Student loan forgiveness programs are for helping students to finance their study in some way. As the demand increasing, loan repayment and forgiveness and loan programs are growing. Recently, the president of the US declared a new law which provides students with their “lost” money. Military student benefits, teacher loan forgiveness, forgiveness for nurses, tax credits and similar programs aimed to finance student and make their studies easier and affordable. Several private loan programs facilitate the process and filter people according to their professions. Farmers, for example, are eligible for one type of loan program that has different regulations and terms. In that sense, teachers are luckier than other professions regarding chances of obtaining loan forgiveness. The number of teacher loan forgiveness programs is more than that of farmers, public workers, and lawyers.
But several things make loan forgiveness program almost unbearable, requirements for example. In this review, I will restate all options for loan forgiveness and eligibility criteria for each application. There are four options for students to obtain loan forgiveness, namely, Public Service Loan Forgiveness, Teacher Loan Forgiveness, Perkins Loan Forgiveness for Teacher, State-Based Loan Repayment Assistance Programs.
Public Service Loan Forgiveness (PSLF)
In 2007, President Bush decried the act of the College Cost Reduction and Access Act. The declaration intended to help students who took a loan in their financing. Students from engineering background were not considered, because eligible applicants required to work in public service. Teachers, nurses are in the center of the program. Those individuals are provided with full – time work when they are graduated. In our previous articles, we gave information about private loans which were mainly aimed to finance particularly motivated students who work in suburban areas. But it is not required for the Public Service Loan Forgiveness program. Instead, the teacher loan forgiveness program, PSLF, demands teachers to work and pay for loans at least 120 terms. The loan forgiveness is responsible for a left of the loan duration.
To be eligible
- Should be an employer either in a government or particular nonprofit organization.
- Need to be a full-time worker
- Took loans and still pay for that
- Your repayment plan should be based on your income. Let’s say if your salary rise, you ought to pay more for the loan
- Complete at least 120 payments.
You could be required to provide Employment Certification once in a month or whenever you change your workplace.
Qualifying employment status
Actually, it is not a special case, almost all state, federal, tribal education centers including high-schools suits the status.
The place you are working should be tax-free not – for – profit organization matches with Internal Revenue Code, Section 501 ©(3)
If you are working with the AmeriCorps or PeaceCorps like companies as a full – time worker your employment status is qualified for the program.
What kind of workforces are not qualified?
- If you are in labor union
- Are a member of a partisan political party
- Working in for-profit organizations. In our previous posts, we stated some of them and loan problems related to those kinds of organizations.
- Not – for – profit organization besides those who met the criteria mentioned in Internal Revenue Code 501.
Eligibility criteria have some additional rules
Even if you are working for any for-profit organization that has been verified by the government, you are not eligible for PSLF, including teacher loan forgiveness. To get a status of eligibility for PSLF, you have to get employed by a qualifying employer itself. The case is that you should be satisfied with the PSLF, not the organization. The workplace you are working need to have a contract with the government.
Being a full-time worker
You need to have at least 30 hours of weekly workload or have a status of the full-time worker which is greater than 30 hours either way.
Working as a part-time worker in two jobs may qualify you. All is needed to have more than 30 hours weekly when it is summing up.
The time sped in charities, worships and similar activities under not- for- profit organization is not counted as a part of 30 hours.
If you take any loan under the William D. Ford Federal Direct Loan Program, you ought to receive any non-defaulted and direct loan. For being eligible for PSLF, your loan receiving date has to be after 1 July 2010. If not, the Federal Family Education Loan is your primary choice.
Does your payment matter?
These payment cases make your payment qualified for the PSLF.
- Salary received after 1 October 2007
- Legitimate repayment plan should match with your salary
- Should pay 15 days before your due date
- The full version should be mentioned in your bill
- And payments you made while you are a full-time worker.
Note that these regulations match with 120 payments rule and no exception makes your payment eligible for PSLF. It is not essential to pay 120 payments sequentially. Missing some months is possible. Missing months could be due to different reasons, for example changing the workplace to the non-qualifying company or having less than 30 hours in a week, etc. You are welcome to pay more than the amount on the payment regulation. However, you will not obtain additional credits for that. The law can only change with the agreement of both sides. You need to talk to your servicer, and with mutual understanding, a monthly payment plan could change. If you paid all your teacher loan forgiveness ahead and left no payment for the last months, you will not receive the credit in those months.
