Filling in the Gaps of Teacher Compensation


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This is the final post in our Teacher Compensation Series, which highlights options for policymakers to create a sustainable approach to teacher compensation that supports long-term entry and persistence in the teacher workforce.

Salary, retirement and health benefits are key components of a teacher compensation package, but state leaders have taken additional steps to address compensation along the teacher pipeline, from preparation to career advancement opportunities. Financial incentives, as a part of a comprehensive strategy to address teacher shortages, are a powerful tool to increase teacher preparation program participation and completion, in addition to supporting professional growth and retention.

While the prospect of taking on student loan debt can discourage entry into a field that pays 20% less than other professions that require a college degree, states have more traditional policy options to address these barriers, including scholarship and loan forgiveness programs and salary increases.

Although these address costs associated with tuition and loan repayment, they may not address the hidden costs of preparation programs that might deter student participation. In addition to licensure exam fees, many teacher candidates are required to undergo a semester or full year of clinical experience prior to earning a license. Oftentimes these student-teaching or residency experiences are unpaid, despite candidates working full time in their placements. This limits their ability to earn the money necessary to cover living expenses and tuition, creating inequitable access to teacher preparation programs.

A growing number of states are addressing this barrier through various stipend or reimbursement programs that compensate student-teachers for their time in the classroom. For example, Indiana awards $4,000 stipends to student-teachers in special education or other high-needs fields who agree to teach in Indiana for at least three years. They also offer a similar stipend program specifically for Black and Latine students. Other states are currently considering legislation that would reimburse districts for a daily stipend or hourly wage paid to student-teachers.

Once teachers have entered the workforce, retaining them is key to mitigating teacher shortages. Some policymakers have developed financial incentives that both support professional growth and encourage retention, as research demonstrates that teachers become more effective as they gain experience.

In the District of Columbia, teachers are able to progress along the Leadership Initiative For Teachers career ladder and earn a base salary increase upon meeting the criteria to reach the next certification level. Teachers are also able to serve as teacher leaders as a part of the Teacher Leadership Innovation program. Teacher leaders earn additional compensation through coaching and supporting their colleagues. Each of these programs provide opportunities for advancement while remaining in the classroom. They also leverage the expertise of veteran educators to provide professional development opportunities for their colleagues, which can improve the quality of instruction throughout the school.

State policymakers have taken other innovative approaches to respond to the unique needs of educators in their states.

  • California: State statute permits school districts to provide affordable housing for teachers in the district, which allows districts to access state and federal funding for affordable housing programs. Districts are increasingly pursuing affordable housing projects in the state.
  • Georgia: The state education agency used Elementary and Secondary School Emergency Relief (ESSER) funds to provide retention bonuses to all teachers in the state and the Legislature enacted B. 32 (2021) to provide tax credits for teachers who agree to teach in rural schools or schools receiving below a certain rating in the state accountability system.
  • Iowa: State statute permits teachers to claim a tax deduction of up to $500 for classroom supplies and professional development expenses.
  • Nevada: The state education agency allocated ESSER funds for classroom supplies and other resources for teachers that were requested through DonorsChoose, a nonprofit that allows individuals to donate directly to public school classroom projects.

For more information on state efforts to address teacher shortages, read our Policy Guide and 50-State Comparison on the topic. 

Author profile
Policy Analyst at Education Commission of the States |

As a policy analyst, Ben works on tracking legislation, answering information requests and contributing to other Policy Team projects. Prior to joining Education Commission of the States, he taught high school social studies in Kentucky and worked in education policy at the National Conference of State Legislatures. He earned a master's degree in education policy from the University of Colorado Boulder and a bachelor's degree in history and education from Transylvania University.

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