House, Senate Leaders Introduce Bill to Incentivize and Aid Teachers Through Improved Loan Assistance

Senator Orrin Hatch, R-Utah, along with Senator Mark Warner, D-Va., Representative Suzanne Bonamici, D-Ore., Representative Susan Brooks, R-Ind., Representative Richard Hanna, R-N.Y., and Representative Derek Kilmer, D-Wash., introduced the Teacher Loan Repayment Act (TELORA) to improve federal loan assistance programs and provide teachers with clear and tangible incentives to enter and remain in the classroom.

“Our top priority in improving education outcomes in the United States should be refining the incentives that both attract bright and talented teachers to the classroom, and help them to stay there,” Senator Hatch said. “We need more teachers in our low-income schools. Making these programs more efficient is a common-sense investment in our future that will pay off for generations." 

“One of the best tools we have at our disposal to attract and retain talented teachers in our most challenging schools is through federally-sponsored grant and loan assistance programs,” said Senator Warner. “Providing upfront monthly student loan payments to teachers in Title I schools is a simple, straightforward way to ensure that our most talented teachers enter and remain in the classrooms where they are most needed.”

"Educating the next generation is very important work, yet teachers are often underpaid and under-resourced,” Rep. Bonamici said. "Current programs to attract and retain teachers to serve in high-needs schools can be burdensome and ineffective. The Teacher Loan Repayment Act delivers a meaningful benefit to America's hardworking educators, and, in doing so, takes an important step to elevate the teaching profession.”

“As the daughter of a public school teacher and coach, and administrator, I understand the importance of rewarding hardworking teachers for their dedication to changing lives in the classroom,” Rep. Brooks said. “I want to see talented, new teachers connect with and stay in high-need schools across our nation. I believe this legislation will help attract teachers to challenging schools, and ultimately transform the lives of students.”

“Evidence over the past several years makes it clear that existing student loan repayment programs have failed to encourage a high number of teachers to work in low-income classrooms,” Rep. Hanna said. “As a result, Title-I schools have continued to face difficulties in recruiting and retaining skilled teachers. By consolidating the failed crop of existing loan repayment programs into one streamlined, accessible program with clearer incentives and fewer bureaucratic hurdles, educators will have greater access to federal support and low-income schools will be able to effectively recruit and retain quality teachers.  While we will all benefit from having tax dollars spent on a more efficient program, with additional teachers in the classrooms of lower-income school districts, students will be the ultimate winners.”  

“My folks were both public school teachers and they taught me to value the doors that a good education can open,” said Rep. Kilmer. “Currently, programs designed to attract our best teachers to schools most in need are not getting the job done. To encourage talented teachers to make their mark helping students learn we need to make sure they are not left with crippling loan payments and substantial debt. Our bipartisan, bicameral bill creates a more effective program that gives teachers the right support so they can make a difference in the lives of kids everywhere.” 

Statement of Support from Third Way

“We commend Senator Hatch, Senator Warner, and Representative Kilmer for their efforts to streamline loan assistance programs through the ‘Teacher Loan Repayment Act’ so that all teachers in Title I schools can begin getting financial relief from Day 1,” said Lanae Erickson Hatalsky, Director of the Social Policy and Politics Program at Third Way. “While well-intentioned, today’s federal loan assistance options for teachers fall short due to their overly-complex qualifications and back-loaded benefits. Having a set monthly loan payment for teachers that grows larger over time will serve as an important tool for both attracting and retaining great teachers in the classrooms that need them the most.”


The current menu of federally-sponsored teacher loan assistance programs does not work. From Federal Stafford and Perkins Loan Forgiveness for Teachers to TEACH grants, the current options available to teachers have failed to meet their stated goals: to attract and retain high talent in our classrooms. Not only do very few teachers take advantage of the benefits available due to confusing eligibility requirements and lengthy commitments, there is evidence to suggest that some of these programs can actually cost teacher candidates more money in the long run. While the NCLB and the Education Department struggle to enforce mandates that states provide equitable access to qualified teachers, there are a variety of obstacles towards getting teachers into the neediest schools, and we are missing the correct incentives.

The Teacher Loan Repayment Act (TELORA) instead provides teachers with a very clear and tangible incentive to enter and remain in the classroom. TELORA would:

Streamline Existing Programs

  • TELORA would eliminate the current patchwork of wasteful loan assistance programs and instead replace them with one streamlined federal program that provides all eligible teachers with a monthly loan payment. Each loan payment would count towards PSLF, resulting in full loan cancellation for teachers after ten years.

Provide Teachers with Real Financial Benefit

  • Under this legislation, the federal government (as administered through the states) would put $250-400 towards every eligible teacher’s loan payment each month up to a total of $23,400. If this monthly payment is less than this stated range, the remaining money would go towards paying down the loan principal. These payments would be non-taxable, providing hardworking teachers with substantial financial relief every month. 

Incentivize Teachers to Work in the Neediest Schools

  • Only teachers who choose to work in Title-I schools (schools enrolling at least 40 percent of children from low-income families) would be eligible to receive loan forgiveness under TELORA. This would provide teachers with an extra incentive to work in the most challenging schools where students need them most. 

How It Works

The payments for TELORA would ramp up every year, rewarding teachers who choose to stay in the classroom long-term. The process to implement TELORA is simple—states report the number of eligible teachers to the federal government, designated federal funds are then sent to state agencies, and then those state agencies pay federal funds to the lenders directly. Teachers simply watch a portion of their loan payments disappear each month.