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Issue 12

Proposed Regulatory Language

Team II - School-based Loan Issues

Origin: HEOA section 465

Issue: Expansion of Teacher, Head Start, 

and Law Enforcement Cancellation 

Categories

Statutory Cite: HEA section 465(a)

Regulatory Cite: §§674.51, 674.53, 674.57, 674.58, 

674.61

DCL page reference: Page 135

Status: Tentative agreement reached

Regulatory language:

Sec. 674.51 Special definitions.

The following definitions apply to this subpart:

 (a) Academic year or its equivalent for elementary 

and secondary schools and special education: (1) One 

complete school year, or two half years from different 

school years, excluding summer sessions, that are complete 
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and consecutive and generally fall within a 12-month 

period.

 (2) If such a school has a year-round program of 

instruction, the Secretary considers a minimum of nine 

consecutive months to be the equivalent of an academic 

year.

 (b) Academic year or its equivalent for institutions 

of higher education: A period of time in which a full-time 

student is expected to complete--

 (1) The equivalent of 2 semesters, 2 trimesters, or 3 

quarters at an institution using credit hours; or

 (2) At least 900 clock hours of training for each 

program at an institution using clock hours.

 (c) Title I Children: Children of ages 5 through 17 

who are counted under section 1124(c)(1) of the Elementary 

and Secondary Education Act of 1965, as amended.

 (d) Children and youth with disabilities Child with a 

disability: A Cchild ren and or youth from ages 3 through 

21, inclusive, who requires special education and related 

services because he or she has they have disabilities one 

or more disabilities as defined in section 602(a)(1)602(3)

of the Individuals with Disabilities Education Act.
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(e) Community defender organizations: A defender 

organization established in accordance with section 

3006A(g)(2)(B) of title 18, United States Code.

 (f) Early intervention services: Those services 

defined in section 672(2) 632(4) of the Individuals with 

Disabilities Education Act that are provided to infants and 

toddlers with disabilities.

 (g) Educational service agency: A regional public 

multi-service agency authorized by State law to develop, 

manage, and provide services or programs to local 

educational agencies as defined in section 9101 of the 

Elementary and Secondary Education Act of 1965, as amended.

 (h) Elementary school: A school that provides 

elementary education, including education below grade 1, as 

determined by--

 (1) State law; or

 (2) The Secretary, if the school is not in a State.

(i) Faculty member at a Tribal College or University: 

An educator or tenured individual who is employed by a 

Tribal College or University, as that term is defined in 

section 316 of the HEA, to teach, research, or perform 

administrative functions., such as deans and department 
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heads. For purposes of this definition an educator may be 

an instructor, lecturer, lab faculty, assistant professor, 

associate professor, or full professor, dean or academic 

department head. 

 (j) Federal public defender organization: A defender 

organization established in accordance with section 

3006A(g)(2)(A) of title 18, United States Code.

 (jk) Firefighter: A firefighter is an individual who

that is employed by a Federal, State, or local firefighting 

agency to extinguish destructive fires; or and provides the

following firefighting related services such as--

(1) Extinguishes destructive fires;

(21) Provides Providing community disaster support 

and, as a first responder, provides providing emergency 

medical services;

(32) Conducts Conducting search and rescue; and or

(43) Provides Providing hazardous materials mitigation 

(HAZMAT).

 (kl) Handicapped children: Children of ages 3 

through 21 inclusive who require special education and 

related services because they are--

 (1) Mentally retarded;
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 (2) Hard of hearing;

 (3) Deaf;

 (4) Speech and language impaired;

 (5) Visually handicapped;

 (6) Seriously emotionally disturbed;

 (7) Orthopedically impaired;

 (8) Specific learning disabled; or

 (9) Otherwise health impaired.

 (lm) High-risk children: Individuals under the age 

of 21 who are low-income or at risk of abuse or neglect, 

have been abused or neglected, have serious emotional, 

mental, or behavioral disturbances, reside in placements 

outside their homes, or are involved in the juvenile 

justice system.

 (mn) Infants and or toddlers with a disabilityies: 

An Iinfants and or toddlers from birth to age 2, inclusive, 

who needs early intervention services for specified 

reasons, as defined in section 672(1) 632(5)(A) of the 

Individuals with Disabilities Education Act.

