A look at Eligibility Codes in Teacher Loan Forgiveness Program

Posted on July 19, 2016

Are you planning to take up the job of a teacher after finishing education? Are you worried about the pay-scales not fulfilling your career objectives, and moreover the burdensome loan you have taken in the sophomore year! Well, you are lucky to be living in 2016 for you have more reasons to celebrate and cherish than your seniors.

The federal government is offering forgiveness of up to USD 18,000 on every subsidized and non-subsidised loans, falling under Direct Loans and Federal Stafford Loans. But you need to put your eligibility in the reckoning to avail the benefits under the Loan forgiveness program for teachers.

Eligibility criteria

• You can’t have any outstanding balance on any of your previous Direct Loans. It includes the Federal Family Education Loan program too, as on October 1, 1998.
• If you have PLUS loans only, you can’t ask for forgiveness.
• Unless you have made satisfactory repayments towards subsidized or un-subsidised loans as an defaulter, you can’t apply for a forgiveness benefit. It is applicable for all defaulters.
• You can apply for the forgiveness as a teacher only if you have completed five years of regular, unchallenged employment without missing your monthly repayments towards the loan.
• The term with the AmeriCorps and Peace Corps may not be counted as a forgiveness factor unless you have already completed the mandatory five years of teaching experience for Teacher Loan forgiveness.

Organizations you must have worked with
For you to earn forgiveness as part of the Teacher Loan Forgiveness scheme, you must have the following employer details on your resume. Elementary school/ District school qualifying as part of the Title I regularised under Elementary and Education Act- 1965

How much is the forgiveness
Once certified by the management of the school, a teacher can receive up to USD 5000 as forgiveness. The amount varies between USD 5000 to USD 17,500 depending on the qualification of the teacher, the subjects taught in the school and the speciality training programs managed by the teacher.

Are breaks in employment accepted?
There is an exception to the clause where a teacher has to complete five consecutive academic years with the regularised institution. Just in case, you fail to complete a year or more in teaching, you may still push your eligibility for the forgiveness.

This is how…

• You should have completed at least half the academic year
• You should have successfully completed the contract requirement as laid by the employer towards earning salary, benefits, leaves and retirement plans

The accepted reasons for incompletion are:

• Break to complete remaining part of the education: Graduation, Master’s and Doctorate programs
• You have a condition as laid by the Family and Medical Leave Act-1993
• You were asked to serve as part of a training program for 30 days at least owing to your membership towards AmeriCorps/ Peace Corps/ Armed forces.

Depending on your employer capabilities, there are different tiers towards earning forgiveness ($0 to$17500)

Loan Cancellation is Part of Teacher’s Loan Forgiveness Program too

Posted on July 5, 2016

Before putting up a requisition for loan forgiveness, have you explored the other significantly beneficial alternative for teachers? As a teacher, there are handfuls of loan forgiveness programs sponsored from federal authorities. And one of the better alternatives is the loan cancellation.

How is loan cancellation different from forgiveness?
Both loan forgiveness and cancellation fall in the same category of Teachers Loan Forgiveness Program. The most conspicuous distinction between cancellation of loans and forgiveness is that the former can earn the total discharge from loans.
On the hindsight, the 100% loan cancellation or discharge is available on Federal Perkins Loan. If you have only PLUS loans, your eligibility for cancellation is not registered.

Eligibility for Loan cancellation
Much like the loan forgiveness program for teacher, cancellation too requires you to fulfil the eligibility criteria.

• Serve as a teacher in rural community, or teaching in a school for low-income students
• Speciality subject teacher for infants, toddlers, kids and youths with physical disabilities
• Subject matter expert teacher in the field of mathematics, science, technology, bilingual subjects, or in other subjects where there is a shortage of teaching professionals (particular to the state)

The best aspect of the Loan cancellation as designed in the Teachers Loan Forgiveness Program is that the eligibility is linked to the duties performed and not on the titular position held at the time of application.

Academic Experience to earn cancellation
Most teachers confuse the academic year pertaining to the cancellation of loans. Unlike the forgiveness part where you have to necessarily put in 5 years of continuous schooling experience, you have to earn at least one year of un-interrupted academic year experience. It excludes the holidays, vacation and other events where there was no productive teaching experience. Approximate term of two and half years is considered as the eligible academic term for earning cancellation.

How to speed up loan cancellation
Federal loan agencies offer the benefit of multiple employment. You can earn loan cancellation by teaching part-time in multiple schools, but the conditions remain the same. You have to produce certificates on your employment terms even if they were as guest trainer or as a part-time faculty.
Loan forgiveness program for teachers also covers professionals teaching in private schools. Make sure that the school is established as a non-profit organization and registered under the Internal Revenue Service- IRS.

Signing up for cancellation under Forgiveness Program for Teachers
Get the Perkin Loan deferment/ cancellation form from the school or from the loan agency. Submit the form after completion attested with your latest photograph, salary slip and official seal of the school.
You can submit the form at the office that administers the Perkin Loan program in your area.

Cancelled amount increments
Forgiveness is non-taxable. Depending on the program, the loan cancellation for teaching is earned as:

• 15% per year for 1st and 2nd year of teaching
• 20% for 3rd and 4th years
• 30% for the 5th year

The interest and the accrued amount are included in the cancellation.