UHEAA Bulletin Vol. 2001 Issue 06

January 11, 2001
Volume 2001 - Issue 06

Teacher Loan Forgiveness Program

Utah Higher Education Assistance Authority (UHEAA) has received numerous inquiries regarding the Teacher Loan Forgiveness Program which was part of the 1998 Higher Education Act (HEA) Reauthorization. The United States Congress included this federal program in the HEA to encourage people to enter and continue in the teaching profession. The Department of Education (ED) issued final regulations regarding this program on November 1, 2000, effective July 1, 2001. (See UHEAA Bulletin Volume 2000 - Issue 87, dated November 15, 2000.) UHEAA is providing the following questions and answers to assist schools and lenders in providing information to interested borrowers.

What types of student loans may be forgiven under the Teacher Loan Forgiveness program?

Subsidized and Unsubsidized Federal Stafford Loans
Subsidized and Unsubsidized Direct Loans
Eligible portions of Federal Consolidation and Direct Consolidation Loans

Does the date I first borrowed my student loans affect my eligibility for this program?

Yes. You must have had no outstanding loan balance under the FFEL Program or the Direct Loan Program on October 1, 1998, or had no outstanding loan balance on the date you obtained a loan after October 1, 1998, to qualify for this program.

I work at a school, but I am not a teacher. Do I qualify for this program?

Probably not. For this program, a "teacher" means a person who provides direct classroom teaching, or classroom-type teaching in a non-classroom setting.

Does my school qualify for the program?

You must teach in a qualified elementary or secondary school. Your school qualifies if:

the school is in a school district that qualifies for funds under Title I;
30 percent of the school's total enrollment is made up of children who qualify for services provided under Title I; and
the school is listed in the Annual Directory of Designated Low-Income Schools for Teacher Cancellation Benefits, published annually by ED. This is the same list that is used to determine eligibility for Perkins loan cancellation programs.

To see if your school qualifies, search for your school name, school district, or state on the ED website at http://www.ed.gov/offices/OSFAP/Students/repayment/teachers/. If you go directly to www.ed.gov, click on "Student Financial Aid,"click on "Financial Aid for Students,"and click on "Paying Back your Student Loan," click on "Teacher Service Options," click on "Teacher Service Options" again, click on "Perkins cancellation provisions," then click on the appropriate school year.

What amount of debt can be forgiven?

For each borrower, the total amount forgiven on all eligible loans may be up to $5,000 of the debt outstanding (principal and interest) after completion of the fifth year of teaching.

How long must I teach to qualify for this program?

You must have been employed as a full-time teacher for five consecutive complete academic years, at least one of which was after the 1997-1998 academic year, at a qualified elementary or secondary school. A disruption of teacher service may be allowed for military duty, school or FMLA leave. Your loans must have been made prior to the end of your fifth year of qualifying teaching service.

Is a forbearance (postponement of repayment) possible during this five-year period?

Yes. You may qualify for a forbearance (postponement of repayment) each year during your five years of teaching service. You may also qualify for a forbearance while you are completing the application for teacher loan forgiveness and waiting for the approval of such application. Other types of forbearance may also be available to you. Contact your lender.

If I make payments during the five-year period, will those payments be refunded to me if I eventually qualify for this program?

No. The amount forgiven will be the amount of debt outstanding at the time you qualify for loan forgiveness, not to exceed $5,000.

My loans are in default. Am I still eligible for this program?

You are not eligible for teacher loan forgiveness on a defaulted loan unless you have made satisfactory repayment arrangements with your guarantor.

After I have been a teacher for five years and have met all the requirements, what must I do to have my loans forgiven under this program?

You will need to complete an application, submit it to your lender, and wait for approval. Application forms are currently being developed and will be made available to lenders. Contact your lender for specific processing details.

Where can I obtain further information about the Teacher Loan Forgiveness Program?

The ED website at http://www.ed.gov/offices/OSFAP/Students/repayment/teachers/ contains information on this program. Also see http://www.ed.gov/offices/OSFAP/Students/payback.html for additional information on repaying student loans. If you go directly to www.ed.gov, click on "Student Financial Aid,"click on "Financial Aid for Students,"and click on "Paying Back your Student Loan" for general repayment information. From this site click on "Teacher Service Options," then click on "Teacher Service Options" again for repayment options specific to teachers.

Any questions regarding this Bulletin can be directed to the UHEAA Policy and Training Department at (801) 321-7166 or by e-mail at cjudd@utahsbr.edu.