 (no) Librarian with a master’s degree: A librarian 

with a master’s degree is an information professional 

trained in library and/or information science who has 
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obtained a postgraduate academic degree awarded after the 

completion of an academic program in library science of up 

to six years in duration, excluding a doctorate or 

professional degree.

 (op) Local educational agency: (1) A public board of 

education or other public authority legally constituted 

within a State to administer, direct, or perform a service 

function for public elementary or secondary schools in a 

city, county, township, school district, other political 

subdivision of a State; or such combination of school 

districts of counties as are recognized in a State as an 

administrative agency for its public elementary or 

secondary schools.

 (2) Any other public institution or agency having 

administrative control and direction of a public elementary 

or secondary school.

 (pq) Low-income communities: Communities in which there 

is a high concentration of children eligible to be counted 

under title I of the Elementary and Secondary Education Act 

of 1965, as amended.
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 (qr) Master’s Degree: A postgraduate academic degree 

awarded after the completion of an academic program of one 

to six years in duration.

 (rsr) Medical technician: An allied health 

professional (working in fields such as therapy, dental 

hygiene, medical technology, or nutrition) who is 

certified, registered, or licensed by the appropriate State 

agency in the State in which he or she provides health care 

services. An allied health professional is someone who 

assists, facilitates, or complements the work of physicians 

and other specialists in the health care system.

 (sts) Nurse: A licensed practical nurse, a 

registered nurse, or other individual who is licensed by 

the appropriate State agency to provide nursing services.

 (tut) Qualified professional provider of early 

intervention services: A provider of services as defined 

in section 672(2) 632 of the Individuals with Disabilities 

Education Act.

 (uvu) Secondary school: (1) A school that provides 

secondary education, as determined by--

 (i) State law; or

 (ii) The Secretary, if the school is not in a State.
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 (2) However, State laws notwithstanding, secondary 

education does not include any education beyond grade 12.

(wxv) Speech language pathologist with a master’s degree:

is Aan individual who-- studies

(1) Evaluates or treats disorders that affect a 

person’s speech, language, cognition, voice, swallowing and 

the rehabilitative or corrective treatment of physical or 

cognitive deficits/disorders resulting in difficulty with 

communication, swallowing, or both; and

. (2) Has obtained a postgraduate academic degree 

awarded after the completion of an academic program of up 

to six years in duration, excluding a doctorate or 

professional degree.

 (vww) State education agency: (1) The State board 

of education; or 

 (2) An agency or official designated by the Governor 

or by State law as being primarily responsible for the 

State supervision of public elementary and secondary 

schools.

(x) Substantial gainful activity: Definition insert –

Team I
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 (xyxy) Teacher: (1) A teacher is a person who 

provides--

 (i) Direct classroom teaching;

 (ii) Classroom-type teaching in a non-classroom 

setting; or

 (iii) Educational services to students directly 

related to classroom teaching such as school librarians or 

school guidance counselors.

 (2) A supervisor, administrator, researcher, or 

curriculum specialist is not a teacher unless he or she 

primarily provides direct and personal educational services 

to students.

 (3) An individual who provides one of the following 

services does not qualify as a teacher unless that 

individual is licensed, certified, or registered by the 

appropriate State education agency for that area in which 

he or she is providing related special educational 

services, and the services provided by the individual are 

part of the educational curriculum for handicapped 

children:

 (i) Speech and language pathology and audiology.

 (ii) Physical therapy.
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 (iii) Occupational therapy.

 (iv) Psychological and counseling services.

 (v) Recreational therapy.

 (yzyz) Teaching in a field of expertise: The 

majority of classes taught are in the borrower's field of 

expertise.

 (zaazaa) Total and permanent disability: Definition 

will be revised – Team IThe condition of an individual who 

is unable to work and earn money because of an injury or 

illness that is expected to continue indefinitely or result 

in death.

