Teachers With Student Debt: The Struggle, The Causes And What Comes Next

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"I am overloaded and struggling. It's terrifying."

"I feel like I'll be making the last payment from my grave."

"It is an albatross around my neck. Years of paying and I feel like I'm getting nowhere."

"Help!"

Those were some of the comments we received from more than 2,000 respondents to NPR Ed's first Teacher Student Debt survey.

Teachers With Student Debt: These Are Their Stories Listen · 4:59 4:59

Teachers are paid significantly less than many other highly educated professionals. We decided to take a look at student debt among teachers specifically, because we see it as a crossroads of several big trends: chronic concerns over teacher pay amid calls to improve teacher quality; the rising cost of higher ed; the increasing reliance on loans to pay for it; and changing policies from the Trump administration.

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While not a scientific sample, the survey respondents gave vivid accounts of their experiences with student loans that match up in many cases with national data. We've used their quotes in italics to illustrate several key factors behind this issue:

Factor No. 1: The pressure to earn more degrees

Public school teachers traditionally have had undergraduate degrees in education. But over the past decade, K-12 teachers have had a growing economic incentive to earn master's degrees. In some cases, they're actually required to do so.

Of the 145 largest school districts in the country, all but a handful pay teachers more if they earn master's degrees. The increase can be thousands of dollars per year. That is according to a database maintained by the National Council on Teacher Quality.

"The state of KY requires a master's degree, [to renew credentials], but offers a very small pay increase once it is received. Without interest, it would take 10+ years to pay off a loan for a master's degree." (Less than $25K in debt)

Factor No. 2: Anemic teacher pay

The temptation to go back for a master's is even stronger because public school teacher pay has been suffering in general. According to a 2016 report by the Economic Policy Institute, teachers earn 17 percent less than similarly educated workers in other fields. In 1994, the gap was just 1.8 percent.

"It costs entirely too much money to become a teacher that gets paid barely above the poverty line. Teachers today are being asked to go into heavy debt and are not being paid as the professionals they are." (More than $50K in debt)

So there is a strong incentive to get a master's degree, combined with a lack of the money to pay out of pocket.

Factor No. 3: Rising tuition and unlimited loans

Graduate tuition grew an average of 28 percent between 2004 and 2014, after inflation, across all types of institutions.

And, starting in the 2006-2007 school year, the federal government created the GRAD PLUS loan, a student loan for graduate students with essentially no limit.

Taken together, rising tuition and higher loan limits mean that 2 out of 3 teachers who get master's degrees take out student loans to pay for them. That proportion has been on the rise. Piled on top of undergraduate loans, this has led to growing debt that outpaces mostly modest income.

"My monthly payment is estimated at one-fourth my total income. Even at that rate, I will take more than 10 years to pay off my loans." (More than $75K in debt)

A 2014 study found that people who earned a master's in education had more student loan debt ($50,879 on average) than people who earned an MBA ($42,000).

There was an 82 percent increase in the average debt load of education majors with a master's degree between 2000 and 2012.

Factor No. 4: Too many confusing repayment options

There are many programs designed to ease the heavy debt burden of teachers, whether for undergrad or graduate school. Some make payments more affordable; others forgive balances altogether.

While these programs help tens of thousands of teachers, the sheer number of options has become a problem in itself, according to the teachers we surveyed as well as some researchers.

"The way Congress works, nobody wanted to add to the existing programs" for teacher loan forgiveness, says Jason Delisle, a resident fellow at the conservative American Enterprise Institute. "They wanted to create a new one."

Delisle recently released a paper in the journal Education Next that calls the many student loan repayment plans for teachers "tangled" and "uncertain."

Teachers can take out several kinds of federally backed loans: Stafford loans, Perkins loans or Grad PLUS loans. They may get federal Teach grants, which Delisle says in practice often function more like loans because 3 out of 4 times, teachers don't meet all the requirements and ultimately have to repay the "grants" plus interest. Then there are state-sponsored loan programs like the Texas College Access Loan.

On top of that, there are private student loans, which come with higher interest rates and fewer repayment options than the rest.

When it comes time to repay loans, the fine print just keeps mounting.

Every borrower has the option to put off payments temporarily because of an economic hardship or to lower payments several ways: graduated, extended, pay-as-you-earn, income-based and income-contingent repayment. If you enroll in these programs, your debts may grow with unpaid interest added to the loan.

Teachers, in particular, can have loans forgiven three ways:

Perkins loans: If you work in a low-income school or in state-designated "critical needs" subjects, you may get the total balance forgiven in just five years. But Perkins balances are usually quite small.

Stafford loans: You may get up to $17,500 of loans forgiven, but only if you teach math, science or special education. Otherwise, it's just $5,000, for other high-need subjects or in low-income schools.

Public Service Loan Forgiveness. This program was announced 10 years ago, which coincides with the increase in teachers pursuing master's degrees. The rules state that all loans can be forgiven after 10 years of work in a public school or a qualifying nonprofit private school. There is no maximum and no rules about the subject or the setting you teach in.

Many of our respondents had problems with this confusing array of repayment options.

