Teacher Loan Forgiveness

Quick Facts

• Benefit type: Federal loan forgiveness that cancels up to $17,500 of Direct Subsidized, Direct Unsubsidized, Subsidized Federal Stafford, and Unsubsidized Federal Stafford loans.
• Who qualifies: Highly qualified teachers who work full time for five consecutive academic years in low-income schools or educational service agencies.
• Maximum forgiveness: $17,500 for mathematics, science, and special education teachers; $5,000 for other subject areas.
• When to apply: After completing the five-year service requirement, submit the Teacher Loan Forgiveness Application to your loan servicer.
• Key advantage: Unlike PSLF, you do not need to make qualifying payments; forgiveness is based on service alone.

Program Overview

Teacher Loan Forgiveness (TLF) provides targeted relief for educators who commit to teaching in low-income communities. It encourages highly qualified teachers to serve in schools that struggle to recruit and retain staff. The program covers loans made under the Direct Loan Program or the Federal Family Education Loan (FFEL) Program, provided the loans were originated after October 1, 1998. Graduate PLUS and Perkins Loans are not eligible, though Perkins borrowers may pursue separate cancellation benefits.

The program differs from Public Service Loan Forgiveness (PSLF): TLF requires five consecutive years of teaching and forgives a fixed dollar amount, whereas PSLF requires 120 qualifying payments and forgives the remaining balance. Teachers can pursue both programs, but the same service years cannot count toward both. Strategic planning is essential to maximize benefits.

Eligibility Requirements

To qualify, you must meet the following criteria:

1. Full-time teaching: Work full time for five complete and consecutive academic years in a qualifying low-income school or educational service agency listed in the Teacher Cancellation Low Income (TCLI) Directory.
2. Qualifying employer: The school must be a Title I-eligible elementary or secondary school or an educational service agency serving low-income families. Private schools can qualify if they meet Title I standards and operate as nonprofit organizations.
3. Highly qualified status: You must meet the definition of “highly qualified” under the Every Student Succeeds Act (ESSA), which generally requires a bachelor’s degree, full state certification, and no certification waivers.
4. Loan type and status: Only Direct Subsidized/Unsubsidized or FFEL Stafford loans qualify. Loans must be in good standing (not in default) or have arrangements for default resolution before forgiveness.
5. Timing of loans: At least one of the five consecutive years must occur after the 1997–98 academic year. Loans must have been made before the end of the five-year service period.
6. No overlapping service for PSLF: Service periods used to obtain TLF cannot be counted toward the required 120 payments for PSLF. You can pursue PSLF after receiving TLF, but you must make additional qualifying payments.

Special Considerations

• Multiple schools: You can combine service across different qualifying schools as long as the service is consecutive without breaks of more than 12 months and you meet full-time requirements each year.
• Breaks for maternity or military leave: Official leave under the Family and Medical Leave Act or military service can count toward consecutive years if documentation shows you were on approved leave.
• AmeriCorps benefits: If you receive an AmeriCorps education award for the same service, you cannot count that year toward TLF.

Benefit Details

• $17,500 category: Highly qualified secondary math and science teachers, and special education teachers serving students with disabilities. Special education teachers must demonstrate knowledge of teaching disabled students and meet state special education certification.
• $5,000 category: All other highly qualified elementary or secondary school teachers.
• Partial forgiveness: If your qualifying loan balance is less than the maximum, only the outstanding principal and accrued interest up to the service completion date are forgiven.
• Tax implications: Teacher Loan Forgiveness is not taxable under current federal law (through 2025 per the American Rescue Plan Act changes).

Application Process

1. Complete service: Ensure you have documentation for five consecutive full academic years. Keep contracts, pay stubs, and evaluation letters.
2. Download application: Access the Teacher Loan Forgiveness Application from Federal Student Aid.
3. Fill out borrower sections: Provide personal information, loan details, and indicate the forgiveness amount category ($5,000 or $17,500).
4. Obtain employer certification: Have the chief administrative officer of the school or educational service agency complete Section 4 certifying your service years, subject area, and highly qualified status. Ensure they include school codes and contact information.
5. Submit to loan servicer: Mail or upload the completed application to your loan servicer (e.g., MOHELA, Nelnet, Aidvantage). Keep copies for your records.
6. Servicer review: The servicer verifies eligibility, which may take 60–120 days. They may request additional documentation.
7. Forgiveness posted: Approved amounts are applied directly to the loan principal. If you have multiple loans with the same servicer, indicate how to allocate the forgiveness.

