Teaching for the Gold

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Teaching for the Gold!

• Teacher Loan Forgiveness
• Presented by
• Eric Lee, Sallie Mae
• Leesa Sorensen, NSLP

2
TLF History

• Program created by HEA 98
• Final Rule
• Published November 1, 2000
• Effective July 1, 2001
• Technical Corrections
• Published June 29, 2001
• Effective July 1, 2001

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TLF History

• Application and Forbearance Forms
• Published November 2001
• Process Flowchart
• Published by NCHELP Regulations Committee on
  October 15, 2001
• Discharge Request Form

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TLF Purpose

• Encourage borrowers to enter and continue
  teaching
• Awards up to 5,000
• 5 years of teaching service

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Qualifications

• New Borrower on or after 10/1/98
• Must teach full-time for 5 "consecutive,
  complete" academic years
• at least 1 year after 1997-1998 academic year

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Qualifications

• School
• Eligible for title I benefits
• Listed in Annual Directory of Designated
  Low-Income Schools for Teacher Cancellation
  Benefits

http//www.ed.gov/offices/OSFAP/Students/repayment
/teachers/stafford.html
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Qualifications

• Loans
• Sub and Unsub Stafford
• FFELP or FDLP
• Exception for portion of Consolidation loan which
  repaid qualifying loan
• Made before end of 5th year of service

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Award

• Discharge of outstanding loan balance
• Includes principal and interest
• Cumulative discharge up to 5,000

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Restrictions

• No refund of payments
• No double benefit with National Community Service
  (for same service period)

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Special Rules

• Teaching requirement
• Elementary demonstrated ability in reading,
  writing, mathematics, and other elementary
  curriculum
• Secondary teaching in subject area relevant to
  academic major
• Certification by Chief Administrative Officer
  required

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Special Rules

• Academic year
• partial years
• multiple schools

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Special Rules

• "Complete consecutive" years
• exceptions for
• FMLA
• Military
• School
• includes time to resume teaching in next
  academic year

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Special Rules

• School becomes eligible after borrower begins
  teaching
• Subsequent years begin qualifying service

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Special Rules

• Loss of school eligibility
• Subsequent years still qualify
• Defaulted loans
• Re-establish title IV eligibility

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Mandatory Forbearance

• During teaching service
• requires borrower request
• 1 year increments
• Applicable to fully-dischargeable loans
• interest capitalization
• Other forbearances may be granted

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Administrative Forbearance

• During application process
• up to 60 days
• During discharge process
• Borrower request not required
• Interest capitalization

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Forgiveness Process

• After completing 5th year of teaching, borrower
  contacts lender requesting forgiveness
• Lender sends forgiveness application to borrower

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Forgiveness Process

• Lender grants forbearance up to 60 days from date
  borrower request received

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Forgiveness Process

• If borrower does not return application by 60th
  day, forbearance is ended
• Accrued interest may be capitalized
• Servicing resumes

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Forgiveness Process

• If borrower returns application after 60th day,
  lender must process forgiveness request

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Forgiveness Process

• Lender checks application for completeness

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Forgiveness Process

• If application not complete

? Application returned to borrower ? If
forbearance period not expired, forbearance
continued through 60th day
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Forgiveness Process

• If application complete

? Lender grants forbearance beginning on date
completed application received ? Lender
determines borrowers eligibility
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Forgiveness Process

• If borrower not eligible
• Forbearance is ended
• Accrued interest may be capitalized
• Servicing resumes
• Lender notifies borrower of denial

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Forgiveness Process

• If borrower eligible
• Lender completes Sections A, B C of the Teacher
  Loan Forgiveness Discharge Request form (TLFDR)
• Lender submits borrower application TLFDR to
  guarantor

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Forgiveness Process

• Lender should submit packet within 60 days of
  receiving the completed borrower application

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Forgiveness Process

• Guarantor reviews TLFDR for completeness
• If not complete, guarantor returns packet to
  lender
• If complete, guarantor determines borrower
  eligibility within 45 days

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Forgiveness Process

• Guarantor determines borrower not eligible
• Guarantor completes Section D, Item 10 of TLFDR
  and indicates reason for denial
• Guarantor returns TLFDR to lender within 45 days

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Forgiveness Process

• Guarantor determines borrower not eligible
  (contd)
• Lender ends forbearance
• Accrued interest may be capitalized
• Servicing resumes
• Lender notifies borrower of denial
• Notification must be sent within 30 days of
  receiving TLFDR from guarantor

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Forgiveness Process

• Guarantor determines borrower is eligible
• Guarantor determines forgiveness amount borrower
  eligible to receive up to 5,000 maximum

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Forgiveness Process

• Guarantor determines borrower is eligible
  (contd)
• Guarantor determines if lender submitted packet
  within 60 days of lender receiving completed
  application from borrower

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Forgiveness Process

• If packet not submitted timely
• Guarantor determines interest penalty amount
• Guarantor completes Section D, Item 11 of TLFDR
• Item 11a gt Item 11b

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Forgiveness Process

• If packet not submitted timely (contd)
• Guarantor returns TLFDR with forgiveness payment
  to lender within 45 days

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Forgiveness Process

• If packet submitted timely

? Guarantor completes Section D, Item 11 of
TLFDR ?Item 11a Item 11b
? Guarantor returns TLFDR with forgiveness
payment to lender within 45 days
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Forgiveness Process

• Lender applies forgiveness amount listed in
  Section D, Item 11a of TLFDR to borrowers
  eligible loan(s)

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Forgiveness Process

• Forgiveness amount applied in the following
  order
• Unsubsidized Stafford
• Subsidized Stafford
• Consolidation
• Borrower may request different payment
  application order

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Forgiveness Process

• If interest penalty assessed

? Lender writes off penalty amount ? Lender
repays to ED any interest benefits and special
allowance received on discharge amount for period
beginning at expiration of 60-day filing
deadline
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Forgiveness Process

• If eligible loan(s) paid in full by forgiveness
  payment, lender refunds overpayment to guarantor,
  not to borrower

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Forgiveness Process

• If loan balance remains, lender ends forbearance
• Accrued interest may be capitalized
• Servicing resumes

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Forgiveness Process

• Lender notifies borrower of approval

? Notification must be sent within 30 days of
receiving TLFDR and payment from guarantor ? If
loan balance remains, lender provides any new
repayment terms
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Comments and Questions