A qualifying repayment plan
The right side of the plan is that it is based on your monthly income. If your income decreases the amount, you should repay decreases as well. If you did not submit that your repayment is under your income, you could not receive Public Service Loan Forgiveness. The 10 – year Standart Repayment Plan is a part of PSLF, but without income-based repayment plan agreement you won’t get any credit. The reason is that after ten years you will have a credit due to the PSLF 120 payments rule. So you need to contract on income based plan for applying the loan forgiveness.
The application form for the PSLF is vital, and you will submit it.
After submitting your employment certification form following processes will take place.
- Your application will be reviewed, and your income-based repayment plan will be checked whether it is eligible
- If the form is not filled correctly, additional revision and documents may be asked from you
- If your contractor does not meet the qualification criteria, you will get a notification about it.
- If all is well and can be considered as eligible, you will receive an appropriate response
- If FedLoan did not serve some of your payments, it would be checked and transferred afterward.
Your employment eligibility status will be examined by someone who has given an authority to check related subjects. In most cases, this is someone from the HR department.
After all of the required steps, if your application denied, probably your some payments do not match with the agreement. Thus you need to transfer these payments.
The FAQ pages about PSLF might be extremely helpful before, after and during the process.
Loan Forgiveness for Teachers
The US government meet its need of teachers by different programs. One of them is Teacher loan forgiveness. This program provides teachers, who have at least five years of teaching experience, with financial aid. The school teachers have to should be low – income school. Loan forgiveness for teachers can be mounted up to $17.500.
- To be eligible, you neither charged of Direct Loan or Federal Family Education Loan nor have a high amount of money on your account.
- You should work as a full-time teacher after 1998. These years must be sequential, and more than 4 of them must not be before 1997.
- The students you served should be from low -income family, and schools can be an elementary or a secondary school. Other qualified education services are also acceptable.
- You have to take the loan for at least five years in advance.
If you have not completed one school years, that might be considered as a full year and serve for completing five years. But there are still some rules.
- Half of that year need to be completed
- Your work attitude should satisfy the employer, and he thinks you obtained experience and meet the criteria for law-based salary increase tenure, etc.
- And it was impossible to complete that year. It could be due to your start date if you came t teaching after a step. And there is some disturbance in your family due to health status.
High qualified teacher
It sounds funny, but the requirements for a “High Qualified Teacher” is not so high. Depends upon where you teach, you shall meet some other criteria. All teachers are expected to
- Complete bachelor degree
- Be certified by the government
- Should never own a waived certification due to different reasons
You can see yourself on the list. Even you have not attended the teacher licensing examination.
Additionally, due to the place, you are working you could meet other standards as well.
If you are a new Elementary School teacher, you have to be tested on subject matter and pedagogy matter. Moreover, different language assessment test can be implemented. Those examinations are done by the state and being successful is what makes you highly qualified.
Secondary or Middle School teachers who are new in their mission should be competent in every academic subject they teach. To be considered competent, you either have to pass the test successfully or complete the academic major with high precision and obtain certification from the state.
If you did not start your teacher career recently, to be addressed with the teacher loan forgiveness you need to satisfy the overall requirements for the appropriate work and must be competent in the subject you are teaching.
If you were careful, you took notice of low-income students above. To make sure you are teaching students from a poor background. Here is a list that is renewed each year by the Education Department. In this database, educational services for poorly financed children stated, you can look for whether the organization is in the list or not. According to the law, if the school you taught was in the database, in your first year, but not in the second and hereafter, then your five consecutive years will be considered in low-income students school.
If you worked in the school between 2006 – 2013. In the list for 2007, the school was on the list of schools where students from scarce resourced families were teaching. Even if the school were never on the list after 2008, you would be considered to work in the educational organization for low-income students. Note that, the teaching service before 2007 is not counted and the conclusion cannot be drawn based on previous years.
There could be some schools work under the authority of the Bureau of Indian Education (BIE) that you could not find on the list. However, those schools are for low-income students as well even if they are not on the list.
You can receive either $17.500 or $5000 or both.
It depends on your subject area how much you will gain. You will earn $17.500
- In case you are teaching math or any other science subject such as physics, biology, and astronomy in secondary school
- Or have an individual responsibility to teach disabled students. You need to be competent in the area of teaching pupils with disabilities.
If you do not provide education either of the cases stated above, the maximum amount of forgiveness you could gain is $5000.
You can receive both teacher loan forgiveness and public service loan forgiveness, but not at the same time.
Note: Without paying enough of your previous loan, you cannot afford the loan forgiveness.
To apply for the loan forgiveness particular forms should be filled and given to your services after the 5th year of consecutive teaching experience. The regulations submitter for the last year are applicable until they are revised.
