Top 3 Reasons Teachers Are Denied Loan Forgiveness

Matthew Driggers

Why is Teacher Loan Forgiveness Important?

Teachers have the option of both Public Service Loan Forgiveness (PSLF) or Teacher Loan Forgiveness (TLF) programs, both being essential opportunities that many teachers rely on when pursuing a career in education. Often times, teacher salaries will not be substantial enough to cover both their living expenses as well as student loan payments, especially starting out. With the help of PSLF or TLF, teachers can pursue careers in education with more peace of mind. But unfortunately, many teachers are not approved for loan forgiveness. In fact, a staggering 99% of loan forgiveness applicants are denied due to various reasons that shouldn’t be as common as they are. Here’s the break down:

Teachers Are Denied Due To Misunderstanding and Lack of Information.

1. 15% are rejected for having ineligible loans

Older repayment plans such as Federal Family Education Loans or Perkins Loans do NOT qualify. However, you can still consolidate these loans into Direct Consolidation loans in order to qualify for PSLF. For TLF, teachers must have Direct Subsidized and/or Unsubsidized Loans, or Subsidized and/or Unsubsidized Federal Stafford Loans.

2. 24% of applicants were rejected due to incorrectly filed forms

Reasons for these mistakes:

Not submitting an Employment Certification Form each year
Errors made filling out information such as: leaving items blank, inconsistencies, and correction errors (signifying with an initial to approve changes on the application)
Not being enrolled in a qualifying Income-Driven Repayment Plan – this is a requirement for PSLF and TLF
Missing payments – 120 on-time payments is a requirement for PSLF

3. 55% of people didn’t match all the requirements to receive forgiveness

Must have non-defaulted Federal Direct Loans
Must work for a qualifying employer
Must be under an Income-Driven Repayment Plan
Must have made 120 on-time monthly payments (with the except of 15 days past the due date) – PSLF

There is a clear problem of the loan forgiveness process being unintuitive. Teachers need an easier way to manage their loans, requirements, and qualifications for PSLF and/or TLF. With Chipper, we can help you keep track of your loans and the process of student loan forgiveness.