If you're a public elementary or secondary school teacher, particularly in a low-income area, you stand a chance of qualifying to have your federal loans forgiven or discharged. Generally, you must teach for a set amount of time, such as five years, before you can apply for these programs. Similar programs may be available at the local and state level.
Teacher Loan Forgiveness Program
If you have either a federal subsidized or unsubsidized Stafford Loan or Direct Loan, you may be eligible for the Teacher Loan Forgiveness program. To qualify, you must be a full-time teacher for five consecutive academic years in an elementary or secondary school that serves low-income families. You may also qualify if you teach at an educational service agency, which is a regional public service agency authorized by state law to develop, manage and provide services and programs to local school districts and other education organizations. You can forgive up to $17,500 in student loan debt.
After completing your fifth year of teaching, submit a Teacher Loan Forgiveness Application to the lender of your federal student loan. If you have more than one lender, you must submit an application to each one. Applications are available online from the Department of Education's website. The chief administrative officer at your school must complete the certification section of the application, confirming your teaching service satisfies the loan forgiveness requirements. If you taught at more than one school over five consecutive academic years, you must obtain certifications from each past chief administrative officer. The additional certifications can be provided on separate sheets of paper and attached to your application.
Loan Cancellation Program
If you have a federal Perkins Loan, you may be eligible to have the loan canceled altogether, also known as loan discharge. You must teach full-time at a public or nonprofit elementary or secondary school that serves low-income children, or teach a particular subject that has a shortage of teachers. You also may qualify if you are a special education teacher. In addition, you must teach for at least one academic year or two half-years from two different schools.
Applying for Loan Cancellation
To apply for cancellation of your Perkins Loan, contact the financial aid office at the school that holds the loan. The school determines whether you qualify and will advise you on the documentation to provide if you do. If you are denied cancellation, you cannot appeal the school's decision. You will not be permitted to cancel any portion of the loan disbursed prior to your teaching assignment or during the loan's enrollment period. If approved, 100 percent of your loan will be cancelled in increments: 15 percent the first and second year of teaching, 20 percent the third and fourth years, and 30 percent the fifth year. The amount canceled includes accrued interest.
Other Forgiveness Programs
In addition to the loan forgiveness and cancellation programs available from the federal government, you may qualify for similar programs provided at the local and state level. The American Federation of Teachers provides a searchable database of various forgiveness programs on the "Loan Forgiveness and Funding Opportunities" page of its website. Also check with your local school board or school district for possible opportunities at the local level in your area. If you teach at an accredited health professions university, also explore the Faculty Loan Repayment Program from the U.S. Health and Human Services Department. Lastly, if you have a federal Direct Loan and work full-time in public service, check out the Public Service Loan Program. You are eligible to apply after completing 120 on-time payments.
- U.S. Department of Education, Federal Student Aid: Teacher Loan Forgiveness
- U.S. Department of Education, Federal Student Aid: Glossary, Educational Service Agency
- American Federation of Teachers: Loan Forgiveness and Funding Opportunities
- U.S. Department of Health and Human Services, Health Resources and Services Administration: Faculty Loan Repayment Program
- U.S. Department of Education, Federal Student Aid: Public Service Loan Forgiveness
Based on the West Coast, Mary Jane Freeman has been writing professionally since 1994, specializing in the topics of business and law. Freeman's work has appeared in a variety of publications, including LegalZoom, Essence, Reuters and Chicago Sun-Times. Freeman holds a Master of Science in public policy and management and Juris Doctor. Freeman is self-employed and works as a policy analyst and legal consultant.