Financial Assistance and Debt Relief for Teachers

Teachers do important work, but it’s often for low pay that comes after piling up a lot of student debt. Much of the available financial assistance for teachers recognizes that those who go into this important service profession sacrifice much financially. Teachers make an average 27% less than their peers with the same education and level of experience.

Student loan debt is a big part of the finance challenge that comes with being a teacher. Almost all public school districts require a bachelor’s degree for employment as a teacher. As a consequence, more than 60% of teachers borrowed money to pay for their education, and in 2025 37% of all teachers – regardless of how long they’d been employed – still had a student loan balance. It’s not just a young teacher’s issue – nearly 20% of teachers over the age of 61 are still repaying student loans, according to the National Education Association. Managing credit card debt is another challenge, with balances rising as younger teachers in particular use cards to help make ends meet.

There is financial help for teachers, including financial assistance and debt relief programs targeted specifically for educators.

Average Teacher Salaries

The national average for public school k-12 teacher salaries for the 2024-25 school year was $74,495, with the average starting salary is $48,112, according to the NEA.

Averages for all teachers range from the highest, California, at $103,552, to a low of $54,975 in Mississippi. Averages for starting teacher salaries range from $60,658 in Washington state to $39,561 in Nebraska.

Teacher salaries, despite increases, haven’t kept up with the cost of living. With inflation, teachers earn 5% less than they did 10 years ago. About 20% of teachers work an extra job to help make ends meet, and many cite their student loans as one factor that makes the extra income necessary, the NEA reports.

Student Loan Forgiveness Programs

One of the biggest financial burdens for teachers are student loans. Those loan balances can be forgiven under two federal programs, Teacher Loan Forgiveness (TLF) and Public Service Loan Forgiveness (PSLF) plans. These programs underwent changes in 2025 that are still evolving, so it’s a good idea to check the U.S. Department of Education student loan resource page for the latest qualifications.

The programs have strict requirements that can make reaching forgiveness challenging. PSLF, the most common student loan forgiveness program for teachers, requires 10 years of monthly payments before the balance is forgiven, which can be hard to achieve in itself. If a borrower consolidates several student loans, that resets the 120-payment clock.

A borrower can not use qualifying teaching years for both PSLF and TLF at the same time. In other words, if you are claiming five years at a school to qualify for TLF, those five years can’t be used to qualify for PSLF.

Teacher Loan Forgiveness (TLF)

The Teacher Loan Forgiveness plan is for teachers who have worked at a Title 1 school, which is a public schools that get federal funding under the Elementary and Secondary Education Act (ESEA) because the district has a high percentage of students from low-income families. In general, it forgives $5,000 a year, up to $17,500, depending on the district and other qualifications.

To be eligible for Teacher Loan Forgiveness of Direct or Stafford loans:

• You must have been employed full-time as a teacher for five complete and consecutive academic years at a Title 1 elementary or secondary school.
• Your school has been selected by the U.S. Department of Education based on a determination that more than 30% of the school’s total enrollment comprises children who qualify for services provided under Title I.
• Your school is listed in the Annual Directory of Designated Low-Income Schools for Teacher Cancellation Benefits or is operated by the Bureau of Indian Education (BIE).
• You can not have a balance on a federal student loan that pre-dates Oct. 1, 1998.

You cannot apply for TLF before your five years is completed, but you can apply for loan forbearance, which means that you can postpone your loan payments until your employment reaches the five-year threshold. You must meet certain criteria and apply for forbearance yearly.

Public Service Loan Forgiveness (PSLF)

PSLF is for any federal student loan borrower who works full-time, for 10 consecutive years, at a qualifying government or not-for-profit organization. The program forgives the remaining balance on federal student loans once the equivalent of 120 qualifying monthly payments are made under an accepted repayment plan while working full-time for an eligible employer. It’s important to note that employment before Oct. 1, 2007, doesn’t count toward the 10 years.

Changes in 2025 made some organizations no longer eligible for PSLF, but most public elementary and secondary schools and public colleges and universities still qualify. The Department of Education has an online employer search to check to see if your employer is eligible. The Department of Education urges borrowers to certify their employment every year, particularly if they change employers, to confirm their on track for the program.

Perkins Loan Cancellation

Perkins Loans were private loans backed by the Department of Education for students who went on to teach at low-income schools or areas where teachers were desperately needed. They were eliminated in 2018, but borrowers who are still paying them back can do so according to the borrowing terms. Perkins Loans aren’t eligible for PSLF unless combined with other federal student loans in a Direct Consolidated Loan. They are eligible for TLF if they are combined with newer loans and the total balance isn’t more than $20,000.

