A bill to amend the Higher Education act of 1965 to expand the loan forgiveness and loan cancellation programs for teachers, to provide loan forgiveness and loan cancellation programs for nurses, and for other purposes.

Summary: Teacher and Nurse Support Act of 2002 - Amends the Higher Education Act of 1965 (HEA) to increase to a maximum of $17,500 the aggregate student loan obligation eligible for forgiveness or cancellation programs for teachers who serve full-time for five consecutive complete years in certain elementary or secondary schools (which qualify based on enrollment of disadvantaged students).Includes, under these HEA student loan forgiveness and cancellation programs, nurses who serve five consecutive complete years in a clinical setting or as a member of the nursing faculty at an accredited school of nursing.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Teacher and Nurse Support Act of 
2002''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--Congress finds the following:
            (1) According to the National Center for Education 
        Statistics, over the next 10 years, the United States will need 
        more than 2,000,000 new teachers to replace the teachers who 
        are retiring or leaving the classroom for other careers.
            (2) The Hart-Rudman National Security Report on education 
        recommended that the President direct the Department of 
        Education to work with the States to devise a comprehensive 
        plan to avert a looming shortage of high-quality teachers.
            (3) According to the National Center for Education 
        Statistics, 20 percent of all new teachers leave the teaching 
        profession within 3 years. Providing loan forgiveness or loan 
        cancellation is one step that would help retain high-quality 
        teachers in schools that need teachers.
            (4) The American Hospital Association has reported more 
        than 126,000 unfilled registered nurse positions in hospitals 
        in the United States. Additionally, the vacancy rate for 
        registered nurse positions at nursing homes throughout the 
        Nation is approaching 20 percent.
            (5) College loans are more of a burden than ever for 
        students and families. According to a recent United States 
        Public Interest Research Group report, average student loan 
        debt almost doubled from $9,200 in 1992-1993 to $16,928 in 
        1999-2000.
    (b) Purpose.--The purpose of this Act is to improve access to, and 
the delivery of, high-quality educational and health services 
throughout the United States by reducing the shortage of qualified 
teachers and nurses.

SEC. 3. LOAN FORGIVENESS AND CANCELLATION.

    (a) Loan Forgiveness.--Section 428J of the Higher Education Act of 
1965 (20 U.S.C. 1078-10) is amended to read as follows:

``SEC. 428J. LOAN FORGIVENESS FOR TEACHERS AND NURSES.

