Federal Loan Forgiveness Programs for Educators

The Public Service Loan Forgiveness Program (PSLF) forgives the remaining balance on your Federal Direct Loans after 120 qualifying payments (estimated over 10 years).

Here's what you need to know about PSLF:

• Unlike other programs, PSLF does not require you to teach at a low-income public school but only requires that you work for a qualifying employer. This includes government organizations at any level (U.S. federal, state, local, or tribal), not-for-profit organizations that are tax exempt under Section 501(c)(3) of the Internal Revenue Code, or other not-for-profit organizations that provide certain types of qualifying public services.
• You must have Direct Loans. If you have other types of federal loans, like FFEL or Perkins Loans, you must consolidate in order for those loans to qualify. To check which types of loans you have, log in to StudentAid.gov.
• You should repay your loans on an income-driven repayment plan if you want to get the most value out of the program. You can apply for an income-driven repayment plan on StudentAid.gov.
• In order for payments to count toward the 120 needed for forgiveness, you must meet specific requirements.
• Loan amounts forgiven under PSLF are NOT considered taxable by the IRS.

The Teacher Loan Forgiveness (TLF) Program forgives up to $17,500 of your Direct or FFEL Subsidized or Unsubsidized Loans after 5 complete and consecutive years of teaching at a qualifying school.

Here's what you need to know about TLF:

• You must have been employed as a full-time teacher at an eligible school for five complete and consecutive academic years, and at least one of those years must have been after the 1997–98 academic year.
• Certain highly qualified special education and secondary mathematics or science teachers can qualify for up to $17,500 in forgiveness. Other eligible teachers can qualify for up to $5,000.
• PLUS Loans and Perkins Loans are not eligible to be forgiven through this program.
• Any time you spent teaching to receive benefits through AmeriCorps cannot be counted toward your required five years of teaching for TLF.
• To maximize your forgiveness amount, you can apply for a Teacher Loan Forgiveness Forbearance, which means you will not have to make monthly loan payments (however, interest will still accrue). Borrowers who have a loan balance that is greater than the TLF amount they are applying for (either 17,5000 or $5,000) are not eligible for this type of forbearance.
  • For example, Jane teaches special education at an eligible low income school and her loan balance is $10,500. She is planning on qualifying for Teacher Loan Forgiveness in 5 years to pay off her loan balance, but she doesn’t want to make payments in the meantime because lowering her loan balance will reduce her loan forgiveness amount. Jane decides to apply for a TFL Forbearance so she doesn’t have to make payments on her loans and so she can receive as much loan forgiveness as possible.
• You apply for TLF after you’ve completed the five-year teaching requirement.