(aabbbb) A Tribal College or University. An 

institution that--

(1) Qualifies for funding under the Tribally 

Controlled Colleges and Universities Assistance Act of 1978 

(25 U.S.C. 1801 et seq.) or the Navajo Community College 

Assistance Act of 1978 (25 U.S.C. 640a note); or

(2) Is cited in section 532 of the Equity in 

Education Land Grant Status Act of 1994 (7 U.S.C. 301 

note).
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Sec. 674.53 Teacher cancellation--Federal Perkins, NDSL and 

Defense loans. 

 (a) Cancellation for full-time teaching in an 

elementary or secondary school serving low-income students. 

(1)(i) An institution must cancel up to 100 percent of the 

outstanding loan balance on a Federal Perkins loan or an 

NDSL made on or after July 23, 1992, for full-time teaching 

in a public or other nonprofit elementary or secondary 

school.

 (ii) An institution must cancel up to 100 percent of 

the outstanding loan balance on a Federal Perkins, NDSL or 

Defense loan made prior to July 23, 1992, for teaching 

service performed on or after October 7, 1998, if the 

cancellation benefits provided under this section are not 

included in the terms of the borrower's promissory note.

(iii) An institution must cancel up to 100 percent of 

the outstanding balance of a Federal Perkins, NDSL, or 

Defense loan for teaching service that includes August 14, 

2008, or begins on or after that date, at performed on or 

after August 14, 2008, in an educational service agency.
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 (2) The borrower must be teaching full-time in a 

public or other nonprofit elementary or secondary school 

that--

 (i) Is in a school district that qualified for funds, 

in that year, under part A of title I of the Elementary and 

Secondary Education Act of 1965, as amended; and

 (ii) Has been selected by the Secretary based on a 

determination that more than 30 percent of the school's or 

educational service agency’s total enrollment is made up of

title I children.

 (3) For each academic year, the Secretary notifies 

participating institutions of the schools and educational 

service agencies selected under paragraph (a) of this 

section.

 (4) (i) The Secretary selects schools and 

educational service agencies under paragraph (a)(1) of this 

section based on a ranking by the State education agency.

 (ii) The State education agency must base its ranking 

of the schools and educational service agencies on 

objective standards and methods. These standards must take 

into account the numbers and percentages of title I 
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children attending those schools and educational service 

agencies.

 (iii) For each academic year, the Secretary notifies 

participating institutions of the schools selected under 

paragraph (a) of this section.

 (5) The Secretary considers all elementary and 

secondary schools operated by the Bureau of Indian Affairs 

(BIA) or operated on Indian reservations by Indian tribal 

groups under contract with BIA to qualify as schools 

serving low-income students.

 (6) A teacher, who performs service in a school or 

educational service agency that meets the requirement of 

paragraph (a)(1) of this section in any year and in a 

subsequent year fails to meet these requirements, may 

continue to teach in that school or educational service 

agency and will be eligible for loan cancellation pursuant 

to paragraph (a) of this section in subsequent years.

 (7) If a list of eligible institutions in which a 

teacher performs services under paragraph (a)(1) of this 

section is not available before May 1 of any year, the 

Secretary may use the list for the year preceding the year 
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for which the determination is made to make the service 

determination.

 (b) Cancellation for full-time teaching in special 

education. (1) An institution must cancel up to 100 

percent of the outstanding balance on a borrower's Federal 

Perkins loan or NDSL loan made on or after July 23, 1992, 

for the borrower's service as a full-time special education 

teacher of infants, toddlers, children, or youth with 

disabilities, in a public or other nonprofit elementary or 

secondary school system.

 (2) An institution must cancel up to 100 percent of 

the outstanding loan balance on a Federal Perkins, NDSL or 

Defense loan made prior to July 23, 1992, for teaching 

service performed on or after October 7, 1998, if the 

cancellation benefits provided under this section are not 

included in the terms of the borrower's promissory note.

(3) An institution must cancel up to 100 percent of 

the outstanding balance on a borrower’s Federal Perkins, 

NDSL, or Defense loan for a borrower’s service that 

includes on or after August 14, 2008, or begins on or after 

that date, as a full-time special education teacher of 
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infants, toddlers, children, or youth with disabilities, in 

an educational service agency.