    ``(a) Statement of Purpose.--It is the purpose of this section to 
encourage individuals to enter and continue in the teaching and nursing 
professions.
    ``(b) Program Authorized.--The Secretary shall carry out a program, 
through the holder of the loan, of assuming the obligation to repay a 
qualified loan amount for a loan made under section 428 or 428H, in 
accordance with subsection (c), for any borrower who has 1 or more 
loans made under section 428 or 428H after October 1, 1998, and who--
            ``(1) has been employed--
                    ``(A) as a full-time teacher for 5 consecutive 
                complete school years--
                            ``(i) in a school that qualifies under 
                        section 465(a)(2)(A) for loan cancellation for 
                        Perkins loan recipients who teach in those 
                        schools;
                            ``(ii) if employed as a secondary school 
                        teacher, is teaching a subject area that is 
                        relevant to the borrower's academic major as 
                        certified by the chief administrative officer 
                        of the public or nonprofit private secondary 
                        school in which the borrower is employed; and
                            ``(iii) if employed as an elementary school 
                        teacher, has demonstrated, as certified by the 
                        chief administrative officer of the public or 
                        nonprofit private elementary school in which 
                        the borrower is employed, knowledge and 
                        teaching skills in reading, writing, 
                        mathematics, and other areas of the elementary 
                        school curriculum; or
                    ``(B) as a full-time eligible nurse for 5 
                consecutive complete years--
                            ``(i) in a clinical setting; or
                            ``(ii) as a member of the nursing faculty 
                        at an accredited school of nursing (as those 
                        terms are defined in section 801 of the Public 
                        Health Service Act (42 U.S.C. 296)); and
            ``(2) is not in default on a loan for which the borrower 
        seeks forgiveness.
    ``(c) Qualified Loan Amount.--
            ``(1) In general.--
                    ``(A) Aggregate amount.--The Secretary shall repay 
                not more than $17,500 in the aggregate of the loan 
                obligation on a loan made under section 428 or 428H 
                that is outstanding after the completion of the fifth 
                complete--
                            ``(i) school year of teaching described in 
                        subsection (b)(1)(A); or
                            ``(ii) year of nursing described in 
                        subsection (b)(1)(B).
                    ``(B) Relation to loan cancellation.--No borrower 
                may receive a reduction of loan obligations under both 
                this section and section 460.
            ``(2) Treatment of consolidation loans.--A loan amount for 
        a loan made under section 428C may be a qualified loan amount 
        for the purposes of this subsection only to the extent that the 
        loan amount was used to repay a Federal Direct Stafford Loan, a 
        Federal Direct Unsubsidized Stafford Loan, or a loan made under 
        section 428 or 428H for a borrower who meets the requirements 
        of subsection (b), as determined in accordance with regulations 
        prescribed by the Secretary.
            ``(3) Forbearance on qualified loan amount.--A holder of a 
        loan on which a borrower is seeking forgiveness under this 
        section--
                    ``(A) shall grant forbearance, at the request of 
                the borrower, in annual increments for each of the 
                years of qualifying service if the holder believes, at 
                the time of the borrower's annual request, that the 
                amount expected to be forgiven under this section at 
                the completion of the period of qualifying service will 
                satisfy the anticipated remaining outstanding balance 
                on the loan; and
                    ``(B) may offer other forbearance options to the 
                borrower.
    ``(d) Regulations.--The Secretary is authorized to issue such 
regulations as may be necessary to carry out the provisions of this 
section.
    ``(e) Construction.--Nothing in this section shall be construed to 
authorize any refunding of any repayment of a loan.
    ``(f) List of Schools.--If the list of schools in which a teacher 
may perform service pursuant to subsection (b)(1)(A) is not available 
before May 1 of any year, the Secretary may use the list for the year 
preceding the year for which the determination is made to make the 
service determination.
    ``(g) Additional Eligibility Provisions.--
            ``(1) Continued eligibility for teachers.--Any teacher who 
        performs service in a school that--
                    ``(A) meets the requirements of subsection 
                (b)(1)(A)(i) in any year during such service; and
                    ``(B) in a subsequent year fails to meet the 
                requirements of that subsection,
        may continue to teach in the school and shall be eligible for 
        loan forgiveness pursuant to subsection (b).
            ``(2) Prevention of double benefits.--No borrower may, for 
        the same service, receive a benefit under both this subsection 
        and--
                    ``(A) subtitle D of title I of the National and 
                Community Service Act of 1990 (42 U.S.C. 12571 et 
                seq.); and
                    ``(B) section 846 of the Public Health Service Act 
                (42 U.S.C. 297n).
    ``(h) Definitions.--In this section:
            ``(1) Eligible nurse.--The term `eligible nurse' means a 
        nurse who meets all of the following:
                    ``(A) The nurse graduated from--
                            ``(i) an accredited school of nursing (as 
                        those terms are defined in section 801 of the 
                        Public Health Service Act (42 U.S.C. 296));
                            ``(ii) a nursing center; or
                            ``(iii) an academic health center that 
                        provides nurse training.
                    ``(B) The nurse holds a valid and unrestricted 
                license to practice nursing in the State in which the 
                nurse practices in a clinical setting.
                    ``(C) The nurse holds 1 or more of the following:
                            ``(i) A graduate degree in nursing, or an 
                        equivalent degree.
                            ``(ii) A nursing degree from a collegiate 
                        school of nursing (as defined in section 801 of 
                        the Public Health Service Act (42 U.S.C. 296)).
                            ``(iii) A nursing degree from an associate 
                        degree school of nursing (as defined in section 
                        801 of the Public Health Service Act (42 U.S.C. 
                        296)).
                            ``(iv) A nursing degree from a diploma 
                        school of nursing (as defined in section 801 of 
                        the Public Health Service Act (42 U.S.C. 296)).
            ``(2) Year.--The term `year', where applied to service as a 
        teacher (or service as a member of an accredited school of 
        nursing (as those terms are defined in section 801 of the 
        Public Health Service Act (42 U.S.C. 296))), means an academic 
        year as defined by the Secretary.''.
    (b) Loan Cancellation.--Section 460 of the Higher Education Act of 
1965 (20 U.S.C. 1087j) is amended to read as follows:

