I 

108TH CONGRESS 

1ST SESSION H. R. 2678

To expand the teacher loan forgiveness programs under the guaranteed and 

direct student loan programs, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 9, 2003

Mr. INSLEE introduced the following bill; which was referred to the Committee 

on Education and the Workforce, and in addition to the Committee on 

Ways and Means, for a period to be subsequently determined by the 

Speaker, in each case for consideration of such provisions as fall within 

the jurisdiction of the committee concerned 

A BILL

To expand the teacher loan forgiveness programs under the 

guaranteed and direct student loan programs, and for 

other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Teachers For Tomor5 row Act of 2003’’. 
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1 SEC. 2. REVISION OF TEACHER LOAN FORGIVENESS PRO2 GRAMS. 

3 (a) GUARANTEED STUDENT LOANS.—Part B of title 

4 IV of the Higher Education Act of 1965 is amended by—

5 (1) redesignating section 428K (20 U.S.C. 

6 1078–11) as section 428L; and 

7 (2) by inserting after section 428J the following 

8 new section: 

9 ‘‘SEC. 428K. EXPANDED LOAN FORGIVENESS FOR TEACH10 ERS. 

11 ‘‘(a) PURPOSE.—It is the purpose of this section to 

12 expand, subject to the availability of appropriations there13 for, the eligibility of individuals to qualify for loan forgive14 ness for teachers beyond that available under section 

15 428J, in order to provide additional incentives for such 

16 individuals to enter and continue in the teaching profes17 sion. 

18 ‘‘(b) PROGRAM AUTHORIZED.—

19 ‘‘(1) IN GENERAL.—From the sums appro20 priated pursuant to subsection (i), the Secretary 

21 shall carry out a program, through the holder of the 

22 loan, of assuming the obligation to repay a qualified 

23 loan amount for a loan made under section 428 or 

24 428H, in accordance with subsection (c), for any 

25 new borrower on or after October 1, 1998, who is 
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1 not eligible for loan forgiveness under section 428J, 

2 but who— 

3 ‘‘(A) is employed as a full-time teacher—

4 ‘‘(i) in a public elementary or sec5 ondary school; 

6 ‘‘(ii) if employed as a secondary school 

7 teacher, is teaching a subject area that is 

8 relevant to the borrower’s academic major 

9 as certified by the chief administrative offi10 cer of the public secondary school in which 

11 the borrower is employed; and 

12 ‘‘(iii) if employed as an elementary 

13 school teacher, has demonstrated, as cer14 tified by the chief administrative officer of 

15 the public elementary school in which the 

16 borrower is employed, knowledge and 

17 teaching skills in reading, writing, mathe18 matics, or other areas of the elementary 

19 school curriculum; 

20 ‘‘(B) has a State certification (which may 

21 include certification obtained through alter22 native means) or a State license to teach, and 

23 has not failed to comply with State or local ac24 countability standards; and
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1 ‘‘(C) is not in default on a loan for which 

2 the borrower seeks forgiveness. 

3 ‘‘(2) SELECTION OF RECIPIENTS.—The Sec4 retary shall by regulations, establish a formula that 

5 ensures fairness and equality for applicants in the 

6 selection of borrowers for loan repayment under this 

7 section, based on the amount available pursuant to 

8 subsection (i). 

9 ‘‘(c) QUALIFIED LOANS AMOUNT.—

10 ‘‘(1) IN GENERAL.—The Secretary shall repay 

11 not more than the percentage specified in paragraph 

12 (2) of the loan obligation on a loan made under sec13 tion 428 or 428H that is outstanding after the com14 pletion of each complete school year of teaching de15 scribed in subsection (b)(1). No borrower may re16 ceive a reduction of loan obligations under both this 

17 section and section 460. 

18 ‘‘(2) PERCENTAGE ELIGIBLE.—The percent of 

19 the loan obligation which the Secretary shall repay 

20 under paragraph (1) of this subsection is—

21 ‘‘(A) in the case of teaching in a school 

22 that qualifies under section 465(a)(2)(A) for 

23 loan cancellation for Perkins loan recipients 

24 who teach in such schools, 25 percent for the
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1 first or second year of such service, and 50 per2 cent for the third year of such service; or 

3 ‘‘(B) in the case of any other public ele4 mentary or secondary school, 15 percent for the 

5 first or second year of such service, 20 percent 

6 for the third or fourth year of such service, and 

7 30 percent for the fifth year of such service. 

8 ‘‘(3) TREATMENT OF CONSOLIDATION LOANS.—

9 A loan amount for a loan made under section 428C 

10 may be a qualified loan amount for the purposes of 

11 this subsection only to the extent that such loan 

12 amount was used to repay a Federal Direct Stafford 

13 Loan, a Federal Direct Unsubsidized Stafford Loan, 

14 or a loan made under section 428 or 428H for a 

15 borrower who meets the requirements of subsection 

16 (b), as determined in accordance with regulations 

17 prescribed by the Secretary. 

