What to Do if Your TEACH Grant Becomes a Loan
"The best kind of money for college is "free money," like scholarships and grants that can be used to decrease the amount you will have to pay using savings or student loans. The federal Teacher Education Assistance for College and Higher Education Grant, or TEACH Grant, can help prospective teachers fund part of the cost of college, but it comes with a few strings attached," U.S. News & World Report writes.
... "When a TEACH Grant becomes a loan, the recipient owes the full amount disbursed, as well as any interest calculated from the date the grant was paid out. "If you did it for four years, that’s around $16,000 plus interest that you weren't planning on having," says Megan Walter, senior policy analyst with National Association of Student Financial Aid Administrators."
"Before your grant converts, you'll receive a notice from the loan servicer, says Walter, and get a six-month grace period to begin repayment. 'And you will be given the opportunity to pay off the interest that would have accrued up front,' she says."
... "'It is a good program and a nice way to get people into teaching specifically in lower-income areas or areas with underrepresented students,' says Walter. However, for some borrowers, it may be limiting or the requirements may be too challenging to achieve."
"On the other hand, Public Service Loan Forgiveness forgives all remaining direct loan balances after 10 years of qualifying employment and payments. Plus, you can teach in just about any public school or private nonprofit institutions, and whatever subject you'd like, and qualify. Of course, you'll have to make 120 consecutive, on-time loan payments before the rest of your debt is forgiven, so it takes a much longer time to get relief."
Publication Date: 8/25/2026
