How Public Service Loan Forgiveness Helps Teachers

If you’re a teacher and struggling with student loan debt, the Public Service Loan Forgiveness (PSLF) program may be for you. Here’s how the program can help you:

  • Eliminate all remaining federal student loan debt after 10 years of qualifying payments
  • Combine with Income-Based repayment option to significantly reduce your payments
  • Combine with a student loan consolidation for one easy monthly payment

Are you a teacher at a public school?

With this program, you can shed your federal student loan debt after 10 years of qualified payments. A qualified payment is any payment made under the following repayment plans:

  • Income-based repayment
  • Income-contingent repayment
  • Pay as You Earn
  • Standard Repayment (If you remain on a Standard Repayment program for 10 years, your entire debt will be paid in full. You may still want to enroll in PSLF and get credit for these qualifying payments in case you switch to another payment plan during the term.)

Help! I’m a teacher with high debt and a low salary. What is the best option for me?

The best option for you is to enroll in the Income-Based Repayment program. Under IBR, your payment is based on your income, not your total debt. If your total debt is more than you make in a year, IBR can help you reduce your payments in half, or more. If you combine IBR with the Public Service Loan Forgiveness program, you’ll only have to make 10 years of low payments, before the remainder of your debt is forgiven.

Kate

Kate’s Payment, Before and After IBR

  • Income = $40,000/year
  • Total student loan debt = $65,000
  • No dependents

Kate’s Pre-IBR Payment:          $784
Kate’s IBR-Payment:                  $297
Monthly Savings:                         $487
With IBR, Kate’s total paid after 10 years will be $35,640. That’s $29,360 less than she originally borrowed. Remember that the payment is tied to income, so if Kate’s salary increases over the 10 years, so will her payment – but only in proportion to what she makes.

John

John’s Payment, Before & After IBR

  • Income = $45,000
  • Total Student Loan Debt = $92,000
  • 2 Dependents

John’s Pre-IBR Payment:       $1058
John’s IBR Payment:                 $219
Monthly savings:                        $839
With IBR, John’s total paid after 10 years will be $26,280. That’s $65,720 less than he originally borrowed. Remember that the payment is tied to income, so if John’s salary increases over the 10 years, so will his payment – but only in proportion to what he makes.