Before combining though, keep in mind that the forgiveness plan for a Perkins is by far the fastest and best student loan forgiveness plan. A portion, including interest, is forgiven for each year under the plan. Under Perkins Loan cancellation, a portion of the loan is forgiven for each year of teaching, starting with 15% for the first year, and increasing for each year, up to 100%. How many years it takes depends on grade level and employment role.

If you haven’t consolidated your Perkins loan with other student loans, but have started paying your other loans back, combining a Perkins loan with the others will restart the clock on your qualifying payments for PSLF.

Combining Student Loan Forgiveness Programs

Many borrowers combine more than one student loan into a Direct Consolidated Loan, which makes repayment easier. If you do this, be sure to check how it will affect your loan forgiveness options.

If you’ve started making loan payments, consolidating resets the clock on the 120 payments required for PSLF. In other words, if you’ve been paying for a year and have made 12 student loan payments, they won’t count toward the 120.

If you’re combining a Perkins Loan under the Direct Consolidated Loan plan, that will reset the clock as well. If you plan to take advantage of Teacher Loan Forgiveness and want to combine a Perkins Loan into a DCL with your other federal student loan or loans, the combined total can’t be more than $20,000.

If you plan to take advantage of both PSLF and TLF, the five years required for TLF don’t count for the public service program, so it’ll take 15 years of service to qualify for PSLF.

Deciding Which Loan Forgiveness Program Is Best for You

Deciding which student loan forgiveness program is right for you depends on your circumstances – how much you owe, where you teach, what your income is. If you still have an outstanding Perkins Loan balance, that’s an added important factor.

If you’re just starting out, look closely at the loan repayment programs. It may have an impact on where you plan to work. If you want a much faster forgiveness option, apply for teaching jobs at qualifying Title 1 schools, and you can have some, or part, of your loan forgiven twice as fast as it would be otherwise.

To get more information on how each program works, check out these Department of Education web pages:

• Teacher Loan Forgiveness
• Public Service Loan Forgiveness
• Perkins Loan Cancellation

You’ll have to do the research and make the decision yourself, but some general tips to keep in mind:

PSLF is best for…

The Public Service Loan Forgiveness program will work best for you if:

• You can make 120 monthly student loan payments, ideally in 10 years.
• You have already combined, or won’t be combining, federal student loans into a direct consolidation loan.
• You don’t, and don’t plan to, work at a Title 1 school for five consecutive years or more.
• You owe more than $17,500.

TLF is best for…

The Teacher Loan Forgiveness program is a great option if you want your student loan balance forgiven more quickly. It only applies if all of these criteria are met:

• You work at a Title 1 school for five (or more) consecutive years.
• You owe $17,500 or less in student loans.

Perkins Loan Cancellation is best for…

If you have an outstanding Perkins Loan balance, you may want to keep it separate, rather than combine it into a Direct Consolidated Loan, in order to take advantage of the quick and generous Perkins Loan forgiveness program.

Opt for the Perkins Loan cancelation program if:

• You are already making loan payments and plan to take advantage of PSLF. Combining a Perkins into a Direct Consolidated Loan will reset the 120-payment clock.
• You are planning to take advantage of TLF and adding the Perkins to the total would bring the total of loans to more than $20,000.

Grants for Teachers

There are many grants and fellowships for teachers who look for them. While a grant might not help directly with student debt forgiveness, it can make a positive difference in a teacher’s financial life. If you are still in college, or planning to go, or are teaching and planning to get another degree, the best use of grants is to help pay for some of that education. There are also grants that help pay for everything from classroom supplies to special programs.

Look for grants for the subject matter and level that you teach, and you may find offerings ranging from national to state level. The NEA Foundation is a good place to start your search, as is DonorsChoose.org. Be sure that the information for whatever grant you’re researching is up to date, since changes to federal grants since 2025 have reduced or eliminated many programs.

Let’s take a look at some of the ways a grant or fellowship can ease some of the money burden for teachers and teachers-to-be.

The TEACH Grant for College

Teacher Education Assistance for College and Higher Education provides up to $4,000 to pay for college for those who agree to teach for four years in a high-need field in a low-income district after graduation, with eight years to complete the obligation.

The grant can help pay for education on the front end, so you have to borrow less and therefor owe less once you are working.

To get a TEACH grant, you must sign a teaching service agreement. If you don’t abide by the agreement, the grant becomes a loan you must repay.