18 ‘‘(4) TREATMENT OF YEARS OF SERVICE FOR

19 CONTINUING EDUCATION LOANS.—For purposes of 

20 paragraph (2), the year of service is determined on 

21 the basis of the academic year that the borrower 

22 began the service as a full-time teacher, except that 

23 in the case of a borrower who incurs a loan obliga24 tion for continuing education expenses while teach25 ing, the year of service is determined on the basis 
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1 of the academic year following the academic year for 

2 which the loan obligation was incurred. 

3 ‘‘(d) REGULATIONS.—The Secretary is authorized to 

4 issue such regulations as may be necessary to carry out 

5 the provisions of this section. 

6 ‘‘(e) CONSTRUCTION.—Nothing in this section shall 

7 be construed to authorize any refunding of any repayment 

8 of a loan. 

9 ‘‘(f ) LIST.—If the list of schools in which a teacher 

10 may perform service pursuant to subsection (c)(2)(A) is 

11 not available before May 1 of any year, the Secretary may 

12 use the list for the year preceding the year for which the 

13 determination is made to make such service determination. 

14 ‘‘(g) ADDITIONAL ELIGIBILITY PROVISIONS.—

15 ‘‘(1) CONTINUED ELIGIBILITY.—Any teacher 

16 who performs service in a school that—

17 ‘‘(A) meets the requirements of subsection 

18 (b)(1)(A) in any year during such service; and 

19 ‘‘(B) in a subsequent year fails to meet the 

20 requirements of such subsection, 

21 may continue to teach in such school and shall be 

22 eligible for loan forgiveness pursuant to subsection 

23 (b). 

24 ‘‘(2) PREVENTION OF DOUBLE BENEFITS.—No 

25 borrower may, for the same service, receive a benefit 
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1 under both this section and subtitle D of title I of 

2 the National and Community Service Act of 1990 

3 (42 U.S.C. 12571 et seq.). 

4 ‘‘(h) DEFINITION.—For purposes of this section, the 

5 term ‘year’, where applied to service as a teacher, means 

6 an academic year as defined by the Secretary. 

7 ‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There 

8 are authorized to be appropriated to carry out this section 

9 such sums as may be necessary for fiscal year 2002 and 

10 each of the 5 succeeding fiscal years.’’. 

11 (b) DIRECT STUDENT LOANS.—Part D of title IV of 

12 the Higher Education Act of 1965 is amended by inserting 

13 after section 460 the following new section: 

14 ‘‘SEC. 460A. EXPANDED LOAN FORGIVENESS FOR TEACH15 ERS. 

16 ‘‘(a) PURPOSE.—It is the purpose of this section to 

17 expand, subject to the availability of appropriations there18 for, the eligibility of individuals to qualify for loan forgive19 ness for teachers beyond that available under section 460, 

20 in order to provide additional incentives for such individ21 uals to enter and continue in the teaching profession. 

22 ‘‘(b) PROGRAM AUTHORIZED.—

23 ‘‘(1) IN GENERAL.—From the sums appro24 priated pursuant to subsection (i), the Secretary 

25 shall carry out canceling the obligation to repay a
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1 qualified loan amount in accordance with subsection 

2 (c) for Federal Direct Stafford Loans and Federal 

3 Direct Unsubsidized Stafford Loans made under this 

4 part for any new borrower on or after October 1, 

5 1998, who is not eligible for loan forgiveness under 

6 section 460, but who— 

7 ‘‘(A) is employed as a full-time teacher—

8 ‘‘(i) in a public elementary or sec9 ondary school; 

10 ‘‘(ii) if employed as a secondary school 

11 teacher, is teaching a subject area that is 

12 relevant to the borrower’s academic major 

13 as certified by the chief administrative offi14 cer of the public secondary school in which 

15 the borrower is employed; and 

16 ‘‘(iii) if employed as an elementary 

17 school teacher, has demonstrated, as cer18 tified by the chief administrative officer of 

19 the public elementary school in which the 

20 borrower is employed, knowledge and 

21 teaching skills in reading, writing, mathe22 matics, or other areas of the elementary 

23 school curriculum;

24 ‘‘(B) has a State certification (which may 

25 include certification obtained through alter-
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1 native means) or a State license to teach, and 

2 has not failed to comply with State or local ac3 countability standards; and 

4 ‘‘(C) is not in default on a loan for which 

5 the borrower seeks forgiveness. 

6 ‘‘(2) SELECTION OF RECIPIENTS.—The Sec7 retary shall by regulations, establish a formula that 

8 ensures fairness and equality for applicants in the 

9 selection of borrowers for loan repayment under this 

10 section, based on the amount available pursuant to 

11 subsection (i). 

