How Federal Actions Could Deepen Teacher Shortages—and What States Can Do

At least 1 in 8 teaching positions nationwide—roughly 425,000—are either unfilled or staffed by teachers not fully certified for their assignments. Students are paying the price through larger class sizes, fewer course offerings, and less effective instruction, with the heaviest burden falling on schools serving more students of color and students from low-income backgrounds. States have worked to close the shortage gap, but a new wave of federal policy changes is likely to make it harder and more expensive to enter and stay in teaching, threatening to stall state progress when the educator workforce needs it most.

Many states are actively addressing shortages by expanding access to high-quality preparation programs and providing competitive compensation, strong mentorship, and leadership supports. These efforts align with research showing that teachers tend to remain in the profession and teach more effectively when they complete high-quality preparation programs anchored in well-supervised clinical experiences aligned with rigorous coursework.

Yet the cost of becoming a teacher, combined with the profession's relatively low pay, remains a significant barrier. Teachers earn about 27% less than other professionals with similar levels of education. Six in 10 have taken out student loans. These financial pressures can steer prospective teachers toward higher-paying careers or into less-comprehensive preparation pathways associated with higher turnover, and contribute to teachers leaving the profession before retirement. By reducing these financial barriers, states can recruit more aspiring teachers and retain experienced educators.

The federal government has often supported state efforts to help teachers afford high-quality preparation and sustain a career in the classroom through federal student loans and affordable repayment and forgiveness options. Yet new headwinds from the administration and Congress may stall state progress.

Changes to Federal Student Aid

The Pell Grant is the federal government's largest need-based grant aid for postsecondary students. For the 2026–27 school year, the maximum Pell award is $7,395, though many eligible students receive less. The maximum award covers only about 30% of costs at public 4-year colleges today, compared to nearly 80% in the mid-1970s, limiting how far the aid can stretch.

The One Big Beautiful Bill Act (H.R. 1), signed into law in July 2025, restricts students' access to federal loans and may push teaching candidates into costlier, less protective financing options, including private loans. For example, H.R. 1:

• Pro-rates loans for all students not attending full-time, making it harder for part-time teacher candidates (e.g., students working while enrolled, including paraprofessionals, and parenting students) to stay enrolled.
• Reduces what graduate students and parents can borrow under the Direct Unsubsidized and Parent Loan for Undergraduate Students (Parent PLUS) programs, making it harder to afford a high-quality preparation program.
• Eliminates Graduate PLUS loans, which had allowed students to borrow up to the full cost of attendance, leaving graduate students who exhaust Direct Unsubsidized graduate loan limits with no federal borrowing options.

Additionally, in May 2026, the U.S. Department of Education (ED) issued a new rule tied to H.R. 1 that excludes education-related degrees from the category of "professional" degrees that are eligible for higher borrowing limits under the remaining graduate loan program. Part of this rule is on hold due to a preliminary injunction, and in the meantime, ED has published an interim list of qualifying professional degree programs. A final decision by the court could apply to some or all of the listed professional degree programs.

Insufficient federal loans may push borrowers to private loans, which typically offer few borrower protections and are ineligible for federal loan forgiveness. Plus, private lenders are not required to serve every student with financial need and generally require strong credit or co-signers, placing this option out of reach for many, especially teacher candidates of color and from low-income backgrounds.

Changes to Federal Student Loan Repayment Options and Forgiveness

H.R. 1 overhauls the repayment landscape, replacing existing plans with two new options for borrowers: the Repayment Assistance Plan, an income-dependent plan in which loans are retired after 30 years, and the Tiered Standard Plan, with repayment terms varying from 10 to 25 years depending on the amount borrowed. These are the only remaining options for borrowers taking out new loans (or consolidating existing ones) after July 1, 2026.

H.R. 1 also reshapes access to the Public Service Loan Forgiveness (PSLF) program. Created with bipartisan support, PSLF cancels a borrower's remaining federal loan balance after 10 years of qualifying payments while the borrower is working full-time in a public service career like teaching. This can shorten the repayment period from as many as 30 years to 10 years.

