To expand the eligibility of individuals to qualify for loan forgiveness for teachers in order to provide additional incentives for teachers currently employed or seeking employment in economically depressed rural areas, Territories, and Indian Reservations.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Teacher Recruitment Act of 2002''.

SEC. 2. EXPANSION OF TEACHER LOAN FORGIVENESS PROGRAMS.

    (a) Guaranteed Student Loans.--Part B of title IV of the Higher 
Education Act of 1965 is amended by--
            (1) redesignating section 428K (20 U.S.C. 1078-11) as 
        section 428L; and
            (2) by inserting after section 428J the following new 
        section:

``SEC. 428K. EXPANDED LOAN FORGIVENESS FOR TEACHERS.

    ``(a) Purpose.--It is the purpose of this section to expand, 
subject to the availability of appropriations therefor, the eligibility 
of individuals to qualify for loan forgiveness for teachers beyond that 
available under section 428J, in order to provide additional incentives 
for such individuals to teach in economically disadvantaged or 
depressed and underserved rural areas.
    ``(b) Program Authorized.--
            ``(1) In general.--From the sums appropriated pursuant to 
        subsection (i), 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 new 
        borrower on or after October 1, 1998, who--
                    ``(A) is employed as a full-time teacher in a 
                public elementary or secondary school in an 
                economically disadvantaged or depressed and underserved 
                rural area;
                    ``(B) has a State certification (which may include 
                certification obtained through alternative means) or a 
                State license to teach, and has not failed to comply 
                with State or local accountability standards; and
                    ``(C) is not in default on a loan for which the 
                borrower seeks forgiveness.
            ``(2) Selection of recipients.--The Secretary shall by 
        regulations, establish a formula that ensures fairness and 
        equality for applicants in the selection of borrowers for loan 
        repayment under this section, based on the amount available 
        pursuant to subsection (i).
    ``(c) Qualified Loans Amount.--
            ``(1) In general.--The Secretary shall repay not more than 
        the percentage specified in paragraph (2) of the loan 
        obligation on a loan made under section 428 or 428H that is 
        outstanding after the completion of each complete school year 
        of teaching described in subsection (b)(1). No borrower may 
        receive a reduction of loan obligations under both this section 
        and section 460.
            ``(2) Percentage eligible.--The percent of the loan 
        obligation which the Secretary shall repay under paragraph (1) 
        of this subsection is 15 percent for the first or second year 
        of such service, 20 percent for the third or fourth year of 
        such service, and 30 percent for the fifth year of such 
        service.
            ``(3) 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 
        such 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.
            ``(4) Treatment of years of service for continuing 
        education loans.--For purposes of paragraph (2), the year of 
        service is determined on the basis of the academic year that 
        the borrower began the service as a full-time teacher, except 
        that in the case of a borrower who incurs a loan obligation for 
        continuing education expenses while teaching, the year of 
        service is determined on the basis of the academic year 
        following the academic year for which the loan obligation was 
        incurred.
    ``(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.--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 such service 
determination.
    ``(g) Additional Eligibility Provisions.--
            ``(1) Continued eligibility.--Any teacher who performs 
        service in a school that--
                    ``(A) meets the requirements of subsection 
                (b)(1)(A) in any year during such service; and
                    ``(B) in a subsequent year fails to meet the 
                requirements of such subsection,
        may continue to teach in such 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 section and 
        subtitle D of title I of the National and Community Service Act 
        of 1990 (42 U.S.C. 12571 et seq.).
    ``(h) Definition.--For purposes of this section:
            ``(1) Area.--The term `economically disadvantaged or 
        depressed and underserved rural area' means any of the 
        following areas in any State (as that term is defined in 
        section 103):
                    ``(A) A rural area that has a chronically high rate 
                of unemployment.
                    ``(B) A rural area in which at least 30 percent of 
                the households have household incomes of less than 
                $15,000, as determined on the basis of the most recent 
                decennial census.
                    ``(C) An Indian reservation.
                    ``(D) Any other rural area that, as determined by 
                regulations, has a significant shortage of educational 
                and employment opportunities.
            ``(2) Indian reservation.--The term `Indian reservation' 
        includes Indian reservations, public domain Indian allotments, 
        former Indian reservations in Oklahoma, and land held by 
        incorporated Native Alaskan groups, regional corporations, and 
        village corporations under the provisions of the Alaska Native 
        Claims Settlement Act (43 U.S.C. 1601 et seq.).
            ``(3) Year.--The term `year', where applied to service as a 
        teacher, means an academic year as defined by the Secretary.
    ``(i) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for fiscal year 2002 and each of the 5 succeeding fiscal years.''.
    (b) Direct Student Loans.--Part D of title IV of the Higher 
Education Act of 1965 is amended by inserting after section 460 the 
following new section:

``SEC. 460A. EXPANDED LOAN FORGIVENESS FOR TEACHERS.

