Stafford Loan
- Eligibility
- How to apply

Perkins Loan
- Eligibility
- How to apply

TEACH Grant Program (New for 2008-09)
- Conditions
- Eligibility
- How to apply

Public Service Loan Forgiveness Program
-Eligibility
-How to apply

The Stafford Loan Forgiveness Program became effective
on July 1, 2001. Eligible borrowers are eligible for grants loan forgiveness of up to $5,000. Certain math, science and special education teachers may qualify for an increased amount of loan forgiveness up to $17,500.

Eligibility
To beeligible for loan forgiveness, all of the following conditions must be met:

1. You borrowed a Stafford Loan through the Federal Family Education Loan (FFEL) and/or through the Federal Direct Loan program.

2. You are a "new borrower."

• You had no outstanding FFEL or Direct Loan balance on Oct. 1, 1998, or
• If you did have an outstanding balance, you paid off that balance before getting the loan(s) for which you are requesting forgiveness.

3. You have been employed for at least five consecutive, complete school years as a full-time teacher in a public or private, nonprofit elementary or secondary school designated as a low-income school. At least one of these years must occur after the 1997-98 school year. (To find out whether your school is considered a low-income school, visit https://www.tcli.ed.gov/CBSWebApp/tcli/
TCLIPubSchoolSearch.jsp.)

Your school does not have to be designated a low-income school in each of the five consecutive years. If you are teaching at a school listed as a low-income school for at least one year during your employment, your subsequent years of service at that school can be counted in the five consecutive years, even if the school is not designated as a low-income school in every subsequent year. For example, if you began teaching at a secondary school in the 1994-95 academic year, and it was designated as a low-income school in 1996-97, you may count your five consecutive years of service at that school starting with the 1996-97 academic year, even if the school
is not designated as a low-income school in
subsequent years.

There are three exceptions to the "consecutive years" requirement:

• You are called to active military status for more than 30 days.
• You have a condition covered by the Family and Medical Leave Act.
• You returned to postsecondary education for a purpose related to performing the teaching service for which you are requesting forgiveness.

For each of the exceptions to be allowable, you must have (a) taught for at least one half of an academic terms, and (b) your employer must consider you to have fulfilled your contract terms for purposes of salary increases, tenure and retirement.

4. You are not in default on the FFEL or Direct Loan for which you are requesting discharge, or you are in default but have established a satisfactory repayment arrangement with the holder of your loan.

5. You have not received a benefit for the same teaching service under the National Community Service Act of 1990 (AmeriCorps).

6. You borrowed the loan for which forgiveness is requested prior to the end of the fifth year of qualifying teaching.

7. You meet the following certification requirements:

If your five consecutive complete years of qualifying service began before October 2004:

You may receive up to $5,000 in loan forgiveness if your school’s chief academic officer certifies that you were—

• a full-time elementary school teacher and that you demonstrated knowledge and teaching skills in reading, writing, math, and other areas of the elementary school curriculum.
• a full-time secondary school teacher and that you taught in a subject area that was relevant to your academic major.

You may receive up to $17,500 in loan forgiveness if, as certified by the chief administrative officer of the school where you were employed, you were—

• a highly qualified full-time math or science teacher in an eligible secondary school, or
• a highly qualified special education teacher whose primary responsibility was to provide special education to children with disabilities, and you were teaching children with disabilities that corresponded to your area of special education training and have demonstrated knowledge and teaching skills in the content areas of the curriculum that you were teaching.

If your five consecutive complete years of qualifying teaching service began on or after Oct. 30, 2004:

You may receive up to $5,000 in loan forgiveness if you were a highly qualified full-time elementary or secondary school teacher.

You may receive up to $17,500 in loan forgiveness if, as certified by the chief administrative officer of the school where you were employed, you were—

• a highly qualified full-time math or science teacher in an eligible secondary school, or
• a highly qualified special education teacher whose primary responsibility was to provide special education to children with disabilities, and you were teaching children with disabilities that corresponded to your area of special education training and have demonstrated knowledge and teaching skills in the content areas of the curriculum that you were teaching.

You should include the certification with your request for forgiveness.

