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Program Administration

Program Administration

Student Loan Repayment Program

About this page

This webpage provides guidance for efficient FY25 program administration, assisting districts who were awarded funds under the Student Loan Repayment Program with resources and answers to frequently asked questions (FAQs) regarding best practices for program monitoring and operations.

Pull down each accordion section to learn more.

IMPORTANT: The Michigan Department of Education (MDE) may send an amended Grant Award Notification (GAN) to districts whose participants’ approval status had changed as a result of the MDE auditing process completed after their initial GAN was sent. In addition to the information presented below, MDE asks districts to be aware that amended GANs may be issued at some point in August 2025, with a corresponding State Aid payment in September 2025.

State Aid Payments to Districts

    • All GANs from the FY25 Student Loan Repayment Program will be distributed to districts in mid-August 2025.
    • Districts with at least one approved participant employed at the district will receive a GAN. Districts where there no participants were approved will receive a different notification, around the same time as GAN distribution.
    • For districts receiving a GAN, one transfer of funds for the FY25 Student Loan Repayment Program will be made to those districts, along with their regular State Aid payment. This will be on August 20, 2025.
    • Since Student Loan Repayment Program funds are state funds, Section 18a of the State School Aid Act applies.
      • The actual final date to spend Student Loan Repayment Program funds is one year from the year a district initially received the funds, ending with the State of Michigan (SOM) FY26 (September 30, 2026).
      • Per the statute, districts must notify the program office by November 1, 2025, of the district’s intent to take advantage of this extra year. An email to MDE-EdWorkforceGrants@Michigan.gov is all that is required. This will allow districts the time they need to complete the correct calculations for payments to approved participants (see below) and make FY25 payments.
    • IMPORTANT: Funds that have been distributed to districts are for FY25 only (10/1/24 through 9/30/25).  No payments to participants may be made for months of loan payments occurring in October 2025 and going forward, even if these participants are approved for the FY25 Student Loan Repayment Program.
    • Please continue to monitor the Student Loan Repayment Program main webpage for information on FY26 applications.
    • MDE has calculated each district’s final GAN award amount as a total of all maximum possible payments for all months in FY25, per approved participant.
    • This means each district receiving a GAN will be transferred more funds than will initially appear necessary to make all payments to their approved participants.
    • By providing districts with excess funding for necessary payment flexibility, districts have freedom to respond to unforeseen situations where a participant’s actual monthly loan payment increases within the grant period, but after the date of application.
    • The actual payment(s) for each approved participant will need to be calculated by the district, using the table attached to their GAN as a guide.
      • The total amount that should be passed from the district to each approved participant is composed of:
        • The exact payments made for all qualifying month(s) of claimed student loan payments between October 2024 and April 2025 (inclusive), not to exceed the monthly maximum, plus
        • The expected loan payment claimed by the applicant for each month between May 2025 and September 2025 (inclusive), not to exceed the monthly maximum.
    • IMPORTANT: The table included with the GAN will show the original amount claimed by the applicant on their application, but, for any given month, this amount may exceed this maximum.
    • Maximum payments for any month (past or current) are $200 or $400 (depending on Band 6 OIS). Districts cannot pay more than the maximum for any given month, regardless of the payment amount claimed by educator.