12 ‘‘(c) QUALIFIED LOANS AMOUNT.—

13 ‘‘(1) IN GENERAL.—The Secretary shall cancel 

14 not more than the percentage specified in paragraph 

15 (2) of the loan obligation on a loan made under this 

16 part that is outstanding after the completion of each 

17 complete school year of teaching described in sub18 section (b)(1). No borrower may receive a reduction 

19 of loan obligations under both this section and sec20 tion 428J. 

21 ‘‘(2) PERCENTAGE ELIGIBLE.—The percent of 

22 the loan obligation which the Secretary shall cancel 

23 under paragraph (1) of this subsection is—

24 ‘‘(A) in the case of teaching in a school 

25 that qualifies under section 465(a)(2)(A) for
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1 loan cancellation for Perkins loan recipients 

2 who teach in such schools, 25 percent for the 

3 first or second year of such service, and 50 per4 cent for the third year of such service; or 

5 ‘‘(B) in the case of any other public ele6 mentary or secondary school, 15 percent for the 

7 first or second year of such service, 20 percent 

8 for the third or fourth year of such service, and 

9 30 percent for the fifth year of such service. 

10 ‘‘(3) TREATMENT OF CONSOLIDATION LOANS.—

11 A loan amount for a Federal Direct Consolidation 

12 Loan may be a qualified loan amount for the pur13 poses of this subsection only to the extent that such 

14 loan amount was used to repay a Federal Direct 

15 Stafford Loan, a Federal Direct Unsubsidized Staf16 ford Loan, or a loan made under section 428 or 

17 428H for a borrower who meets the requirements of 

18 subsection (b), as determined in accordance with 

19 regulations prescribed by the Secretary. 

20 ‘‘(4) TREATMENT OF YEARS OF SERVICE FOR

21 CONTINUING EDUCATION LOANS.—For purposes of 

22 paragraph (2), the year of service is determined on 

23 the basis of the academic year that the borrower 

24 began the service as a full-time teacher, except that 

25 in the case of a borrower who incurs a loan obliga-
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1 tion for continuing education expenses while teach2 ing, the year of service is determined on the basis 

3 of the academic year following the academic year for 

4 which the loan obligation was incurred. 

5 ‘‘(d) REGULATIONS.—The Secretary is authorized to 

6 issue such regulations as may be necessary to carry out 

7 the provisions of this section. 

8 ‘‘(e) CONSTRUCTION.—Nothing in this section shall 

9 be construed to authorize any refunding of any repayment 

10 of a loan. 

11 ‘‘(f ) LIST.—If the list of schools in which a teacher 

12 may perform service pursuant to subsection (c)(2)(A) is 

13 not available before May 1 of any year, the Secretary may 

14 use the list for the year preceding the year for which the 

15 determination is made to make such service determination. 

16 ‘‘(g) ADDITIONAL ELIGIBILITY PROVISIONS.—

17 ‘‘(1) CONTINUED ELIGIBILITY.—Any teacher 

18 who performs service in a school that—

19 ‘‘(A) meets the requirements of subsection 

20 (b)(1)(A) in any year during such service; and 

21 ‘‘(B) in a subsequent year fails to meet the 

22 requirements of such subsection, 

23 may continue to teach in such school and shall be 

24 eligible for loan forgiveness pursuant to subsection 

25 (b). 
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1 ‘‘(2) PREVENTION OF DOUBLE BENEFITS.—No 

2 borrower may, for the same service, receive a benefit 

3 under both this section and subtitle D of title I of 

4 the National and Community Service Act of 1990 

5 (42 U.S.C. 12571 et seq.). 

6 ‘‘(h) DEFINITION.—For purposes of this section, the 

7 term ‘year’, where applied to service as a teacher, means 

8 an academic year as defined by the Secretary. 

9 ‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There 

10 are authorized to be appropriated to carry out this section 

11 such sums as may be necessary for fiscal year 2002 and 

12 each of the 5 succeeding fiscal years.’’. 

13 SEC. 3. NO INCOME TAX BY REASON OF LOAN FORGIVE14 NESS. 

15 Subsection (f) of section 108 of the Internal Revenue 

16 Code of 1986 is amended by adding at the end the fol17 lowing new paragraph: 

18 ‘‘(4) LOAN FORGIVENESS FOR TEACHERS.—In 

19 the case of an individual, gross income does not in20 clude any amount which (but for this paragraph) 

21 would be includible in gross income by reason of the 

22 discharge (in whole or in part) of any loan if such 

23 discharge was pursuant to section 428J, 428K, 460, 

24 or 460A of the Higher Education Act of 1965 (20 
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1 U.S.C. 1078–10), as in effect on the date of the en2 actment of this paragraph.’’

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