Eligibility requirements for a TEACH grant are:

• You must meet the basic criteria for federal student loan programs and complete the FAFSA (Free Application for Federal Student Aid) form.
• You must be enrolled at a school that participates in the program.
• You must be in a qualifying teacher education program.
• You must meet certain academic achievement requirements such as scoring above the 75th percentile on a portion of the college admission test or carrying a 3.25 GPA.
• You must receive TEACH grant counseling on a yearly basis.
• You must sign a TEACH Grant Agreement to Serve or Repay.

When applying for a TEACH grant, be sure that your school and program qualify. Some changes to federal policy for the grants beginning in 2025 has cut funding in some areas.

Other Notable Grants for Teachers

Some of the other notable grants for teachers are:

• STEM – STEMgrants.com lists more than 100 opportunities for grants in STEM (science, technology, engineering and math). The Albert Einstein Distinguished Educator Fellowship (AEF) Program gives K-12 STEM teachers an opportunity to spend 11 months working for a federal agency.
• Humanities – The National Endowment for the Humanities has several grant programs geared toward language, literature, history, and the arts. The Philanthropic Ventures Foundation offers grants to music, theater, visual arts, and dance education.
• Professional Development – The McCarthey Dressman Education Foundation provides grants for up to $10,000 a year for teacher development.
• Class Achievement – The NEA Foundation has Student Success Grants of $2,000 and $5,000 available for members who teach in public schools. The funds are meant for classroom supplies.

Income-Driven Repayment Plans

Teachers who are having trouble managing their federal student loan payments can get debt relief through an income-based repayment plan. The one plan now offered by the federal government for federal student loans has lower monthly payments than the standard repayment plan, and is based on the borrower’s income and family size. Keep in mind, the plan only applies to federal student loans, not private loans.

Lower payments mean a longer payback period, and increases the amount you pay overall because of accumulated interest, but it can help you manage your finances better and stay current on bills.

Major changes to federal student loan repayment made in 2025 affect all borrowers. Those borrowing after July 1, 2026, have the choice of two repayment plans, the Standard Repayment Plan and the new Repayment Assistance Plan.

Loans taken out before that date can be paid back using four plans created in 2025: the 10-year Standard Plan, 10-year Graduated Repayment Plan, and 25-year Extended Plan and the RAP.

Previous income-driven plans expire in 2028, including Pay As You Earn (PAYE), Income-Contingent Repayment (ICR), and Income-Based Repayment (IBR). Borrowers who are not already using those plans can’t join them, and those using them must switch to one of the new plans by July 1, 2028.

The changes are confusing for a lot of borrowers. Which plan is an option for you largely depends on whether you are already paying back student loans and when you borrowed the money.

Student loan repayment plan options are:

The Standard Repayment Plan: For loans taken out after July 1, 2026. A fixed monthly payment, with a payback term ranging from 10 to 25 years, based on the amount of the loan.

Repayment Assistance Plan: For loans taken out after July 1, 2026. Monthly payment is based on adjusted gross income (AGI) and family size, with payment as a percentage of AGI ranging from 1% to 10% as income increases. It also lowers a borrower’s payment by $50 per month per dependent child, except for the lowest-income borrowers, who don’t get that deduction. Borrowers are required to make a minimum monthly payment of $10. Any balance that’s left after 30 years of on-time monthly payments is discharged.

Standard 10-Year Repayment Plan: For loans borrowed before July 1, 2026. Fixed payment, depending on loan amount, that ensures loans are paid off within 10 years (10-30 for consolidation loans).

Graduated Standard Repayment Plan: For loans borrowed before July 1, 2026, Payments are lower at first and then increase, usually every two years. Payment amounts are designed to ensure loans are paid off within 10 years (within 10 to 30 years for Consolidation Loans).

Extended Standard Repayment Plan: For loans borrowed before July 1, 2026. Payments can be fixed or graduated and will ensure that loans are paid off within 25 years.

Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), Pay As You Earn (PAYE) Repayment Plan: These all expire July 1, 2028, and no longer available for new loans. Those who are repaying under these plans must move their loans to10-year, graduated or extended standard plan or RAP by then.

Debt Relief Options for Teachers

Maybe a student loan forgiveness plan is taking too long. Maybe you’ve overextended yourself with your credit cards. Maybe you underestimated your ability to handle the mortgage on a house. It happens, especially on a teacher’s salary.

