Taxpayer-Teacher Protection Act of 2004
PL 108-409 (H.R.5186), enacted 10/30/2004

118 STAT. 2299
PUBLIC LAW 108–409—OCT. 30, 2004
Public Law 108–409
108th Congress
An Act
To reduce certain special allowance payments and provide additional teacher loan
forgiveness on Federal student loans.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Taxpayer-Teacher Protection
Act of 2004’’.
SEC. 2. REDUCTION OF SPECIAL ALLOWANCE PAYMENTS FOR LOANS
FROM THE PROCEEDS OF TAX EXEMPT ISSUES.
Section 438(b)(2)(B) (20 U.S.C. 1087–1(b)(2)(B)) is amended—
(1) in clause (i), by striking ‘‘this division’’ and inserting
‘‘this clause’’;
(2) in clause (ii), by striking ‘‘division (i) of this subpara-
graph’’ and inserting ‘‘clause (i) of this subparagraph’’;
(3) in clause (iv), by inserting ‘‘or refunded after September
30, 2004, and before January 1, 2006,’’ after ‘‘October 1, 1993,’’;
and
(4) by adding at the end the following new clause:
‘‘(v) Notwithstanding clauses (i) and (ii), the quarterly rate
of the special allowance shall be the rate determined under
subparagraph (A), (E), (F), (G), (H), or (I) of this paragraph,
or paragraph (4), as the case may be, for a holder of loans
that—
‘‘(I) were made or purchased with funds—
‘‘(aa) obtained from the issuance of obligations the
income from which is excluded from gross income under
the Internal Revenue Code of 1986 and which obliga-
tions were originally issued before October 1, 1993;
or
‘‘(bb) 
obtained 
from 
collections 
or 
default
reimbursements on, or interest or other income per-
taining to, eligible loans made or purchased with funds
described in division (aa), or from income on the invest-
ment of such funds; and
‘‘(II) are—
‘‘(aa) financed by such an obligation that, after
September 30, 2004, and before January 1, 2006, has
matured or been retired or defeased;
‘‘(bb) refinanced after September 30, 2004, and
before January 1, 2006, with funds obtained from a
source other than funds described in subclause (I) of
this clause; or
Taxpayer-
Teacher
Protection Act
of 2004.
20 USC 1001
note.
Oct. 30, 2004
[H.R. 5186]
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118 STAT. 2300
PUBLIC LAW 108–409—OCT. 30, 2004
‘‘(cc) sold or transferred to any other holder after
September 30, 2004, and before January 1, 2006.’’.
SEC. 3. LOAN FORGIVENESS FOR TEACHERS.
(a) IMPLEMENTING
HIGHLY
QUALIFIED
TEACHER
REQUIRE-
MENTS.—
(1) AMENDMENTS.—
(A) FFEL LOANS.—Section 428J(b)(1) of the Higher
Education Act of 1965 (20 U.S.C. 1078–10(b)(1)) is
amended—
(i) in subparagraph (A), by inserting ‘‘and’’ after
the semicolon; and
(ii) by striking subparagraphs (B) and (C) and
inserting the following:
‘‘(B) if employed as an elementary school or secondary
school teacher, is highly qualified as defined in section
9101 of the Elementary Secondary Education Act of 1965;
and’’.
(B) DIRECT LOANS.—Section 460(b)(1)(A) of such Act
(20 U.S.C. 1087j(b)(1)(A)) is amended—
(i) in clause (i), by inserting ‘‘and’’ after the semi-
colon; and
(ii) by striking clauses (ii) and (iii) and inserting
the following:
‘‘(ii) if employed as an elementary school or sec-
ondary school teacher, is highly qualified as defined
in section 9101 of the Elementary and Secondary Edu-
cation Act of 1965; and’’.
(2) TRANSITION RULE.—
(A) RULE.—The amendments made by paragraph (1)
of this subsection to sections 428J(b)(1) and 460(b)(1)(A)
of the Higher Education Act of 1965 shall not be applied
to disqualify any individual who, before the date of enact-
ment of this Act, commenced service that met and continues
to meet the requirements of such sections as such sections
were in effect on the day before the date of enactment
of this Act.
