108TH CONGRESS 

2D SESSION H. R. 5186 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 7, 2004 

Received 

AN ACT 

To reduce certain special allowance payments and provide 

additional teacher loan forgiveness on Federal student loans. 

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

2 This Act may be cited as the ‘‘Taxpayer-Teacher Pro3 tection Act of 2004’’. 

4 SEC. 2. REDUCTION OF SPECIAL ALLOWANCE PAYMENTS 

5 FOR LOANS FROM THE PROCEEDS OF TAX EX6 EMPT ISSUES. 

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

8 amended— 

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

10 inserting ‘‘this clause’’; 

11 (2) in clause (ii), by striking ‘‘division (i) of this 

12 subparagraph’’ and inserting ‘‘clause (i) of this sub13 paragraph’’; 

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

15 after September 30, 2004, and before January 1, 

16 2006,’’ after ‘‘October 1, 1993,’’; and 

17 (4) by adding at the end the following new 

18 clause: 

19 ‘‘(v) Notwithstanding clauses (i) and (ii), the 

20 quarterly rate of the special allowance shall be the 

21 rate determined under subparagraph (A), (E), (F), 

22 (G), (H), or (I) of this paragraph, or paragraph (4), 

23 as the case may be, for a holder of loans that— 

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

25 ‘‘(aa) obtained from the issuance of 

26 obligations the income from which is ex-
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1 cluded from gross income under the Inter2 nal Revenue Code of 1986 and which obli3 gations were originally issued before Octo4 ber 1, 1993; or 

5 ‘‘(bb) obtained from collections or de6 fault reimbursements on, or interest or 

7 other income pertaining to, eligible loans 

8 made or purchased with funds described in 

9 division (aa), or from income on the invest10 ment of such funds; and 

11 ‘‘(II) are— 

12 ‘‘(aa) financed by such an obligation 

13 that, after September 30, 2004, and before 

14 January 1, 2006, has matured or been re15 tired or defeased; 

16 ‘‘(bb) refinanced after September 30, 

17 2004, and before January 1, 2006, with 

18 funds obtained from a source other than 

19 funds described in subclause (I) of this 

20 clause; or 

21 ‘‘(cc) sold or transferred to any other 

22 holder after September 30, 2004, and be23 fore January 1, 2006.’’. 
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1 SEC. 3. LOAN FORGIVENESS FOR TEACHERS. 

2 (a) IMPLEMENTING HIGHLY QUALIFIED TEACHER

3 REQUIREMENTS.— 

4 (1) AMENDMENTS.— 

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

6 the Higher Education Act of 1965 (20 U.S.C. 

7 1078–10(b)(1)) is amended— 

8 (i) in subparagraph (A), by inserting 

9 ‘‘and’’ after the semicolon; and 

10 (ii) by striking subparagraphs (B) and 

11 (C) and inserting the following: 

12 ‘‘(B) if employed as an elementary school 

13 or secondary school teacher, is highly qualified 

14 as defined in section 9101 of the Elementary 

15 Secondary Education Act of 1965; and’’. 

16 (B) DIRECT LOANS.—Section 460(b)(1)(A) 

17 of such Act (20 U.S.C. 1087j(b)(1)(A)) is 

18 amended— 

19 (i) in clause (i), by inserting ‘‘and’’ 

20 after the semicolon; and 

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

22 and inserting the following: 

23 ‘‘(ii) if employed as an elementary 

24 school or secondary school teacher, is high25 ly qualified as defined in section 9101 of 
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1 the Elementary and Secondary Education 

2 Act of 1965; and’’. 

3 (2) TRANSITION RULE.— 

4 (A) RULE.—The amendments made by 

5 paragraph (1) of this subsection to sections 

6 428J(b)(1) and 460(b)(1)(A) of the Higher 

7 Education Act of 1965 shall not be applied to 

8 disqualify any individual who, before the date of 

9 enactment of this Act, commenced service that 

10 met and continues to meet the requirements of 

11 such sections as such sections were in effect on 

12 the day before the date of enactment of this 

13 Act. 

14 (B) RULE NOT APPLICABLE TO INCREASED

15 QUALIFIED LOAN AMOUNTS.—Subparagraph 

16 (A) of this paragraph shall not apply for pur17 poses of obtaining increased qualified loan 

18 amounts under sections 428J(c)(3) and 

19 460(c)(3) of the Higher Education Act of 1965 

20 as added by subsection (b) of this section. 

