I

106TH CONGRESS

2D SESSION H. R. 5319

To expand the teacher loan forgiveness programs under the guaranteed and

direct student loan programs, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 27, 2000

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 2000’’.
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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 or nonprofit private sec11 ondary school in which the borrower is em12 ployed; and

13 ‘‘(iii) if employed as an elementary

14 school teacher, has demonstrated, as cer15 tified by the chief administrative officer of

16 the public or nonprofit private elementary

17 school in which the borrower is employed,

18 knowledge and teaching skills in reading,

19 writing, mathematics, and other areas of

20 the elementary school curriculum;

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

22 include certification obtained through alter23 native means) or a State license to teach, and

24 has not failed to comply with State or local ac25 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 (b) is not

11 available before May 1 of any year, the Secretary may use

12 the list for the year preceding the year for which the deter13 mination 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 or nonprofit private sec15 ondary school in which the borrower is em16 ployed; and

17 ‘‘(iii) if employed as an elementary

18 school teacher, has demonstrated, as cer19 tified by the chief administrative officer of

20 the public or nonprofit private elementary

21 school in which the borrower is employed,

22 knowledge and teaching skills in reading,

23 writing, mathematics, and other areas of

24 the elementary school curriculum;
9

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

2 include certification obtained through alter3 native means) or a State license to teach, and

4 has not failed to comply with State or local ac5 countability standards; and

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

7 the borrower seeks forgiveness.

8 ‘‘(2) SELECTION OF RECIPIENTS.—The Sec9 retary shall by regulations, establish a formula that

10 ensures fairness and equality for applicants in the

11 selection of borrowers for loan repayment under this

12 section, based on the amount available pursuant to

13 subsection (i).

14 ‘‘(c) QUALIFIED LOANS AMOUNT.—

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

16 not more than the percentage specified in paragraph

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

18 part that is outstanding after the completion of each

19 complete school year of teaching described in sub20 section (b)(1). No borrower may receive a reduction

21 of loan obligations under both this section and sec22 tion 428J.

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

24 the loan obligation which the Secretary shall cancel

25 under paragraph (1) of this subsection is—
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1 ‘‘(A) in the case of teaching in a school

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

3 loan cancellation for Perkins loan recipients

4 who teach in such schools, 25 percent for the

5 first or second year of such service, and 50 per6 cent for the third year of such service; or

7 ‘‘(B) in the case of any other public ele8 mentary or secondary school, 15 percent for the

9 first or second year of such service, 20 percent

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

11 30 percent for the fifth year of such service.

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

13 A loan amount for a Federal Direct Consolidation

14 Loan may be a qualified loan amount for the pur15 poses of this subsection only to the extent that such

16 loan amount was used to repay a Federal Direct

17 Stafford Loan, a Federal Direct Unsubsidized Staf18 ford Loan, or a loan made under section 428 or

19 428H for a borrower who meets the requirements of

20 subsection (b), as determined in accordance with

21 regulations prescribed by the Secretary.

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

23 CONTINUING EDUCATION LOANS.—For purposes of

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

25 the basis of the academic year that the borrower
11

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

2 in the case of a borrower who incurs a loan obliga3 tion for continuing education expenses while teach4 ing, the year of service is determined on the basis

5 of the academic year following the academic year for

6 which the loan obligation was incurred.

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

8 issue such regulations as may be necessary to carry out

9 the provisions of this section.

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

11 be construed to authorize any refunding of any repayment

12 of a loan.

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

14 may perform service pursuant to subsection (b) is not

15 available before May 1 of any year, the Secretary may use

16 the list for the year preceding the year for which the deter17 mination is made to make such service determination.

18 ‘‘(g) ADDITIONAL ELIGIBILITY PROVISIONS.—

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

20 who performs service in a school that—

21 ‘‘(A) meets the requirements of subsection

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

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

24 requirements of such subsection,
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1 may continue to teach in such school and shall be

2 eligible for loan forgiveness pursuant to subsection

3 (b).

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

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

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

7 the National and Community Service Act of 1990

8 (42 U.S.C. 12571 et seq.).

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

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

11 an academic year as defined by the Secretary.

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

13 are authorized to be appropriated to carry out this section

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

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

16 SEC. 3. NO INCOME TAX BY REASON OF LOAN FORGIVE17 NESS

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

19 Code of 1986 is amended by adding at the end the fol20 lowing new paragraph:

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

22 the case of an individual, gross income does not in23 clude any amount which (but for this paragraph)

24 would be includible in gross income by reason of the

25 discharge (in whole or in part) of any loan if such
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1 discharge was pursuant to section 428J, 428K, 460,

2 or 460A of the Higher Education Act of 1965 (20

3 U.S.C. 1078–10), as in effect on the date of the en4 actment of this paragraph.’’

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