[Code of Federal Regulations] [Title 34, Volume 3] [Revised as of July 1, 2003] From the U.S. Government Printing Office via GPO Access [CITE: 34CFR685.217] [Page 861-863] TITLE 34--EDUCATION DEPARTMENT OF EDUCATION PART 685--WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM--Table of Contents Subpart B--Borrower Provisions Sec. 685.217 Teacher loan forgiveness program. (a) General. The teacher loan forgiveness program is intended to encourage individuals to enter and continue in the teaching profession. For new borrowers, the Secretary will repay up to a combined total of $5,000 of subsidized and unsubsidized Federal Stafford Loans, Direct Subsidized Loans, Direct Unsubsidized Loans, and, in certain cases, Federal Consolidation Loans or Direct Consolidation Loans. The forgiveness program is only available to a borrower who has no outstanding loan balance under the FFEL Program or the Direct Loan Program on October 1, 1998 or who has no outstanding loan balance on the date he or she obtains a loan after October l, 1998. In addition, the borrower must have been employed as a full-time teacher for five consecutive complete academic years, at least one of which was after the 1997-1998 academic year, in certain eligible elementary or secondary schools that serve low-income families. The loan for which the borrower is seeking forgiveness must have been made prior to the end of the fifth year of qualifying teaching service. (b) Definitions. The following definitions apply to this section: Academic year means one complete school year at the same school, or two complete and consecutive half years at different schools, or two complete and consecutive half years from different school years at either the same school or different schools. Half years exclude summer sessions and generally fall within a twelve-month period. For schools that have a year-round program of instruction, a minimum of nine months is considered an academic year. Elementary school means a public or nonprofit private school that provides elementary education as determined by [[Page 862]] State law or the Secretary if that school is not in a State. Full-time means the standard used by a State in defining full-time employment as a teacher. For a borrower teaching in more than one school, the determination of full-time is based on the combination of all qualifying employment. Secondary school means a public or nonprofit private school that provides secondary education as determined by State law or the Secretary if the school is not in a State. Teacher means a person who provides direct classroom teaching or classroom-type teaching in a non-classroom setting, including Special Education teachers. (c) Borrower eligibility. (1) A borrower may obtain loan forgiveness under this program if he or she has been employed as a full-time teacher for five consecutive complete academic years, at least one of which was after the 1997-1998 academic year, in an elementary or secondary school that-- (i) Is in a school district that qualifies for funds under title I of the Elementary and Secondary Education Act of 1965, as amended; (ii) Has been selected by the Secretary based on a determination that more than 30 percent of the school's total enrollment is made up of children who qualify for services provided under title I; and (iii) Is listed 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. (2) If the school at which the borrower is employed meets the requirements specified in paragraph (c)(1) of this section for at least one year of the borrower's five consecutive complete academic years of teaching and the school failed to meet those requirements in subsequent years, those subsequent years of teaching qualify for purposes of this section for that borrower. (3) A borrower who is employed as an elementary school teacher must demonstrate knowledge and teaching skills in reading, writing, mathematics, and other areas of the elementary school curriculum, as certified by the chief administrative officer of the school in which the borrower was employed. (4) A borrower who is employed as a secondary school teacher must teach in a subject area that is relevant to the borrower's academic major as certified by the chief administrative officer of the school in which the borrower was employed. (5) The academic year may be counted as one of the borrower's five consecutive complete academic years if the borrower completes at least one-half of the academic year and the borrower's employer considers the borrower to have fulfilled his or her contract requirements for the academic year for the purposes of salary increases, tenure, and retirement if the borrower is unable to complete an academic year due to-- (i) A return to postsecondary education, on at least a half-time basis, that is directly related to the performance of the service described in this section; (ii) A condition that is covered under the Family and Medical Leave Act of 1993 (FMLA) (19 U.S.C. 2654); or (iii) A call or order to active duty status for more than 30 days as a member of a reserve component of the Armed Forces named in section 10101 of title 10, United States Code. (6) If a borrower meets the requirements of paragraph (c)(5) of this section, the borrower's period of postsecondary education, active duty, or qualifying FMLA condition including the time necessary for the borrower to resume qualifying teaching no later than the beginning of the next regularly scheduled academic year, does not constitute a break in the required five consecutive years of qualifying teaching service. (7) A borrower who teaches in more than one qualifying school during an academic year and demonstrates that the combined teaching was the equivalent of full-time, as supported by the certification of one or more of the chief administrative officers of the schools involved, is considered to have completed one academic year of qualifying teaching. (8) A borrower is not eligible for teacher loan forgiveness on a defaulted [[Page 863]] loan unless the borrower has made satisfactory repayment arrangements to re-establish title IV eligibility, as defined in Sec. 685.200(b). (9) A borrower may not receive loan forgiveness for qualifying teaching service under this section if the borrower receives a benefit for the same teaching service under subtitle D of title I of the National and Community Service Act of 1990. (d) Forgiveness amount. (1) A qualified borrower is eligible for forgiveness of up to $5,000 of the aggregate amount of a borrower's Direct Subsidized Loan, Direct Unsubsidized Loan, or Direct Consolidation Loan obligation that is outstanding after the borrower completes his or her fifth consecutive complete academic year of teaching as described in paragraph (c) of this section. Only the outstanding portion of a Direct Consolidation Loan that was used to repay an eligible subsidized or unsubsidized Federal Stafford loan, an eligible Direct Subsidized Loan, or an eligible Direct Unsubsidized Loan qualifies for loan forgiveness under this section. (2) A borrower may not receive more than a total of $5,000 in loan forgiveness for outstanding principal and accrued interest under both this section and 34 CFR Sec. 682.215. (3) The Secretary does not refund payments that were received from or on behalf of a borrower who qualifies for loan forgiveness under this section. (e) Application. (1) A borrower, after completing the qualifying teacher service, must request loan forgiveness from the Secretary on a form provided by the Secretary. (2) If the Secretary determines that the borrower meets the eligibility requirements for loan forgiveness under this section, the Secretary-- (i) Notifies the borrower of this determination; and (ii) Unless otherwise instructed by the borrower, applies the proceeds of the loan forgiveness first to any outstanding Direct Unsubsidized Loan balances, next to any outstanding Direct Subsidized Loan balances, next to any qualifying Direct Unsubsidized Consolidation Loan balances, and last to any qualifying outstanding Direct Subsidized Consolidation Loan balances. (3) If the Secretary determines that the borrower does not meet the eligibility requirements for loan forgiveness under this section, the Secretary notifies the borrower of this determination. (Approved by the Office of Management and Budget under control number 1845-0021) (Authority: 20 U.S.C. 1087a et seq.) [65 FR 65629, Nov. 1, 2000]