Managing Your Debt
Loan Forgiveness

Teacher Loan Forgiveness

The following Website provides general information on Perkins loan cancellation and a list of qualifying schools: http://studentaid.ed.gov/PORTALSWebApp/students/english/cancelperk.jsp?tab=repaying

Basic Eligibility Requirements

• Be a new borrower on/after October 1, 1998. That is, the borrower either -
  • Had not borrowed FFELP or FDLP loans prior to October 1, 1998;
  • Had borrowed prior to October 1, 1998, but had repaid all loans prior to October 1, 1998; or
  • Had borrowed prior to October 1, 1998, and had repaid all loans after October 1, 1998, but before receiving new loans for which the discharge is requested.
• Have been employed for at least 5 consecutive, complete school years as a full-time teacher in a public or private-nonprofit elementary or secondary school that has been designated by the Secretary of Education as a low-income school.
• Meet certain subject area or teacher certification requirements.
  • As an elementary teacher, the borrower has demonstrated knowledge and teaching skills in reading, writing, mathematics, and other areas of the elementary school curriculum.
  • As a secondary school teacher, the borrower has taught in a subject area that is relevant to his/her academic major.

Loans Eligible for Forgiveness

• FFELP Loans - Federal Stafford (subsidized and unsubsidized) and any portion of a Federal Consolidation Loan used to pay off eligible FFELP or FDLP Loans.
• FDLP Loans - Federal Direct Stafford/Ford Loans, Federal Direct Unsubsidized Stafford/Ford Loans, and any portion of a Federal Direct Consolidation Loan that was used to pay off eligible FFELP or FDLP Stafford Loans.
• Defaulted FFELP and FDLP Loans - Defaulted loans may be included only if the borrower has made satisfactory repayment arrangements with the holder(s) of the loans.

The maximum amount that can be forgiven under this program is $5000. The borrower must repay any loan balance that remains after forgiveness has been granted. However, the borrower will not receive a refund for any payments that may bring the total outstanding balance owed below $5000.

Teaching Service Requirements

• The qualifying teaching service may begin prior to October 1, 1998, provided one qualifying year is after the 1997-1998 academic year.
• Teaching at more than one qualified school in an academic year can meet the complete academic year requirement and/or the full-time teaching requirement.
• There are several conditions that would not constitute a break in the 5 complete consecutive full years of teaching requirement:
  • A return to post-secondary education related to the performance of teaching service required for forgiveness.
  • A condition covered under the Family Medical Leave Act (FMLA).
  • A call to active-duty military status for more than 30 days.

The Department publishes a list of eligible low-income schools in the Annual Directory of Designated Low-Income Schools for Teacher Cancellation Benefits. If this directory is not available before May 1 of any year, the previous year's directory may be used. At ED's Website (www.ed.gov/offices/OSFAP/Students/repayment/teachers/stafford.html), borrowers can search by state, by city, or by school to identify eligible schools.

Forbearance

A mandatory forbearance may be granted in one-year increments while the borrower is performing qualifying teaching service-but only if the loan is expected to be fully repaid by the forgiveness amount. Lenders may grant forbearances for other situations, such as when a borrower experiences difficulties in making loan payments. Regulations also permit short forbearances to allow time for the borrower to complete the application and for the lender and guarantor to determine whether the borrower qualifies for forgiveness. The borrower must request these forbearances, and interest can be capitalized. Lenders will need to track borrowers with mandatory forbearances to ensure that their debts does not exceed $5000 before the end of their service period.

Additional information on the program is available from the ED website noted above. Copies in PDF of the Teacher Loan Forgiveness Program application form and the forbearance request form can be viewed and/or printed by clicking on the links below:

• Teacher Loan Forgiveness Forbearance Request Form (FFELP & Direct):
  www.ifap.ed.gov/dpcletters/attachments/gen0115a.pdf
   
• Teacher Loan Forgiveness Application Form (FFELP & Direct):
  www.ifap.ed.gov/dpcletters/attachments/gen0115b.pdf

Adobe Acrobat Reader is required to view or print .PDF (portable document format) documents. OSAC uses .PDF to distribute various forms to our customers. Click here to make sure you have the most recent version.

Home | About Us | Contact Us | OSAC | ASPIRE
Resources | Site Map | Privacy Policy

Oregon Student Assistance Commission
1500 Valley River Drive, Suite 100, Eugene, OR 97401
© Copyright 2001 by OSAC, all rights reserved.