On October 7, 1998, the Higher Education Amendments of 1998 (H.R. 6) were signed into law. These amendments expand the deferment and partial loan cancellation benefits for older Federal Perkins, National Direct, and National Defense Loans (William D. Ford Direct Subsidized and Unsubsidized Loans are not included in this provision). Partial loan cancellation provisions have been expanded for loans received prior to July 23, 1992 and deferment provisions for loans received prior to July 1, 1993 to equal provisions granted to loan recipients with loans made after those respective dates. Borrowers who received loans on or after those dates are not affected.
Please Note: If you have a Direct or FFEL Stafford Loan, please see the Department of Education's web site at US Dept. of Ed. Stafford Loan Teacher Cancellation for information on a teacher cancellation for loans received on or after October 7, 1998 by a borrower with no outstanding loan balance as of that date.
The provisions of the law became effective October 7, 1998. The law is not retroactive and covers only eligible deferment and cancellation service you may have since October 7, 1998.
Cancellations: In addition to the cancellation provisions in their promissory note, borrowers with an outstanding balance on a Federal Perkins, National Direct, or National Defense loan made prior to July 23, 1992, may be eligible for partial cancellation of their loan for each qualified year of service for: *
- Full-time teaching in a field of expertise such as mathematics, science, foreign languages, bilingual education or other fields where the State education agency determines there is a shortage of qualified teachers;
- Full-time teaching in the field of special education;
- Full-time teaching in a school classified by the Department of Education as a low-income school eligible under the Chapter 1 of the Education Consolidation and improvement Act of 1981, see the Department of Education website to see if your school is eligible at the following link:
U. S. Department of Education Low-Income School Listing- Full-time employment as a state licensed nurse or medical technician providing health care services;
- Full-time employment in a public or private nonprofit child or family service agency providing or supervising the provision of services to high-risk children from low-income communities and families of such children;
- Full-time employment as a qualified professional provider of early intervention services in a public or other nonprofit program under public supervision by the lead agency as authorized in Sect. 676(b)(9) of the Individuals with Disabilities Education Act;
- Volunteer service in the Peace Corps Act or Domestic Volunteer Service Act of 1973 (VISTA);
- Employment as a law enforcement or corrections officer in an eligible local, state, or federal agency which is publicly funded and if its principals activities pertain to crime prevention, control or reduction of enforcement of criminal law, and principal responsibilities are unique to the criminal justice system; or
- Full-time educational staff member in a pre-school program carried out under the Head Start Act.
*Additional requirements apply.
Cancellation Provisions
National
DefenseNational Direct
Disbursed Prior
to 7/23/92Federal Perkins
Disbursed Prior
to 7/23/92Federal Perkins/ National Direct
Disbursed on or
after 7/23/92Full-time employment in a Head Start Program None 15% a year up to 100% 15% a year up to 100% 15% a year up to 100%
Total and permanent disability or death of borrower 100% 100% 100% 100% Full-time law enforcement of correction officer 100% 100%
100% 100% Full-time teaching in low income school eligible for funding under Chapter 1 of the Education Consolidation and improvement Act of 1981 2,3 100%6 100% 100% 100% Full-time special education teacher of infants, toddlers, children or youth with disabilities 2, 6 100% 100% 100% 100% Provider of early intervention services in a public or nonprofit program under public supervision 2, 7 100% 100% 100% 100% Full-time teacher of handicapped students in a public or nonprofit elementary/secondary school 100% 6 100% 4 100% 4 100% Full-time teacher of mathematics, science, foreign languages, bilingual education, or any field of expertise determined by the state education agency to have shortage of qualified teachers 2 100% 100% 100% 100% Provider or supervisor of provision of services to high-risk children from low-income communities and their families 2, 8 100% 100% 100% 100% Licensed Nurse or medical technician providing health care services2 100% 100% 100% 100% Peace Corps or ACTION programs volunteer 11 None None
70% 70% Service in U.S. Armed Forces full time in area of hostility10 50% 50% 50% Full-time teaching in public/nonprofit elementary/secondary school, institution of higher education or overseas Department of Defense elementary/secondary school 50% 13 N/A N/A N/A
1. Cancellation rate is 15% per year.
2 Cancellation rate is 15% per year for first and second years; 20% per year for third and fourth years; and 30% for fifth year.
3 If the borrower teaches at a school that does not qualify as a low-income school in a subsequent year, the borrower remains eligible for loan cancellation as long as the borrower continues to teach full-time at the school.
4 Cancellation rate is 15% per academic year.
5 Infants, toddlers, children and youth with disabilities are defined in Section 602(a)(1) and 672(1) of the individuals with Disabilities Education Act.
6 A qualified professional provider of early intervention services is defined in Section 672(2) of the Individuals with Disabilities Education Act.
7 Must be employed in public or nonprofit child or family services agency. High-risk children are defined as individuals under the age of 21 who: are low-income; have been or are at risk or being abused or neglected; have serious emotional, mental, or behavioral disturbances; reside in placements outside of their homes; or are involved in the juvenile justice system. Low-income communities are defined as those communities in which there is high concentration of children eligible to be counted under Chapter 1 of Title 1 of the Elementary and Secondary Act of 1965.
8 Cancellation applies only to Federal Perkins Loans; does not apply to National Direct loans. Cancellation rate is 15% per year for the first and second years and 20% per year for the third and fourth years.
9 Cancellation rate is 12.5% per year of consecutive service.
10 Military service must be in an area that qualifies for hazardous duty pay. Cancellation rate is 12.5% per year of consecutive service. Limit of 4 Years.
11 Cancellation rate is 10% per academic year.
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