(c) Cancellation for full-time teaching in fields of 

expertise. (1) An institution must cancel up to 100 

percent of the outstanding balance on a borrower's Federal 

Perkins loan or NDSL made on or after July 23, 1992, for 

full-time teaching in mathematics, science, foreign 

languages, bilingual education, or any other field of 

expertise where the State education agency determines that 

there is a shortage of qualified teachers.

 (2) An institution must cancel up to 100 percent of 

the outstanding loan balance on a Federal Perkins, NDSL or 

Defense loan made prior to July 23, 1992, for teaching 

service performed on or after October 7, 1998, if the 

cancellation benefits provided under this section are not 

included in the terms of the borrower's promissory note.

 (d) Cancellation rates. (1) To qualify for 

cancellation under paragraph (a), (b), or (c) of this 

section, a borrower shall must teach full-time for a 

complete academic year or its equivalent.

 (2) Cancellation rates are--
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 (i) 15 percent of the original principal loan amount 

plus the interest on the unpaid balance accruing during the 

year of qualifying service, for each of the first and 

second years of full-time teaching;

 (ii) 20 percent of the original principal loan 

amount, plus the interest on the unpaid balance accruing 

during the year of qualifying service, for each of the 

third and fourth years of full-time teaching; and

 (iii) 30 percent of the original principal loan 

amount, plus the interest on the unpaid balance accruing 

during the year of qualifying service, for the fifth year 

of full-time teaching.

 (e) Teaching in a school system. The Secretary 

considers a borrower to be teaching in a public or other 

nonprofit elementary or secondary school system or an 

educational service agency only if the borrower is directly 

employed by the school system.

 (f) Teaching children and adults. A borrower who 

teaches both adults and children qualifies for cancellation 

for this service only if a majority of the students whom 

the borrower teaches are children.
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Sec. 674.57 Cancellation for law enforcement or corrections 

officer service--Federal Perkins, NDSL and Defense loans.

 (a)(1) An institution must cancel up to 100 percent 

of the outstanding balance on a borrower's Federal Perkins 

or NDSL made on or after November 29, 1990, for full-time 

service as a law enforcement or corrections officer for an 

eligible employing agency.

 (2) An institution must cancel up to 100 percent of 

the outstanding loan balance on a Federal Perkins, NDSL, or 

Defense loan made prior to November 29, 1990, for law 

enforcement or correction officer service performed on or 

after October 7, 1998, if the cancellation benefits 

provided under this section are not included in the terms 

of the borrower's promissory note.

(3) An eligible employing agency is an agency--

 (i) That is a local, State, or Federal law 

enforcement or corrections agency;

 (ii) That is public-funded; and

 (iii) The principal activities of which pertain to 

crime prevention, control, or reduction or the enforcement 

of the criminal law.
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 (4) Agencies that are primarily responsible for 

enforcement of civil, regulatory, or administrative laws 

are ineligible employing agencies.

 (5) A borrower qualifies for cancellation under this 

section only if the borrower is--

 (i) A sworn law enforcement or corrections officer; 

or

 (ii) A person whose principal responsibilities are 

unique to the criminal justice system.

 (6) To qualify for a cancellation under this section, 

the borrower's service must be essential in the performance 

of the eligible employing agency's primary mission.

 (7) The agency must be able to document the 

employee's functions.

 (8) A borrower whose principal official 

responsibilities are administrative or supportive does not 

qualify for cancellation under this section.

(b)(1) An institution must cancel up to 100 percent 

of the outstanding balance of a borrower’s Federal Perkins, 

NDSL, or Defense loan for service that includes August 14, 

2008, performed or begins on or after that date, August 14, 

2008, as a full-time attorney employed in Federal public 
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defender organizations or community defender organizations, 

established in accordance with section 3006A(g)(2) of title 

18, United States Code.

 (bc)(1) To qualify for cancellation under paragraph 

(a) of this section, a borrower shall must work full-time 

for 12 consecutive months.

 (2) Cancellation rates are--

 (i) 15 percent of the original principal loan amount 

plus the interest on the unpaid balance accruing during the 

year of qualifying service, for each of the first and 

second years of full-time employment;

 (ii) 20 percent of the original principal loan amount 

plus the interest on the unpaid balance accruing during the 

year of qualifying service, for each of the third and 

fourth years of full-time employment; and

 (iii) 30 percent of the original principal loan 

amount plus the interest on the unpaid balance accruing 

during the year of qualifying service, for the fifth year 

of full-time employment.

