The Complete Guide To Student Loan Forgiveness For School SLPs
April 6, 2018
The Complete Guide To Student Loan Forgiveness For School SLPs
Do your student loans give you panic attacks? Are you counting down the days until you’re no longer burdened by your monthly payment? This blog post is for you! As a school-based SLP who is currently working on paying off my own student loans, I was elated when I learned that student loan forgiveness was a possibility for SLPs! Since learning of this possibility, you could say I’ve done my research. I’ve searched the depths of the internet. I’ve called my loan processor multiple times (always fun). And I’ve talked with my school administrators. In my own journey to finding freedom from student loans, I feel that I’ve become a bit of an expert on the topic, so I decided to compile a guide of everything I’ve learned.
What Are My Options?
If you are an SLP working in a nonprofit clinic or hospital, you may qualify for the Public Service Loan Forgiveness Plan. More about that here. If you are a school-based SLP, you may have two student loan forgiveness options. I made this flowchart to help you figure out which student loan forgiveness program may be best for you.
For School-Based SLPs:
Teacher Loan Forgiveness Program
You can read all about the Teacher Loan Forgiveness Program here. SLPs CAN receive forgiveness under this program. The gist of the TLFP is that if you work for a low income school for 5 consecutive years you may be eligible to receive forgiveness on up to $17,500 of your student loans. SLPs may qualify for forgiveness under the title of “highly qualified special education teacher.” You can check if your school qualifies as a low income school by visiting this directory (Teacher Cancellation Low Income Directory). Note that sometimes the directory takes a while to be updated.
To qualify for this program you must:
- Be employed as a full-time employee for 5 consecutive years after the 1997-1998 school year. There are exceptions for maternity leave, Family and Medical Leave, and active military duty. See the the Teacher Loan Forgiveness website for more information.
- Your school must be in the low income school directory. If your school appears in the directory only one year (for example, 2016-2017). You may still continue to qualify for TLFP if you continue to work for that school for 5 consecutive years, even if the school only appeared in the directory that one year. In this case, if your school appeared in the directory in 2016-2017, but not again after that, you could still apply for TLFP after the 2020-2021 school year.
- Fill out this form and sent it to your loan servicer at the end of your 5th year. There is nothing that you need to do until you complete your 5th year.
- Pay close attention to detail in the forms. It is not uncommon for people to be denied forgiveness due to errors in paperwork (i.e. formatting the dates wrong).
Am I “Highly Qualified?”
After perusing the MANY Facebook and Reddit threads and talking to SLPs who have had success with this program, it seems the answer to this question is not always agreed upon by the loan companies. Unfortunately, it is common for SLPs to apply for this program and be denied by their loan provider. There seems to be a pattern emerging that if an SLP also holds a teaching license, as some are required by their state to do so, they are more likely to receive loan forgiveness under this program. However, there have been SLPs with teaching licenses who have been denied. There have also been SLPs without a teaching license that have been approved. Unfortunately, it seems to depend on the leniency of your loan provider as well as who is processing your application.
What If I’m denied?
I have heard many stories from SLPs who were denied by their servicer 2, 3, or even 4 times before they finally succeeded. Keep trying! What I have gathered is that it helps to have a school administrator (e.g. principal, superintendent) write a letter on your behalf explaining how you are a “highly qualified” staff member. In order to gather more information to help SLPs in the future, I’ve created this google doc to help gather specific data to better help SLPs seeking loan forgiveness in the future! If you have attempted loan forgiveness as an SLP, please let us know what did or did not work for you!
Public Service Loan Forgiveness Program
While the TLFP forgives up to $17,500 of student loans after 5 years, the Public Service Loan Forgiveness Program (PSLFP) will forgive your remaining student loan balance after making 120 payments (10 years). There are a few catches here. This program began in October of 2007, and since you must make qualifying payments for 10 years, there are only a handful of people eligible for this program at this time. I haven’t yet heard of an SLP having success with this program, unlike the TLFP. You can read about this program for yourself at this website.
To qualify for this program, you must:
- Fill out this form to verify employment as soon as possible. You are to fill out this form and submit it annually or every time that you change employers. The PSLFP website states, “Too many borrowers wait to submit this important form until they have been in repayment for several years, at which point they learn that they have not been making qualifying payments. In order to ensure you’re on track to receive forgiveness, you should continue to submit this form both annually and every time you switch employers.”
- You must work for a “qualifying employer.” A qualifying employer is defined by their tax filing status. The website states that you may work for a qualifying employer if you work for a government organization, non-profit organizations that are tax-exempt, and “other types of not-for-profit organizations that are not tax-exempt under Section 501(c)(3)”.
- You must work at lease 30 hours a week.
- The PSLFP website states that if you’re planning to seek forgiveness under the PSLFP, you should make sure that you are repaying loans on an income-driven repayment plan. If you are repaying under a standard 10 year plan, you will pay off your remaining balance in 10 years and there will be no remaining balance to be forgiven.
- After 120 payments, you then submit this form to apply for forgiveness. Note: this form looks very similar to the employment verification form, but they are in fact two separate forms.
- Pay close attention to detail when filling out the paperwork.
If you’ve been around our blog, you know we love visuals. I couldn’t resist! Here’s a comparison of the two programs.
Q: Is it possible to enroll in and receive forgiveness via both programs?
Yes it is! Read more about that here.
Q: What if I had my loans consolidated? How do I make sure I have the right type of loans?
These questions would be best answered by your specific loan provider. Both the TFLP website and the PSLF website discuss this in some detail, but your loan provider may be able to provide a better answer.
Q: What about maternity leave?
If you went on maternity leave during your 5 years of the TFLP, you are still considered full-time and may receive loan forgiveness. I could not find a specific answer on the PSLF website, but I would assume they had a similar clause.
Q: Do I have to pay taxes on the loan balances that were forgiven?
The PSLF websites states, “Note that loan amounts forgiven under the PSLF Program are not considered income by the Internal Revenue Service. Therefore, you will not have to pay federal income tax on the amount of your Direct Loans that is forgiven after you have made the 120 qualifying payments.”
Q: I heard the future of these programs is up in the air?
As the PSLF website states, “We can’t make any guarantees about the future availability of PSLF. The PSLF Program was created by Congress, and Congress could change or end the PSLF Program.” According to this article, it seems that more than likely they would end the program for future borrowers, as opposed to people who have already been filling out employment verification forms yearly.
Q: What about Perkins Loans?
You can read about Perkins Loan Cancellations for teachers here!
If you have more questions, there are many FAQs on the PSLF FAQ page!
Have You Had Success With Student Loan Forgiveness?
If so- please fill out this google doc! This will help SLPs in the future to know how to best approach the loan forgiveness process! Please let us know what has worked for you. Good luck to everyone else in their journey to freedom from student loans!