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

TITLE IV--STUDENT ASSISTANCE

PART D--WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM

SEC. 456. LOAN CANCELLATION FOR TEACHERS

Part D of title IV (20 U.S.C. 1087a et seq.) is further amended by adding after section 459 (as added by section 455) the following:

`SEC. 460. LOAN CANCELLATION FOR TEACHERS.

`(a) STATEMENT OF PURPOSE- It is the purpose of this section to encourage individuals to enter and continue in the teaching profession.

`(b) PROGRAM AUTHORIZED-

`(1) IN GENERAL- The Secretary shall carry out a program of canceling the obligation to repay a qualified loan amount in accordance with subsection (c) for Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans made under this part for any new borrower on or after October 1, 1998, who--

`(A) has been employed as a full-time teacher for 5 consecutive complete school years--

`(i) in a school that qualifies under section 465(a)(2)(A) for loan cancellation for Perkins loan recipients who teach in such schools;

`(ii) if employed as a secondary school teacher, is teaching a subject area that is relevant to the borrower's academic major as certified by the chief administrative officer of the public or non-profit private secondary school in which the borrower is employed; and

`(iii) if employed as an elementary school teacher, has demonstrated, as certified by the chief administrative officer of the public or nonprofit private elementary school in which the borrower is employed, knowledge and teaching skills in reading, writing, mathematics and other areas of the elementary school curriculum; and

`(B) is not in default on a loan for which the borrower seeks forgiveness.

`(2) SPECIAL RULE- No borrower may obtain a reduction of loan obligations under both this section and section 428J.

`(c) QUALIFIED LOAN AMOUNTS-

`(1) IN GENERAL- The Secretary shall cancel not more than $5,000 in the aggregate of the loan obligation on a Federal Direct Stafford Loan or a Federal Direct Unsubsidized Stafford Loan that is outstanding after the completion of the fifth complete school year of teaching described in subsection (b)(1)(A).

`(2) TREATMENT OF CONSOLIDATION LOANS- A loan amount for a Federal Direct Consolidation Loan may be a qualified loan amount for the purposes of this subsection only to the extent that such loan amount was used to repay a Federal Direct Stafford Loan, a Federal Direct Unsubsidized Stafford Loan, or a loan made under section 428 or 428H, for a borrower who meets the requirements of subsection (b), as determined in accordance with regulations prescribed by the Secretary.

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

`(e) CONSTRUCTION- Nothing in this section shall be construed to authorize any refunding of any canceled loan.

`(f) LIST- If the list of schools in which a teacher may perform service pursuant to subsection (b) is not available before May 1 of any year, the Secretary may use the list for the year preceding the year for which the determination is made to make such service determination.

`(g) ADDITIONAL ELIGIBILITY PROVISIONS-

`(1) CONTINUED ELIGIBILITY- Any teacher who performs service in a school that--

`(A) meets the requirements of subsection (b)(1)(A) in any year during such service; and

`(B) in a subsequent year fails to meet the requirements of such subsection, may continue to teach in such school and shall be eligible for loan cancellation pursuant to subsection (b).

`(2) PREVENTION OF DOUBLE BENEFITS- No 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. 12571 et seq.).

`(h) DEFINITION- For the purpose of this section, the term `year' where applied to service as a teacher means an academic year as defined by the Secretary.'.

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Last Modified: 09/24/2003