Federal Perkins Loan Forgiveness
This loan is designed to finance students who are in need and offered by the US Department of Education.
There are two subsections of the loan called cancelation and discharge of loan. For cancelation, you need to work in a specified condition, at a given length of time.
Cancelation of your Perkins teacher loan.
If you worked in a public secondary or elementary school at a full-time base, you might be suitable for the cancelation. In the following cases, you will be eligible for the cancelation of your loan.
- To educate students from a poor background.
- Special education for lower age students, such as disabled toddlers, youth
- Be one of a few teachers in the subjects mentioned as a shortage of educators by the state. Let’s say if the state published that there is a shortage of math teachers in the given area, being a math teacher makes you eligible for the cancelation of Perkins Loan Forgiveness.
Being eligible require to be employed by the school directly.
You don’t have to be a teacher specifically,
Any worker in the school who serve for the students can be eligible for the teacher requirements of the program. Librarians can be a teacher as well. Your school should employ you for a full-time worker even if you are a librarian. You are not eligible for the loan cancelation if you are a researcher, supervisor, etc. but not a teacher.
It is different than teacher loan forgiveness, in a way that it does not require exact the number of hours per week. The decision should be made by the school. You need to complete a year or as an equivalent, two half years. Those years should be in a row. In that case, some portions of your loan could be canceled not all of it.
If you are teaching at multiple schools as a part-time teacher, but one of the schools gives you a credential for a full-time job, then you are qualified for this cancelation.
If you are teaching in a private school, the school should regulate its nonprofit status with IRS regulation and every single service the school provides need to be in accordance with the law.
Educational service agency teachers will have their cancelation chance only if their starting date is after 14th August of 2008.
Some kinds of special services like for
- speech and auditory disable students
- Physical therapies
- Physiological therapies and counseling
Eligibility – Who can get what portion of the loan forgiven?
Full-time firefighters, medical workers, tribal college workers, librarians, federal public attorneys, Head Start education members, almost everyone, can be eligible for the Federal Perkins Teacher loan Cancelation.
Teachers, full-time nurses, and technicians, firefighters, speech pathologists, librarians who hold a master degree, law enforcement or correction officers, general public or community employed attorneys and public or nonprofit child, and family service members can get 100% of their loan canceled after five years of job experience.
Head Start education organization members can get a variable amount of their loan, from 15% to 100% in just seven years of employment.
Military servants could get 50% of their loan canceled after four years or 100 percent after five years of job experience. The interest rate is 12.5% per year.
AmeriCorps Vista and Peace Corps volunteers can get 70% of their loan canceled after four years of service.
100% of discharging because of bankruptcy (in rare conditions)
100% of discharge for closed schools
100% of discharge for death
100% of discharge for disability, both for total and permanent disabilities.
State-Based Loan Repayment Assistance Programs
This program is more specifical, so the terms and conditions can vary throughout states. It depends on how many teachers or any other profession is needed, how much specific service programs like, for mentoring children with disabilities or physiological care, etc.
For every single state, the particular state loan programs established — twenty-six of loan programs called with the name of the state. Texas student loan forgiveness program and Florida student loan forgiveness program are named after states. Some states like Arkansas has two student loan forgiveness programs, State Teacher Education Program (STEP) and Out-Of-State Veterinary Loan Repayment Program.
All these programs can be qualified for almost anyone, and you can be eligible for all of the programs. You need to understand that you cannot overlap some programs.
For Montana State, four programs can be considered as loan forgiveness programs.
I will explain the State-Based Loan Repayment Assistance Programs on the example of Montana state. You should take note that the main requirements for all of the state-based programs are the same, but few differences are also possible.
Quality Educator Loan Assistance Program.
Amount of the money provided is $3000 in a year, and this can round up to 4 years. With the Quality Educator Loan Assistance Program, you can secure $12.000 of your loan.
Awardees may be chosen according to the scoring of their school, their academic performance. To be eligible, a candidate must
- Have a certified for specific teaching and to work in one of the district schools, The Montana School for the Deaf and Blind, the Montana Youth Challange Program and similar educative and services.
- Teaching in areas saw a shortage of teachers in a specific subject
- Teaching in less popular schools, such as situated in rural parts of the State. In those schools, students are economically unstable and have to work much harder to get what others got simply. It is due to the gap between resources.
Although this Teacher Loan Forgiveness is specific, the condition for each state is similar. In order to get more affordable loan forgiveness or repayment plans, one needs to choose rural areas to be a teacher.