``SEC. 460. LOAN CANCELLATION FOR TEACHERS AND NURSES.

    ``(a) Statement of Purpose.--It is the purpose of this section to 
encourage individuals to enter and continue in the teaching and nursing 
professions.
    ``(b) Program Authorized.--
            ``(1) In general.--The Secretary shall carry out a program 
        of canceling the obligation to repay a qualified loan amount in 
        accordance with subsection (c) for Federal Direct Stafford 
        Loans and Federal Direct Unsubsidized Stafford Loans made under 
        this part for any borrower who has 1 or more loans made under 
        this part after October 1, 1998, and who--
                    ``(A) has been employed--
                            ``(i) as a full-time teacher for 5 
                        consecutive complete school years--
                                    ``(I) in a school that qualifies 
                                under section 465(a)(2)(A) for loan 
                                cancellation for Perkins loan 
                                recipients who teach in those schools;
                                    ``(II) if employed as a secondary 
                                school teacher, is teaching a subject 
                                area that is relevant to the borrower's 
                                academic major as certified by the 
                                chief administrative officer of the 
                                public or nonprofit private secondary 
                                school in which the borrower is 
                                employed; and
                                    ``(III) if employed as an 
                                elementary school teacher, has 
                                demonstrated, as certified by the chief 
                                administrative officer of the public or 
                                nonprofit private elementary school in 
                                which the borrower is employed, 
                                knowledge and teaching skills in 
                                reading, writing, mathematics, and 
                                other areas of the elementary school 
                                curriculum; or
                            ``(ii) as a full-time eligible nurse for 5 
                        consecutive complete years--
                                    ``(I) in a clinical setting; or
                                    ``(II) as a member of the nursing 
                                faculty at an accredited school of 
                                nursing (as those terms are defined in 
                                section 801 of the Public Health 
                                Service Act (42 U.S.C. 296)); and
                    ``(B) is not in default on a loan for which the 
                borrower seeks forgiveness.
            ``(2) Special rule.--No borrower may obtain a reduction of 
        loan obligations under both this section and section 428J.
    ``(c) Qualified Loan Amounts.--
            ``(1) In general.--The Secretary shall cancel not more than 
        $17,500 in the aggregate of the loan obligation on a Federal 
        Direct Stafford Loan or a Federal Direct Unsubsidized Stafford 
        Loan that is outstanding after the completion of the fifth 
        complete--
                    ``(A) school year of teaching described in 
                subsection (b)(1)(A)(i); or
                    ``(B) year of nursing described in subsection 
                (b)(1)(A)(ii).
            ``(2) Treatment of consolidation loans.--A loan amount for 
        a Federal Direct Consolidation Loan may be a qualified loan 
        amount for the purposes of this subsection only to the extent 
        that the loan amount was used to repay a Federal Direct 
        Stafford Loan, a Federal Direct Unsubsidized Stafford Loan, or 
        a loan made under section 428 or 428H, for a borrower who meets 
        the requirements of subsection (b), as determined in accordance 
        with regulations prescribed by the Secretary.
            ``(3) Forbearance on qualified loan amount.--A holder of a 
        loan on which a borrower is seeking cancellation under this 
        section--
                    ``(A) shall grant forbearance, at the request of 
                the borrower, in annual increments for each of the 
                years of qualifying service if the holder believes, at 
                the time of the borrower's annual request, that the 
