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.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Teachers For Tomor-
row Act of 2003’’.
SEC. 2. REVISION OF TEACHER LOAN FORGIVENESS PRO-
GRAMS. 
(a) GUARANTEED STUDENT LOANS.—Part B of title 
IV of the Higher Education Act of 1965 is amended by—
(1) redesignating section 428K (20 U.S.C. 
1078–11) as section 428L; and 
(2) by inserting after section 428J the following 
new section: 
‘‘SEC. 428K. EXPANDED LOAN FORGIVENESS FOR TEACH-
ERS. 
‘‘(a) PURPOSE.—It is the purpose of this section to 
expand, subject to the availability of appropriations there-
for, the eligibility of individuals to qualify for loan forgive-
ness for teachers beyond that available under section 
428J, in order to provide additional incentives for such 
individuals to enter and continue in the teaching profes-
sion. 
‘‘(b) PROGRAM AUTHORIZED.—
‘‘(1) IN
GENERAL.—From the sums appro-
priated pursuant to subsection (i), the Secretary 
shall carry out a program, through the holder of the 
loan, of assuming the obligation to repay a qualified 
loan amount for a loan made under section 428 or 
428H, in accordance with subsection (c), for any 
new borrower on or after October 1, 1998, who is
not eligible for loan forgiveness under section 428J, 
but who— 
‘‘(A) is employed as a full-time teacher—
‘‘(i) in a public elementary or sec-
ondary school; 
‘‘(ii) if employed as a secondary school 
teacher, is teaching a subject area that is 
relevant to the borrower’s academic major 
as certified by the chief administrative offi-
cer of the public secondary school in which 
the borrower is employed; and 
‘‘(iii) if employed as an elementary 
school teacher, has demonstrated, as cer-
tified by the chief administrative officer of 
the public elementary school in which the 
borrower is employed, knowledge and 
teaching skills in reading, writing, mathe-
matics, or other areas of the elementary 
school curriculum; 
‘‘(B) has a State certification (which may 
include certification obtained through alter-
native means) or a State license to teach, and 
has not failed to comply with State or local ac-
countability standards; and
‘‘(C) is not in default on a loan for which 
the borrower seeks forgiveness. 
‘‘(2) SELECTION
OF
RECIPIENTS.—The Sec-
retary shall by regulations, establish a formula that 
ensures fairness and equality for applicants in the 
selection of borrowers for loan repayment under this 
section, based on the amount available pursuant to 
subsection (i). 
‘‘(c) QUALIFIED LOANS AMOUNT.—
‘‘(1) IN GENERAL.—The Secretary shall repay 
not more than the percentage specified in paragraph 
(2) of the loan obligation on a loan made under sec-
tion 428 or 428H that is outstanding after the com-
pletion of each complete school year of teaching de-
scribed in subsection (b)(1). No borrower may re-
ceive a reduction of loan obligations under both this 
section and section 460. 
‘‘(2) PERCENTAGE ELIGIBLE.—The percent of 
the loan obligation which the Secretary shall repay 
under paragraph (1) of this subsection is—
‘‘(A) in the case of teaching in a school 
that qualifies under section 465(a)(2)(A) for 
loan cancellation for Perkins loan recipients 
who teach in such schools, 25 percent for the
first or second year of such service, and 50 per-
cent for the third year of such service; or 
‘‘(B) in the case of any other public ele-
mentary or secondary school, 15 percent for the 
first or second year of such service, 20 percent 
for the third or fourth year of such service, and 
30 percent for the fifth year of such service. 
‘‘(3) TREATMENT OF CONSOLIDATION LOANS.—
A loan amount for a loan made under section 428C 
may be a qualified loan amount for the purposes of 
this subsection only to the extent that such loan 
amount was used to repay a Federal Direct Stafford 
Loan, a Federal Direct Unsubsidized Stafford Loan, 
or a loan made under section 428 or 428H for a 
borrower who meets the requirements of subsection 
(b), as determined in accordance with regulations 
prescribed by the Secretary. 
