What Is The Teacher Student Loan Forgiveness Program?

As an incentive for more people to get into teaching, due to a shortage of teachers in the USA, there is a scheme whereby those who go into teaching after college can have their Stafford loans cancelled.

Stafford loans are the most commonly awarded type of federal student loan, and can really help a lot of people who couldn't otherwise afforded it to get a college education. They have to be paid off, with monthly repayments usually starting six months after you graduate.

If you go into teaching, you may qualify for cancellation of the remainder of your loan balance, up to a maximum amount of $17,500, after you have successfully met all of the requirements for the Teacher Student Loan Forgiveness Scheme. The standard loan forgiveness has a maximum of $5000, but the $17,500 ceiling is available to teachers of math or science in qualifying schools or teachers who work with students with special needs. The forgiveness applies to the full, aggregate amount you have left to repay, comprising both you original loan amount and interest that has been accrued over the years you have held the student loan.

The main criteria for qualifying to have your Stafford Loan balance cancelled as a teacher, is that you must have completed five consecutive school years as a full time teacher in an eligible elementary or secondary school. You do not have to serve all five of these years at the same school, but the schools you work in must all meet the criteria prescribed for the scheme and the years must run consecutively (with some exceptions, such as if you are called up for active service as part of a reserve part of the US military or have to take time off because of ill health which is covered by the Family and Medical Leave Act of 1993).

This means that even if you go straight into teaching after college, you will still be making your loan repayments for five years while you are working, before you will be able to have your student loan forgiveness approved.

The schools that qualify for the loan forgiveness scheme are the schools deemed to be most in need of good teachers. These are elementary and secondary schools in poorer areas. Your school needs to qualify for Title I funding, have an enrollment of a minimum of 30% of pupils who qualify for Title I funding and services, and be listed on the Annual Directory of Designated Low-Income Schools for Teacher Cancellation Benefits - this list is updated each year, but if your school is taken off the list after you have served over a year there any subsequent years may still count towards you five consecutive full time teaching years.

When you apply for your loan forgiveness, you can get forbearance on loan repayments while a decision is reached, which can take up to 135 days.

The forgiveness scheme only applies to the balance left on your loan after your fifth consecutive year of eligible teaching work. You cannot get refunds on loan repayments you have already made, even if your outstanding amount is much less than the maximum loan forgiveness dollar amount.