Nation's largest student-loan guarantor advises borrowers to consider their options

Child-Care Workers, Teachers May Qualify for Student-Loan Forgiveness

INDIANAPOLIS—USA Funds®, the nation's largest student-loan guarantor, reports that certain child-care workers and teachers may benefit from new federal programs to forgive some or all of the student-loan debt they incurred to attend college. The deadline for applying for the 2001 federal Child Care Provider Loan Forgiveness Program has passed; however, eligible child-care providers still may qualify for forbearance of their loan payments. Next year's child-care-provider loan-forgiveness program is subject to annual appropriations that the U.S. Congress must approve.

Because the teacher loan-forgiveness program is restricted to new borrowers as of Oct. 1, 1998, who have taught at least five consecutive years, few teachers currently qualify. Nonetheless, USA Funds advises recently hired teachers and current college students who are pursuing teaching degrees to keep this benefit in mind.

"Congress enacted these programs to attract and retain qualified individuals in the child-care and teaching professions," said USA Funds President and CEO Carl C. Dalstrom. "We encourage eligible borrowers to take advantage of these loan-forgiveness provisions."

Teacher loan forgiveness
Certain elementary and secondary teachers who teach for at least five consecutive years in schools serving low-income students may qualify to receive up to $5,000 in loan forgiveness on their Stafford loans or the outstanding portion of a consolidation loan that was used to repay a qualifying Stafford loan. To qualify, a teacher must meet the following criteria:

  • Was a new borrower as of Oct. 1, 1998.

  • Served as a full-time teacher for at least five years in a school serving a low-income area.

  • Secondary-school teachers must teach a subject area that is relevant to their academic major.

  • Elementary-school teachers must have demonstrated knowledge and teaching skills in reading, writing, mathematics and other areas of the elementary-school curriculum.
Additional restrictions and qualifying provisions may apply. Borrowers who believe they qualify for teacher loan forgiveness should contact the holder of their loans or their loan servicer.