    ``(a) Purpose.--It is the purpose of this section to expand, 
subject to the availability of appropriations therefor, the eligibility 
of individuals to qualify for loan forgiveness for teachers beyond that 
available under section 460, in order to provide additional incentives 
for such individuals to teach in economically disadvantaged or 
depressed and underserved rural areas.
    ``(b) Program Authorized.--
            ``(1) In general.--From the sums appropriated pursuant to 
        subsection (i), the Secretary shall carry out 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 
        new borrower on or after October 1, 1998, but who--
                    ``(A) is employed as a full-time teacher in a 
                public elementary or secondary school in an 
                economically disadvantaged or depressed and underserved 
                rural area;
                    ``(B) has a State certification (which may include 
                certification obtained through alternative means) or a 
                State license to teach, and has not failed to comply 
                with State or local accountability standards; and
                    ``(C) is not in default on a loan for which the 
                borrower seeks forgiveness.
            ``(2) Selection of recipients.--The Secretary shall by 
        regulations, establish a formula that ensures fairness and 
        equality for applicants in the selection of borrowers for loan 
        repayment under this section, based on the amount available 
        pursuant to subsection (i).
    ``(c) Qualified Loans Amount.--
            ``(1) In general.--The Secretary shall cancel not more than 
        the percentage specified in paragraph (2) of the loan 
obligation on a loan made under this part that is outstanding after the 
completion of each complete school year of teaching described in 
subsection (b)(1). No borrower may receive a reduction of loan 
obligations under both this section and section 428J.
            ``(2) Percentage eligible.--The percent of the loan 
        obligation which the Secretary shall repay under paragraph (1) 
        of this subsection is 15 percent for the first or second year 
        of such service, 20 percent for the third or fourth year of 
        such service, and 30 percent for the fifth year of such 
        service.
            ``(3) 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 such 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.
            ``(4) Treatment of years of service for continuing 
        education loans.--For purposes of paragraph (2), the year of 
        service is determined on the basis of the academic year that 
        the borrower began the service as a full-time teacher, except 
        that in the case of a borrower who incurs a loan obligation for 
        continuing education expenses while teaching, the year of 
        service is determined on the basis of the academic year 
        following the academic year for which the loan obligation was 
        incurred.
    ``(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.--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 such service 
determination.
    ``(g) Additional Eligibility Provisions.--
            ``(1) Continued eligibility.--Any teacher who performs 
        service in a school that--
                    ``(A) meets the requirements of subsection 
                (b)(1)(A) in any year during such service; and
                    ``(B) in a subsequent year fails to meet the 
                requirements of such subsection,
        may continue to teach in such 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 section and 
        subtitle D of title I of the National and Community Service Act 
        of 1990 (42 U.S.C. 12571 et seq.).
    ``(h) Definition.--For purposes of this section:
            ``(1) Area.--The term `economically disadvantaged or 
        depressed and underserved rural area' means any of the 
        following areas in any State (as that term is defined in 
        section 103):
                    ``(A) A rural area that has a chronically high rate 
                of unemployment.
                    ``(B) A rural area in which at least 30 percent of 
                the households have household incomes of less than 
                $15,000, as determined on the basis of the most recent 
                decennial census.
                    ``(C) An Indian reservation.
                    ``(D) Any other rural area that, as determined by 
                regulations, has a significant shortage of educational 
                and employment opportunities.
            ``(2) Indian reservation.--The term `Indian reservation' 
        includes Indian reservations, public domain Indian allotments, 
        former Indian reservations in Oklahoma, and land held by 
        incorporated Native Alaskan groups, regional corporations, and 
        village corporations under the provisions of the Alaska Native 
        Claims Settlement Act (43 U.S.C. 1601 et seq.).
            ``(3) Year.--The term `year', where applied to service as a 
        teacher, means an academic year as defined by the Secretary.
    ``(i) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for fiscal year 2002 and each of the 5 succeeding fiscal years.''.

Summary: Teacher Recruitment Act of 2002 - Amends the Higher Education Act of 1965 (HEA) to establish new programs for teacher student loan forgiveness, under the guaranteed loan program and the direct loan program. Makes eligible for such student loan forgiveness any new borrower on or after October 1, 1998, who is: (1) employed as a full-time teacher in a public elementary or secondary school in an economically disadvantaged or depressed and underserved rural area. (2) State-certified or State-licensed to teach, and in compliance with State or local accountability standards. And (3) not in default on the loan. Directs the Secretary to establish a formula that ensures fairness and equality for applicants in the selection of borrowers for such loan repayment under this section, based on the amount available. Limits the portion of the outstanding loan obligation which the Secretary may repay to 15 percent for the first or second year of such service, 20 percent for the third or fourth year, and 30 percent for the fifth year.