Sec. 674.58 Cancellation for service in an early childhood 

education program. Head Start program.
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 (a)(1) An institution must cancel up to 100 percent 

of the outstanding balance on a borrower's NDSL or Federal 

Perkins loan, for service as a full-time staff member in a 

Head Start program.

 (2) An institution must cancel up to 100 percent of 

the outstanding balance on a Defense loan for service as a 

full-time staff member in a Head Start program performed on 

or after October 7, 1998, if the cancellation benefits 

provided under this section are not included in the terms 

of the borrower's promissory note.

(3) An institution must cancel up to 100 percent of 

the outstanding balance of a borrower’s NDSL, Defense, or 

Federal Perkins loan for service that includes August 14, 

2008, or begins performed on or after that date, August 14, 

2008, as a full-time staff member of a pre-kindergarten or 

childcare program that is licensed or regulated by the 

State.

(34) The Head Start, pre-kindergarten or child care

program in which the borrower serves must operate for a 

complete academic year, or its equivalent.

 (45) In order to qualify for cancellation, the 

borrower's salary may not exceed the salary of a comparable 
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employee working in the local educational agency of the 

area served by the local Head Start, pre-kindergarten or 

child care program.

 (b) The cancellation rate is 15 percent of the 

original loan principal, plus the interest on the unpaid 

balance accruing during the year of qualifying service, for 

each complete academic year, or its equivalent, of fulltime teaching service.

 (c)(1) “Head Start” is a preschool program carried 

out under the Head Start Act (subchapter B, chapter 8 of 

title VI of Pub. L. 97-35, the Budget Reconciliation Act of 

1981, as amended; formerly authorized under section 

222(a)(1) of the Economic Opportunity Act of 1964). (42 

U.S.C. 2809(a)(1))

(2) A pre-kindergarten program is a State-funded 

program that serves children from birth through age six and 

addresses the children’s cognitive (including language, 

early literacy, and early mathematics), social, emotional, 

and physical development.

(3) A child care program is a program that is 

licensed and regulated by the State and provides child care 

services for fewer than 24 hours per day per child, unless 
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care in excess of consecutive 24 hours is needed due to the 

nature of the parents’ work.

(24) “Full-time staff member” is a person regularly 

employed in a full-time professional capacity to carry out 

the educational part of a Head Start, pre-kindergarten or 

child care program.
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Issue 12

Amendatory Language

Team II – School-based Loan Issues

PART 674--FEDERAL PERKINS LOAN PROGRAM

x. The authority citation for part 674 continues to 

read as follows:

AUTHORITY: 20 U.S.C. 421–429, 1070g, 1087aa–1087hh, 

unless otherwise noted.

x. Section 674.51 is amended by:

A. Revising paragraph (d).

B. Redesignating paragraphs (e) through (s) as 

follows:

Old Paragraph New Paragraph

674.51(e) 674.51(f)

674.51(f) 674.51(h)

674.51(g) 674.51(l)

674.51(h) 674.51(m)

674.51(i) 674.51(n)

674.51(j) 674.51(p)

674.51(k) 674.51(q)

674.51(l) 674.51(r)
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674.51(m) 674.51(s)

674.51(n) 674.51(t)

674.51(o) 674.51(u)

674.51(p) 674.51(w)

674.51(q) 674.51(y)

674.51(r) 674.51(z)

674.51(s) 674.51(aa)

C. Adding new paragraphs (e), (g), (i), (j), (k), 

(o), (v),(x), and (bb).

D. In newly redesignated paragraph (f), removing the 

number “672(2)”, and adding, in its place, the number

“632(4)”. 

E. Revising newly redesignated paragraph (n).

F. In newly redesignated paragraph (t), by removing 

the number “672(2)”, and adding, in its place, the number

“632”.

G. Revising newly designated paragraph (aa).

H. Revising the authority citation that appears at 

the end of the section.

The revisions and additions read as follows:

§674.51 Special Definitions.

