Teacher Forgiveness Programs January, 2003 Prepared by Steve Bomeisl New York State Higher Education Services Corporation

History of Teacher Forgiveness Programs in FFELP Established in 1992 Reauthorization Allowed forgiveness of up to 100% of balance after working 5 years Congress never funded 1992 “Federal Stafford Loan Forgiveness Demonstration Program” (Teaching and Nursing professions)

“Targeted” Teacher Deferment Available to “new borrowers” with loans made from July 1987 – June Up to 3 years as a full time teacher Teaching in a teacher-shortage area designated by Chief State School Officer Teacher shortage area is NOT restricted by community location

Update On Teacher Forgiveness Program 1998 Reauthorization Program is funded Two major restrictions: Eligibility – available to new borrowers Forgiveness amount – up to $5,000

Eligibility Available to new borrowers on/after 10/1/98 Borrowers must teach 5 consecutive complete academic years One of those 5 years must begin after the academic year Teach in elementary or secondary “Low Income” school

Forgiveness Amount Principal and interest up to $5,000 O/S balance calculated after borrower teaches 5 years No refund of any overpayments allowed

How Can Schools Help? Exit Interview – provide fact sheets Reconfirm: “New Borrower” and $5,000 max Encourage contact with lenders or HESC

Other Forgiveness/Repayment Programs Forgiveness for Child Care Providers – HEA 1998 For new borrowers as of 10/7/98 AA or Bachelor’s – EARLY CHILDHOOD EDUCATION Work full time for 2 years in daycare “facilities” that serve low-income communities Payoff – up to 100% after 5 years of qualified employment

Other Forgiveness/Repayment Programs Repayment of Title IV Loans for Federal Employees (4/11/2001) Financial incentive to recruit “highly qualified” personnel Three years minimum service requirement Approval and procedures are agency specific Repayment amount - $6,000/$40,000 total

Loan Forgiveness “Proposals” in Congress For full time Head Start Teachers (Perkins and FDSL only) Increase Teacher Forgiveness to $17,500 (HR5091) Forgive Perkins for Active Duty personnel (Frank) S1806 – Forgiveness for Pharmacists to address serious shortage of pharmacists Other proposals on Congressional and State Websites

Other Teacher Forgiveness Program Websites