‘‘(4) TREATMENT OF YEARS OF SERVICE FOR 
CONTINUING EDUCATION LOANS.—For purposes of 
paragraph (2), the year of service is determined on 
the basis of the academic year that the borrower 
began the service as a full-time teacher, except that 
in the case of a borrower who incurs a loan obliga-
tion for continuing education expenses while teach-
ing, the year of service is determined on the basis
of the academic year following the academic year for 
which the loan obligation was incurred. 
‘‘(d) REGULATIONS.—The Secretary is authorized to 
issue such regulations as may be necessary to carry out 
the provisions of this section. 
‘‘(e) CONSTRUCTION.—Nothing in this section shall 
be construed to authorize any refunding of any repayment 
of a loan. 
‘‘(f ) LIST.—If the list of schools in which a teacher 
may perform service pursuant to subsection (c)(2)(A) is 
not available before May 1 of any year, the Secretary may 
use the list for the year preceding the year for which the 
determination is made to make such service determination. 
‘‘(g) ADDITIONAL ELIGIBILITY PROVISIONS.—
‘‘(1) CONTINUED
ELIGIBILITY.—Any teacher 
who performs service in a school that—
‘‘(A) meets the requirements of subsection 
(b)(1)(A) in any year during such service; and 
‘‘(B) in a subsequent year fails to meet the 
requirements of such subsection, 
may continue to teach in such school and shall be 
eligible for loan forgiveness pursuant to subsection 
(b). 
‘‘(2) PREVENTION OF DOUBLE BENEFITS.—No 
borrower may, for the same service, receive a benefit
under both this section and subtitle D of title I of 
the National and Community Service Act of 1990 
(42 U.S.C. 12571 et seq.). 
‘‘(h) DEFINITION.—For purposes of this section, the 
term ‘year’, where applied to service as a teacher, means 
an academic year as defined by the Secretary. 
‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this section 
such sums as may be necessary for fiscal year 2002 and 
each of the 5 succeeding fiscal years.’’. 
(b) DIRECT STUDENT LOANS.—Part D of title IV of 
the Higher Education Act of 1965 is amended by inserting 
after section 460 the following new section: 
‘‘SEC. 460A. EXPANDED LOAN FORGIVENESS FOR TEACH-
ERS. 
‘‘(a) PURPOSE.—It is the purpose of this section to 
expand, subject to the availability of appropriations there-
for, the eligibility of individuals to qualify for loan forgive-
ness for teachers beyond that available under section 460, 
in order to provide additional incentives for such individ-
uals to enter and continue in the teaching profession. 
‘‘(b) PROGRAM AUTHORIZED.—
‘‘(1) IN
GENERAL.—From the sums appro-
priated pursuant to subsection (i), the Secretary 
shall carry out canceling the obligation to repay a
qualified loan amount in accordance with subsection 
(c) for Federal Direct Stafford Loans and Federal 
Direct Unsubsidized Stafford Loans made under this 
part for any new borrower on or after October 1, 
1998, who is not eligible for loan forgiveness under 
section 460, but who— 
‘‘(A) is employed as a full-time teacher—
‘‘(i) in a public elementary or sec-
ondary school; 
‘‘(ii) if employed as a secondary school 
teacher, is teaching a subject area that is 
relevant to the borrower’s academic major 
as certified by the chief administrative offi-
cer of the public secondary school in which 
the borrower is employed; and 
‘‘(iii) if employed as an elementary 
school teacher, has demonstrated, as cer-
tified by the chief administrative officer of 
the public elementary school in which the 
borrower is employed, knowledge and 
teaching skills in reading, writing, mathe-
matics, or other areas of the elementary 
school curriculum;
‘‘(B) has a State certification (which may 
include certification obtained through alter-
native means) or a State license to teach, and 
has not failed to comply with State or local ac-
countability standards; and 
‘‘(C) is not in default on a loan for which 
the borrower seeks forgiveness. 
‘‘(2) SELECTION
OF
RECIPIENTS.—The Sec-
retary shall by regulations, establish a formula that 
ensures fairness and equality for applicants in the 
selection of borrowers for loan repayment under this 
section, based on the amount available pursuant to 
subsection (i). 
