Being a teacher can be tough. Salaries are generally low (much lower than they should be, in my opinion), and increasingly, many school districts require teachers to obtain graduate degrees. Even in districts where this is not the case, earning your Master’s or even your Ph.D. can be crucial if you want to move up in the teacher salary scale. Of course, as we all know, education is not cheap in this country, so most teachers have to finance their careers through student loans. Talk about a disincentive to becoming a teacher… years of schooling, tens of thousands of dollars in student debt, followed by years of low salaries and difficult monthly student loan payments.
Luckily, there are many beneficial programs out there to help teachers who are federal student loan borrowers. These are serious perks, so check them out…
Income-Based Repayment (“IBR”). This is a repayment program that is available to everyone, not just teachers. But it is particularly helpful for teachers. The program caps your monthly payments at a low percentage (~15%) of your adjusted gross income, no matter how large your federal student debt burden is. This means that no matter how much you owe in federal student loans, your monthly payments will be manageable. For example, a teacher with a $40,000 annual salary who has $50,000 in federal student loans will have a monthly payment of only $300, as opposed to nearly $600 on the standard federal repayment plan. Moreover, after 25 years of on-time payments, any remaining federal student loan balance is forgiven. This is huge. Read my previous post on IBR here.
Public Service Loan Forgiveness (“PSLF”). If you work in public service—which includes government and 501(c)(3) non-profit institutions—you may be eligible to have the remaining balance of your federal student loans forgiven after 10 years, as opposed to 25 years. All public school teachers should be eligible for this program. Many private school teachers should be eligible as well, provided the school is a 501(c)(3) non-profit institution. It is not completely clear at this point whether private, religious school teachers are eligible for the program, but it is my understanding that the Department of Education is working on getting some answers. Read my previous post on PSLF here.
Teacher-Specific Perkins Loan Cancellation. Federal Perkins loans are low-interest federal student loans that are available to borrowers with high financial need. These loans have many benefits (click here for more info on Perkins loans). One of the biggest benefits of the Perkins loan is the cancellation options for teachers. After several consecutive years of service, Perkins loans can be cancelled for the following educational professionals: full-time teachers in designated elementary or secondary schools serving students from low-income families; full-time special education teachers; full-time teachers of math, science, foreign languages, and bilingual education; full-time employees of public or non-profit child/family services agencies providing services to high-risk children and their families from low-income communities; full-time staff members in the educational component of Head Start; full-time staff members in a pre-kindergarten or childcare program licensed or regulated by the state; full-time speech pathologists with master’s degrees working in certain elementary or secondary schools; and certain librarians working in certain eligible schools.
Teacher-Specific Federal Student Loan Forgiveness. The federal government also provides certain levels of loan forgiveness specifically for teachers. The Department of Education will forgive up to $5,000 of federal student loans for full-time teachers who work for five consecutive years in certain schools that serve low-income families. The Department of Education will forgive up to $17,500 for full-time teachers who teach five consecutive years as highly qualified math or science teachers in eligible secondary schools, or as special education teachers in eligible elementary or secondary schools. Importantly, you cannot receive both the $5,000 and the $17,500 forgiveness.
If you work in an educational setting or personally know any teachers, please pass this on!