When the weight of your student loans along with your other debts becomes too heavy, you have avenues to explore for relief. Among them are:

• Debt Management Programs
• Debt Consolidation
• Personal Loans
• Home Equity Loans
• Balance Transfer Credit Card
• Payday Loans

Some will fit your financial situation better than others, but it’s smart to be aware of all your alternatives. Here’s a nutshell glance at them.

Debt Management Programs (DMP)

A debt management plan is useful when your high-interest credit card debt becomes too much. It can reduce the interest rate on debt, lower monthly payments and eliminate your credit card debt in 24-48 months.

The average interest rate on credit cards is 19%-20%, but those who’ve missed payments or frequently max out their cards can have rates as high as 33%. A debt management plan can reduce the interest rate you pay on your credit card debt to around 8%.

A DMP is not a loan, and you can opt out at any time. It doesn’t matter if your credit score isn’t up to snuff; credit scores aren’t considered when you enroll in a debt management program.

DMPs are offered by nonprofit credit counseling agencies such as InCharge Debt Solutions, who work with your creditors to reduce interest rates and downsize your monthly payments to a manageable level. You can’t use a DMP to help with secured debts such as house or car payments. But your credit card debt, which is unsecured, can be disposed of in a couple of years.

Debt Consolidation Loans for Teachers with Bad Credit

A debt consolidation loan is a loan that pays off high-interest credit cards. Since the loan has a lower interest rate than the cards, and the payback term is for a specific amount of time, you pay less monthly as well in the long run. Student loan debt in most cases can’t be paid through a DMP, but if you’re paying less monthly toward credit cards or other debt, it can free up money to help pay back your student loans and is a way to get debt relief with bad credit.

Some lenders offer loans specifically for debt consolidation, with slightly different rates and terms than a general personal loan. Some lenders pay off your creditors directly. Some rely on you to do it. Many direct consolidation loan agreements require that a certain percentage of the loan is used for debt consolidation.

The worse your credit, the higher interest the loan will be and the more restrictive the terms. Shop around for the best loan possible, and keep an eye on lenders that have experience working with teachers. Your professional association/union or teacher-specific credit union might be the place to start your search. The National Education Association (NEA) touts its loan program, which can cover a wide variety of expenses.

If you have bad credit, your teaching status can help you out. Lenders want to know they’ll be paid back, and a tenured educator with a steady, reliable income is a good risk.

Personal Loans

If your debt load is reasonably small and you have decent credit, a personal loan from a bank, a credit union or an online lender usually won’t require you to put up collateral as long as you have a good credit score. As with other loans, though, the terms are less favorable if you have a record of missed payments or a high debt-to-income ratio.

If you decide to take out a personal loan to pay off credit-card or other high-interest debt, shop around for the best terms. A teacher-specific credit union is a good place to start, and if you don’t belong to one, join one in your area. Credit unions often offer more favorable rates than traditional banks and online lenders.

Teachers with bad credit committed to a personal loan should take the steps anyone else with troubled credit should do: Contact creditors about negotiating the removal of bad reports, and pay down or pay off outstanding balances (even if that might involve taking a part-time job).

Home Equity Loans

A home equity loan or home equity line of credit (HELOC) is a second mortgage on your house. You borrow against the equity in your home, which is the appraised value minus the amount you owe on it. Most lenders will allow a loan of up to 80% of equity. The interest rate on a home equity loan or HELOC is usually around what the mortgage rate is, which is much lower than personal loan and credit card rates.

Some credit unions solely service people in the education industry., and most offer home equity loans and HELOCs designed specifically for teachers, often with no closing costs and no prepayment penalties.

A home equity loan can be for a much larger sum than most personal loans, and it can be used for anything you want, including debt relief. The interest rates on your federal student loans may not be much higher, so if federal student loan debt is your biggest debt burden, it may not be worth it. On the other hand, if you have high-interest private student loan debt, or high-interest credit cards or medical bills that are making it tough to meet your student loan payments, it may be a good move. The biggest risk with using home equity to borrow is that you can lose your house if you can’t pay it back. Crunch the numbers and make sure that it’s a smart financial move.

Balance Transfer Credit Card

A balance transfer credit card can consolidate your debt from other credit cards into a new account at a lower interest rate, sometimes even 0%, for a limited amount of time. The balance on the new card has to be paid off in full during the introductory period, which is usually 12-18 months. If you don’t pay it off by then, the interest rate soars.

To qualify for a balance transfer credit card, you need a good credit score, usually 680 or higher. You’ll be charged a 3%-5% fee on whatever debt you transfer to the new card.

