Boost in Loan Forgiveness Offers Potential Recruiting Tool

By Anthony Rebora — December 10, 2004 1 min read

Legislation signed by President Bush on Oct. 30, 2004, aims to help schools fill high-need teaching positions by increasing the amount of student-loan forgiveness available to some math, science, and special education teachers.

In general, qualified teachers who work full-time in a low-income school for five years are eligible to have up to $5,000 of their student-loan debt cancelled. About 75,000 teachers are expected to apply for the $5,000 amount each year through 2014, according to an analysis released in October by the Congressional Budget Office.

The newly enacted Taxpayer-Teacher Protection Act boosts the limit on loan forgiveness to $17,500 for high school math and science teachers and elementary and high school special education teachers who work in high-poverty schools. To qualify for the benefit, a teacher must be “highly qualified” under the No Child Left Behind Act and—perhaps the key sticking point—must have taken out their student loan prior to Oct. 1, 2005.

The CBO estimated that some 5,000 math, science, and special education teachers will be eligible for the increased loan cancellation in some years. Their average amount of loan forgiveness upon completion of the required five years of service is estimated to be roughly $16,000.

The legislation was billed as a boost to school recruitment and retention efforts. “The Taxpayer-Teacher Protection Act creates real financial incentives to help rural and urban communities find and keep the teachers they need,” Rep. John Boehner (R-Ohio), chairman of the House education committee, said in a press release. “This is a benefit that will encourage teachers to stay in needy, Title I schools; a benefit they will get in a few years if they seek out teaching positions in the places that need them the most.”

The new federal loan-forgiveness provision joins a host of sometimes little-known state initiatives to provide incentives to teachers who work hard-to-fill positions. According to Education Week‘s Research Center, 25 states offer incentives—ranging from loans and scholarships to bonuses—to teachers in shortage subject areas. Thirteen also offer incentives for teachers who work in high-poverty or low-performing schools.