"It can be so hard to determine eligibility. I made unnecessary payments for 1 1/2 years before I realized that my program didn't require those payments." (Less than $25K in debt)

"Because I teach history, not science or math, I only got $5,000 off my loans instead of $20,000. I don't understand. I'm teaching the same low-income kids. The loan forgiveness programs aren't equal." (Less than $25K in debt)

"I am very frustrated with the federal forgiveness programs. I have taught at a Title I building [low-income school] for 18 years and do not qualify for $5,000 forgiveness because I have a loan from 1997. I also don't qualify for the 10 year on-time payments because I make too much money." (More than $50K in debt)

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Factor No. 5: Servicer complaints

For-profit companies called servicers handle the repayment of federal student loans. Borrowers rely on them for finding out about repayment options, enrolling in the various programs and keeping track of payments.

Unfortunately, many borrowers have had problems dealing with servicers.

Navient, the largest student-loan servicer, was sued by the U.S. Consumer Financial Protection Bureau, a federal watchdog agency, and by the Illinois and Washington attorneys general in January of this year.

These cases allege that Navient brought bad customer service to a point where it broke the law by repeatedly giving customers the wrong information, misallocating payments and enrolling them in the wrong payment plans.

Navient has denied these allegations.

"Navient's job as a student loan servicer is to help borrowers understand their options so they can make an informed choice about what's best for them," Patricia Christel, a spokeswoman for the company, told NPR Ed. "When federal student loan borrowers find their payment is not affordable, Navient representatives discuss the various options for a more affordable payment, such as the many income-driven repayment options."

In June, the CFPB released a report covering 11,500 federal student loan servicing complaints over a 12-month period, from March 2016 through February 2017. Navient was the target of 4,638 of the complaints, three times as many as the next most frequent target.

"Borrowers have identified a range of student loan industry practices that delay, defer or deny access to expected debt relief," the report concluded. These practices, borrowers told the CFPB, included providing inaccurate or confusing information, poor record keeping and misapplication of payments.

The report particularly highlighted problems experienced by people trying to enroll in the federal Public Service Loan Forgiveness program, which requires recertifying your employment year after year. Once a borrower is enrolled in the program, they become a customer of a company called FedLoan Servicing.

Most of our respondents reported a middling experience with their servicers: 44 percent chose 3 on a 5-point scale that ranged from "wonderful" to "horrible." However, some had similar complaints to those detailed in the CFPB report.

"My loan servicer ... basically scammed me out of my Teach Grant and I'm fighting them through my Congressman and a class action suit." ($25K-50K in debt)

"[My servicer] has made numerous mistakes including saying my loan was deferred, but then 2 months later that it wasn't." ($25K-50K in debt)

"I paid off my loan ... but I was never able to speak to a person or get a payoff balance. ... I have no way to question or protest with that terrible company." (Less than $25K in debt)

Factor No. 6: Uncertainty about Public Service Loan Forgiveness

For teachers with more than $17,500 in loans (the average for those with master's degrees, again, is more than twice that) or who don't teach in a high-need subject or a low-income school, Public Service Loan Forgiveness is the best, most generous option for repayment.

But the very breadth of the program means its future is being called into question.

"Nervous about the removal of the public service loan forgiveness and then I'll be fully sc*****." (More than $50K in debt)

President Trump's budget request in February called for canceling Public Service Loan Forgiveness.

Robert Shireman was part of the Obama administration's Department of Education when Public Service Loan Forgiveness was enacted, and even he says that the program has had unforeseen consequences. "The biggest problem with the program is that when it was created, no one was thinking much about the simultaneous creation of the Grad PLUS Program that allows unlimited borrowing."

Most federal student loans have maximum limits — $57,500 for independent undergraduates, for example. But as we said earlier, beginning in 2006, the Department of Education created Grad PLUS loans with no limit.

"Having a loan program without a cap combined with a pretty generous loan forgiveness program creates a moral hazard," Shireman says.

Graduate programs have little incentive to keep tuition down, and teachers seeking a small bump in a modest salary are encouraged to go back for that degree. The result is debt, debt and more debt.

Where do we go from here?

The federal government controls part of the teacher student-debt game, and so do school districts. If loan limits for graduate programs are reimposed or Public Service Loan Forgiveness is canceled going forward, or both, it will get harder for teachers to pay for that extra education.

Districts may be pressured to raise salaries further if they want teachers with more qualifications. Universities may lower their prices, or new professional-development models may emerge, or both. Programs like Relay Graduate School of Education, which can be subsidized by AmeriCorps, or Western Governor's University, a lower-cost online program, may become more popular. Both allow teachers to earn a salary while they study.

In the meantime, the impact of the runup in teacher student-debt will last for decades.

Research on student loan debt shows that, as loans climb higher, they weigh on borrowers' most intimate and personal life decisions. People with higher student loans are less able to get married, buy houses and save for retirement.

"I just want to help kids with special needs from low-income families. This is part of the reason why I don't think I'll ever own a home or that I shouldn't have children because I can't afford it." (More than $75K in debt)

"It's a huge stress. Including my boyfriend's debt, which is far greater than mine. I worry every day about how it's going to affect our future." (Less than $25K in debt)

Loans have an invisible, internal effect as well, research shows. They cause stress and anxiety and interfere with mental health.

"About 14 years ago I had a frank discussion with my loan servicer, wondering if I died, would my daughter have to repay my loan? She said no, and then after a brief silence asked me if I was thinking about taking my own life." (More than $75K in debt)