Student loan debt has reached $37,584 on average per borrower.1 This debt can be crippling for any recent graduate, but especially for a new educator. Luckily, there are a variety of loan forgiveness programs that educators can use to reduce their debt.
These options include:
- The Teacher Loan Forgiveness Program
- Public Service Loan Forgiveness
- Perkins Loan Cancellation
- State-Backed forgiveness programs
Learn more about each program to determine which one may work best for your unique circumstances.
Option #1: The Teacher Loan Forgiveness Program
The Teacher Loan Forgiveness Program could reduce educator’s debt by up to $17,500, depending on a few qualifications.2
- No debt through Direct Loans or the FFEL Program, including loans before and after Oct. 1, 1998.
- You must be a highly qualified teacher for five continuous and complete years, with at least one year occurring after 1998.
- You must have taught at a school that serves low-income students.
- Your loans must have occurred before the previously stated five-year qualification period.
There are some additional requirements depending on your educational setting and experience. But this program is generally best for science, special education and mathematics teachers, as they can receive the highest amount of forgiveness at $17,500.2
Option #2: Public Service Loan Forgiveness
The Public Service Loan Forgiveness program will eliminate any remaining debt after paying 120 continuous monthly payments.3
To be eligible, you must have direct loans and work full-time for a qualified employer, which includes:3
- Government organizations including federal, state, local or tribal
- Not-for-profit organizations
This would be best for educators who have accumulated a large amount of student debt.
Option #3: Perkins Loan Cancellation
If your loans are federal Perkins loans, then you may have your entire loan forgiven, as long as you meet one of the following requirements:4
- Serve a low-income school.
- Teach special education, mathematics, science, foreign languages, bilingual education or a subject suffering from a teacher shortage.
The percentage of your loan that is forgiven will depend on how long you have taught.4 This program may be best for teachers who already have several years of experience.
Option #4: State-Backed Forgiveness Programs
The American Federation of Teachers has a database which lists several state-based programs to help eliminate debt.5 Checking this database can help you find programs that may only be applicable to your specific state. Who these programs are best for will change based on location. Make sure to double-check yours before making a final decision.
Additional Repayment Plans
Beyond loan forgiveness, there are a few ways to adjust your loan type to help reduce the burden of high monthly payments. These loan adjustments can also be combined with loan forgiveness options, possibly reducing your overall debt.
If you have multiple loans, then consolidation could be beneficial. You will have a single monthly payment instead of several smaller ones. However, this usually means that your monthly payments are lower, causing you to pay more in the long run.6
Graduated Payment Plans
Graduated plans are intended for recent graduates, providing a lower monthly payment that increases with time.7
Income-Based Repayment Plans
There are a variety of income-based plans with different advantages. Generally, these plans adjust your monthly payment to a percentage of your income and include:7
- Revised Pay As You Earn Repayment Plan
- Income-Based Repayment Plan
- Income-Contingent Repayment Plan
- Income-Sensitive Repayment Plan
Extended Repayment Plans
Extended plans can be graduated or standard, but increase the time it takes to pay your loan, reducing monthly payments but increasing overall cost.7
Student debt is a burden for every college graduate. But educators have a variety of options that can help relieve this burden. Make sure to measure the benefits and qualifications of different programs and loan types to find the right one for you, and eliminate as much debt as possible.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.