21 (b) ADDITIONAL AMOUNTS ELIGIBLE TO BE RE22 PAID.— 

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

24 Higher Education Act of 1965 (20 U.S.C. 1078– 
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1 10(c)) is amended by adding at the end the fol2 lowing: 

3 ‘‘(3) ADDITIONAL AMOUNTS FOR TEACHERS IN

4 MATHEMATICS, SCIENCE, OR SPECIAL EDUCATION.— 

5 Notwithstanding the amount specified in paragraph 

6 (1), the aggregate amount that the Secretary shall 

7 repay under this section shall be not more than 

8 $17,500 in the case of— 

9 ‘‘(A) a secondary school teacher— 

10 ‘‘(i) who meets the requirements of 

11 subsection (b); and 

12 ‘‘(ii) whose qualifying employment for 

13 purposes of such subsection is teaching 

14 mathematics or science on a full-time 

15 basis; and 

16 ‘‘(B) an elementary school or secondary 

17 school teacher— 

18 ‘‘(i) who meets the requirements of 

19 subsection (b); 

20 ‘‘(ii) whose qualifying employment for 

21 purposes of such subsection is as a special 

22 education teacher whose primary responsi23 bility is to provide special education to 

24 children with disabilities (as those terms 
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1 are defined in section 602 of the Individ2 uals with Disabilities Education Act); and 

3 ‘‘(iii) who, as certified by the chief ad4 ministrative officer of the public or non5 profit private elementary school or sec6 ondary school in which the borrower is em7 ployed, is teaching children with disabilities 

8 that correspond with the borrower’s special 

9 education training and has demonstrated 

10 knowledge and teaching skills in the con11 tent areas of the elementary school or sec12 ondary school curriculum that the bor13 rower is teaching.’’. 

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

15 Higher Education Act of 1965 (20 U.S.C. 1087j(c)) 

16 is amended by adding at the end the following: 

17 ‘‘(3) ADDITIONAL AMOUNTS FOR TEACHERS IN

18 MATHEMATICS, SCIENCE, OR SPECIAL EDUCATION.— 

19 Notwithstanding the amount specified in paragraph 

20 (1), the aggregate amount that the Secretary shall 

21 cancel under this section shall be not more than 

22 $17,500 in the case of— 

23 ‘‘(A) a secondary school teacher— 

24 ‘‘(i) who meets the requirements of 

25 subsection (b)(1); and 
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1 ‘‘(ii) whose qualifying employment for 

2 purposes of such subsection is teaching 

3 mathematics or science on a full-time 

4 basis; and 

5 ‘‘(B) an elementary school or secondary 

6 school teacher— 

7 ‘‘(i) who meets the requirements of 

8 subsection (b)(1); 

9 ‘‘(ii) whose qualifying employment for 

10 purposes of such subsection is as a special 

11 education teacher whose primary responsi12 bility is to provide special education to 

13 children with disabilities (as those terms 

14 are defined in section 602 of the Individ15 uals with Disabilities Education Act); and 

16 ‘‘(iii) who, as certified by the chief ad17 ministrative officer of the public or non18 profit private elementary school or sec19 ondary school in which the borrower is em20 ployed, is teaching children with disabilities 

21 that correspond with the borrower’s special 

22 education training and has demonstrated 

23 knowledge and teaching skills in the con24 tent areas of the elementary school or sec-
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1 ondary school curriculum that the bor2 rower is teaching.’’. 

3 (3) EFFECTIVE DATE.—The amendments made 

4 by this subsection shall apply only with respect to el5 igible individuals who are new borrowers (as such 

6 term is defined in 103 of the Higher Education Act 

7 of 1965 (20 U.S.C. 1003)) on or after October 1, 

8 1998, and before October 1, 2005. 

9 (c) INFORMATION ON BENEFITS TO RURAL SCHOOL

10 DISTRICTS.—The Secretary shall— 

11 (1) notify local educational agencies eligible to 

12 participate in the Small Rural Achievement Program 

13 authorized under subpart 1 of part B of title VI of 

14 the Elementary and Secondary Education Act of 

15 1965 of the benefits available under the amendments 

16 made by this section; and 

17 (2) encourage such agencies to notify their 

18 teachers of such benefits. 

Passed the House of Representatives October 7, 

2004. 

Attest: JEFF TRANDAHL, 

Clerk.