Programs Designed to Forgive Student Loan Debt

downloadAre you letting money hold you back from going back to school? Do you have a large amount of student loan debt? Is there a passion you want to pursue in the education field but your district won’t pay for it? Well, you don’t have to let those things hold you back any longer because there are programs out there ready to help you take that next step!

The idea of student loan debt has haunted so many people to the point that they don’t make anything happen. Several school districts are moving away from their tuition reimbursement programs or financially supporting their employees to further their education. As upsetting as this may be, do not let it stop you from making a decision. Several federal programs exist for public service workers and most importantly teachers. I have done the research for you and have listed some of these programs below:

downloadPublic Service Loan Forgiveness (PSLF)

Teachers can apply for the Public Service Loan Forgiveness if they have qualifying direct subsidized and unsubsidized loans, dire PLUS loans and direct consolidation loans. To determine the type of loans you have, visit the Department of Education Federal Student Aid to find out. You have the option to consolidate all of your loans into one huge payment or keep them separate. If you have already started making payments under this program consolidation is not suggested because it will start the clock to loan forgiveness all over. Therefore, decide before you make your first payment under this program whether or not you want to consolidate. Once you have identified the loans that fall under this play for forgiveness you are read to apply. Here are the steps you need to take every year to ensure your loan payments are being count under this payment:

  1. Complete the Employment Certification Form every year:

    Your loans will become managed by Fed Loan Servicing and you will receive a confirmation letter each year of your qualifying payments.

  2. Complete paperwork for the Income Driven Repayment Program:

    Each year you have to submit proof of income to Fed Loan Servicing, who will then calculate your monthly payments based on your income under one of the following programs:

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

After 120 qualifying payments have been made under this program the remaining balance of your loans will be forgiven. Please keep in mind your payments have to be made on time and in full each month under this program. This program is a great opportunity to get ride of your student loan debt and swipe the slate clean. To ensure that this happens it is imperative that you keep track of every payment that is made, yearly deadlines and all paperwork that you receive.

Student Loan Forgiveness for Teachers

Teachers that have direct consolidation loans or federal consolidation loans may be eligible for loan forgiveness. The loans have to be Stafford loans and subsidized or unsubsidized loans in order to qualify. Requirements for this loan are:

  • Outstanding balances that qualify are loans distributed after October 1, 1998.
  • You must be a full-time highly qualified teacher for five consecutive academic years, at least one of those year has to be after 1997-1998.
  • Employment must be at an educational service agency, elementary school or secondary school that is a considered low-income school. Click on the link to check the data base to see if your school qualifies.
  • Loans must have been distributed before the end of five academic years.

$5,000 or $17,500 will be forgiven based on the subject that is taught under this program. Teachers that teach math, science or special education can received up to $17,500 of loan forgiveness. While teachers who teach all other subject matters can receive up to $5,000 forgiven.

It is always important to read the fine print, or to understand everything about these programs. One stipulation that you need to understand is the role that the public service loan forgiveness plays in this situation. You cannot have both of these services working with you simultaneously. If you are currently having loans forgiven under this program and apply for the teacher loan forgiveness program then the payments you have made for the last 5 years will be disregarded towards your 120 payments. Therefore, it would be ideal to wait until you have made your 120 payments under the public service loan forgiveness program and then apply for the teach loan forgiveness in order to maximize the benefits of both these services.


Federal Perkins Loan Forgiveness

Cancellation for the Federal Perkins loans may qualify up to 100% of the loan disbursed. Those that qualify are:

  • Teachers who serve full-time in a public or non-profit elementary or secondary school system.
  • Teachers who serve students from low-income families.
  • Special education teachers.
  • Teachers that teach math, science, foreign languages or bilingual education.

To apply for eligibility you have to submit an official position description of your duties to support that you provide direct services to students. To qualify for this loan you do not need to have a certifications or licenses. Although, you have to work with children full-time.

Aside from reading this post I do encourage you to choose a program that interest you and do some further digging. Don’t be afraid to pick up the phone and ask questions. This is your future you’re talking about, don’t shy away from it!

How has this article helped you in making the decision to go back to school? Do any of these programs interest you? Let’s start a conversation. We would love to hear from you!