Federal legislation made significant changes in the terms of teacher loan forgiveness for Stafford-loan borrowers. The eligibility requirements and maximum amounts of loan forgiveness now differ depending on when a borrower began teaching service that qualifies for loan forgiveness and the subject matter that the borrower is employed to teach.

Who is Eligible?

• You must have been a new borrower as of Oct. 1, 1998, who had no outstanding loan balance on a Federal Family Education Loan Program or William D. Ford Federal Direct Loan Program loan as of that date or the date you obtained a loan after Oct. 1, 1998.
• You must have been employed as a full-time teacher for five consecutive, complete years in a qualified elementary or secondary school serving a low-income community or for an educational service agency. At least one of the five years of qualified teaching service must have been after the 1997-1998 academic year.
• The loan for which forgiveness is sought must have been made before the end of the fifth academic year of qualified teaching employment.
• If you are in default on the loans for which you seek loan forgiveness, you must have made satisfactory repayment arrangements with your loan holder.
• You may not seek loan forgiveness based on teaching service for which you already have received a benefit through the AmeriCorps program.

Additional eligibility requirements for teachers who began teaching service that qualifies for loan forgiveness prior to Oct. 30, 2004.

• If you are employed as an elementary-school teacher, you must have demonstrated knowledge and teaching skills in reading, writing, mathematics and other areas of the school's curriculum.
• If you are employed as a secondary-school teacher, you must be teaching a subject that is relevant to your academic major.
• Up to $5,000 of the outstanding balance of a qualified loan may be forgiven.

Additional eligibility requirements for teachers who began teaching service that qualifies for loan forgiveness on or after Oct. 30, 2004.

• You must be a highly qualified teacher as defined in the Elementary and Secondary Act of 1965.
  Up to $5,000 of the outstanding balance of a qualified loan may be forgiven.

Additional eligibility requirements to qualify for a maximum $17,500 in loan forgiveness.

• You must be a highly qualified teacher as defined in the Elementary and Secondary Act of 1965 and employed for the required period as a full-time secondary-school teacher of mathematics or science, or as an elementary- or secondary-school special-education teacher.

Definition of highly qualified teacher. To be deemed highly qualified, teachers must have: 1) a bachelor’s degree, 2) full state certification or licensure, and 3) prove that they know each subject they teach.

Additional Information

• The program forgives only the outstanding principal and interest of qualified federal education loans. Amounts that you previously paid will not be refunded.
• If you are engaged in qualified teaching service, you may apply to your lender or loan servicer for forbearance to suspend payments on qualified loans for up to one year at a time. Teachers who are employed by private, nonprofit schools and who are exempt from state-certification requirements may qualify for loan forgiveness by taking competency tests in applicable grade levels and subject areas.

How to Apply

You must complete a Teacher Loan Forgiveness Application and submit the application to your loan holder or loan servicer.