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College & Workforce Readiness

Bipartisan Bill Would Overhaul Teacher Loan Assistance Program

By Lauren Camera — July 30, 2015 3 min read
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A bipartisan group of lawmakers in the House and Senate introduced a bill Thursday that would overhaul the federal loan-assistance program for teachers and provide them with incentives to enter and remain in the classroom, especially in low-income schools.

The proposal, titled the Teacher Loan Repayment Act, is backed by Sens. Orrin Hatch, R-Utah, and Mark Warner, D-Va., and Reps. Suzanne Bonamici, D-Ore., Susan Brooks, R-Ind., Richard Hanna, R-N.Y., and Derek Kilmer, D-Wash.

Specifically, the bill would eliminate the current patchwork of loan assistance programs for teachers, including TEACH grants, and replace them with one streamlined federal program that provides all eligible teachers with a monthly loan payment.

Under the proposal, the federal government would put $250 to $400 towards every eligible teacher’s loan payment each month up to a total of $23,400. If the monthly payment is less than the range of payments, the remaining money would go towards paying down the loan principal. The payments would be non-taxable.

In addition, teachers who work in Title I schools (those enrolling at least 40 percent of children from low-income families) would be eligible for loan forgiveness after 10 years.

“Our top priority in improving education outcomes in the United States should be refining the incentives that both attract bright and talented teachers to the classroom, and help them to stay there,” said Hatch in a statement. “We need more teachers in our low-income schools. Making these programs more efficient is a common-sense investment in our future that will pay off for generations.”

So how would it work?

The monthly payments would ramp up every year, rewarding teachers who choose to stay in the classroom long-term. As for implementation, states would report the number of eligible teachers to the federal government, designated federal funds would then be sent to state agencies, and those state agencies would pay the federal funds to the lenders directly.

“Teachers simply watch a portion of their loan payments disappear each month,” said the bill’s co-authors.

The current program, the Teacher Education Assistance for College and Higher Education (TEACH), is an unusual hybrid grant-loan program that helps subsidize recipients’ teacher preparation. But it’s come under fire recently for a number of reasons.

Bonamici called it “burdensome and ineffective” in a statement Thursday.

My colleague Stephen Sawchuk reported over at the Teacher Beat about a Government Accountability Office report that found that about a third of the grants awarded under the current federal program to encourage teacher-candidates to work in low-income schools end up mistakenly being converted to loans.

The program is also hampered by its complexity, Sawchuk wrote. There’s a great deal of paperwork involved in the grant, and recipients have to file forms annually to prove they’re teaching, or planning to teach, to maintain the grant. In addition, college administrators interviewed by the GAO said that many teachers aren’t even aware of the grant or find its conditions confusing.

The Third Way, a centrist think-tank in Washington, did its own analysis of the current program, and found the TEACH grants are actually burdening a fair number of recipients.

“While well-intentioned, today’s federal loan assistance options for teachers fall short due to their overly-complex qualifications and back-loaded benefits,” said Lanae Erickson Hatalsky, Third Way’s social Policy and politics program director, Thursday in a statement. “Having a set monthly loan payment for teachers that grows larger over time will serve as an important tool for both attracting and retaining great teachers in the classrooms that need them the most.”

So what are its chances?

Well, Congress heads out of town Friday for a five-week summer recess. When it returns, it will have all sorts of top-tier congressional priorities to deal with, including how to avert a government shutdown before Oct. 1. However, both the House and Senate education committees are working on proposals to reauthorize the Higher Education Act, and that seems like as good a place as any for this bill to land.

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