PUBLIC LAW 108–409—OCT. 30, 2004 118 STAT. 2299

Public Law 108–409

108th Congress

An Act

To reduce certain special allowance payments and provide additional teacher loan

forgiveness on Federal student loans.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Taxpayer-Teacher Protection

Act of 2004’’.

SEC. 2. REDUCTION OF SPECIAL ALLOWANCE PAYMENTS FOR LOANS

FROM THE PROCEEDS OF TAX EXEMPT ISSUES.

Section 438(b)(2)(B) (20 U.S.C. 1087–1(b)(2)(B)) is amended—

(1) in clause (i), by striking ‘‘this division’’ and inserting

‘‘this clause’’;

(2) in clause (ii), by striking ‘‘division (i) of this subparagraph’’ and inserting ‘‘clause (i) of this subparagraph’’;

(3) in clause (iv), by inserting ‘‘or refunded after September

30, 2004, and before January 1, 2006,’’ after ‘‘October 1, 1993,’’;

and

(4) by adding at the end the following new clause:

‘‘(v) Notwithstanding clauses (i) and (ii), the quarterly rate

of the special allowance shall be the rate determined under

subparagraph (A), (E), (F), (G), (H), or (I) of this paragraph,

or paragraph (4), as the case may be, for a holder of loans

that—

‘‘(I) were made or purchased with funds—

‘‘(aa) obtained from the issuance of obligations the

income from which is excluded from gross income under

the Internal Revenue Code of 1986 and which obligations were originally issued before October 1, 1993;

or

‘‘(bb) obtained from collections or default

reimbursements on, or interest or other income pertaining to, eligible loans made or purchased with funds

described in division (aa), or from income on the investment of such funds; and

‘‘(II) are—

‘‘(aa) financed by such an obligation that, after

September 30, 2004, and before January 1, 2006, has

matured or been retired or defeased;

‘‘(bb) refinanced after September 30, 2004, and

before January 1, 2006, with funds obtained from a

source other than funds described in subclause (I) of

this clause; or

TaxpayerTeacher

Protection Act

of 2004.

20 USC 1001

note.

Oct. 30, 2004

[H.R. 5186]

118 STAT. 2300 PUBLIC LAW 108–409—OCT. 30, 2004

‘‘(cc) sold or transferred to any other holder after

September 30, 2004, and before January 1, 2006.’’.

SEC. 3. LOAN FORGIVENESS FOR TEACHERS.

(a) IMPLEMENTING HIGHLY QUALIFIED TEACHER REQUIREMENTS.—

(1) AMENDMENTS.—

(A) FFEL LOANS.—Section 428J(b)(1) of the Higher

Education Act of 1965 (20 U.S.C. 1078–10(b)(1)) is

amended—

(i) in subparagraph (A), by inserting ‘‘and’’ after

the semicolon; and

(ii) by striking subparagraphs (B) and (C) and

inserting the following:

‘‘(B) if employed as an elementary school or secondary

school teacher, is highly qualified as defined in section

9101 of the Elementary Secondary Education Act of 1965;

and’’.

(B) DIRECT LOANS.—Section 460(b)(1)(A) of such Act

(20 U.S.C. 1087j(b)(1)(A)) is amended—

(i) in clause (i), by inserting ‘‘and’’ after the semicolon; and

(ii) by striking clauses (ii) and (iii) and inserting

the following:

‘‘(ii) if employed as an elementary school or secondary school teacher, is highly qualified as defined

in section 9101 of the Elementary and Secondary Education Act of 1965; and’’.

(2) TRANSITION RULE.—

(A) RULE.—The amendments made by paragraph (1)

of this subsection to sections 428J(b)(1) and 460(b)(1)(A)

of the Higher Education Act of 1965 shall not be applied

to disqualify any individual who, before the date of enactment of this Act, commenced service that met and continues

to meet the requirements of such sections as such sections

were in effect on the day before the date of enactment

of this Act.

(B) RULE NOT APPLICABLE TO INCREASED QUALIFIED

LOAN AMOUNTS.—Subparagraph (A) of this paragraph shall

not apply for purposes of obtaining increased qualified loan

amounts under sections 428J(c)(3) and 460(c)(3) of the

Higher Education Act of 1965 as added by subsection (b)

of this section.