‘‘(c) QUALIFIED LOANS AMOUNT.—
‘‘(1) IN GENERAL.—The Secretary shall cancel 
not more than the percentage specified in paragraph 
(2) of the loan obligation on a loan made under this 
part that is outstanding after the completion of each 
complete school year of teaching described in sub-
section (b)(1). No borrower may receive a reduction 
of loan obligations under both this section and sec-
tion 428J. 
‘‘(2) PERCENTAGE ELIGIBLE.—The percent of 
the loan obligation which the Secretary shall cancel 
under paragraph (1) of this subsection is—
‘‘(A) in the case of teaching in a school 
that qualifies under section 465(a)(2)(A) for
loan cancellation for Perkins loan recipients 
who teach in such schools, 25 percent for the 
first or second year of such service, and 50 per-
cent for the third year of such service; or 
‘‘(B) in the case of any other public ele-
mentary or secondary school, 15 percent for the 
first or second year of such service, 20 percent 
for the third or fourth year of such service, and 
30 percent for the fifth year of such service. 
‘‘(3) TREATMENT OF CONSOLIDATION LOANS.—
A loan amount for a Federal Direct Consolidation 
Loan may be a qualified loan amount for the pur-
poses of this subsection only to the extent that such 
loan amount was used to repay a Federal Direct 
Stafford Loan, a Federal Direct Unsubsidized Staf-
ford Loan, or a loan made under section 428 or 
428H for a borrower who meets the requirements of 
subsection (b), as determined in accordance with 
regulations prescribed by the Secretary. 
‘‘(4) TREATMENT OF YEARS OF SERVICE FOR 
CONTINUING EDUCATION LOANS.—For purposes of 
paragraph (2), the year of service is determined on 
the basis of the academic year that the borrower 
began the service as a full-time teacher, except that 
in the case of a borrower who incurs a loan obliga-
tion for continuing education expenses while teach-
ing, the year of service is determined on the basis 
of the academic year following the academic year for 
which the loan obligation was incurred. 
‘‘(d) REGULATIONS.—The Secretary is authorized to 
issue such regulations as may be necessary to carry out 
the provisions of this section. 
‘‘(e) CONSTRUCTION.—Nothing in this section shall 
be construed to authorize any refunding of any repayment 
of a loan. 
‘‘(f ) LIST.—If the list of schools in which a teacher 
may perform service pursuant to subsection (c)(2)(A) is 
not available before May 1 of any year, the Secretary may 
use the list for the year preceding the year for which the 
determination is made to make such service determination. 
‘‘(g) ADDITIONAL ELIGIBILITY PROVISIONS.—
‘‘(1) CONTINUED
ELIGIBILITY.—Any teacher 
who performs service in a school that—
‘‘(A) meets the requirements of subsection 
(b)(1)(A) in any year during such service; and 
‘‘(B) in a subsequent year fails to meet the 
requirements of such subsection, 
may continue to teach in such school and shall be 
eligible for loan forgiveness pursuant to subsection 
(b).
‘‘(2) PREVENTION OF DOUBLE BENEFITS.—No 
borrower may, for the same service, receive a benefit 
under both this section and subtitle D of title I of 
the National and Community Service Act of 1990 
(42 U.S.C. 12571 et seq.). 
‘‘(h) DEFINITION.—For purposes of this section, the 
term ‘year’, where applied to service as a teacher, means 
an academic year as defined by the Secretary. 
‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this section 
such sums as may be necessary for fiscal year 2002 and 
each of the 5 succeeding fiscal years.’’. 
SEC. 3. NO INCOME TAX BY REASON OF LOAN FORGIVE-
NESS. 
Subsection (f) of section 108 of the Internal Revenue 
Code of 1986 is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(4) LOAN FORGIVENESS FOR TEACHERS.—In 
the case of an individual, gross income does not in-
clude any amount which (but for this paragraph) 
would be includible in gross income by reason of the 
discharge (in whole or in part) of any loan if such 
discharge was pursuant to section 428J, 428K, 460, 
or 460A of the Higher Education Act of 1965 (20