How To Prevent TEACH Grants From Becoming Loans

TEACH grants are an awesome program that will give you free money to go to school if you plan on becoming a teacher.  Currently, the program gives you up to $4,000 per year if you take certain classes and programs to become a teacher.  You also have to sign an agreement that states that you will serve as a teacher in certain schools or classes, or else your grant will become a loan.

Here’s where the problem lies.  You have to do a bunch of specific requirements, AND tell your lender regularly that you are following through on these commitments, or your grants will become loans that you have to pay back.

Here’s what you have to do to prevent your TEACH Grants from becoming loans.


Requirements For Teach Grants

To qualify for a TEACH Grant, you have to sign an agreement where you agree to the following:

  • Teach in a high need field, which are currently bi-lingual education, foreign language, math, reading, science, and special education.
  • At a school that serves low income students (Title 1 Schools)

You also have to meet the following criteria:

  • You must work at least 4 of your 8 years in a school or program that meets the above criteria
  • You must perform this service at a school that meets the criteria for low income students
  • You must provide the Department of Education with proof of your service

It’s important to note that if you receive a TEACH Grant for both undergraduate and graduate school, you actually owe two commitments, but the 4 years of service counts towards both.

If you don’t follow through on these commitments, your grants will be converted to Direct loans.


Informing The Department of Education

The biggest issue with TEACH Grants is the fact that you have to inform the Department of Education, or else your grants will be converted to loans.

Even though the Department of Education handles TEACH Grants, they typically outsource the servicing of them to a network of Student Loan Servicers, like FedLoan and NelNet.  These servicers are the ones who check your paperwork each year and also will convert your grants to loans if you don’t submit the paperwork correctly or on time.

However, these companies want your grants to become loans – they will make more money as a result.  So, it’s extremely important that you do the following when sending in your paper work.

First, only send in your certification once you’ve made copies of everything.

Second, make sure that you send it to the servicing company Certified Mail with Return Receipt.  This will give you proof of mailing and proof of receipt.  Since timing is so important (if you miss by just one day they can convert your grants to loans), you need this proof.  If anything happens, the $5 in postage you will pay is totally worth it!

Finally, make sure you follow up if you don’t receive a confirmation.  Sometimes these companies will convert your grants to loans and not even tell you!  Make sure that you call and follow up if you don’t hear back.

What has been your experience with TEACH grants?

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