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Frequently Asked Questions (FAQs) and Clarifications

Frequently Asked Questions (FAQs) and Clarifications

FY26 Student Loan Repayment Program

  • On December 18, 2025, an official MDE memo was posted explaining legislative changes that repurpose funding from the Student Loan Repayment Program in the State School Aid Act. As a result, plans for the development and administration of an application for FY26 funds were discontinued.
  • MCL 388.1627l of the FY 2026 State School Aid Act provides over $350 million to districts to increase educator compensation and offset normal costs associated with retiree health care benefits. MDE encourages districts to consider using a portion of these funds to help educators manage student loan expenses or otherwise enhance total compensation.
  • There is no effect on the distribution of funds or the administration of payments for the FY25 Student Loan Repayment Program. Those educators whose applications were approved should receive correct payments from their employers, who have already, or will soon, receive official Grant Award Notifications (GANs). Districts newly receiving GANs are encouraged to consult the Program Administration webpage for the FY25 Student Loan Repayment Program for best practices in administering payments.

FY25 Student Loan Repayment Program Questions

Understanding FY25 Application Denials

Application

  • In FY25, the application required individuals to apply. They provided relevant personal information and the monthly amounts of their student loan information, uploading matching loan documentation for verification. Districts used the system to supply employment details necessary to complete the eligibility confirmation. Application instructions and eligibility requirements were made available to the public on the main page of the Student Loan Repayment Program.

  • Yes, this was allowed under the FY25 statute (MCL 388.1627k). The Student Loan Repayment Program was available to any school employee who works directly with pre-K to grade 12 students for 50% or more of their working time (per examples listed in MCL 388.1627k). As a reminder, any third party who completed an application on behalf of an individual applicant made assurances that the information provided was accurate and submitted by the deadline in order to be processed.

  • The list of eligible PSLF loan types is still available on the Federal Public Service Loan Forgiveness webpage and our Student Loan Repayment Program webpage, under “Information for Applicants.”

  • No. MCL 388.1627k states that eligible district staff members will remain eligible for other student loans when receiving funds under this program.

  • The application allowed an individual to report the exact amount of their loan payments as far back as October 1, 2024. Applicants were required to ensure that all documentation uploaded with the application verified that these payments had been made. Note they were also required to include the expected amounts of monthly payments between the time of application and September 30, 2025.
  • No—funds are distributed to districts, who will provide payments to eligible participants.
  • If an application is approved through both the loan verification and employment verification steps, the applicant’s employing district will be notified via an official Grant Award Notification (GAN) process that will take place by August 2025. Please note that employing districts will not know the status of your application until then. Once MDE sends GANs to employing district, MDE will announce this on the Student Loan Repayment Program website. 

Eligibility

  • Eligibility of participants is determined using the following criteria:

    • participating in a federal student loan forgiveness program as described in subsection (3) and (4) of MCL 388.1627k, also found on the Student Loan Repayment Program webpage;
    • meeting federal loan and payment plan requirements as described in subsection (3) and (4) of MCL 388.1627k;
    • working 32 hours or more per week at a district or intermediate district; and
    • at least 50% of that working time is spent in direct contact with pre-K to grade 12 students.
  • An employer is responsible for categorizing whether an employee’s position or work assignment has at least 50% of its assigned time spent in direct contact with pre-K to grade 12 students. All applicants for FY25 will be referred to their own employers for those definitions.
  • Yes, you can still apply for “back payments” from October 1, 2024, and going forward, even if your loans are newly paid off as of February. You will simply put $0 in for the months the application shows, from February onward.
  • According to the wording provided by MCL 388.1627k, the law restricts individuals from participating because “the department shall make payments to the district or intermediate district that employs each eligible participant”. Since staff members hired by third-party companies or organizations are by definition not employed by a Michigan intermediate school district, traditional public school district, or public school academy, they are not eligible to receive funds under the Student Loan Repayment Program.
  • Per section 27k, the statute does not specify the age of the students. The statute requires that, for a teacher to be eligible, they must have at least 50% of their working time spent in direct contact with students in a PreK-12 program. This includes Early On programs.

    For students between the ages of 18-26, if the district records these students as Grade 12 students, following special education and Pupil Accounting policies, then educators working directly with these students would meet the description found in MCL 388.1627k. Residential- and institutional-based programs do not qualify.
  • Final determinations are a two-step process. MDE staff are responsible for verifying loan documentation submitted by individual applicants. The individual’s employing district is responsible for verifying all employment data submitted with the application.
  • If the employment status of a program participant changes in such a way that the participant is no longer working at least 32 hours per week at their district, then the Student Loan Repayment Program monthly payments that are made to the educator must immediately stop. If this happens, the staff member must immediately inform MDE at MDE-EdWorkforceGrants@Michigan.gov.
  • Most leaves of absence would have no impact on an applicant’s student loan repayment program. However, an interruption of employment would impact eligibility. To determine if an applicant is on a type of leave that is not considered an interruption to employment, please work with your HR department. A policy should be in place to determine if there is an interruption to employment versus an eligible leave of absence.

Information for Districts

  • We recommend the following procedure:

    • Information related to districts’ Opportunity Index Score is publicly available on the Department’s State Aid Payment Information page.
    • Download the spreadsheet with the “2024-25 At Risk Estimates” link from the Office of State Aid and School Finance.
    • Opportunity Index (OI) Scores are determined based on districts’ prior year fall ED count.
    • The spreadsheet includes each district’s OI Score in Column H.
    • Districts with OI Scores of 85 or higher are in Band 6.

  • No, due to the restrictions in MCL 388.1627k.

  • While the MDE cannot provide tax-related advice, it recommends that school districts stay in touch with qualified professionals to get the final word on tax implications arising from grant reimbursements. This includes understanding how publicly available sources such as IRS Publication 970 relate to their local fiscal policies.

  • No. These payments are considered reimbursements for student loan debt and are not reported to ORS. Accordingly, they are not eligible to be included in an FAC, and the employer should not report it on DTL2 Wage and Service or DTL4 Defined Contributions records. Please contact ORS with questions. 

    Please see the ORS Public School Reporting webpage for more information regarding the reportability of additional educational funding.

  • Each district that has an eligible participant in the student loan report program shall report distributions to the Michigan Department of Education (MDE) annually. That report and or reconciliation shall include but is not limited to the amount disbursed to eligible participants.   

  • Ultimately, the participant was responsible for submitting accurate, appropriate, and factual data utilizing the application system. If it was found that inaccurate or incomplete data was provided, the participant was denied during the application process.

  • In this case, the participant would report this to their employer, and the district would notify MDE that it intended to cease payments starting with the month after the payoff.

  • For school staff that may not yet be assigned a PIC (for example, newly hired personnel whose names have not yet been entered into the Registry for Educational Personnel, or REP), a PIC may be requested from the Center for Educational Performance and Information (CEPI), found on page 7 of the REP PIC Search User Guide.