Required Documentation Checklist

• Employment contracts or HR letters confirming full-time status and dates.
• Certification letter from principal or HR director confirming you are highly qualified and taught the relevant subject.
• State teaching license or certification verification.
• Loan statements showing outstanding balance.
• Records of leaves of absence (if applicable) approved under FMLA or military leave.
• Copies of previous TCLI Directory listings showing your school was eligible during each year.

Deadlines and Timing

• When to apply: After completing the fifth consecutive year. You can apply any time after that as long as the loans exist.
• Processing time: 2–4 months depending on servicer workload. Follow up if you do not receive confirmation within 90 days.
• Deadline considerations: Apply before consolidating eligible loans into a Direct Consolidation Loan if you intend to use TLF; consolidation resets the clock unless the new loan includes only loans that were eligible.
• Recertification: Not required annually; once forgiveness is granted, it is permanent.

Interaction with Other Programs

• Public Service Loan Forgiveness: After receiving TLF, you can still pursue PSLF. However, the five years used for TLF cannot count toward PSLF’s 120 payments. Consider whether to apply for TLF or focus solely on PSLF depending on loan balance and career plans.
• Income-Driven Repayment (IDR): Payments made during the five years can be under any repayment plan. If you anticipate large remaining balances, staying on IDR and pursuing PSLF may yield greater forgiveness.
• Perkins Loan Cancellation: If you have Perkins Loans, pursue Perkins cancellation separately; those loans are ineligible for TLF but have their own teacher forgiveness pathway.
• State incentives: Some states offer additional teacher loan repayment programs. TLF can be stacked with state benefits if program rules allow.

Maximizing Your Benefit

1. Verify school eligibility annually: Check the TCLI Directory each year to confirm your school remains on the list. Save screenshots or printed pages as evidence.
2. Maintain documentation: Keep thorough records of service, including evaluations, licenses, and subject assignments, to avoid delays when applying.
3. Choose high-demand subject areas: If you have the qualifications, teach math, science, or special education to access the higher $17,500 benefit.
4. Avoid default: Stay current on loan payments or work with your servicer to rehabilitate defaulted loans before applying.
5. Coordinate with PSLF strategy: If you have large loan balances, weigh the benefits of applying for TLF versus counting those years toward PSLF. Some teachers opt to forgo TLF to preserve the five years toward PSLF’s 120 payments.

Common Mistakes to Avoid

• Incorrect school listings: Submitting applications for schools not in the TCLI Directory leads to denial. Confirm the exact school name and district.
• Incomplete employer certification: Missing signatures, incorrect dates, or failing to indicate highly qualified status are common issues. Review forms with HR before submission.
• Consolidating too early: Consolidating loans before applying can reset eligibility. Submit your TLF application first, then consolidate remaining balances if desired.
• Misunderstanding consecutive years: Taking a break between school years longer than 12 months or switching to part-time breaks the consecutive requirement.
• Assuming automatic forgiveness: You must submit the application; servicers do not forgive loans automatically even if they see you teach in a low-income school.

Example Scenarios

• Special education teacher: Maria teaches special education at a Title I elementary school for five consecutive years. She applies and receives $17,500 in forgiveness on her Direct Unsubsidized Loan, reducing her balance to $6,000.
• High school math teacher: Devin teaches Algebra II in a rural low-income high school, qualifies as highly qualified, and secures $17,500 forgiveness. He continues working toward PSLF for the remaining balance.
• Elementary teacher: Priya teaches first grade at a qualifying school and applies for the $5,000 forgiveness. She plans to combine TLF with state loan repayment assistance offered by her district.

Frequently Asked Questions

• Can I receive TLF twice? No. The maximum forgiveness per borrower is $17,500, though you can apply multiple times to reach that amount if you originally qualified for $5,000 and later meet criteria for $17,500.
• What if I taught part of a year? Partial years do not count unless you completed at least one half of the academic year and your employer considers it a full year due to qualifying leave or placement from a state-approved alternative certification program.
• Are charter schools eligible? Yes, if they are nonprofit, Title I-eligible, and listed in the TCLI Directory.
• Does substitute teaching count? No. Only full-time classroom teachers qualify.
• Is the forgiveness taxable? Under current federal law, no; forgiven amounts are excluded from taxable income through 2025, and Congress may extend this provision.

Additional Resources

• Federal Student Aid Teacher Loan Forgiveness page
• Teacher Loan Forgiveness Application (PDF)
• Teacher Cancellation Low Income (TCLI) Directory
• Public Service Loan Forgiveness program
• NEA student debt support toolkit