachers, and then specific requirements depending upon whether you are (1) an elementary or a secondary school teacher, and (2) a new teacher or not. Let's look at all of these requirements.
Requirements for All Teachers:
To be considered highly qualified, all teachers must:
Requirements for New Elementary School Teachers:
In addition to the requirements for all teachers, listed above, new elementary school teachers must pass a rigorous text to demonstrate subject knowledge and teaching skills in reading, writing, math, and other basic areas of the elementary school curriculum.
Requirements for New Middle School and Secondary School Teachers:
In addition to the requirements for all teachers, listed above, new middle school and secondary school teachers must demonstrate a high level of competency in each of the subject areas they teach, specifically by EITHER:
Requirements for Teachers Who Are Not New:
In addition to the requirements for all teachers, listed above, all teachers (whether in elementary, middle, or secondary school) must:
Whew! That's a lot of information! Now that you know what constitutes a qualified low-income school, and now that you understand what is required to be considered a highly-qualified teacher, it's simple: If you are a highly-qualified teacher who teaches in a qualified low-income school for five consecutive years, you are eligible for some amount of Teacher Loan Forgiveness. But you have to APPLY! For help in determining your eligibility and your specific level of potential loan forgiveness, contact NSLSC.
In addition to Teacher Loan Forgiveness, there are three other types of loan forgiveness for which you may also qualify: Perkins Loan Forgiveness, Public Service Loan Forgiveness, and State Loan Forgiveness for Teachers. Check out our articles on each of these topics.