Passing Payments to Participants

    • Districts should first refer to the Section 27k Student Loan Repayment Program Financial Considerations and Accounting Guidance, published July 21, 2025, in collaboration with the Office of State Aid and School Finance.
    • KEY CONCEPT: Districts have the responsibility to make “regular monthly payments on an equal basis” (MCL 388.1627k) to participants equal to the actual payments they make to their loan servicer, up to the maximum amount of $200 or $400 (see above).
      • Note: this means participants may be paid less than the maximum amount, even though districts have been sent the maximum amounts per participant in their State Aid payments.
      • The maximum amount sent to districts thus becomes an “escrow” against which payments can be made, and potential future increases in monthly payments incurred by educators can be accommodated.
      • Districts must create systems to account for the excess paid to each participant, with accurate recordkeeping of payments paid against maximum balances.
    • It is important to understand the money paid to eligible participants under the Student Loan Repayment Program is not a wage or salary. MDE recommends using the accounting code 2390 to designate monthly payments to participants as an “Other Special Allowance.”
    • Districts should create financial systems that efficiently pass both initial and monthly payments to participants, minimizing delay.
    • IMPORTANT: MDE does not provide tax advice. Districts are encouraged to communicate with participants about IRS Publication 970 and to direct participants to tax professionals for information about thresholds for non-taxable benefits.
    • After receiving funds from MDE with State Aid payments, districts should first plan to calculate and pass an initial payment to each listed participant which represents the sum total of all actual monthly payments made to the participant’s loan servicer, to the maximum of $200 or $400 per month (see above), between October 1, 2024 and the month in which the district received the Student Loan Repayment Program funds.
    • At the time of creating the GANs for distribution, MDE already used the number of “back” payments to October 1, 2024, in its calculations for total award, multiplying this number by $200 or $400, adding to this amount a calculation for the maximum monthly payments needed to finish out the State of Michigan’s FY25.
    • To allow for 12 months of possible maximum payments, a district’s GAN award is $2,400 or $4,800 (depending on Band 6 Opportunity Index Status, or OIS), per approved participant.
    • Thus, districts will be sent more than enough funds to first pay each of their listed participants an initial payment that accounts for the total of the actual payments made to their loan servicer between October 1, 2024, and the month when their applicant district received funds in the State Aid payment.
    • Districts should refer to their own participant records to calculate this payment; the method of payment is left up to the district. MDE recommends this initial payment remain separate from each monthly payment going forward for ease of recordkeeping.
    • Once an initial payment is calculated and made, districts are expected to use the actual monthly payment information collected by eligible participants, and included in the GAN, to make regular monthly payments to participants going forward, until the end of September 2025.
    • Reminder: FY25 funds cannot be used to reimburse participants for months of loan payments that start October 2025.
    • The method and schedule of payments are left up to the district.MDE recommends districts communicate with their participants to establish a regular schedule of when monthly payments will be passed to participants for best financial planning on both ends.
    • In accordance with district policies and procedures, it is also acceptable for a district to choose to pay its approved participants one lump sum paid in September 2025, reflecting all months that their approved participants claimed payments for FY25.
    • Again, MDE recommends districts communicate with their participants to establish a schedule of when a lump sum payment is expected to be passed to participants for best financial planning on both ends.

Staff Transitions

    • Staff members who are approved participants for the FY25 Student Aid Repayment Program who left employment at a point between the submission of the application and the August State Aid payment made to the district should still receive their initial payments as described above.
      • The district is expected to determine a method for sending a departing participant the initial payment in a manner as efficient as possible given the circumstances of departure.
      • The district should not plan to continue paying monthly payments after the initial payment is made.
    • Since districts cannot modify past Student Loan Repayment Program application data for past years, participants who may have been eligible and who may have been listed in a previous district’s application will have to wait for their new district to include them in the next year.
    • Districts should not plan to provide these new employees monthly payments when they join their district, even if they were eligible and approved under a previous application and subsequent award.
      • These participants should plan to apply during the FY26 application window.
      • These participants should review their eligibility using the information found on the Student Loan Repayment Program webpage, since circumstances may have changed in the transition time.
    • MDE encourages cooperation between intermediate school districts (ISDs) or Regional Education Service Areas (RESAs) and the districts within their service area to ensure a continuity of personnel services for employees that transfer between employment for an ISD or RESA and an individual district (or vice-versa), where possible.
    • Pursuant to an agreement between a district and its ISD or RESA, a participant receiving monthly payments under the Student Loan Repayment Program can continue to receive those payments even if they transfer employment to or from a district and its ISD or RESA.
    • Under MCL 388.1627k, it is the responsibility of the individual participant to notify MDE of any changes in actual payment amount, as well as whether or not their student loan(s) have been paid off or forgiven.
    • Individual participants should follow the instructions that will be posted on the Student Loan Repayment Program webpage in mid-August to report changes in payments since the time of application.
    • If a participant leaves employment, the district should stop monthly payments starting on the month following leaving employment. Note that the participant may still be due an initial payment for back months paid (see above).
    • If a participant remains employed but drops out of eligibility for any reason (for example, begins working less than 32 hours per week, or takes a role that the district deems no longer working directly with students for at least 50% of their assigned time), then the district should stop monthly payments starting on the month following the transition out of eligibility.
    • Individual educators do not have the right to appeal the result of the application review conducted by MDE. However, as an intermediate school district, traditional public school district, or public school academy, you have the right to appeal the decision on your behalf. This would be considered an informal appeal. 
    • MDE has set up a separate webpage to assist districts in understanding the four-step process for making an informal appeal on behalf of their employees: FY25 Student Loan Repayment Program Informal Appeals Process. 
    • Please note the following before you begin. 
      • Communicating with individual employees regarding specific reasons for their denial and/or the next steps for the informal appeal is done at the discretion of the employing district. 
      • Submitting an informal appeal on behalf on employees does not automatically result in a denial being overturned. 
      • There is no set time limit for the resolution of an informal appeal. 
      • MDE staff will not communicate directly with employees about the status of their appeal.