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Alleviating Student Loan Debt With Loan Forgiveness Programs

Corps members may be eligible for help managing student loan debt with a variety of loan forgiveness programs specifically designed for teachers.

A female Teach For America teacher stands in her classroom holding a clipboard.

By The TFA Editorial Team

January 23, 2018

Student loan debt can be a huge source of anxiety, especially for new teachers, whose salaries typically range from $33,000 to $58,000 depending on where you teach. While joining Teach For America does not mean your student loans are automatically forgiven, help may be available through a variety of federal loan forgiveness programs. Many of these programs offer additional benefits to teachers working in low-income communities.

If you qualify, loan forgiveness programs can either reduce monthly loan payments and/or eliminate the balance you owe on your loans so that you are no longer obligated to pay the remaining amount. Most forgiveness programs also double as incentives to retain teachers in the classroom and require you to teach beyond your two-year commitment as a Teach For America corps member.

Be sure to read all requirements and conditions of each program and reach out to your loan provider and the forgiveness program for more information. Once you are accepted into the corps, your placement region can also help you navigate details about any state-specific requirements for loan forgiveness.


Income Based Repayment Plan

Most federal student loans are eligible for at least one income-based repayment plan (IBR). Under IBR, your required monthly payment is capped at an amount that is intended to be affordable based on your income and family size.

You may enter an IBR plan if your federal student loan debt is high relative to your income and family size. The loans can be new or old and for any type of education (undergraduate, graduate, professional, or job training).

Any StaffordGrad PLUS, or Consolidation Loan made under either the Direct Loan or Federal Family Education Loan program is eligible for repayment under IBR, except loans that are currently in default, parent PLUS Loans, or consolidation loans that repay a parent PLUS Loan.


Public Service Loan Forgiveness Program

If you are employed by a government or nonprofit organization, you may be able to receive loan forgiveness through the Public Service Loan Forgiveness Program. Under the program, borrowers may qualify for forgiveness of the remaining balance due on their eligible federal student loans. You are eligible only after you have made 120 payments on loans under certain repayment plans while employed full-time by certain public service employers.

Borrowers must make 120 monthly payments on their eligible federal student loans beginning after October 1, 2007 before they qualify for loan forgiveness. Therefore, the first cancellations of loan balances will not be granted until October 2017.

Any non-defaulted loan made under the Direct Loan Program is eligible for loan forgiveness. Loans made under other federal student loan programs may qualify for forgiveness if they are consolidated into a Direct Consolidation Loan.


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Stafford Loan Forgiveness Program for Teachers

Individuals may be eligible for the Stafford Loan Forgiveness Program, if if they’ve taught full-time for five consecutive, complete academic years in certain elementary and secondary schools that serve low-income families (and meet other qualifications). The program offers forgiveness of up to a combined total of $17,500 in principal and interest on Federal Family Education Loans and/or loans through the Direct Loan program.

In order to be eligible, you must submit your completed application to the chief administrative officer at your school to certify that you have taught full-time for five consecutive years at that school.


The National Defense Education Act: Perkins Loan Forgiveness

Full-time teachers in elementary or secondary schools that serve students from low-income families can have a portion of their Perkins Loan forgiven under The National Defense Education Act.

This program forgives 15 percent of your loan for the first and second years of teaching, 20 percent for the third and fourth, and 30 percent for the fifth. Contact your school district's administration to find out if your school qualifies for this program.


AmeriCorps Loan Forbearance & Interest Payments

During one or both years of your corps service, you may be eligible to enroll as an AmeriCorps member. To qualify for enrollment, you must meet specific citizenship and service term requirements.

As an AmeriCorps member, you may be eligible for the AmeriCorps loan forbearance and interest payment benefit, which allows corps members to postpone regular monthly loan payments while serving as an AmeriCorps member. You can use loan forbearance to save for a major expense (car, graduate school, etc.), pay off loans more efficiently, or put money toward other responsibilities.

AmeriCorps only guarantees forbearance for qualified loans—those provided through state or federal agencies. However, several private lenders have determined that AmeriCorps membership is a valid reason for loan forbearance. Ultimately, for private loans, it’s at the lender’s discretion whether or not to grant forbearance.

While loans that are in forbearance still continue to accrue interest, AmeriCorps will pay up to 100 percent of the interest that accrues on your qualified student loans (those provided through a federal or state agency) after each successful year as an AmeriCorps member. Interest payments will not be deducted from your AmeriCorps education award.

Both loan forbearance and interest payment are subject to eligibility. Learn more about AmeriCorps benefits available to corps members.