* * * * *
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(d) Child with a disability: A child or youth from 

ages 3 through 21, inclusive, who requires special 

education and related services because he or she has one or 

more disabilities as defined in section 602(3) of the 

Individuals with Disabilities Education Act.

(e) Community defender organizations: A defender 

organization established in accordance with section 

3006A(g)(2)(B) of title 18, United States Code.

* * * * *

 (g) Educational service agency: A regional public 

multi-service agency authorized by State law to develop, 

manage, and provide services or programs to local 

educational agencies as defined in section 9101 of the 

Elementary and Secondary Education Act of 1965, as amended.

* * * * *

(i) Faculty member at a Tribal College or University: 

An educator or tenured individual who is employed by a 

Tribal College or University, as that term is defined in 

section 316 of the HEA, to teach, research, or perform 

administrative functions. For purposes of this definition 

an educator may be an instructor, lecturer, lab faculty, 
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assistant professor, associate professor, or full 

professor, dean or academic department head. 

 (j) Federal public defender organization: A 

defender organization established in accordance with 

section 3006A(g)(2)(A) of title 18, United States Code.

 (k) Firefighter: A firefighter is an individual who 

is employed by a federal, state, or local firefighting 

agency to extinguish destructive fires; or provide 

firefighting related services such as--

(1) Providing community disaster support and, as a 

first responder, providing emergency medical services;

(2) Conducting search and rescue; or

(3) Providing hazardous materials mitigation 

(HAZMAT).

* * * * *

 (n) Infant or toddler with a disability: An infant

or toddler from birth to age 2, inclusive, who need early 

intervention services for specified reasons, as defined in 

section 632(5)(A) of the Individuals with Disabilities 

Education Act.

 (o) Librarian with a master’s degree: A librarian 

with a master’s degree is an information professional 
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trained in library or information science who has obtained 

a postgraduate academic degree in library science awarded 

after the completion of an academic program of up to six 

years in duration, excluding a doctorate or professional 

degree.

* * * * *

 (w) Speech language pathologist with a masters 

degree: An individual who evaluates or treats disorders 

that affect a person’s speech, language, cognition, voice, 

swallowing and the rehabilitative or corrective treatment 

of physical or cognitive deficits/disorders resulting in 

difficulty with communication, swallowing, or both.

(aa) A Tribal College or University: An institution 

that--

(1) Qualifies for funding under the Tribally 

Controlled Colleges and Universities Assistance Act of 1978 

(25 U.S.C. 1801 et seq.) or the Navajo Community College 

Assistance Act of 1978 (25 U.S.C. 640a note); or

(2) Is cited in section 532 of the Equity in 

Education Land Grant Status Act of 1994 (7 U.S.C. 301 

note).

* * * * *
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x. Section 674.53 is amended by:

A. Adding new paragraph (a)(iii).

B. Revising paragraphs (a)(2)(i) and (a)(2)(ii).

C. Revising paragraph (a)(3).

D. Revising paragraphs (a)(4)(i) and (a)(4)(ii).

E. Removing paragraph (a)(4)(iii).

F. Revising paragraph (a)(6).

G. Adding new paragraph (b)(3).

H. In paragraph (d)(1), removing the word “shall” and 

adding, in its place, the word “must”.

I. Revising paragraph (e).

The revisions and additions read as follows:

§674.53 Teacher cancellation--Federal Perkins, NDSL and 

Defense loans. 

* * * * *

(a) * * *

(1) * * *

(iii) An institution must cancel up to 100 percent of 

the outstanding balance of a Federal Perkins, NDSL, or 

Defense loan for teaching service that includes August 14, 

2008, or begins on or after that date, at an educational 

service agency.
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* * * * *

(2) * * * 

 (i) Is in a school district that qualified for funds, 

in that year, under part A of title I of the Elementary and 

Secondary Education Act of 1965, as amended; and

 (ii) Has been selected by the Secretary based on a 

determination that more than 30 percent of the school's or 

educational service agency’s total enrollment is made up of 

title I children.

 (3) For each academic year, the Secretary notifies 

participating institutions of the schools and educational 

service agencies selected under paragraph (a) of this 

section.

