What are the biggest things educators don’t know about their loans?

Many federal student loan borrowers (including educators) do not know what type of federal student loan(s) they possess.  Loan type is important because it can determine a borrower’s eligibility to enroll in federal loan forgiveness programs.  Borrowers typically have Direct Loans, Federal Family Education Loans (FFEL), and Perkins Loans.  While the federal government no longer originates FFEL loans, many borrowers still have FFEL loans, which include Stafford loans.

Don’t consolidate your federal student loans until you understand what types of loans you own.  Once you do, and understand which loan forgiveness programs you are eligible for (or not eligible for)  based on your existing loan types, you can determine whether loan consolidation is right for you.

What are the top three things members should do if they want to reduce their student loan payments:

First, get on one of the federal Income-Driven Repayment plans.  These plans base student monthly payments on adjusted gross income (AGI) and family size.

Second, determine whether you are eligible for Teacher Loan Forgiveness and/or Teacher Loan Cancellation.  After five consecutive academic teaching years at a low income or Title I school, teachers can potentially have $5,000-$17,500 forgiven.

Third, enroll in Public Service Loan Forgiveness (PSLF).  Once an educator is enrolled on an Income-Driven Repayment plan, they will be making PSLF eligible payments.  After 10 years of payments, borrowers can potentially have the remaining balance discharged.

It seems confusing and complicated – why should members bother?  What’s the benefit?

The benefits outweigh any initial frustrations over enrolling in any of the above referenced programs.  Educators can potentially have portions of their federal student loans discharged.  Moreover, by enrolling in these federal programs, borrowers are demonstrating that there is a constituency that needs and wants these programs to remain in existence.

Why don’t more members take advantage of these programs?

It’s not just NJEA members.  For example, 33 million federal student loan borrowers are eligible to enroll in Public Service Loan Forgiveness (PSLF), including nearly seven million educators.  These programs are often not well-publicized, and it can be confusing and complicated to understand how to enroll in programs, and – most importantly – which program to enroll in.

How do members apply for Teacher Loan Forgiveness?

Applying for Teacher Loan Forgiveness (TLF) is relatively straightforward.  However, determining whether you should apply for TLF or take advantage of PSLF can be more challenging.  These resources  can help.

I work with low-income students.  Is there something specific I should check out?

This page is the best place to learn the eligibility requirements for Federal Student Loan forgiveness or cancellation based on serving low-income students.


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