4 Loan Forgiveness Programs for Teachers

Loan RepaymentTips for Success5.5 minutes

Teachers with federal student loans have some loan forgiveness program options:

  1. Public Service Loan Forgiveness (PSLF) Program
  2. Teacher Loan Forgiveness (TLF) Program
  3. Perkins Loan cancellation for teachers
  4. State-sponsored student loan forgiveness programs

Read on to learn which ones you may be eligible for and tips for weighing the options.

1

Public Service Loan Forgiveness (PSLF) Program

PSLF forgives the remaining balance on your Direct Loans after 120 qualifying payments (a minimum of 10 years).

Unlike other programs, PSLF doesn’t require you teach at a low-income public school. Instead, PSLF requires that you work for a qualifying employer. This includes government organizations at any level (U.S. federal, state, local, or tribal), nonprofit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code, or other nonprofit organizations that provide certain types of qualifying public services.

You must have Direct Loans. If you have other types of federal loans, like Federal Family Education Loan (FFEL) Program loans or Federal Perkins Loans, you must consolidate in order for those loans to qualify. Visit your StudentAid.gov Dashboard to check which types of loans you have.

You should repay your loans on an income-driven repayment (IDR) plan if you want to get the most value out of PSLF. You can apply for an IDR plan online.

In order for your payments to count toward the 120 needed to get forgiveness, you must meet specific requirements.

Loan amounts forgiven under PSLF are not considered taxable by the IRS. 

You can use the PSLF Help Tool to confirm whether you qualify for PSLF and check if your previous payments have counted.

View complete program details at StudentAid.gov/publicservice.

2

Teacher Loan Forgiveness (TLF) Program

TLF forgives up to $17,500 of your Direct Subsidized and Unsubsidized Loans and Subsidized and Unsubsidized Federal Stafford Loans after five complete and consecutive years of teaching at a qualifying school.

To qualify for TLF, you must have been employed as a full-time teacher at an eligible school for five complete and consecutive academic years. At least one of those years must have been after the 1997–98 academic year, and you must have been a new borrower on or after Oct. 1, 1998.

Any time you spent teaching to receive benefits through AmeriCorps, or time counted toward PSLF or TEPSLF, doesn’t count toward your required five years of teaching for TLF.

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.

Direct PLUS Loans, FFEL PLUS Loans, and Perkins Loans aren’t eligible to be forgiven through TLF. Only Direct Subsidized and Unsubsidized Loans and Subsidized and Unsubsidized Federal Stafford Loans qualify.

To maximize your forgiveness amount, you can apply for a TLF forbearance. If approved, you won’t have to make monthly loan payments; however, interest will still accrue (add up). Borrowers with eligible loans and a balance that is greater than the TLF amount they are applying for (either $17,5000 or $5,000) aren’t eligible for this forbearance type. 

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 TLF in five 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 TLF forbearance so she doesn’t have to make payments on her loans and can receive as much loan forgiveness as possible.

Jane applied for TLF forbearance because you apply for TLF after you have completed the five-year teaching requirement. Learn more about the TLF Program.

Ally has been teaching at a low-income school for six years, and her loan balance is $17,500. She should enroll in TLF. Josh has been teaching at a public school for two years, and his loan balance is $60,000. He should enroll in PSLF.
Choosing the student loan forgiveness program that’s right for you depends on your circumstances.

3

Perkins Loan Cancellation for Teachers

This program forgives up to 100% of your Federal Perkins Loan(s) if you teach full time at a low-income school or if you teach certain subjects.

Perkins Loan cancellation for teachers can only forgive your Federal Perkins Loans. Visit your StudentAid.gov Dashboard to check if you have Perkins Loans.

If you’re eligible for Perkins Loan cancellation, up to 100% of your loan(s) may be canceled in the following increments:

  • 15% canceled per year for the first and second years of service 
  • 20% canceled for the third and fourth years 
  • 30% canceled for the fifth year

Each amount canceled per year includes the interest that accrued during that year. Unlike other forgiveness programs, Perkins Loan cancellation forgives portions of your loans in yearly increments after you meet service requirements. Other forgiveness programs wait to forgive your loans until after you complete all the required years of your service requirement.

To find out if a school is classified as a low-income school, check our online database for the year(s) you’ve been employed as a teacher. 

Even if you don’t teach at a low-income school, you may qualify if you teach mathematics, science, foreign languages, bilingual or special education, or any subject determined by your state education agency as having a shortage of qualified teachers. 

Private school teachers can qualify if

  • the school has established its nonprofit status with the Internal Revenue Service (IRS) and
  • the school is providing elementary and/or secondary education according to state law. 

Learn more about Perkins Loan cancellation. To apply for Perkins Loan cancellation, contact the holder of your Perkins Loan for next steps.

4

State-Sponsored Student Loan Forgiveness Programs

Many states offer loan forgiveness programs for teachers—especially if you teach in a high-need area. Reach out to your state’s education agency for details.

How To Weigh Your Forgiveness Options

Select the link below for a comparison of the PSLF and TLF programs.
Learn the ins and outs of the TLF and PSLF Programs before choosing one.

See a text-only version of the image above, “Two Loan Forgiveness Options for Teachers.”

Trying to decide whether to work toward PSLF or TLF? Compare the total amount you’d pay over the life of your loan(s) under each program by using Loan Simulator

The results page in Loan Simulator shows the total you would pay under the plan that would result in the lowest amount paid over time.
Example of the results page in Loan Simulator, showing the Income-Based Repayment Plan.

You can also ask your federal loan servicer. Your servicer can explain your options using your specific situation and make any changes you need for your repayment plan. If you have specific questions about PSLF, reach out to the Federal Student Aid Information Center (FSAIC) at 1-888-303-7818.

If You Qualify for More Than One Program

You may qualify for more than one of the federal forgiveness programs above, but in some instances, your decision to take advantage of one program may impact your ability to take advantage of another. So be sure you look at them all carefully.

You must have Direct Loans in order to qualify for PSLF. If you have any Perkins Loans, you may be tempted to consolidate them into a Direct Consolidation Loan to make them eligible for PSLF. However, if you do that, you’ll no longer qualify for Perkins Loan cancellation. You may be better off leaving your Perkins Loans as they are, so you can take advantage of both programs.

You may not receive a benefit under both the TLF Program and the PSLF Program for the same period of teaching service. For example, if you make payments on your loans during your five years of qualifying employment for TLF and then receive loan forgiveness for that service, the payments you made during that five-year period will not count toward PSLF.

Some people could benefit from both PSLF and TLF. For example, you could receive TLF after 5 years and PSLF after 15 years. This is a rare situation that is ideal for a borrower with a higher loan balance and a lower annual gross income.

Make sure you consider your unique situation as you decide which forgiveness programs to work toward.