What is Teacher Loan Forgiveness?

Teacher Loan Forgiveness is a program designed for teachers with federal student loans. Forgiveness is available for both Direct and FFEL loans, which is a benefit over PSLF (at least outside of the current waiver program). Although there are many nuances to this (and every federal loan) program, the basic qualifiers are 1) being a teacher and 2) working at an approved school for five consecutive and full years. A full listing of details on the program can be found here on the Department of Education’s studentaid.gov website.

Keep in mind that there might be employer-specific and/or state programs to consider. For information on these, it’s best to talk to your supervisor and visit the website of your state’s higher education authority.

What is Public Service Loan Forgiveness?

Public Service Loan Forgiveness (commonly shortened to PSLF) is the more commonly recognized of the two programs. This is because it serves a broader base of public servants and because the program gets a lot of bad publicity (a lot of it well-deserved). This program has four broad requirements:

  1. Direct loans
  2. Paying under a qualifying repayment plan
  3. Working full time for a qualifying employer (primarily nonprofit, military, or government)
  4. Make 120 qualifying payments

Forgiveness under this program can be quite lucrative as there is no cap on forgiveness.

Borrowers should also be aware that a waiver program currently exists for the PSLF which removes many of the requirements above. I have written about these changes in another blog post. This program expires on October 31, 2022.

Can I pursue Teacher Loan Forgiveness and Public Service Loan Forgiveness together?

According to the Department of Education, borrowers cannot pursue both of these programs simultaneously. Given that teacher’s loan forgiveness is a five-year process, this means if a borrower receives forgiveness under this program it can significantly add to the timeline for Public Service Loan Forgiveness. For borrowers, this essentially means they need to pick between the two programs wisely when creating an overall student loan forgiveness plan. Although Teacher Loan Forgiveness has a shorter time horizon, PSLF can grant forgiveness in larger amounts (with no cap). Also, PSLF doesn’t require consecutive years in terms of time served (rather, a borrower has to achieve 120 qualifying payments).

HOWEVER – There is great news for individuals pursuing both programs. Under the new PSLF waiver program, the double-counting restriction noted above is temporarily waived, as are many other normal PSLF requirements. As mentioned previously, the PSLF waiver is a temporary program designed to “fix” the historically broken PSLF system.

For more information on these programs, schedule a free consultation with us today.