Demystifying Student Loan Forgiveness Programs for Teachers

posted by: Melissa | December 11, 2018, 09:40 PM

This week's guest post is by Emeka Oguh, Founder and CEO of PeopleJoy.

Educators may qualify for two types of student loan forgiveness. The first type, Public Service Loan Forgiveness (PSLF) is the most well-known and is regularly mentioned in the news. The other type is called Teacher Loan Forgiveness. It comes with its own requirements. So, educators may have more forgiveness options than they realize.

Both programs were designed to help alleviate the student loan burden of those who give back to the community in service. The rules and regulations regarding each type of loan forgiveness tend to be extensive and confusing. How does one know if one qualifies? How does one apply? Filing inappropriately for any of these forgiveness programs can mean a missed opportunity on the cancellation of student debt.

Public Service Loan Forgiveness

To apply for PSLF, borrowers need to make 120 qualifying monthly payments. Qualifying monthly payments refers to payments that were made after October 1, 2007, under a qualifying repayment plan, for the full amount shown on the monthly statement, on time or no later than 15 days past the due date, and while employed full-time with a qualifying employer.

These qualifying monthly payments need to be made toward a qualifying repayment plan while working for a qualifying employer. What counts as a qualifying repayment plan or a qualifying employer? Under the current regulations, qualifying repayment plans fall under income-driven repayment plans, such as Revised Pay As You Earn Repayment Plan (REPAYE Plan) and the Income-Based Repayment Plan (IBR Plan).

Qualifying employers are not specific to the job but to the type of organization. For example, any borrower who works for a government organization at any level or at a not-for-profit organization may qualify for student loan forgiveness. Public school educators are considered to be government employees.

Teachers who want to qualify for loan forgiveness must also be considered full-time at the qualifying employer, which can mean whatever the employer defines as full time or at least 30 hours a week. Part-time teaching does not meet the requirements.

It is also not enough that you meet all of the requirements for PSLF. You still need to officially apply for the program. Borrowers who want to qualify for PSLF and think that they meet all of the requirements need to submit a PSLF Employment Certification form [PDF] as soon as they can. This form needs to be submitted every year and every time you change employers.

What do you do if your application is denied? Thankfully, there are more options. The Consolidated Appropriations Act, 2018 has provided borrowers with another opportunity to apply for PSLF. This program is called the Temporary Expanded Public Service Loan Forgiveness (TEPSLF) and can only be applied for after you have applied for PSLF and been denied once.

To apply for TEPSLF, send an email to TEPSLF@myfedloan.org and request that FedLoan Servicing reconsider your eligibility for PSLF. Include your name and date of birth. The subject line should be “TEPSLF request.” FedLoan Servicing will send an email response back on your current status for the application.

Teacher Loan Forgiveness

The Teacher Loan Forgiveness (TLF) program is very similar; however, it only applies to educators employed in schools or educational service agencies that serve low-income students. Forgiveness for Direct Subsidized and Unsubsidized Loans and Subsidized and Unsubsidized Federal Stafford Loans is capped at $17,500.

Eligibility for this program is also very specific. To qualify, you must not have any outstanding balances on Direct Loans or Federal Family Education Loan (FFEL) Program loans after October 1, 1998.

You must also be employed full-time as a highly qualified teacher for five consecutive years in a low-income elementary school, secondary school, or educational service agency. At least one of those years has to be after the 1997-1998 academic school year. The loans that you want to have forgiven also have to have been obtained before your five consecutive years of employment.

Highly qualified teachers, as defined by the TLF program, hold at least a bachelor’s degree, have full state certification as a teacher and have not had any certifications waived for any reason, such as emergency, temporary, or on a provisional basis. New elementary school teachers also have to demonstrate knowledge and teaching skills in a variety of subjects. New middle and high school teachers have to have a high level of competency in the subject area that they teach.

In many cases, the PSLF program is the best choice for educators to receive cancellation of their student loans. You are more likely to be able to maximize the forgiveness amount you receive under the PSLF program. It also has fewer stipulations than the TLF program.

Navigating student loan forgiveness can be confusing. There are so many regulations and requirements. There are tools and organizations that can help teachers navigate the process. PeopleJoy provides a free student loan analysis tool that you can use to find out if you qualify for student loan forgiveness and other programs.

Emeka Oguh is the founder and CEO of PeopleJoy, a financial wellness company. PeopleJoy helps employers attract, retain and engage talent using student loan education, assistance and refinancing as an employee benefit. Find us at peoplejoy.com. We also offer a free student loan analysis tool that can help you find out how much you can save on your student loans!

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