During my first class of the day, I posed a question to my students, or rather to their avatars appearing on the online classroom screen. I waited for an answer, but I fell silent. Since none of my students turned on their cameras, I couldn’t figure out why I wasn’t getting a response, but it’s possible some of them were on their phones or in bed. I began to cry absurdly, and I no longer realized a profession yet.
Today, I am one of hundreds of thousands of public school teachers who have dropped out of education since the beginning of the pandemic, according to the US Bureau of Labor Statistics. By doing so, I lost the loan forgiveness promise I was counting on. My balance of approximately $50,000 must be paid in full.
However, I know I made the best decision for myself and my family. I was very unhappy and not satisfied.
“If someone had the opportunity to significantly improve their financial situation and job satisfaction, I certainly couldn’t blame them for moving on and putting forgiveness in the rearview mirror,” says Barry Coleman, executive director at the National Credit Counseling Corporation.
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Here are the factors I’ve taken into account and the steps I’ve taken to protect my family’s financial health.
Check your progress towards loan forgiveness
Borrowers must typically make 120 payments on time while working full-time for an eligible employer before they are eligible to apply for Public Service Loan Forgiveness or PSLF.
When I was considering leaving education, I wanted to see how close I was to total tolerance. According to my FedLoan account, I was shorter from 64 to 74 payments, depending on the loan. (MOHELA, the new loan service that takes over the wallet previously held by the FedLoan Service, has a similar payment tracker on its website.)
If you are closer to loan forgiveness, it may be worth delaying your career change. some notes:
- Borrowers will receive credits for the months they have gone without payments during the current federal student loan repayment pause due to the pandemic. They still have to certify their work during this period.
- There is a valid Public Service Loan Waiver Waiver which may count previously unqualified payments toward the total required. You must submit your PSLF aggregator/employment certificate form by October 31, 2022, for consideration.
- Teachers who serve low-income schools for five consecutive years may receive loan forgiveness for federal loans of up to $17,500. This program, Teacher Loan Tolerance, is separate from the PSLF.
Looking for better compensation
Excluding public service loan forgiveness, I needed a repayment plan. First, I had to find a higher paying job, which thankfully happened quickly.
“Depending on the profession you are in and the new salary, the loan balance can be quickly recovered,” says Jillian Lucas, founder of JML Career Coaching.
But there is more than just the bottom line.
Teacher compensation is unique in a few ways. Since many teachers don’t work during the summer, they get paid for 10 months of work, not 12. Teachers looking to change jobs should take this into account when evaluating job offers.
In addition, public school teachers in many states are eligible for a traditional pension, an increasingly rare benefit. If you haven’t continued teaching long enough to qualify, finding a job that offers a 401(k) match may be a priority.
Also look at bonuses, salaries, equity, and insurance premiums when considering new jobs. How do these compare to what you give up as a teacher?
Let the payment begin
When loan forgiveness is no longer an option, you will have to set a new debt repayment date. Online calculators can help.
Next, find out what repayment approach is best for your new situation. To qualify for the PSLF, borrowers must enroll in one of four income-driven payment plans. But if you no longer qualify for loan forgiveness due to a career change, you don’t have to be tied to a particular plan. Also, remember that federal borrowers will be able to enroll in a new income-driven payment plan that will make loan repayments more manageable by not charging interest on the loan balance as long as you make your monthly payments, among other fixes.
There are ways to speed up the payment deadline, too. You can send “extra” money like a debt tax refund. Be sure to tell your loan service officer to apply any additional payments to your current balance rather than counting it towards next month’s payments.
Or try the fortnightly payment method. Let’s say your monthly loan payment is $500. Instead of paying $500 per month, you’ll be paying $250 every two weeks. At the end of the year, you will have made the equivalent of an additional month’s payment.
Forgiveness or happiness?
At the time I left teaching, I had only 13 months of qualifying work shy of partial loan forgiveness. I had already put in 12 years. Can I do another one?
I’m not a rushed or financially irresponsible person, but I fell in love with my job. Who was this teacher that I became, and how will I be a teacher, mother, and wife after another year in this profession? My mental health and the balance of my family will suffer greatly, and nothing is worth it — not even thousands of dollars in loan forgiveness.
“Everyone deserves a job they love,” Lucas says. “And money will only take you away if you hate what you do.”
This article was written by NerdWallet and originally published by the Associated Press.
An article on why a teacher changed jobs and gave loan forgiveness originally appeared on NerdWallet.