[Code of Federal Regulations]

[Title 34, Volume 3]

[Revised as of July 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 34CFR674.55]



[Page 603-604]

 

                           TITLE 34--EDUCATION

 

 CHAPTER VI--OFFICE OF POSTSECONDARY EDUCATION, DEPARTMENT OF EDUCATION

 

PART 674_FEDERAL PERKINS LOAN PROGRAM--Table of Contents

 

                       Subpart D_Loan Cancellation

 

Sec. 674.55  Teacher cancellation--Defense loans.



    (a) Cancellation for full-time teaching. (1) An institution shall 

cancel up to 50 percent of the outstanding balance on a borrower's 

Defense loan for full-time teaching in--

    (i) A public or other nonprofit elementary or secondary school;

    (ii) An institution of higher education; or

    (iii) An overseas Department of Defense elementary or secondary 

school.

    (2) The cancellation rate is 10 percent of the original principal 

loan amount, plus the interest on the unpaid balance accruing during the 

year of qualifying service, for each complete year, or its equivalent, 

of teaching.

    (b) Cancellation for full-time teaching in an elementary or 

secondary school serving low-income students. (1) The institution shall 

cancel up to 100 percent of the outstanding balance on a borrower's 

Defense loan for full-time teaching in a public or other nonprofit 

elementary or secondary school that--

    (i) Is in a school district that qualifies for funds in that year 

under title I of the Elementary and Secondary Education Act of 1965, as 

amended; and

    (ii) Has been selected by the Secretary based on a determination 

that a high concentration of students enrolled at the school are from 

low-income families.

    (2)(i) The Secretary selects schools under paragraph (b)(1) of this 

section based on a ranking by the State education agency.

    (ii) The State education agency shall base its ranking of the 

schools on objective standards and methods. These standards must take 

into account the numbers and percentages of title I children attending 

those schools.

    (3) The Secretary considers all elementary and secondary schools 

operated by the Bureau of Indian Affairs (BIA) or operated on Indian 

reservations by Indian tribal groups under contract with BIA to qualify 

as schools serving low-income students.

    (4) For each academic year, the Secretary notifies participating 

institutions of the schools selected under paragraph (b) of this 

section.



[[Page 604]]



    (5) The cancellation rate is 15 percent of the original principal 

loan amount, plus the interest on the unpaid balance accruing during the 

year of qualifying service, for each complete academic year, or its 

equivalent, of full-time teaching.

    (6) [Reserved]

    (7) Cancellation for full-time teaching under paragraph (b) of this 

section is available only for teaching beginning with academic year 

1966-67.

    (c) Cancellation for full-time teaching of the handicapped. (1) An 

institution shall cancel up to 100 percent of the outstanding balance on 

a borrower's Defense loan, plus interest, for full-time teaching of 

handicapped children in a public or other nonprofit elementary or 

secondary school system.

    (2) The cancellation rate is 15 percent of the original principal 

loan amount, plus the interest on the unpaid balance accruing during the 

year of qualifying service, for each complete academic year, or its 

equivalent, of full-time teaching.

    (3) A borrower qualifies for cancellation under this paragraph only 

if a majority of the students whom the borrower teaches are handicapped 

children.

    (4) Cancellation for full-time teaching under paragraph (c) of this 

section is available only for teaching beginning with the academic year 

1967-68.

    (d) Teaching in a school system. The Secretary considers a borrower 

to be teaching in a public or other nonprofit elementary or secondary 

school system only if the borrower is directly employed by the school 

system.

    (e) Teaching children and adults. A borrower who teaches both adults 

and children qualifies for cancellation for this service only if a 

majority of the students whom the borrower teaches are children.



(Authority: 20 U.S.C. 425(b)(3))



[52 FR 45758, Dec. 1, 1987. Redesignated and amended at 59 FR 61413, 

61414, Nov. 30, 1994]