Payday Loans

Payday, or cash-advance, loans are an absolute last-ditch option in an emergency. The amount you owe can rise fast because of fees and a high interest rate, especially if you roll over your loan. The average interest rate on a payday loan is 399%. It isn’t unheard of for a payday loan interest rate to reach 600%.

The way payday loans work is that you apply online, and if approved, the money goes into your bank account usually within a day. The deadline for paying back the loan is the next day you’re scheduled to get paid, usually within two weeks. If you can’t pay it back by then, you can roll the loan over until your next payday. If you do, the already-high interest rate and finance charges will skyrocket.

Only use a payday loan in an absolute emergency, and then only if you are cut off from all other areas of relief and know you can pay it back quickly.

You’re far better off giving a nonprofit debt management program a try. Learn from professionals how you can consolidate your debts without a loan. Your credit score is not a factor for enrolling in a debt management program.

Ways for Teachers to Make Extra Money in the Summer

Summer for teachers is hardly a three-month vacation. Aside from curriculum planning and other academic obligations, it often means working another job to help make ends meet.

Some teachers are able to add to their income by teaching a summer session, that work is often in addition to their curriculum planning and other academic obligations. Others, though, find non-teaching work to help pay the bills, particularly student loan and credit card debt.

Some options for summer work in which teachers can make the most of their skills and experience are:

• Summer Camps: Camps are always interested in experienced teachers who know how to manage kids. You might find one that specializes in your area of interest, the arts, for instance.
• Tutoring: This can be done on a freelance basis, or with an organization, and either in person or online. One benefit is that the house can often be flexible enough to still enjoy summer activities and family time. One place to start is Varsity Tutors, which links students and tutors in specialized areas. Tutoring isn’t only a job option for summer, but can bring additional income year ’round.
• Childcare Work: Often the need for temporary help increases in the summer when kids are out of school, particularly with day camps and structured day programs for elementary school-age kids.

Of course, there are always options that can give teachers a break from their usual routine, such as:

• Seasonal Work: You don’t have to live in a high tourist area to find businesses that need extra help in the summer. Amusement parks, landscaping companies, the local parks and recreation department, state and regional parks, and more, often are looking for staff.
• House or Pet Sitting: This is another need that spikes in the summer, with options that include doing it yourself, or signing on with an organization or service.
• Gig Work: Driving for Uber, Lyft, Instacart, Door Dash, GrubHub, or other similar services is flexible, and can also be lucrative, depending on where you live. It’s also a job that you can do during the year as well.
• Restaurants: Many restaurants need extra staff in the summer, particularly staff they can count on. While it’s often hard work, the pay can be better than other part-time jobs.

Cost Breaks for School Supplies

Teachers often have to dip into their own pockets to pay for sorely needed school supplies. The good news is, there are discounts available for teachers to help them with these costs.

Some cost breaks for teachers who pay for school supplies are:

• Microsoft offers eligible teaching institutions Office 365 Education and Microsoft Teams for Education for free, plus 10% off Windows devices.
• The New York Times, Washington Post, Boston Globe, Wall Street Journal, USA Today and other newspapers offer discounts on digital subscriptions for teachers.
• PBS provides free access to thousands of videos, lesson plans, games, and other materials for teachers who sign up for PBS LearningMedia, as well as a 10% discount for teachers at the PBS online store.
• Michael’s offers 15% off the entire purchase price after you create a Michaels account and get verified as a teacher.
• K12 School Supplies offers up to 80% off on school supplies on clearance.
• Staples offers a 20% discount on in-store purchases for teachers.
• Office Depot offers members of its Star Teacher program 10% back in Rewards on ink, toner, and paper, along with a number of other discounts.
• The Container Store offers discounts on storage and organization products for the classroom for educators enrolled in their loyalty programs.

Many other businesses, including retail stores, offer both online and instore discounts available to teachers. And often, those discounts apply to items not related to the classroom, including deals for teachers at places such as Cole Haan, LL Bean, J Crew, Bonobos and others.

Get Help with Your Debt from Financial Professionals

Student loans, low pay and rising cost of living can make it hard for teachers to get by.

Free nonprofit credit counseling can provide teachers with the professional direction and support necessary to manage their finances and get out from under debt.

Credit counselors have done their homework, too, and are prepared to evaluate your debt with you and explore the different debt-relief options available.

They can help teachers choose the best strategies for paying off debt and perhaps help more teachers remain in a challenging and vital profession where they are so sorely needed.