                amount expected to be canceled under this section at 
                the completion of the period of qualifying service will 
                satisfy the anticipated remaining outstanding balance 
                on the loan; and
                    ``(B) may offer other forbearance options to the 
                borrower.
    ``(d) Regulations.--The Secretary is authorized to issue such 
regulations as may be necessary to carry out the provisions of this 
section.
    ``(e) Construction.--Nothing in this section shall be construed to 
authorize any refunding of any canceled loan.
    ``(f) List of Schools.--If the list of schools in which a teacher 
may perform service pursuant to subsection (b)(1)(A)(i) is not 
available before May 1 of any year, the Secretary may use the list for 
the year preceding the year for which the determination is made to make 
such service determination.
    ``(g) Additional Eligibility Provisions.--
            ``(1) Continued eligibility for teachers.--Any teacher who 
        performs service in a school that--
                    ``(A) meets the requirements of subsection 
                (b)(1)(A)(i)(I) in any year during such service; and
                    ``(B) in a subsequent year fails to meet the 
                requirements of that subsection,
        may continue to teach in the school and shall be eligible for 
        loan cancellation pursuant to subsection (b).
            ``(2) Prevention of double benefits.--No borrower may, for 
        the same service, receive a benefit under both this section 
        and--
                    ``(A) subtitle D of title I of the National and 
                Community Service Act of 1990 (42 U.S.C. 12571 et 
                seq.); and
                    ``(B) section 846 of the Public Health Service Act 
                (42 U.S.C. 297n).
    ``(h) Definitions.--In this section:
            ``(1) Eligible nurse.--The term `eligible nurse' means a 
        nurse who meets all of the following:
                    ``(A) The nurse graduated from--
                            ``(i) an accredited school of nursing (as 
                        those terms are defined in section 801 of the 
                        Public Health Service Act (42 U.S.C. 296));
                            ``(ii) a nursing center; or
                            ``(iii) an academic health center that 
                        provides nurse training .
                    ``(B) The nurse holds a valid and unrestricted 
                license to practice nursing in the State in which the 
                nurse practices in a clinical setting.
                    ``(C) The nurse holds 1 or more of the following:
                            ``(i) A graduate degree in nursing, or an 
                        equivalent degree.
                            ``(ii) A nursing degree from a collegiate 
                        school of nursing (as defined in section 801 of 
                        the Public Health Service Act (42 U.S.C. 296)).
                            ``(iii) A nursing degree from an associate 
                        degree school of nursing (as defined in section 
                        801 of the Public Health Service Act (42 U.S.C. 
                        296)).
                            ``(iv) A nursing degree from a diploma 
                        school of nursing (as defined in section 801 of 
                        the Public Health Service Act (42 U.S.C. 296)).
            ``(2) Year.--The term `year', where applied to service as a 
        teacher (or service as a member of an accredited school of 
        nursing (as those terms are defined in section 801 of the 
        Public Health Service Act (42 U.S.C. 296))), means an academic 
        year as defined by the Secretary.''.

SEC. 4. PHASE OUT OF CURRENT PROGRAM.

    An individual who began the required period of teaching described 
in section 428J(b)(1) or 460(b)(1)(A) of the Higher Education Act of 
1965 (20 U.S.C. 1078-10 and 1087j) as such sections were in effect on 
the day before the date of enactment of this Act, shall--
            (1) be eligible to receive loan forgiveness or loan 
        cancellation in the amount described in, and in accordance with 
        the requirements of, such sections as in effect on the day 
        before the date of enactment of this Act; and
            (2) not be eligible to receive loan forgiveness or loan 
        cancellation under section 428J or 460 of the Higher Education 
        Act of 1965 as in effect on the date of enactment of this Act.