(b) ADDITIONAL AMOUNTS ELIGIBLE TO BE REPAID.—

(1) FFEL LOANS.—Section 428J(c) of the Higher Education

Act of 1965 (20 U.S.C. 1078–10(c)) is amended by adding at

the end the following:

‘‘(3) ADDITIONAL AMOUNTS FOR TEACHERS IN MATHEMATICS,

SCIENCE, OR SPECIAL EDUCATION.—Notwithstanding the amount

specified in paragraph (1), the aggregate amount that the Secretary shall repay under this section shall be not more than

$17,500 in the case of—

‘‘(A) a secondary school teacher—

‘‘(i) who meets the requirements of subsection (b);

and

20 USC 1078–10

note.

PUBLIC LAW 108–409—OCT. 30, 2004 118 STAT. 2301

‘‘(ii) whose qualifying employment for purposes of

such subsection is teaching mathematics or science

on a full-time basis; and

‘‘(B) an elementary school or secondary school teacher—

‘‘(i) who meets the requirements of subsection (b);

‘‘(ii) whose qualifying employment for purposes of

such subsection is as a special education teacher whose

primary responsibility is to provide special education

to children with disabilities (as those terms are defined

in section 602 of the Individuals with Disabilities Education Act); and

‘‘(iii) who, as certified by the chief administrative

officer of the public or non-profit private elementary

school or secondary school in which the borrower is

employed, is teaching children with disabilities that

correspond with the borrower’s special education

training and has demonstrated knowledge and teaching

skills in the content areas of the elementary school

or secondary school curriculum that the borrower is

teaching.’’.

(2) DIRECT LOANS.—Section 460(c) of the Higher Education

Act of 1965 (20 U.S.C. 1087j(c)) is amended by adding at

the end the following:

‘‘(3) ADDITIONAL AMOUNTS FOR TEACHERS IN MATHEMATICS,

SCIENCE, OR SPECIAL EDUCATION.—Notwithstanding the amount

specified in paragraph (1), the aggregate amount that the Secretary shall cancel under this section shall be not more than

$17,500 in the case of—

‘‘(A) a secondary school teacher—

‘‘(i) who meets the requirements of subsection

(b)(1); and

‘‘(ii) whose qualifying employment for purposes of

such subsection is teaching mathematics or science

on a full-time basis; and

‘‘(B) an elementary school or secondary school teacher—

‘‘(i) who meets the requirements of subsection

(b)(1);

‘‘(ii) whose qualifying employment for purposes of

such subsection is as a special education teacher whose

primary responsibility is to provide special education

to children with disabilities (as those terms are defined

in section 602 of the Individuals with Disabilities Education Act); and

‘‘(iii) who, as certified by the chief administrative

officer of the public or non-profit private elementary

school or secondary school in which the borrower is

employed, is teaching children with disabilities that

correspond with the borrower’s special education

training and has demonstrated knowledge and teaching

skills in the content areas of the elementary school

or secondary school curriculum that the borrower is

teaching.’’.

(3) EFFECTIVE DATE.—The amendments made by this subsection shall apply only with respect to eligible individuals

who are new borrowers (as such term is defined in 103 of

the Higher Education Act of 1965 (20 U.S.C. 1003)) on or

after October 1, 1998, and before October 1, 2005.

Applicability.

20 USC 1078–10

note.

118 STAT. 2302 PUBLIC LAW 108–409—OCT. 30, 2004

LEGISLATIVE HISTORY—H.R. 5186:

CONGRESSIONAL RECORD, Vol. 150 (2004):

Oct. 7, considered and passed House.

Oct. 9, considered and passed Senate.

Æ

(c) INFORMATION ON BENEFITS TO RURAL SCHOOL DISTRICTS.— The Secretary shall—

(1) notify local educational agencies eligible to participate

in the Small Rural Achievement Program authorized under

subpart 1 of part B of title VI of the Elementary and Secondary

Education Act of 1965 of the benefits available under the

amendments made by this section; and

(2) encourage such agencies to notify their teachers of

such benefits.

Approved October 30, 2004.

20 USC 1078–10

note.

Notification.