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What to Do If Your TEACH Grant Becomes a Loan Ranger student loan


The Federal Teacher Training Assistance Grant for College and Higher Education, or the TEACH Grant, can be a great way for prospective teachers to fund some of the cost of college, but it comes with a few. conditions. Unlike other federal grants, you must fulfill a teaching service obligation and certify your progress every year, otherwise the TEACH grant will turn into a loan.


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

However, you should carefully read and understand the terms and conditions of any scholarship you agree to pay for college, and the TEACH grant is a prime example of how important this is. Here is information on the TEACH grant and tips on what you can do if you have one that becomes a loan.

The TEACH grant program

Congress authorized the TEACH grant program in 2007, and people who study to begin a career in teaching are eligible to receive grants in exchange for certain qualifications during and after school. Submitting the free application for Federal Student Aid, known as FAFSA, is the first step in applying for the TEACH grant.

The federal government provides TEACH grants in exchange for a service agreement that requires grantees to work as a highly qualified teacher in a high-need area at a primary or secondary school or qualified educational service agency in a low-income area. .

The work commitment is at least four full academic years within eight years of completion or completion of the study program for which the scholarship was received. Examples of high need areas, as defined by the US Department of Education, are English language acquisition, math, reading, science, and special education.

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

The grant, which must be applied for annually, provides a maximum of $ 4,000 per year for a bachelor’s or master’s degree. But due to the Federal Budget Control Law of 2011, also known as the Escrow Law, TEACH grants paid on or after October 1, 2020 and before October 1, 2021 must be reduced by 5.7% compared to the amount of the grant that the student would otherwise have received. For example, the maximum award of $ 4,000 reduced by 5.7%, or $ 228, would result in an actual award of $ 3,772.

Grant recipients must be enrolled in an eligible undergraduate, graduate, or post-baccalaureate program at a school that participates in the TEACH grant program and must meet certain academic achievement requirements. They must also sign a TEACH Grant Agreement to Serve, which outlines all terms and conditions such as the annual certification process.

The service obligation may be temporarily suspended in certain cases, for example if your state requires you to obtain a teaching license or certification to teach in elementary or secondary schools in that state; if you have a condition that qualifies you for leave under federal Family and Medical Leave Act, commonly known as FMLA; or an eligible case where you are ordered for active duty military status.

Grant recipients must submit documentation showing that they have completed one year of qualifying educational service – or their intention to meet the requirement – to the Department of Education by October 31 of each year. Initial certification is also required within 120 days of graduation or leaving school. Failure to complete a certification may result in the grant being converted into a loan.

How a TEACH grant can become a loan

The conversion of a TEACH grant to an unsubsidized direct loan can occur for a number of reasons, for example if the recipient does not meet the requirements of the job; missing an annual certificate of eligible employment; or fails to provide timely notification that he or she has commenced qualifying educational service, intends to do so or qualifies for a temporary suspension of its completion.

When a TEACH grant becomes a loan, the beneficiary is liable for the full amount disbursed, as well as any interest that would have accrued from the date of payment of the grant.

Unfortunately, it is common for a TEACH grant to be converted into a loan. According to the Bureau of Management and Budget, the majority of these grants – 66% – are turned into loans. Small paperwork issues, such as grant recipients submitting annual certification of their teaching status a day late, are often what triggered conversions.

What to do if your TEACH grant is converted

If the education department contacts you and declares that you are eligible to request a review, you may have the loan converted back to grants if you can demonstrate that you have completed the required four years of qualified service during the period. service obligation of eight years or so and will be able to do so.

You can still request a reconsideration even if the education department doesn’t 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 prove that you have met or will be able to meet the requirements of the service on time.

To request a review, contact FedLoan Servicing, the TEACH Grants Manager, by phone at 855-499-9543 or by email at [email protected] Be prepared to answer questions and provide the information the company needs to determine your eligibility status.

If you are unable to get a reconsideration and therefore cannot convert the loan back to a TEACH grant, be sure to read and understand all of the terms and conditions of your new loan. Fortunately, he’s eligible for all of the federal student loan program’s borrower benefits and protections, including the ability to lower your monthly payment if necessary and defer your loans if you can’t make a payment.

At the same time, however, there are consequences if you miss your loan payments and fall into default or default.

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