Main Federal Loan Forgiveness Programs
There are four main things schools need to understand in order to make the best use of federal forgiveness programs in teacher recruitment efforts. State forgiveness programs have their own requirements. Borrowers with private loans that are not federally insured must negotiate repayment directly with the lender.
- The type of forgiveness that a teacher is eligible for varies by the type of federal student loan the teacher has. Forgiveness for some loans is only available after five years of teaching, so it’s important to understand the programs for all teachers, not just new hires.
- Teachers who work in schools designated as “low-income” are more likely to be eligible for forgiveness than teachers who work in other schools. Low-income schools are Title I-eligible schools - thosein which 30% or more of students meet a measure of poverty under section 1113(a)(5) of the Elementary and Secondary Education Act. Th e federal website “Low-Income School Search” at identifies low-income schools in each state. If your school qualifies as low-income, it is important to make sure that it islisted on the website and to contact your state if it is not. Many of you let me know that you looked at the list and your school wasn’t there. I don’t know why this is the case, but you should check with your state about making sure the school is listed if it’s eligible. Some prospective teachers with student loans do look at this site when considering where to teach, so the list should be made accurate.
- Teachers of “shortage area” subjects are more likely to be eligible for student loan forgiveness than other teachers. National shortage areas are special education, math, science, foreign languages, bilingual education, (and reading specialist for some loans); states may also identify shortage areas. The Teacher Shortage Area Nationwide List is available at
- Schools must help teachers with the documentation necessary to secure loan forgiveness. Learn what needs to be done and make sure your school is doing it and communicating to teachers that it will help with their forgiveness paperwork.
Major Types of Federal Loan Forgiveness Programs
Perkins Loans:
Recipients ofPerkins Loans can receive up to 100% cancellation of their loan if they meet the teaching service criteria listed below. Cancellation rates are 15% per year for the first and second years of service, 20% for the third and fourth years, and 30% for the fifth year of service. Borrowers must request the appropriate loan cancellation forms from their college.
Criteria:
- Teach full time in a low-income school or a school operated by or under contract with the Bureau of Indian Affairs. These teachers are not limited by subject area and in some cases pre-K teachers also qualify. Or,
- Teach in a federal or state shortage area, in a school of any income level. Or
- Work full-time as a librarian or speech language pathologist in a low-income school. Note: this is a new provision of the recently passed Higher Education Act and is not yet widely publicized.
FFEL and William D. Ford Direct Loans (Stafford Loans):
Forgiveness works differently for FFEL (private loans insured by the federal government) and Direct Loans (issued by the federal government) than for Perkins Loans. To be eligible, borrowers must work in a school designated as low-income. Forgiveness occurs only after five consecutive years of full-time teaching. The program offers up to $5,000 in loan forgiveness for highly qualified teachers in most subject areas and up to $17,500 for highly qualified teachers of math, science, or special education. Lenders are permitted to grant forbearance on the loan for each year of qualifying teaching, but the borrower must negotiate it directly with the lender.
Note: Teachers with low salaries may be eligible to re-negotiate the terms of their repayment schedule. This could help teachers who are on track for forgiveness but not receiving forbearance and/orteachers who work in low-paying schools.
Higher Education Act:
The recently re-authorized Higher Education Act includes a provision (Sec. 430) for federal student loan forgiveness of up to $10,000 ($2,000 per year of service for no more than five years). Details are not20yet complete, but the legislation defines eligibility for school service as follows:
- Early childhood educators (pre-K), teachers of critical foreign languages, teachers of ELL students;
- Employees in low-income schools who work full-time as a Highly Qualified teacher; librarian; speech language pathologist; school counselor; superintendent, principal, or other administrator;
- A Highly Qualified teacher who “is an individual from an underrepresented population in the teaching profession.”
TEACH:
The new TEACH program is not a loan forgiveness program at all. Rather, it’s a grant program. Colleges must opt to participate, and recipients must agree to teach a shortage-area subject in a low-income school for four years. It provides up to $4,000 per year and is a good program for students who are certain they will teach and know where they plan to teach. But TEACH also carriesrisks to the student. If the recipient does not teach, for whatever reason, in a shortage subject area in a qualifying school for the full four years, he or she is required to repay the grant as an unsubsidized student loan, which means interest accrues and must be paid by the recipient from the date the award was issued. See this article in Education Week ( for more information. Or, sign up for RPM-Premium Exclusives, where the October edition includes an analysis of the TEACH program. To subscribe, go to
Other links to information on loan forgiveness programs:
- General federal student loan forgiveness link:
- American Federation of Teachers loan forgiveness website (includes several private programs as well as links to many state programs):
- National Education Association loan repayment website explains options for private as well as federal student loans:
Courtesy of The Rural Forum, an e-mail based discussion of topics affecting rural schools and communities.