Regulatory changes under the previous administration made it easier to access PSLF. H.R. 1 makes it more complicated. Specifically, under H.R. 1, only the Repayment Assistance Plan qualifies for PSLF. The Tiered Standard Plan—the default for borrowers who do not actively choose a plan—is not eligible. This places the burden of opting into or switching to a PSLF-qualifying plan on borrowers, not loan servicers or the federal government. Only borrowers with no new or consolidated loans can stay on existing PSLF-eligible plans.

Additional Federal Actions

Federal actions that may further adversely affect state efforts include the following:

• New ED rule creates uncertainty about whether certain public schools will remain qualifying PSLF employers: Under the October 2025 rule, ED has the broad discretion to determine whether certain public employers remain qualifying PSLF employers. Any employer that the administration determines has engaged in activities that have a "substantial illegal purpose," including aiding or abetting violations of federal immigration laws, illegal discrimination, or disorderly conduct or public nuisance, would be ineligible. The rule has been challenged in federal court and is currently vacated, though potential appeals leave lingering uncertainty that could weaken a key recruitment and retention tool.
• Canceled federal grants for programs preparing candidates to teach in high-need schools and fields: ED has canceled more than 128 federal grants, totaling nearly $520 million, across the Teacher Quality Partnership, Augustus F. Hawkins Centers of Excellence, National Professional Development, and the Individuals with Disabilities Education Act, Part D, Personnel Preparation and State Personnel Development grant programs. These programs help remove or reduce financial barriers in part by funding stipends for teaching candidates during their clinical experience. They also support access to high-quality preparation programs in special education and at Historically Black Colleges and Universities, Tribally Controlled Colleges and Universities, and Minority Serving Institutions.
• Unspent congressionally appropriated funds: To date, the administration has blocked ED from spending all congressionally appropriated funding for some of the above programs, creating further funding instability.

Steps States Can Take

As federal support narrows, states' roles in addressing teacher shortages are more critical than ever. In recent years, states have invested in several promising evidence-based policies to improve teacher recruitment and retention. They include:

Improving compensation by:

• Increasing teacher salaries. Among other states, Iowa, Mississippi, Nevada, New Mexico, and South Carolina have invested additional state funding into pay for teachers across the experience spectrum.
• Incentivizing and supporting National Board Certification (NBC). Research links NBC to stronger teacher effectiveness, and many states incentivize NBC through salary increases. Alabama, Maryland, and Michigan increased salaries for NBC-certified teachers and added supplemental pay for those teaching in high-need schools. Texas' Teacher Incentive Allotment allows NBC-certified teachers to qualify for salary supplements. California offers a $25,000 stipend to NBC-certified teachers who commit to teaching in high-priority schools for 5 years.

Increasing financial supports by:

• Offering service scholarships. California offers candidates up to $20,000, and North Carolina provides $5,000 per semester in exchange for service in high-need schools or shortage areas.
• Providing loan repayment support. Delaware offers stipends that can be applied to education loan debt for teachers working in high-need schools or areas.

Investing in high-quality preparation and support by:

• Expanding access to high-quality preparation. One of the strongest pathways for effectiveness and retention is the teacher residency. California, New Mexico, and Texas have made significant investments to seed, scale, and sustain residencies. High-quality routes could also include Grow Your Own programs and emerging pathways, such as Registered Teacher Apprenticeship Programs.
• Providing mentoring and induction support. Turnover is highest during a teacher's first few years. Well-designed mentoring and induction programs can support retention for early-career teachers. Oregon has directed $8 million to provide more than 1,200 beginning educators with high-quality mentors and support in key areas such as classroom management and co-teaching.
• Strengthening school leader preparation and support to retain teachers. Providing school leaders with high-quality learning opportunities helps support effective instruction, positive school climates, and teacher retention. Most school leaders pursue advanced degrees and may face the federal loan repayment and forgiveness pressures described above. States like North Carolina help cover the cost of leader preparation, including a yearlong internship under a veteran principal, and Mississippi underwrites teachers' salaries while they pursue an administrator credential.

Teaching shortages represent more than a workforce problem—they affect students' access to the high-quality teaching that supports learning and long-term success. Research shows that the teacher workforce can be strengthened through sustained investments in preparation, compensation, and support. As federal support recedes, states have an increasingly important role to play in making the investments needed to build and sustain a strong educator workforce.