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ISSUE BRIEF: (Download Now)Loan Forgiveness Program Spring, 2002
Qualified teachers enhance children’s learning. Today’s science shows that children’s development is enhanced by the quality of the care they receive at an early age. Teachers who receive more early childhood education and training benefit the children in their child care programs. Child care teachers also need consistent wages in order to keep them interested and stable in their job, as confirmed by the national Cost, Quality and Child Outcomes study (University of Colorado at Denver, 1995), which found that staff wages, education and turnover were highly correlated with quality of care. Pennsylvania Child Care Teachers: High Skill-Low Salaries. Pennsylvania has a highly trained child care workforce. According to the Legislative Budget and Finance Commission’s 1999 study, 67% of teachers in child care centers have B.A. or Master’s degrees and another 18% have Associates degrees. Yet the average annual salary for this group is about $17,000 annually. Fully 59% earn below the federal poverty level for a family of four. Salaries for degreed teachers in group and family child care homes are even lower. Child care teachers with B.A. degrees often leave work in child care programs because they can command much higher salaries as public school teachers. Low wages and a strong labor market have resulted in a drain of qualified teachers into other fields. Increasing parent fees to improve compensation and reduce turnover would only make child care less affordable to struggling families. The Commonwealth must develop strategies to keep highly skilled teachers in the field, to keep our children learning and growing at their full potential. Pennsylvania’s Loan Forgiveness Program. Pennsylvania is a national leader in providing "loan forgiveness" to assist individuals who complete a B.A. or AA degree and serve as child care teachers. Following Pennsylvania’s lead, in 2000 Congress established a national child care loan forgiveness program. The PHEAA Early Childhood Education Professional Loan Forgiveness Program was created by the legislature in 1993 to offer loan forgiveness to child care professionals working in approved Pennsylvania child care facilities. Teachers with a degree and a Pennsylvania early childhood teacher certification who have worked in the field for at least one year are eligible. A maximum loan forgiveness award of $2,500 for each calendar year is available to full-time professionals, to a maximum of $10,000 for any applicant. Applicants are selected by lottery. In 2000, the state legislature appropriated $100,000 for the program, reinstating it to its 1998-1999 levels. PHEAA estimates that at least $740,000 would be necessary to meet demand at current income levels. The income limit of $18,500 was set in 1993 and limits participation for an estimated 20% of degreed child care teachers whose earnings place them over income. Early Childhood Loan Forgiveness History in Pennsylvania
How many teachers have received the benefit to date? Since its inception, 489 child care teachers from 53 counties have been selected in the lottery to receive funds. There is no renewal provision in the legislation, so each participant must reapply each year. Only one applicant has received loan forgiveness for the four year statutory maximum. Salaries of Loan Forgiveness Applicants. The average salaries of loan forgiveness applicants underscores the urgent need for this program. Applicants with degrees and certification earned an average of $14,360 in 1998-99. Note that the average salary has not increased significantly since 1993-94. California, Illinois and Minnesota also offer variations on loan forgiveness programs. North Carolina and Vermont provide wage supplements to teachers who have completed degrees. Recommendations: 1 Eligible applicant pool excludes applicants with incomes over $18,500.
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