 (4)(i) The Secretary selects schools and educational 

service agencies under paragraph (a)(1) of this section 

based on a ranking by the State education agency.

 (ii) The State education agency must base its ranking 

of the schools and educational service agencies on 

objective standards and methods. These standards must take 

into account the numbers and percentages of title I 

children attending those schools and educational service 

agencies.
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* * * * *

 (6) A teacher, who performs service in a school or 

educational service agency that meets the requirement of 

paragraph (a)(1) of this section in any year and in a 

subsequent year fails to meet these requirements, may 

continue to teach in that school or educational service 

agency and will be eligible for loan cancellation pursuant 

to paragraph (a) of this section in subsequent years.

* * * * *

(b) * * *

(3) An institution must cancel up to 100 percent of 

the outstanding balance on a borrower’s Federal Perkins,

NDSL, or Defense loan for a borrower’s service that 

includes August 14, 2008, or begins on or after that date, 

as a full-time special education teacher of infants, 

toddlers, children, or youth with disabilities, in an 

educational service agency.

* * * * *

 (e) Teaching in a school system. The Secretary 

considers a borrower to be teaching in a public or other 

nonprofit elementary or secondary school system or an 
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educational service agency only if the borrower is directly 

employed by the school system.

* * * * *
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x. Section 674.57 is amended by:

A. Adding new paragraph (b).

B. In paragraph (c), removing the word “shall” and 

adding, in its place, the word “must”.

The addition reads as follows:

§674.57 Cancellation for law enforcement or corrections 

officer service--Federal Perkins, NDSL, and Defense loans.

* * * * *

(b) An institution must cancel up to 100 percent of 

the outstanding balance of a borrower’s Federal Perkins, 

NDSL, or Defense loan for service that includes August 14, 

2008, or begins on or after that date, as a full-time 

attorney employed in Federal public defender organizations 

or community defender organizations, established in 

accordance with section 3006A(g)(2) of title 18, U.S.C.

* * * * *
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x. Section 674.58 is amended by:

A. In the section title, removing the words

“Cancellation for service in a Head Start program” and 

adding, in their place, the words “Cancellation for service 

in an early childhood education program.”

B. Redesignating paragraphs (a)(3) and (a)(4) as 

paragraphs (a)(4) and (a)(5), respectively.

C. Adding new paragraph (a)(3).

D. Revising newly redesignated paragraph (a)(4).

E. Revising newly redesignated paragraph (a)(5).

F. Redesignating paragraph (c)(2) as paragraph 

(c)(4).

G. Adding new paragraphs (c)(2) and (c)(3).

H. Revising newly redesignated paragraph (c)(4).

The revisions and additions read as follows:

§674.58 Cancellation for service in an early childhood 

education program.

* * * * *

(a) * * *

(3) An institution must cancel up to 100 percent of 

the outstanding balance of a borrower’s NDSL, Defense, or 

Federal Perkins loan for service that includes August 14,
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2008, or begins on or after that date, as a full-time staff 

member of a pre-kindergarten or childcare program that is 

licensed or regulated by the State.

(4) The Head Start, pre-kindergarten or child care

program in which the borrower serves must operate for a 

complete academic year, or its equivalent.

 (5) In order to qualify for cancellation, the 

borrower's salary may not exceed the salary of a comparable 

employee working in the local educational agency of the 

area served by the local Head Start, pre-kindergarten or 

child care program.

* * * * *

(c) * * *

(2) A pre-kindergarten program is a State-funded 

program that serves children from birth through age six and 

addresses the children’s cognitive (including language, 

early literacy, and early mathematics), social, emotional, 

and physical development.

(3) A child care program is a program that is 

licensed and regulated by the State and provides child care 

services for fewer than 24 hours per day per child, unless 
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care in excess of 24 consecutive hours is needed due to the 

nature of the parents’ work.

(4) “Full-time staff member” is a person regularly 

employed in a full-time professional capacity to carry out 

the educational part of a Head Start, pre-kindergarten or 

child care program.

* * * * *

x. Section 674.61 is amended by removing the citation 

“§674.51(s)” each time it appears and adding, in its place, 

the citation “§674.51(z)".