How to Pay Off Debt as an Educator

Are you sick of being held down by your student loan debt? As someone who has successfully paid off their own debt and achieved financial independence, I’m here to share my experience and knowledge with you.

My wife and I paid off $105,000 of debt in 5 years as two educators, right at the start of our careers.

Managing your finances as an educator can be tough, but with a little bit of guidance and determination, you can take control of your financial future. 

In this article, I’m going to give you all the tips and tricks I’ve learned over the years to help you pay off your debt on a teacher salary, which we both know isn’t super glamorous.

I’ll share strategies to increase your income with side jobs, tips to climb up the educational career ladder, to creating a solid plan and budget for paying off your debt. 

I’ll also share insights on student loan forgiveness programs and provide you with tools like a debt snowball spreadsheet or a debt avalanche.

So, get ready to take the first step towards financial freedom! Together, we’ll tackle your debt and create a brighter future for yourself and your loved ones.

Table of Contents

• Table of Contents
• How Can Teachers Get Out of Debt?
• Make a Budget to Maximize Your Debt Repayments
• Increase Your Income
• Find a Second Job that Aligns with Your Schedule and Skills
• Summer Camps or Lifeguarding
• Food Service
• Pursue a Master’s Degree
• Climb the Career Ladder
• What is the Average Teacher Debt?
• How Do Teachers Pay Off Their Student Loans?
• Debt Snowball Method or Debt Avalanche Method
• How Long Does It Take to Pay Off Student Loans as a Teacher?
• Income Level
• Repayment Plan
• Student Loan Forgiveness
• Teacher Loan Forgiveness
• Public Service Loan Forgiveness
• Perkins Loan Cancellation
• Conclusion

How Can Teachers Get Out of Debt?

Debt can feel really overwhelming, especially if you’re an educator not making a ton of money. Finding the right resources and strategies can help you take back control of your money and take practical steps toward paying off debt as an educator.

These are the same strategies we used to help us get out of debt on two teacher salaries. 

Make a Budget to Maximize Your Debt Repayments

Making a budget is essential for paying off debt and maintaining financial stability. If you’re limiting excess spending, you can put more money toward your debt and pay it off faster.

Here are some steps to get started. These are tried and true strategies that work. Don’t be afraid to try them.

1. Track Your Expenses and Income: By tracking your expenses and income, you can understand your current spending habits and identify areas where you can cut back. Use a spreadsheet or budgeting app to make this process easier.
2. Set Financial Goals: Having specific financial goals in mind will help you stay motivated and focused. This could include paying off debt, saving for a down payment on a house, or building an emergency fund. You can track them in this sinking fund tracker.
3. Create a Budget: Based on the information you gathered in the previous steps, create a zero based budget that works for you. Include all of your expenses, such as rent, utilities, food, transportation, debt payments, and savings goals.
4. Use Budgeting Strategies: There are various budgeting strategies you can use to help you stay on track and avoid overspending. For instance, the envelope system involves dividing your cash into different envelopes for various expense categories. Zero-based budgeting requires you to assign every dollar a job, so that there’s no money left unaccounted for.

By following these steps and sticking to your budget, you can pay off debt and achieve financial stability as an educator. Remember to be realistic and flexible, and to adjust your budget as needed to ensure you’re on track to meet your financial goals.

Increase Your Income

As educators, we’ve learned how to stretch a dollar, but sometimes we need more than a dollar to stretch. One of the most effective ways to pay off debt is to increase your income. 

As an educator, you have several options to boost your earnings. Here are some practical examples you can tailor to your own circumstances and job skills.

You can also check out these educator related side hustles from real teachers.

Find a Second Job that Aligns with Your Schedule and Skills

Getting a second job doesn’t sound very glamorous. In fact, it sounds terrible. 

But as an educator, you have the joy of summer, and summer is a great time for educators to earn some extra cash while taking a break from the classroom. There are plenty of options to choose from, including:

Summer Camps or Lifeguarding

Working at a summer camp is a great way to earn extra income and gain valuable experience. You can work as a camp counselor, lifeguard, or activity instructor.

If you enjoy spending time at the pool or beach, consider becoming a lifeguard. You’ll earn a steady paycheck and be able to enjoy the sun and water at the same time.

Food Service

Working at a restaurant or delivering food can be a lucrative option for summer employment. I personally think being a bartender or server is the best paying second job, and perfect for teachers during the summer.

For example, my wife and I both worked at a restaurant and made $10,000 in one summer from our tips and paychecks. This money helped us pay off some of our student loan debt and get ahead financially.

