Laws & Guidance HIGHER EDUCATION
1998 Amendments to the Higher Education Act of 1965
P.L. 105-244

TITLE IV--STUDENT ASSISTANCE

Part B--Federal Family Education Loan Program

SEC. 425. LOAN FORGIVENESS FOR CHILD CARE PROVIDERS

Part B (20 U.S.C. 1071 et seq.) is amended by inserting after section 428J (20 U.S.C. 1078-10) the following:

`SEC. 428K. LOAN FORGIVENESS FOR CHILD CARE PROVIDERS.

`(a) PURPOSE- It is the purpose of this section--

`(1) to bring more highly trained individuals into the early child care profession; and

`(2) to keep more highly trained child care providers in the early child care field for longer periods of time.

`(b) DEFINITIONS- In this section:

`(1) CHILD CARE FACILITY- The term `child care facility' means a facility, including a home, that--

`(A) provides child care services; and

`(B) meets applicable State or local government licensing, certification, approval, or registration requirements, if any.

`(2) CHILD CARE SERVICES- The term `child care services' means activities and services provided for the education and care of children from birth through age 5 by an individual who has a degree in early childhood education.

`(3) DEGREE- The term `degree' means an associate's or bachelor's degree awarded by an institution of higher education.

`(4) EARLY CHILDHOOD EDUCATION- The term `early childhood education' means education in the areas of early child education, child care, or any other educational area related to child care that the Secretary determines appropriate.

`(5) INSTITUTION OF HIGHER EDUCATION- Notwithstanding section 102, the term `institution of higher education' has the meaning given the term in section 101.

`(c) DEMONSTRATION PROGRAM-

`(1) IN GENERAL- The Secretary may carry out a demonstration program of assuming the obligation to repay, pursuant to subsection (d), a loan made, insured, or guaranteed under this part or part D (excluding loans made under sections 428B and 428C or comparable loans made under part D) for any new borrower after the date of enactment of the Higher Education Amendments of 1998, who--

`(A) completes a degree in early childhood education;

`(B) obtains employment in a child care facility; and

`(C) has worked full time for the 2 consecutive years preceding the year for which the determination is made as a child care provider in a low-income community.

`(2) LOW-INCOME COMMUNITY- For the purposes of this subsection, the term `low-income community' means a community in which 70 percent of households within the community earn less than 85 percent of the State median household income.

`(3) AWARD BASIS; PRIORITY-

`(A) AWARD BASIS- Subject to subparagraph (B), loan repayment under this section shall be on a first-come, first-served basis and subject to the availability of appropriations.

`(B) PRIORITY- The Secretary shall give priority in providing loan repayment under this section for a fiscal year to student borrowers who received loan repayment under this section for the preceding fiscal year.

`(4) REGULATIONS- The Secretary is authorized to prescribe such regulations as may be necessary to carry out the provisions of this section.

`(d) LOAN REPAYMENT-

`(1) IN GENERAL- The Secretary shall assume the obligation to repay--

`(A) after the second consecutive year of employment described in subparagraphs (B) and (C) of subsection (c)(1), 20 percent of the total amount of all loans made after date of enactment of the Higher Education Amendments of 1998, to a student under this part or part D;

`(B) after the third consecutive year of such employment, 20 percent of the total amount of all such loans; and

`(C) after each of the fourth and fifth consecutive years of such employment, 30 percent of the total amount of all such loans.

`(2) CONSTRUCTION- Nothing in this section shall be construed to authorize the refunding of any repayment of a loan made under this part or part D.

`(3) INTEREST- If a portion of a loan is repaid by the Secretary under this section for any year, the proportionate amount of interest on such loan which accrues for such year shall be repaid by the Secretary.

`(4) SPECIAL RULE- In the case where a student borrower who is not participating in loan repayment pursuant to this section returns to an institution of higher education after graduation from an institution of higher education for the purpose of obtaining a degree in early childhood education, the Secretary is authorized to assume the obligation to repay the total amount of loans made under this part or part D incurred for a maximum of two academic years in returning to an institution of higher education for the purpose of obtaining a degree in early childhood education. Such loans shall only be repaid for borrowers who qualify for loan repayment pursuant to the provisions of this section, and shall be repaid in accordance with the provisions of paragraph (1).

`(5) INELIGIBILITY OF NATIONAL SERVICE AWARD RECIPIENTS- No student borrower may, for the same volunteer service, receive a benefit under both this section and subtitle D of title I of the National and Community Service Act of 1990 (42 U.S.C. 12601 et seq.).

`(e) REPAYMENT TO ELIGIBLE LENDERS- The Secretary shall pay to each eligible lender or holder for each fiscal year an amount equal to the aggregate amount of loans which are subject to repayment pursuant to this section for such year.

`(f) APPLICATION FOR REPAYMENT-

`(1) IN GENERAL- Each eligible individual desiring loan repayment under this section shall submit a complete and accurate application to the Secretary at such time, in such manner, and containing such information as the Secretary may require.

`(2) CONDITIONS- An eligible individual may apply for loan repayment under this section after completing each year of qualifying employment. The borrower shall receive forbearance while engaged in qualifying employment unless the borrower is in deferment while so engaged.

`(g) EVALUATION-

`(1) IN GENERAL- The Secretary shall conduct, by grant or contract, an independent national evaluation of the impact of the demonstration program assisted under this section on the field of early childhood education.

`(2) COMPETITIVE BASIS- The grant or contract described in subsection (b) shall be awarded on a competitive basis.

`(3) CONTENTS- The evaluation described in this subsection shall--

`(A) determine the number of individuals who were encouraged by the demonstration program assisted under this section to pursue early childhood education;

`(B) determine the number of individuals who remain employed in a child care facility as a result of participation in the program;

`(C) identify the barriers to the effectiveness of the program;

`(D) assess the cost-effectiveness of the program in improving the quality of--

`(i) early childhood education; and

`(ii) child care services;

`(E) identify the reasons why participants in the program have chosen to take part in the program;

`(F) identify the number of individuals participating in the program who received an associate's degree and the number of such individuals who received a bachelor's degree; and

`(G) identify the number of years each individual participates in the program.

`(4) INTERIM AND FINAL EVALUATION REPORTS- The Secretary shall prepare and submit to the President and the Congress such interim reports regarding the evaluation described in this subsection as the Secretary deems appropriate, and shall prepare and so submit a final report regarding the evaluation by January 1, 2002.

`(h) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this section $10,000,000 for fiscal year 1999, and such sums as may be necessary for each of the 4 succeeding fiscal years.'.

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Last Modified: 09/24/2003