Teacher Loan Forgiveness Programs
Teacher Loan Forgiveness/Teacher Loan Cancellation
Federal Family Education Loan (FFEL)/Federal Direct Loan Teacher Loan Forgiveness
The Teacher Loan Forgiveness (TLF) Program is intended to encourage individuals to enter and continue in the teaching profession. Eligible applicants can receive loan forgiveness for up to a combined total of $5,000 of subsidized and unsubsidized Federal Family Education Loans (FFEL) or Federal Direct Loans.
The TLF Program is only available if you:
• did not have an outstanding balance on an FFEL or Direct Loan on October 1, 1998, or on the date you obtained an FFEL or Direct Loan after October 1, 1998;
• teach full-time at least five consecutive, complete school years as a full-time teacher in an elementary or secondary school designated as a low-income school;
• are not in default on the loan for which you are requesting forgiveness;
• have not received a benefit for the same teaching service through the AmeriCorps Program;
• completed one of your five years of qualifying teaching service after the 1997-1998 academic year; and
• took the loan for which you are requesting forgiveness before the end of your fifth year of qualifying teaching.
Highly qualified teachers, as defined by the No Child Left Behind Act, can qualify for an increased level of $17,500 in TLF if they have been a full-time teacher for five years.
Federal Perkins Loan Teacher Loan Cancellation
In order to be eligible for Federal Perkins Loan teaching cancellation, you must be teaching full-time at a low-income school, as determined by your State’s education agency. The low-income designation is based on statistics gathered about the population of each elementary and secondary school in your State.
Forged signature
If you believed that someone forged your signature on the loan application, promissory note, or authorization for electronic funds transfer, you may qualify for a loan discharge. You must provide five different samples of your signature, with at least two of the samples on documents that are clearly dated within a year before or after the date of the contested signature.
School owes you a refund
You may also qualify for partial discharge of an FFEL or Direct Loan if your school failed to pay a tuition refund required under federal law. Only the amount of the unpaid refund will be discharged. You may qualify for this refund regardless of whether the school is closed or open.
Death
On your death, your federal student loan debt will be discharged. Your estate will not owe any money on your loan.
Public Service Employee Loan Forgiveness
Section 401 of the College Cost Reduction and Access Act (P.L. 110-84), enacted September 27, 2007, amended the Higher Education Act of 1965. It creates a new Public Service Employee Loan Forgiveness Program for those who have non-defaulted Direct Loans. The program provides for the cancellation of the remaining balance when the borrower has made 120 qualifying monthly payments after October 1, 2007, while employed in certain public service fields. The borrower must also be employed in public service at the time cancellation is approved. The first Public Service Employee loan cancellations cannot be granted before October 2017.
Public service employees who have other types of federal loans must consolidate those into the Direct Loan Program to be eligible for the Public Service Employee Loan Forgiveness Program. Individuals who have already consolidated with another lender can consolidate with Direct Loans as of July 1, 2008.
Since this legislation is new, the Department of Education is reviewing it to determine final, detailed eligibility requirements. Public service employees with Direct Loans should watch for the final regulations and the procedures for applying for loan forgiveness.
