Why should I become a teacher? Financial Aid for the most important profession
By Joe Messinger, CFP®
May 13, 2016
Last week we celebrated national Teacher Appreciation week. So for all the teachers reading this blog, thank you and we hope you got your free burrito at Chipotle. We appreciate the work you do every week and every day. Choosing to be an educator is not a profession you enter into if you are not passionate about it. For many it is a true calling.
We all know teaching is not a profession you enter into to get rich, but it can certainly be a rewarding and fulfilling one. The reality is that new teachers earn less than their peers in other professions requiring comparable education and responsibilities. According to the most recent research by the National Association of Colleges and Employers, the average starting salary for education majors for 2014 was $40,863. In contrast, it may come as no surprise that engineering grads topped the list at $62,891. The same study found that the average starting salary for the class of 2014 was $45,473 across all disciplines. These figures are important to keep in mind as you should never take out more in student loans for your education than your projected starting salary.
Don’t let all this talk of low starting salaries deter you from following your passion! We need great teachers now more than ever, and the good news is a number of federal programs are now available to help aspiring teachers pay for college like the TEACH Grant and the Teacher Loan forgiveness program. (In addition, it should also be noted that most educators benefit from wonderful health and wellness benefits and a pension that is unheard of today in the private sector.)
The Teacher Education Assistance for College and Higher Education (TEACH) Grant provides financial assistance with the understanding that you will spend time as a high-need teacher in a low-income school—a great opportunity to make a meaningful impact, but be sure to understand all the details or the grant will become a loan you need to pay back.
The TEACH Grant program provides up to $4,000 per year (up to a maximum of $16,000) for an undergraduate degree and up to $8,000 towards a graduate degree. You should be aware of this provision taken directly from the Department of Education website:
Due to sequestration, award amounts for any TEACH Grant that is first disbursed on or after Oct. 1, 2014, and before Oct. 1, 2015, must be reduced by 7.3 percent from the award amount for which a recipient would otherwise have been entitled. Any TEACH Grant that is first disbursed on or after Oct. 1, 2015, and before Oct. 1, 2016, must be reduced by 6.8 percent. For example:
- For any 2015–16 TEACH Grant first disbursed on or after Oct. 1, 2014, and before Oct. 1, 2015, the maximum award of $4,000 is reduced by 7.3 percent ($292), resulting in a maximum award of $3,708.
- For any 2015–16 TEACH Grant first disbursed on or after Oct. 1, 2015, and before Oct. 1, 2016, the maximum award of $4,000 is reduced by 6.8 percent ($272), resulting in a maximum award of $3,728.
To receive the grant, your student agrees to serve:
- In a high-need field
- At a low-income elementary school, secondary school, or educational service agency
- For at least four full-time academic years within the first eight years after graduation (or completion of study) – If you obtain both a bachelor’s degree and a graduate degree and receive TEACH Grants for both, you only have to serve four total years.
If you fail to fulfill these requirements, the grant will be converted to a Federal Direct Unsubsidized loan which you will have to repay including interest as if you took out the loan the day that you accepted the TEACH Grant. For most families it is advisable to go ahead and accept the TEACH Grant when offered. You may not know if you will work in a qualifying position upon graduation, but you can always pay off the loans down the road. In the mean time, you can hold on to your assets and pay off the loan at a later date.
A student must:
1. Meet the basic eligibility criteria for federal student aid program
2. Complete the FAFSA
3. Be enrolled in a school and program participating in the TEACH Grant program – Check with your school to see if their program is eligible.
4. Meet academic requirements – above 75th percentile on college admissions test and cumulative GPA of 3.25
5. Receive TEACH Grant counseling each year of your grant to review your obligation
6. Sign the TEACH Grant Agreement to Serve
So what are high need fields? These include: bilingual education and English language acquisition, foreign language, mathematics, reading specialist, science, and special education, as well as those listed in the annual Teacher Shortage Nationwide Listing.
To fulfill your obligation, you will need to work at a low-income school. You can determine if a school meets the low-income requirement by referring to this list in the annual Teacher Cancellation Low-Income Directory or the Bureau of Indian Education.
The TEACH Grant program is a great way for a student to realize their dream of becoming a teacher and fill a real need in our country to provide quality education to low-income schools. As we always say though, be an informed consumer! Make sure you know all the terms and conditions of the agreement.
Check out our blog post next week when we will discuss the two types of loan forgiveness programs for teachers: Teacher loan forgiveness for Direct Federal Stafford Loans and Teacher cancellation for Federal Perkins Loans.
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