Are You Eligible for Student Loan Forgiveness?

Many educators may qualify to have their student loans reduced or erased. It could save you significant money.

Female Happily Paying Bills Online

by NEA Member Benefits


IMPORTANT COVID-19 UPDATE: If your income has gone down suddenly due to a layoff or reduction of hours, you may be eligible to have your student loan payment reduced through a federal income-driven repayment program. Please visit the new automatic sign-up tool that our partners at Savi created to help NEA members dealing with the economic impacts of the novel coronavirus.

If you spotted tens of thousands of dollars just lying on the street, you’d pick it up, right?

Of course you would. But many educators who are eligible for college student loan forgiveness don’t take advantage of the various programs. These people are walking right past that big pile of money on the street.

Approximately 37% of adults under age 30 have outstanding student loans. Looking only at those with a bachelor’s degree or higher levels of education, the percentage of those with outstanding student debt jumps to 53%.1 As of 2016, the median student loan debt for bachelor’s degree holders was $25,000 while those with postgraduate degrees owed a median of $45,000.1

According to a report from the American Association of University Women, two-thirds of all this student debt—nearly $900 billion as of mid-2018—is held by women.

The (somewhat) good news is that just 11% of bachelor’s degree holders are having trouble making payments on their loans, and only 5% of graduate degree holders are behind on payments, according to the Federal Reserve.1

Still, many of these borrowers may qualify for favorable loan repayment options extended to those in public-service fields, including education.

Big savings for those who qualify

One path to loan forgiveness is the Public Service Loan Forgiveness (PSLF) program. It’s important to note that this program kicks in only after 120 payments—that is, after 10 years. It went into effect in 2007, so the first actual forgiveness window will be in October 2017. The standard loan repayment program pays down the loan in 10 years, so to benefit from forgiveness under PSLF a borrower would have to slow down payments by enrolling in an income-driven prepayment (IDR) plan or some other form of extension.

In 2012, the U.S. Department of Education introduced a voluntary Employment Certification Form (ECF) so that borrowers can keep track of whether they will qualify for loan forgiveness under PSLF. Since then, approximately 740,000 employment certification forms have been approved.2

There are other options available to teachers for loan forgiveness and exploring them will be well worth your time regardless of the obstacles. Such options are extended to teachers because it’s forecast that the United States will need more than 425,000 educators by the end of the decade to replace retiring baby boomers, and the profession’s average starting salary is only $38,617.

For instance, you can have as much as $17,500 of a subsidized or non-subsidized loan forgiven through the federal Teacher Loan Forgiveness program.

This applies to the William D. Ford Federal Direct Loan (Direct Loan) Program and the Federal Family Education Loan (FFEL) Program loans. You’re eligible if you’ve been teaching full-time in a low-income elementary or secondary school, or an educational service agency, for five consecutive years.

In addition, the Federal Perkins Loan Program allows for loan cancellations up to 100% after five years if you:

  • Serve full-time in a public or nonprofit elementary or secondary school system as a teacher serving students from low-income families, or
  • Are a special education teacher, or a teacher in fields of math, science, foreign languages, bilingual education or other specialties for which your state determines there is a shortage of qualified educators.

There are other special circumstances that can result in a loan being forgiven, canceled or discharged—all of which means the loan doesn’t have to be repaid, according to the U.S. Department of Education. These include a total and permanent disability and, in certain cases, bankruptcy.

Short of loan forgiveness, an IDR plan such as the Income-Based Repayment (IBR) plan sets a borrower’s monthly payment at a fixed percentage of your income so that payments become more manageable. As your income rises, your monthly payments will go up accordingly.

How to claim your loan forgiveness

To be considered for any forgiveness option, you must go through your student loan servicer and indicate which option you’re interested in. You’ll need to complete all paperwork and follow-through, including forms that your employer must sign.

  • If you’ve taught at different schools, you’ll have to have each one sign off on the application.
  • If you have multiple loans with different companies, you have to complete the same process for each one.

But just think of the potential savings you could reap as a result. If  a borrower graduated with $30,000 in debt and currently pays about $350 a month (a typical cost), would end up spending nearly $42,000 over 10 years to resolve the loan, according to estimates by Robert Farrington, founder of The College Investor. With $17,500 forgiven, the payments would shrink to $248 after the fifth year. The borrower would spend an additional $14,900 on the original $30,000 loan—a huge savings.

“It can get complex, but it’s worth it,” Farrington says. “You never want to walk away from ‘free’ money!”

One more option to ease your payments

Even if you can’t take advantage of student-loan forgiveness programs, you still may be able to reduce the interest rates on your loans. There aren’t any federal programs that can lower them, but many student loan-servicing companies offer incentives to do so.

Signing up for automatic payments, for instance, can get a reduction in rates because the servicer is assured of getting the monthly payment on time. This can reduce the interest rate by as much as 2% over time.

You can get more information about federal loan-forgiveness options from the Federal Student Aid site.

The Consumer Financial Protection Bureau offers a student-loan debt toolkit for teachers and other public servants.


1 Source: Pew Research Center analysis of data from the Federal Reserve Board’s 2016 Survey of Household Economics and Decisionmaking.

2 Source: FedLoan Servicing via

Explore your options for student loan repayment and forgiveness