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[108th Congress Public Law 409]
[From the U.S. Government Printing Office]

[DOCID: f:publ409.108]

[[Page 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. <<NOTE: Oct. 30, 
                         2004 -  [H.R. 5186]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, <<NOTE: Taxpayer-Teacher 
Protection Act of 2004. 20 USC 1001 note.>> 

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

[[Page 118 STAT. 2300]]

                          ``(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) <<NOTE: 20 USC 1078-10 note.>> 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

[[Page 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) <<NOTE: Applicability. 20 USC 1078-10 note.>> 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.

[[Page 118 STAT. 2302]]

    (c) Information <<NOTE: 20 USC 1078-10 note. Notification.>> 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.

LEGISLATIVE HISTORY--H.R. 5186:
---------------------------------------------------------------------------

CONGRESSIONAL RECORD, Vol. 150 (2004):
            Oct. 7, considered and passed House.
            Oct. 9, considered and passed Senate.

                                  <all>
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