Whatever summer job you choose, make sure it’s something you enjoy and can fit into your schedule. With some planning and effort, you can earn extra cash during the summer and work towards your financial goals.

Pursue a Master’s Degree

Why settle for being a teacher when you can be a master? Pursuing a master’s degree not only enhances your skills but also your earning potential. Plus, it’s a great excuse to indulge in cute school supplies.

The only downside is possibly accruing more debt for a master’s degree.

Here are some examples of master’s degree programs to consider:

• Master’s in Curriculum and Instruction
• Educational Leadership
• Master’s in Special Education
• Master’s in Instructional Design and Technology

My partner completed a one year masters degree program in curriculum and instruction and got a $20,000 pay raise. We paid $12,000 and have made that money back threefold in just a couple years.

It’s definitely a time and money commitment, but it could be worth it, especially if you can save up and avoid going into loads more debt.

Climb the Career Ladder

As educators, we’re experts in helping our students climb to new heights. Why not apply the same principle to our careers? 

Advancing to a higher-paying position can help increase your income and provide new challenges. Consider these leadership positions:

• Department Head
• Assistant Principal
• Principal
• Superintendent

Don’t be afraid to think big and pursue your goals. With hard work and dedication, you can climb the career ladder and achieve financial success.

Use the skills you have to your advantage. Your school is probably looking for highly motivated, organized, and solution oriented people to join leadership and admin teams.

What is the Average Teacher Debt?

• Discuss the current statistics and data surrounding the average teacher debt.
• Provide context for why it’s important to be aware of this information.

What is the Average Teacher Debt?

As educators, we don’t become teachers for the big bucks, but that doesn’t mean we don’t have big bills. 

Are you ready for some shocking numbers? 

According to a new analysis by the Economic Policy Institute, teachers now earn 23.5 percent less than comparable college graduates. 

But wait, there’s more. 

Teachers who have Master’s degrees have an average of $50,000 in student loan debt. That’s enough to make you want to scream into your pillow or start a side hustle selling handmade soap. 

No wonder so many teachers work a second job. Especially when so many classroom supplies are paid for by teachers out of their own pocket.

So, the big question is, what are the best strategies for teachers to pay off debt? You can also check out this article on money advice for new teachers. A lot of the strategies work for veteran teachers too. 

This is where it gets exciting and we breathe hope into educators like you.

How Do Teachers Pay Off Their Student Loans?

If you’re an educator with student loan debt, which is probably most teachers out there, you’re probably looking for strategies or tools to help pay off debt fast. 

The good news is, there are strategies and methods that can help you pay off your loans. I’m going to give a brief outline of two great strategies that work and you can choose the one that fits your own debt situation.

Debt Snowball Method or Debt Avalanche Method

The debt snowball method is a popular strategy for paying off debt that involves tackling your debts from smallest to largest, regardless of interest rate. 

The idea is to start with the smallest debt and work your way up, gaining momentum and motivation as you pay off each debt. If you need to set one up, here’s an article that explains how to set up a debt snowball spreadsheet step by step to track and organize your debt.

Here are the basics:

• Make a list of all your debts, including the balance, interest rate, and minimum payment.
• Focus on paying off the smallest debt first, while continuing to make minimum payments on your other debts.
• Once the smallest debt is paid off, move on to the next smallest debt and so on.
• As you pay off each debt, use the money that you were putting towards the minimum payment for that debt to pay off the next debt on your list.
• Repeat until all of your debts are paid off.

The debt avalanche method works exactly the same except for one important difference.

The debt avalanche prioritizes paying off the debt with the highest interest rate first. It might take longer to pay off your first debt, but mathematically you’ll save money on interest over the life of your student loans and other debt.

The debt avalanche works especially well for credit cards and other high interest debts.

If all of your debts and student loans have a pretty similar interest rate, it might be better to focus on the debt snowball method.

How Long Does It Take to Pay Off Student Loans as a Teacher?

The time it takes to pay off student loans as a teacher can vary depending on a few factors. Here are some things to consider:

Income Level

Your income level can have a big impact on how quickly you’re able to pay off your student loans. If you have a higher income, you may be able to make larger payments and pay off your loans more quickly. On the other hand, if you have a lower income, you may need to make smaller payments and take a longer time to pay off your loans.

Repayment Plan

The repayment plan you choose can also impact how long it takes to pay off your student loans. For example, if you choose an income-driven repayment plan, your monthly payments may be lower, but you may end up paying more in interest over time.