How to Apply  
You can apply for loan cancellation after completing the
five-year teaching requirement. Get an application for your lender or the loan servicing agent holding your loan. Once you completed the application, give it to the chief administrative officer at your school to complete the certification section as described above. Once the application is complete, submit it to your lender or loan servicing agency for process.

You can get a forbearance for up to 60 days while completing the loan discharge application, which includes the time it takes for the lender and guarantor to review it.

The loan holder or guaranty agency must notify you within 135 days of their decision on your application. If your application is approved, new repayment terms based on any remaining loan balances will be provided to you. The lender may cancel up to $17,500 of the aggregate loan amount that is outstanding after you’ve finished your fifth year of teaching. (The aggregate loan amount includes both principal and interest.) However, the lender cannot refund the payments you made before you complete the fifth year of teaching service.

Your lender can grant forbearance for each year of your qualifying teaching service if the expected cancellation amount will satisfy the anticipated remaining outstanding balance on the loan at the time of the expected
cancellation. Unless you give your lender or loan servicing agency other instructions, your unsubsidized Stafford
Loan balance will be cancelled first, followed by any outstanding subsidized Stafford Loan balance, and then
any eligible outstanding Consolidation Loan balance. The lender may cancel only the outstanding portion of the Consolidation Loan that was used to repay subsidized or unsubsidized Stafford Loans that qualified for loan forgiveness.

Perkins Loan Forgiveness began in 1972 and will forgive up to 100% of your loan if you are: 

• a full-time teacher employed in public or nonprofit elementary or secondary schools in districts eligible for ESEA Title I-A funding, where the percentage of children from low-income families enrolled in the school exceeds 30% of total enrollment, or
• a full-time special education teacher in public or nonprofit elementary or secondary schools (including teachers of infants and toddlers) or qualifies professional providers of early intervention services under the Individuals with Disabilities Education Act (IDEA), or
• a full-time teacher of math, science, foreign languages, bilingual education, or other fields determined to have a shortage by the state educational agency.

The Perkins forgiveness loan is forgiven based on the following scheduled:

Need More Information? 

• The holder(s) of your loan(s) can give you an application and other important information.
• The Federal Student Aid Web site contains information on loan cancellation for both Stafford and federal Perkins loans:
  http://studentaid.ed.gov/PORTALSWebApp/
  students/english/teachercancel.jsp

Through the College Cost Reduction and Access Act of 2007, Congress created the Teacher Education Assistance for College and Higher Education (TEACH) Grant Program that provides grants of up to $4,000 per year to students who intend to teach in a public or private elementary or secondary school that serves students from low-income families. If, after reading all of the information on this fact sheet, you are interested in learning more about the TEACH Grant Program, you should contact the financial aid office at the college where you will be enrolled starting with the 2008-09 school year.

Conditions
In exchange for receiving a TEACH Grant, you must agree to serve as a full-time teacher in a high-need field in a public or private elementary or secondary school that serves low-income students (see below for more information on high-need fields and schools serving low-income students). As a recipient of a TEACH Grant, you must teach for at least four academic years within eight calendar years of completing the program of study for which you received a TEACH Grant. IMPORTANT: If you fail to complete this service obligation, all amounts of the TEACH Grants that you received will be converted to a Federal Direct Unsubsidized Stafford Loan. You must then repay this loan to the U.S. Department of Education. You will be charged interest from the date the grant(s) was disbursed.

Student Eligibility Requirements
To receive a TEACH Grant you must:

• Complete the Free Application for Federal Student Aid (FAFSA), although you do not have to demonstrate financial need.
• Be a U.S. Citizen or eligible non-citizen.
• Be enrolled as an undergraduate, post-baccalaureate, or graduate student in a postsecondary educational institution that has chosen to participate in the TEACH Grant Program.
• Be enrolled in coursework that is necessary to begin a career in teaching or plan to complete such coursework. Such coursework may include subject area courses (e.g., math courses for a student who intends to be a math teacher).
• Meet certain academic achievement requirements (generally, scoring above the 75th percentile on a college admissions test or maintaining a cumulative GPA of at least 3.25).
• Sign a TEACH Grant Agreement to Serve (see below for more information on the TEACH Grant Agreement to Serve).

If you are  interested in learning more about the TEACH Grant Program, you should contact the financial aid office at the college where you will be enrolled to find out if they will participate in the TEACH Grant Program for the 2008-2009 school year.

