Loan-Forgiveness Programs for Teaching Seen as Key Policy Tool

By Ann Bradley — February 28, 1990 7 min read

In the three years since the North Carolina Teaching Fellows program was created to attract brighter students into teaching, more than 1,200 scholarship loans have been awarded to students who are expected to repay the state by teaching in public schools.

Although the first class of fellows will not graduate from college until next spring, the Public School Forum of North Carolina believes the program has met its goal of attracting better-quality students into teaching.

For example, officials of the public-private policy group say, the Scholastic Achievement Test scores of the teaching fellows have averaged more than 275 points above the average state score of 836.

And they point to the fact that more than 1,750 applicants are vying for the 400 new scholarships that will be awarded this spring as evidence of the program’s competitiveness.

The North Carolina program is considered the most ambitious of the many state loan-incentive programs for teachers--in part because of a unique enrichment component that includes field trips and intensive support for students. But officials in several other states said in interviews last week that their programs also have provided a mechanism to influence their teaching workforces, if in limited ways.

For example, the programs have assisted teachers working in areas of critical need, they said, and they appear to have prompted beginning teachers to stay in the profession during the difficult first years.

Arthur E. Wise, director of the rand Corporation’s Center for the Study of the Teaching Profession, also suggested that such programs may influence the career decisions of some undecided young people by sending a message that teaching is important.

Meanwhile, several states are taking steps to extend and expand their loan-forgiveness programs for teaching, and the Congress is considering legislation to create new scholarships to attract people--particularly minorities--into teaching.

But whether loan-incentive programs actually attract people who would not otherwise have gone into teaching--and thus truly increase the pool of potential teachers--remains an open question, experts say.

“Very few of the programs take on the quality and the shortage issues at the same time,” noted Barbara Hatton, deputy director of the Ford Foundation’s education and culture program. “Unless you deal with both issues at the same time, you aren’t going to have any impact on the quality and the composition of the teacher workforce.”

It will be years before the results of many of the programs will be known.

None of the North Carolina fellows, for example, has started to teach, and each scholarship recipient must teach for four years to repay the $5,000 annual loans. Those who do not complete their teaching obligations must repay the loans with interest.

A 1985 College Board report examining such “forgivable-loan programs” called them the most frequently legislated incentive to attract students to teaching. (See Education Week, Sept. 4, 1985.)

Some states, like North Carolina, specifically target high-achieving students; others use the loan incentives primarily to address teacher shortages in subject-matter areas or geographic regions.

The Education Commission of the States found in a 1985-86 survey that 37 states had some type of loan incentive for teachers.

Although there apparently is little new national data on such programs, several state officials said last week that their programs are consistently attracting more applicants than can be served.

In Georgia, lawmakers have been asked to consider a proposal to expand the state’s loan program to serve paraprofessionals interested in becoming teachers.

Currently, college students can qualify for loans of $2,500 during both their junior and senior years that can be repaid by teaching for two years in the fields of mathematics, science, or special education.

The loan timetable reflects the fact that most students do not begin their education-school studies until the last two years of undergraduate study, explained Robert G. McCants, deputy executive director of the Georgia Student Finance Commission.

However, Mr. McCants said, the commission has asked the legislature to consider expanding the $550,000 program to cover four years of college so that paraprofessionals interested in becoming teachers could qualify for the program and attend school part time while working.

Georgia has found that approxi4mately 70 percent of the teaching students who received the loans actually went into teaching after graduation, he added. As in most other states with such programs, those who do not fulfill their teaching commitments are required to repay the loans.

In New York, the education department has proposed expanding the state’s current loan programs to include incentives to keep teachers in the field.

The new program would help people who teach in subject-matter or geographical shortage areas to pay off their outstanding loans from either undergraduate or graduate programs, said Patricia Dyer, coordinator of development activities for the department.

The department has requested that the state underwrite 1,000 awards of $2,500 each year for four years.

Because the program would be retroactive, it would not involve a “promise to teach,” Ms. Dyer said, but would aid those already engaged in teaching.

The proposal is aimed at addressing the high turnover rates common during the first few years of teaching, and is particularly attractive, she noted, because New York requires teachers to have earned a master’s degree within five years for permanent state certification.

“We saw this as adding the next step once you attract good people to the profession,” Ms. Dyer said. “Other careers don’t require you to pursue graduate studies.”

Gov. Carroll A. Campbell Jr. of South Carolina has proposed creating a new scholarship program for potential teachers targeting 200 students who graduate in the top 10 percent of their high-school classes.

The state already has a teacher-loan program for those who graduate in the top 40 percent of their high-school classes and agree to teach in areas of “designated need,” primarily mathematics and science.

The current program distributed 971 loans this year with a budget of $3.3 million. Mr. Campbell has proposed spending $1 million on the new program, which would distribute grants of up to $5,000 annually.

Rather than attempt to recruit new teachers, California’s incentive program tries to influence the fields in which current education students will teach by assuming their loans if they agree to teach in certain subject areas or low-income school districts.

The state gives 500 “conditional warrants” each year to students in education schools, pledging to pay up to $8,000 in loans during the first three years a teacher is working.

The program, which is expected to pay out $1.7 million in benefits this fiscal year, is geared toward retaining teachers during their first years on the job. State figures suggest that 65 percent of the teachers in California public schools drop out of teaching in their first two years.

Of the 160 first-year teachers whose loans were paid during 1988-89, 97.5 percent have continued to teach, according to a recent report. A survey of all program participants indicated that more than 95 percent intended to teach for three years.

The concept of paying for actual service rendered instead of the promise of future teaching also appealed to the Texas legislature,which created a program similar to California’s last year. However, no money has been appropriated for it.

The state is continuing to administer earlier loan-forgiveness programs that began in 1984 and have distributed about $1.8 million in loans, said Mack Adams, assistant commissioner for student servicesfor the Texas Higher Education Coordinating Board.

The goal of Texas’ new program is also to address shortage areas, he noted, but would allow the state to “recruit teachers who have been trained elsewhere.”

Two other states that reportstrong interest in their teaching-loan programs are Florida and Washington.

Florida has five loan-forgiveness programs created during the 1980’s to encourage talented high-school students to go into teaching, channel teachers into shortage areas, spur mid-career professionals to enter teaching, and assist current teachers studying for master’s degrees.

This year, the state is spending about $6.5 million on the programs.

Washington State awarded 50 $3,000 scholarships for the current academic year from an applicant pool of about 650 people.

Of the 1988-89 applicants, only 35 were members of minority groups, said Marilyn Sjolund, assistant director of student financial aid for the Higher Education Coordinating Board. However, 12 of the recipients were from minorities.

“We feel really positive about this program,” said Ms. Sjolund, adding that it has consistently received budget increases from the state legislature. “Clearly, from the number of applicants, it’s very well received.”

A version of this article appeared in the February 28, 1990 edition of Education Week as Loan-Forgiveness Programs for Teaching Seen as Key Policy Tool