Here are some specific examples and timelines for paying off student loans based on different scenarios:

• Scenario 1: A teacher with a starting salary of $40,000 and $30,000 in student loan debt. If this teacher makes payments of $350 per month on a standard repayment plan, they can pay off their loans in 10 years.
• Scenario 2: A teacher with a starting salary of $60,000 and $50,000 in student loan debt. If this teacher makes payments of $550 per month on a standard repayment plan, they can pay off their loans in 10 years.
• Scenario 3: A teacher with a starting salary of $40,000 and $50,000 in student loan debt. If this teacher chooses an income-driven repayment plan, their monthly payments may be lower, but they may end up paying more in interest over time. It may take them 20-25 years to pay off their loans.

Keep in mind that these are just examples and timelines can vary depending on individual circumstances. It’s important to create a repayment plan that works best for your budget and financial situation.

If you use a tool like the debt snowball spreadsheet mentioned above, paying off debt as an educator goes a lot faster.

Student Loan Forgiveness

If you’re an educator, you may be feeling the weight of student loan debt on your shoulders. But fear not – there are teacher loan forgiveness options available to help you out! Here are some options to consider:

Teacher Loan Forgiveness

The Teacher Loan Forgiveness program can be a godsend for educators who have worked in low-income schools or educational service agencies for five consecutive years. 

Depending on your eligibility, you may be able to have up to $17,500 of your Direct or FFEL subsidized or unsubsidized loans forgiven.

My partner is a science teacher who qualified for the maximum amount of $17,500 in loan forgiveness through this program. As a history teacher, I only qualified for $5,000 in loan forgiveness. 

So, make sure to check your loan terms to see what you may be eligible for. I didn’t realize there was such a big difference in loan forgiveness depending on what you teach.

And a point to note, the paper work is TEDIOUS! My partner refiled 3-4 times before it was finally approved. If you get rejected, find out why and resubmit.

Public Service Loan Forgiveness

The Public Service Loan Forgiveness program is a great option for educators who work in public service. 

Here’s what you need to know:

• To be eligible, you must make 120 qualifying payments on your Direct Loans while working full-time for a qualifying employer.
• Qualifying employers include government organizations and nonprofit organizations.
• Once you’ve made the required payments, the remaining balance of your loans will be forgiven.

So, let’s say you’re a teacher working for a nonprofit organization. You make your 120 qualifying payments, and the remaining balance of your loans is forgiven. That’s like getting a free pass to teacher heaven!

But be aware – the Public Service Loan Forgiveness program can be a bit tricky to navigate. Many applicants have been denied forgiveness due to mistakes in the application process. 

That’s why it’s important to review the requirements carefully and ensure that you’re meeting all of the necessary criteria.

Don’t let that scare you away, though! Public Service Loan Forgiveness can be a great way to alleviate the burden of student loan debt for educators who work in public service. 

So, if you’re eligible, be sure to take advantage of this program and get out of debt faster.

Perkins Loan Cancellation

If you have Perkins loans, the Perkins Loan Cancellation program may be a great option for you. Here’s what you need to know:

• Depending on the subject you teach, you may be eligible to have a portion or all of your Perkins loans cancelled.
• Eligible subjects include:
  • Special education teachers
  • Mathematics teachers
  • Science teachers
  • Foreign language teachers
• To qualify, you must work full-time in a public or nonprofit elementary or secondary school system, or in certain other public service organizations.

For example, if you’re a special education teacher with Perkins loans and you work full-time in a public school, you may be eligible to have up to 100% of your loans cancelled. That’s a huge relief!

It’s important to note that there are different requirements for each type of cancellation. Be sure to review the requirements carefully and ensure that you’re meeting all of the necessary criteria.

Conclusion

Being an educator can be a challenging job, both emotionally and financially. 

However, with the right strategies and mindset, you can use these practical steps to pay off debt as an educator.

• Increase your income by taking on side jobs, pursuing a master’s degree, or climbing the career ladder.
• Make a plan to pay off your debt by using strategies like the debt snowball or debt avalanche methods.
• Utilize student loan forgiveness programs such as Teacher Loan Forgiveness or Public Service Loan Forgiveness.
• Make a budget and stick to it, using budgeting strategies like the envelope system or zero-based budgeting.
• Stay committed to your financial goals and adjust your budget as needed to ensure you’re on track to meet them.

By following these steps and being proactive about your finances, you can pay off your debt as an educator and achieve financial independence. Next up, read more on dealing with debt as an educator.