Think Tank: You Should Pay Teacher’s Debt

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By Blake Neff

Third Way, a centrist think tank, has proposed a new way to draw young adults into the teaching profession: have the government pay off teachers’ student loans for every month they remain in the profession.

Reform is needed, the group says, to offset what they describe as a crisis in teacher retention. The attrition rate for first-year teachers has risen 40 percent over the last 20 years, and more than half of all teachers have left the profession by the end of their fifth year. A key factor in this, Third Way said, is debt, since teachers often take on significant loans to obtain advanced degrees, without going into a sufficiently lucrative profession to pay off those debts easily.

The government already offers a litany of programs specifically created to aid teachers with student loans, but these programs are very underused, Third Way found. The largest reason is simple ignorance; 31.7 percent of incoming teachers are not even aware that special programs for them exist. As a result, while 1.5 million teachers are 40 years old or younger, and 150,000 new teachers enter the profession every year, only 65,000 teachers used federal loan assistance in 2013.

The low usage rates do not represent a lack of student loans, the group said. In fact, the average incoming teacher with an advanced degree today has $50,000 in student loans, higher than the debt burden of the typical MBA. Even for teachers with only a bachelor’s degree, the debt load surpasses $20,000.

Participation is low, the group said, because existing government programs are organized and structured in an utterly disastrous manner.

“At present, these programs are confusing, underutilized, conflicting, and sometimes even detrimental to the long-term finances of teachers who apply for them,” said the paper’s authors Tamara Hiler and Lanae Erickson Hatalsky.

The programs often require teachers to apply for retroactive assistance on loans after working for as many as ten years. With today’s young workers more prone than generations past to change their career fields after just a few years, the long wait for assistance serves as a major deterrent to becoming a teacher in the first place, Third Way argues.

Another problem is that participating in one program, the Stafford Loan Forgiveness Program, can inhibit participation in the similar Public Service Loan Forgiveness program.

The needed reform is simple, Third Way says: The government should scrap its myriad teacher-assistance programs and create one unified one, which starts paying teachers’ student loans off from day one of their jobs.

The program could be based on a similar one for congressional staffers, which lets them receive up to $6000 a year in student loan assistance. Similar assistance would be enough to largely eliminate the stress of student loans for most teachers, the group said, and would increase both retention and recruitment.

Research conducted by the group found that 82 percent of high-achieving undergraduates would be more willing to consider teaching if more substantial student loan assistance were offered.

Such assistance could come surprisingly cheap, the group argues. Congress already allocates $2.9 billion to efforts to recruit and retain teachers, including $350 million for existing student loan assistance programs. Spending less than half of that, $1.35 billion, would enable full coverage of the average student loan payment for 260,000 teachers.

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