Recruiting and Retaining Effective School Leaders Act

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Recruiting and Retaining Effective 
School Leaders Act''.

SEC. 2. LOAN FORGIVENESS FOR PRINCIPALS IN HIGH NEEDS SCHOOLS.

    Part D of title IV of the Higher Education Act of 1965 (20 U.S.C. 
1087a et seq.) is amended by adding at the end the following:

``SEC. 460A. LOAN FORGIVENESS FOR PRINCIPALS IN HIGH NEEDS SCHOOLS.

    ``(a) Loan Forgiveness Authorized.--The Secretary shall carry out a 
program of canceling the obligation to repay a qualified loan amount in 
accordance with subsection (b) for loans made under this part, which 
were first disbursed on or after July 1, 2010, to any borrower who--
            ``(1) has graduated from a high-quality program, as 
        determined by the appropriate State agency for higher 
        education, in consultation with the Secretary;
            ``(2) has been employed as a full-time principal, as 
        defined by, for not less than 1 complete school year in a 
        school or location that qualifies under section 465(a)(2)(A) 
        for loan cancellation for Perkins loan recipients who teach in 
        such schools or locations; and
            ``(3) is not in default on a loan for which the borrower 
        seeks forgiveness.
    ``(b) Qualified Loan Amounts.--
            ``(1) In general.--
                    ``(A) First 4 years.--Subject to paragraph (2), 
                after the completion of service as a principal as 
                described in subsection (a)(2) for a complete school 
                year for any school year after the first complete 
                school year of such service through the fourth complete 
                school year of such service, the Secretary shall 
                cancel--
                            ``(i) 15 percent of the loan obligation on 
                        a loan made under this part, which was first 
                        disbursed on or after July 1, 2010; and
                            ``(ii) the total amount of interest that 
                        accrued during such school year.
                    ``(B) Succeeding years.--Subject to paragraph (2), 
                after the completion of service as a principal as 
                described in subsection (a)(2) for a complete school 
                year for any school year after the fourth complete 
                school year of such service through the seventh 
                complete school year of such service, the Secretary 
                shall cancel--
                            ``(i) 20 percent of the loan obligation on 
                        a loan made under this part, which was first 
                        disbursed on or after July 1, 2010; and
                            ``(ii) the total amount of interest that 
                        accrued during such school year.
            ``(2) Limitations.--To be eligible for loan cancellation 
        under subparagraph (A) or (B) of paragraph (1) for any school 
        year after the first complete school year of service, a 
        principal--
                    ``(A) shall be serving as a principal in the school 
                or location in which the principal served for such 
                first year, except that a principal may serve as a 
                principal in a different school or location described 
                in subsection (a)(2) for a school year after such first 
                year if the local educational agency involved places 
                the principal in such different school or location; and
                    ``(B) may stop serving as a principal for not more 
                than 1 complete school year after such first year.
            ``(3) Treatment of consolidation loans.--A loan amount for 
        a Federal Direct Consolidation Loan, which was first disbursed 
        on or after July 1, 2010, 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, a Federal Direct 
        PLUS Loan for enrollment in a graduate or professional program 
        or a loan made under section 428, 428H, or 428B for enrollment 
        in a graduate or professional program, for a borrower who meets 
        the requirements of subsection (a), as determined in accordance 
        with regulations prescribed by the Secretary.
    ``(c) List.--If the list of schools in which a high need principal 
may perform service pursuant to subsection (a)(2) 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.
    ``(d) Continuing Eligibility.--Any principal who performs service 
as in a school that--
            ``(1) meets the requirements of subsection (a)(2) in any 
        year during such service; and
            ``(2) in a subsequent year fails to meet the requirements 
        of such subsection, may continue to serve as a principal in 
        such school and shall be eligible for loan cancellation 
        pursuant to subsection (a).
    ``(e) Forgiveness Not Considered Income.--The amount of a loan, and 
interest on a loan, which is canceled under this section shall not be 
considered income for purposes of the Internal Revenue Code of 1986.
    ``(f) Construction.--Nothing in this subsection shall be construed 
to authorize refunding of any refunding of any canceled loan.
    ``(g) No Double Benefit.--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. 12601 et 
seq.).
    ``(h) Regulations.--The Secretary is authorized to issue such 
regulations as may be necessary to carry out this section.
    ``(i) Definitions.--For the purpose of this section:
            ``(1) Principal.--The term `principal' has the meaning 
        given such term in section 2102 of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 6602).
            ``(2) Year.--The term `year' where applied to service as a 
        teacher means an academic year as defined by the Secretary.''.

Summary: Recruiting and Retaining Effective School Leaders Act This bill amends title IV (Student Assistance) of the Higher Education Act of 1965 to direct the Department of Education to establish a student loan forgiveness program for school principals employed in schools where at least 30% of students meet federal poverty guidelines. Loans are forgiven over a seven-year period.