Teachers with federal student loan debt qualify for different forgiveness programs, but the Public Service Loan Forgiveness Program offers the most tax-free relief.
Teachers have three student loan forgiveness options — Public Service Loan Forgiveness, Teacher Loan Forgiveness, and Perkins Loan Cancellation for Teachers — that can forgive your federal student loan debt. None of these programs apply to private student loans. Check with your lender to see if they offer any private student loan relief options.
Ahead, I'll go over the three student loan forgiveness programs for teachers and how to apply.
Public Service Loan Forgiveness Program
The PSLF Program gives tax-free student loan forgiveness to teachers who work full-time for a public school or a charter or private school that's a qualified nonprofit organization. You're eligible for it even if the school you taught at wasn't in a Title I, low-income area.
- Teach full-time for a public school or qualifying nonprofit organization. If you leave the classroom to work as an administrator or counselor, you remain eligible.
- Have loans made under the Direct Loan Program, including Direct Consolidation Loans and Parent PLUS Loans. If you have other types of loans — FFEL and Perkins Loans — you can consolidate them to become eligible.
- Make 10 years' worth of payments under an income-driven repayment plan. The payments don't have to be consecutive. You're still eligible if you take a deferment or forbearance or if you take time off.
Who PSLF works best for: Educators with high federal student loan balances benefit the most from this program. While other forgiveness options cap the amount of debt that can be discharged, PSLF wipes out all of your debt after making the qualifying payments.
How to apply: Submit an employment certification form from each school you've worked full-time at since October 2007 to the company that currently oversees the program, FedLoan Servicing. The Department of Education will be switching responsibility to a new loan servicer in the coming months, MOHELA. Although you're not required, you can submit the form every year when you complete the annual IDR recertification.
Previously denied PSLF? The U.S. Department of Education recently took a chainsaw to the program to temporarily clear the way for many previously denied borrowers. Following this massive PSLF update, you can receive retroactive credit for payments made toward the wrong type of loans, late payments, and payments for less than the full amount. This limited waiver might allow retired teachers to qualify for student loan forgiveness if they made 120 qualifying payments before retiring.
Learn More: Are FFEL Loans Eligible for PSLF?
Many teachers are eligible for all three student loan forgiveness programs. But you can't take advantage of them at the same time. So if you owe a lot of student loan debt, focus on qualifying for the program that offers the most relief: Public Service Loan Forgiveness.
Teacher Loan Forgiveness
The Teacher Loan Forgiveness Program forgives up to $17,500 of your Direct or FFEL Subsidized or Unsubsidized Loans after five consecutive years of teaching at a qualifying school. Your school qualifies if it is a low-income elementary school, secondary school, or educational service agency.
- Teach full-time for five consecutive academic years at a qualifying low-income school or educational service agency. You can check the Teacher Cancellation Low Income Directory (TCLI Directory) to see if your school qualifies.
- Have Direct Loans, FFEL Loans, or Stafford Loans. Other types of loans — PLUS Loans and Perkins Loans — aren't eligible.
Forgiveness Amount Limits:
- Get up to $17,500 forgiven if you're a science teacher, special education teacher, or secondary mathematics teacher at the elementary or secondary level.
- Get up to $5,000 forgiven if you're a highly-qualified teacher — have a bachelor's degree, received full state certification as a teacher at any grade level, and have not had any certifications or licenses waived.
Who it works best for: Teacher Loan Forgiveness is less generous than Public Service Loan Forgiveness, but you qualify for forgiveness quicker. Choose this option if you don't have significant student loan debt and are looking to get rid of it quickly.
How to apply: Submit the Teacher Loan Forgiveness Application to your loan servicer at the end of your fifth consecutive year of teaching.
Perkins Loan Cancellation for Teachers
This cancellation program forgives the balance owed on Federal Perkins Loans for educators who teach certain subject areas or work full-time at a school in the TCLI Directory. School teachers at private schools can qualify if the school has established its nonprofit status with the IRS and provides elementary or secondary education according to state law.
- Teach at a low-income school or teach special education, math, science, a foreign language, bilingual education, or another subject that has a designated teacher shortage.
- Only Federal Perkins Loans are eligible. Federal Direct Loans and Federal Family Education Loans don't qualify even if consolidated. Check to see what type of loans you have at the Federal Student Aid website, studentaid.gov.
Forgiveness Amount Limits: Perkins Loan cancellation occurs in intervals, unlike the other two student loan forgiveness programs for teachers. Full-time teachers will get up to 15 percent canceled per year during their first and second years of teaching service. In years three and four, they'll get 20 percent for each year of service. Finally, in year five, they'll get 30 percent canceled.
Who it works best for: This program works best for school teachers with Perkins Loans and little to no other federal student loan debt.
How to apply: Contact the school where you got the Perkins Loan. Each school has its own process.