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Stafford Loan Cancellation for
Teachers
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Over
50 percent of students graduate from college with at
least some debt in the form of student loans. But many
fewer are aware that the number of programs that will
forgive (repay all or part of) a student's loans is
substantial--and growing. |
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The loan cancellation for teachers applies to
Stafford Loans made to new borrowers after October
1,1998 and to the portions of a Consolidation Loan
derived from these loans.
You might be able to cancel up to $5,000 of your
Stafford Loans if you are teaching in a low-income
school and you are a "new borrower." A new borrower
is one who received his or her first Stafford Loan
on or after October 1, 1998 or who, when the new
loan was made, had no remaining balance on a
Stafford Loan made prior to October 1, 1998.
To
qualify, you must work as a full-time teacher for
five consecutive years in an elementary or secondary
school that has been designated as a "low-income"
school. Low-income elementary and secondary schools.
Each year, the U.S. Department of Education
publishes a list of low-income elementary and
secondary schools.
To
find out if the school that employs you is
classified as a low income school, you can check our
online database for the year(s) that you have been
employed as a teacher. Usually, you will want to
check the database for the most recent years in
which you taught at the school. Questions about the
inclusion or omission of a particular school should
be directed to the
State Education Agency contact in the state
where the school is located and not to the U.S.
Department of Education. Following is the list of
low-income schools by year:
School Years:
1997-1998 |
1998-1999 |
1999-2000 |
2000-2001 |
2001-2002 |
2002-2003 |
Additional conditions:
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At least one of the five qualifying years of
teaching must be later than the 1997-98 academic
year. |
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The loan must have been made before the end of the
fifth year of qualifying teaching. |
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The elementary school must be public or private
nonprofit. |
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A defaulted loan cannot be cancelled for teacher
service unless you've made satisfactory repayment
arrangements with the holder of the loan.
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A borrower may not receive loan forgiveness for
qualifying teaching service if the borrower
receives an Americorps benefit for the same
teaching service. |
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Interruptions in your school's low-income
designation |
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Your school does not have to be designated a
low-income school in each of the 5 consecutive
years. If you are teaching at a school that is
listed as a low-income school for at least one year
(during your employment), your subsequent years of
service at that school can be counted in the five
consecutive years, even if the school is not
designated as a low-income school in every
subsequent year. For example, if you began teaching
at a secondary school in the 1994-95 academic year,
and it was designated as a low-income school in
1996-97, you may count your five consecutive years
of service at that school starting with the 1996-97
academic year, even if the school is not designated
as a low-income school in subsequent years. |
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Interruptions in teaching service |
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Your five consecutive years won't necessarily be
interrupted if you were unable to teach a full year
because of a family or medical leave condition*, if
you went back to school (at least half-time) for
reasons directly related to the performance of your
teaching service, or if you were called or ordered
to active duty status for more than 30 days as a
member of a reserve component of the Armed Forces**.
If you completed at least one-half of the academic
year and your employer considers you to have
fulfilled your contract requirements for the
academic year for the purposes of salary increases,
tenure, and retirement, that academic year can be
counted as one of your qualifying years of teaching
service.
*
A condition that is covered under the Family and
Medical Leave Act of 1993 (FMLA) (19 U.S.C. 2654)
**
A reserve component of the Armed Forces named in
section 10101 of Title 10, United States Code. |
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How to Apply |
You may apply for cancellation after completing the
five year teaching requirement. To apply you must
submit an application to the lender or servicer
holding your loan. Copies of the application can be
obtained from the holder of your loan. The chief
administrative officer at your school must certify
on this form that you have taught full-time for five
consecutive years at that school, and---
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if you're teaching in an elementary school, that
you have knowledge of or teaching skills in
reading, writing, mathematics, and other areas of
the elementary curriculum. |
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if you're teaching in a secondary school, that you
are teaching in a subject area relevant to your
academic major. |
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Postponing repayment while under consideration for
cancellation |
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You can get forbearance for up to 60 days while
you're getting the required information for your
application and during the time it takes for your
application to be reviewed by the lender and
guarantor. (The loan holder and guaranty agency must
notify you within 135 days of the decision on your
application and, if it is approved, provide new
repayment terms based on any remaining loan
balances.) The lender may cancel up to $5,000 of the
aggregate loan amount that is outstanding after
you've finished your fifth year of teaching. (The
aggregate loan amount includes both principal and
interest.) However, the lender cannot refund the
payments you made before you completed the fifth
year of teaching service. You may want to request
forbearance from your lender for each of the years
of your qualifying teaching service if the expected
cancellation amount will satisfy the anticipated
remaining outstanding balance on the loan at the
time of the expected cancellation. Unless you give
your lender or servicer other instructions, your
unsubsidized Stafford loan balance will be cancelled
first, followed by any outstanding subsidized
Stafford loan balances, and then any eligible
outstanding consolidation loan balances. The lender
may cancel only the outstanding portion of the
consolidation loan that was used to repay subsidized
or unsubsidized Stafford loans that qualified for
loan forgiveness. |
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Download a summary of this information |
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You can download and print out this information in a
convenient
Portable Document Format (PDF), requires the
Adobe Acrobat Reader, which you can download for
free at the Adobe Web site. The color version works
best if printed as a two-sided sheet and then folded
into a brochure. This brochure can be duplicated but
not sold. |
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Community service loan forgiveness |
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This provision excludes from income student loan
amounts forgiven by non-profit, tax-exempt
charitable or educational institutions for borrowers
who take community-service jobs that address unmet
community needs. For example, a recent graduate who
takes a low-paying job in a rural school will not
owe any additional income tax if in recognition of
this service her college or another charity forgives
a loan it made to her to help pay her college costs.
This provision applies to loans forgiven after
August 5, 1997. |
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Contact Us |
NY Lay Faculty Association
588 North State Road
Briarcliff Manor, NY 10510
Phone: (914) 944-4440
Fax: (914) 944-3333
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