Child Care Provider May Receive Benefit from Loan Forgiveness Program

The U. S. Department of Education (ED) recently released a Federal Register, dated July 27, 2001, announcing eligibility criteria and procedures regarding the Child Care Provider Loan Forgiveness Demonstration Program. (A copy of this Federal Register is provided as an attachment in PDF format.) This program was designed to "bring more highly trained individuals into the early child care profession; and to keep more highly trained child care providers in the early child care field for longer periods of time." Congress appropriated $1 million for fiscal year 2001 on a "first-come, first-served basis" to be allocated to student loan borrowers by September 30, 2001. Because of this limited funding, it is important for eligible borrowers to apply as soon as possible.

Eligibility for the demonstration program is limited to individuals who are currently working a minimum of 30 hours per week in eligible child care facilities that serve low-income families and who meet these qualifications:

• The individual had no outstanding student loan debt on October 7, 1998, or has no outstanding loan balance on the date the individual obtains a loan after October 7, 1998.
• The individual obtained an associate's or bachelor's degree in early childhood education.
• The individual has worked full-time as a child care provider for two consecutive years in an eligible facility, including a home, that serves low-income children. (At least 70 percent of the individuals the facility serves are from families that earn less than 85 percent of the State median household income.)
• The individual has not received benefits under the AmeriCorps program for the same service.
• Individuals must submit applications to the U.S. Department of Education by September 17, 2001.

Those who meet the eligibility requirements will receive up to 100% student loan forgiveness, beginning with 20% loan forgiveness after two-consecutive years of employment and increasing to 100% after five years of full-time employment. Funds for the demonstration program are limited to $1 million, so it is important to apply early.

Individuals who do not meet the two-consecutive years of employment requirement may be eligible for loan forbearance while performing the qualifying employment.

Applications and forbearance forms are attached and are also available at www.uheaa.org or by contacting UHEAA at 801-321-7200, and must be submitted to the U.S. Department of Education by September 17, 2001. For additional information about the Child Care Provider Loan Forgiveness Program, please contact ED at 1-888-562-7002.

Federal Register July 27, 2001
Child Care Loan Forgiveness Application
Child Care Loan Forgiveness Forbearance Form