What to do if a TEACH grant becomes a loan

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A federal teacher education grant for colleges and higher education or TEACH grant can be a great way for prospective teachers to fund a fraction of the cost of college tuition, but there are some conditions attached to it. Unlike other federal grants, you must meet the learning commitments and prove your progress annually, otherwise the TEACH grant will become loan

The best kind of money for college is “free money,” which is perhaps better described as money that you don’t need to pay back. This is why using scholarships as well as grants This is usually a great way to fund your education and save on college fees. These resources can be used to reduce the amount you have to pay using savings or student loans.

However, you should carefully read and understand the terms and conditions of any remuneration you accept to pay for college tuition, and the TEACH grant is a great example of why this is important. Here is information about the TEACH grant and tips on what you can do if you have a grant that becomes a loan.

TEACH Grant Program

Congress authorized the TEACH Grant Program in 2007 and people who are studying to begin teaching careers are eligible for grants in exchange for certain qualifications both during and after school. Applying for a free application for Federal Student Aid, known as the FAFSA, is the first step in applying for a TEACH grant.

[Read: Completing the FAFSA: Everything You Should Know.]

The federal government provides TEACH grants in exchange for a service agreement that requires beneficiaries to work as highly qualified teachers in a high-demand area in primary or secondary school or a skilled education agency in a low-income area.

The commitment to work is at least four full academic years within eight years after completion or termination of the course of study for which the grant was received. Examples of the most in-demand areas, as defined by the US Department of Education, are English language learning, math, reading, science, and special education.

If the recipient does not meet all of the work and certification requirements and other conditions of the TEACH grant, it will be converted into a federal direct unsubsidized student loan, which must be fully repaid. interest

The grant, which must be submitted each year, provides a maximum of $ 4,000 per year for a bachelor’s or master’s degree. But pursuant to the 2011 Federal Budget Control Act, also known as the Sequestration Act, TEACH grants disbursed on or after October 1, 2020, but before October 1, 2021, must be reduced by 5.7% of the amount. payment that the student would otherwise receive. For example, a maximum bounty of $ 4,000 reduced by 5.7%, which is $ 228, would result in an actual bounty of $ 3,772.

Grant recipients must be enrolled in an undergraduate, graduate or postgraduate qualifying program at a school that participates in the TEACH Grant Program and must meet certain academic achievement requirements. They must also sign a TEACH Service Grant Agreement that sets out all the conditions, such as an annual certification process.

[READ: What You Need to Know About Becoming an Education Major.]

In some cases, the service commitment may be temporarily suspended, for example, if your state requires you to obtain a teaching license or certificate to teach in elementary or secondary schools in that state; if you have a condition that qualifies you for leave under the Federal Family and Medical Leave Act, commonly known as the FMLA; or the appropriate case where you are ordered active military service status.

Grant recipients must submit documentation to the Department of Education by October 31 of each year confirming that they have completed a year of qualifying teaching work or intend to fulfill this requirement. An initial certification is also required within 120 days of graduation. Failure to comply with certification may result in the grant being converted into a loan.

How TEACH Grant Can Become a Loan

Conversion of a TEACH grant into an outright unsubsidized loan can happen for a number of reasons, for example, if the recipient does not meet job requirements; misses the annual certification of skilled work; or fails to promptly notify that he has started qualified teaching work, intends to do so or has the right to temporarily suspend its completion.

When a TEACH grant becomes a loan, the recipient must pay the full amount as well as any interest that would have accrued from the date the grant was disbursed.

Unfortunately, a TEACH grant usually turns into a loan. According to the Office of Management and Budget, the majority of these grants – 66% – have been converted into loans. Minor paperwork problems, such as when grant recipients submit their annual teaching status one day late, often cause a transition.

What to do if your TEACH grant is converted

If the Department of Education contacts you and tells you that you are eligible to request a review, you may be eligible for a loan back into grants if you can demonstrate that either you have completed the required four years of qualified service during the eight-year service period, or you intend to and can. to do.

[READ: Student Loan Forgiveness Programs for Teachers.]

You can still request a review even if the Department of Education does not contact you – for example, if you were on the right track but missed the annual certification requirement or made a mistake. Whatever the reason, you must show that you have met or will be able to meet the service requirements within the required time frame.

To request a revision, contact FedLoan Servicing, TEACH Grant Provider, at 855-499-9543 or email TEACHgrantconversions@myfedloan.org… Be prepared to answer questions and provide the necessary information so that the company can determine your membership status.

If you are unable to obtain a revision and therefore cannot re-convert the loan into a TEACH grant, be sure to read and understand everything. terms and the terms of your new loan. Fortunately, he is eligible for all of the benefits and protections for borrowers under the federal student loan program, including the ability to lower your monthly payment if necessary and defer your loan if you cannot make a payment.

However, at the same time, there are consequences if you miss your loan payments and end up in delinquency or by default.

If your TEACH grant has not been converted into a loan but have questions about your annual certification date, contact FedLoan Servicing at 800-699-2908.

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