Public Service Loan Forgiveness began in 2007 as a result of the College Cost Reduction and Access Act. Eligible borrowers are entitled to have the entirety of their debt (interest and principal) discharged after ten years of full time employment in public service. The borrower must have made 120 payments as part of the Direct Loan program in order to obtain this benefit. Only payments made on or after October 1, 2007 count toward the required 120 monthly payments. Borrowers are permitted to consolidate into Direct Lending in order to qualify for this loan forgiveness program.

Eligibility
To be eligible for loan forgiveness, all of the following conditions must be met:

• Forgiveness occurs after 120 monthly payments made on or after October 1, 2007 on an eligible Federal Direct Loan.
• The borrower must be employed full-time in a public service job for each of the 120 monthly payments. Some of these jobs include government, military service, public safety and law enforcement (police and fire), public health, public education, public early childhood education, public child care, social work in a public child or family service agency, public services for individuals with disabilities or the elderly, public interest legal services (including prosecutors, public defenders and legal advocacy in low-income communities), public librarians, school librarians and other school-based services, full-time faculty at tribal colleges, faculty teaching in high need areas, and employees of tax exempt 501(c)(3) organizations.
• Eligible loans include:
      -Federal Direct Stafford Loans (Subsidized and
       Unsubsidized)
      -Federal Direct PLUS Loans 
      -Federal Direct Consolidation Loans 
      -Important note: Borrowers in the Direct Loan
       program do not need to consolidate in order to
       qualify for loan forgiveness. Borrowers in the FFEL
       (Federal Family Education Loan) program will
       need to consolidate into Direct Loans.
• Borrowers may use income-based repayment, income-contingent repayment, standard repayment or a combination of these repayment plans. To maximize the amount of forgiveness, borrowers are urged to use income-based repayment. If income-based repayment is unavailable, then income contingent repayment is recommended.
• FFEL borrowers may obtain a Federal Direct Consolidation Loan to qualify for public service loan forgiveness even if they had previously consolidated in the FFEL program. These borrowers will be limited to the income based repayment, income contingent repayment and standard repayment plans.
• Even though Perkins Loans are not eligible for public service loan forgiveness, if they are included in a Federal Direct Consolidation Loan the entire consolidation loan (Perkins Loans included) is eligible for forgiveness. 
     - Note however, that when Perkins loans are 
       consolidated, they lose several desirable benefits,
       such as subsidized interest, a 9 month grace
       period, and a generous loan forgiveness program.
• There is no financial benefit in seeking forgiveness of Parent PLUS loans, as they are not eligible for income-contingent repayment or income-based repayment under the Higher Education Act. However, if a Parent PLUS loan that has entered repayment before July 1, 2006 is included in a Federal Direct Consolidation Loan, it will be eligible for income-contingent repayment (but not income-based repayment), making it possible to obtain forgiveness.
• Until July 1, 2009, income-contingent repayment cannot be used for Grad PLUS loans. Starting on July 1, 2009, one can use income-contingent repayment for Grad PLUS loans provided that they are included in a Federal Direct Consolidation Loan, and the borrower did not enter repayment before July 1, 2006.

How to Apply
The Department of Education is expected to release regulations November 2008, which should provide more details on how to apply. You can get more information about the program at: http://studentaid.ed.gov/
PORTALSWebApp/students/english/repaying.jsp

You will likely need to consolidate your loans into a federal direct loan consolidation. Find out more about how to do this at: http://www.finaid.org/loans/publicservice.phtml and scroll down to "Obtaining a Federal Direct Consolidation Loan". 

Sources:

Stafford Loan Forgiveness for Teachers, U.S. Department of Education, 2001.

Student Loan Forgiveness Programs, CRS Report for Congress, August 9, 2004

Teacher Loan Forgiveness Program - FFEL and Direct Loan Programs, U.S. Department of Education Web site: http://studentaid.ed.gov/PORTALSWebApp/students/
english/cancelstaff.jsp?tab=repaying

TEACH Grant Program, U.S. Department of Education Web site: http://studentaid.ed.gov/PORTALSWebApp/students/
english/TEACH.jsp 

FinAid: www.finaid.org/loans/publicservice.phtml