(B) RULE
NOT
APPLICABLE
TO
INCREASED
QUALIFIED
LOAN AMOUNTS.—Subparagraph (A) of this paragraph shall
not apply for purposes of obtaining increased qualified loan
amounts under sections 428J(c)(3) and 460(c)(3) of the
Higher Education Act of 1965 as added by subsection (b)
of this section.
(b) ADDITIONAL AMOUNTS ELIGIBLE TO BE REPAID.—
(1) FFEL LOANS.—Section 428J(c) of the Higher Education
Act of 1965 (20 U.S.C. 1078–10(c)) is amended by adding at
the end the following:
‘‘(3) ADDITIONAL AMOUNTS FOR TEACHERS IN MATHEMATICS,
SCIENCE, OR SPECIAL EDUCATION.—Notwithstanding the amount
specified in paragraph (1), the aggregate amount that the Sec-
retary shall repay under this section shall be not more than
$17,500 in the case of—
‘‘(A) a secondary school teacher—
‘‘(i) who meets the requirements of subsection (b);
and
20 USC 1078–10
note.
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118 STAT. 2301
PUBLIC LAW 108–409—OCT. 30, 2004
‘‘(ii) whose qualifying employment for purposes of
such subsection is teaching mathematics or science
on a full-time basis; and
‘‘(B) an elementary school or secondary school teacher—
‘‘(i) who meets the requirements of subsection (b);
‘‘(ii) whose qualifying employment for purposes of
such subsection is as a special education teacher whose
primary responsibility is to provide special education
to children with disabilities (as those terms are defined
in section 602 of the Individuals with Disabilities Edu-
cation Act); and
‘‘(iii) who, as certified by the chief administrative
officer of the public or non-profit private elementary
school or secondary school in which the borrower is
employed, is teaching children with disabilities that
correspond with the borrower’s special education
training and has demonstrated knowledge and teaching
skills in the content areas of the elementary school
or secondary school curriculum that the borrower is
teaching.’’.
(2) DIRECT LOANS.—Section 460(c) of the Higher Education
Act of 1965 (20 U.S.C. 1087j(c)) is amended by adding at
the end the following:
‘‘(3) ADDITIONAL AMOUNTS FOR TEACHERS IN MATHEMATICS,
SCIENCE, OR SPECIAL EDUCATION.—Notwithstanding the amount
specified in paragraph (1), the aggregate amount that the Sec-
retary shall cancel under this section shall be not more than
$17,500 in the case of—
‘‘(A) a secondary school teacher—
‘‘(i) who meets the requirements of subsection
(b)(1); and
‘‘(ii) whose qualifying employment for purposes of
such subsection is teaching mathematics or science
on a full-time basis; and
‘‘(B) an elementary school or secondary school teacher—
‘‘(i) who meets the requirements of subsection
(b)(1);
‘‘(ii) whose qualifying employment for purposes of
such subsection is as a special education teacher whose
primary responsibility is to provide special education
to children with disabilities (as those terms are defined
in section 602 of the Individuals with Disabilities Edu-
cation Act); and
‘‘(iii) who, as certified by the chief administrative
officer of the public or non-profit private elementary
school or secondary school in which the borrower is
employed, is teaching children with disabilities that
correspond with the borrower’s special education
training and has demonstrated knowledge and teaching
skills in the content areas of the elementary school
or secondary school curriculum that the borrower is
teaching.’’.
(3) EFFECTIVE DATE.—The amendments made by this sub-
section shall apply only with respect to eligible individuals
who are new borrowers (as such term is defined in 103 of
the Higher Education Act of 1965 (20 U.S.C. 1003)) on or
after October 1, 1998, and before October 1, 2005.
Applicability.
20 USC 1078–10
note.
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118 STAT. 2302
PUBLIC LAW 108–409—OCT. 30, 2004
LEGISLATIVE HISTORY—H.R. 5186:
CONGRESSIONAL RECORD, Vol. 150 (2004):
Oct. 7, considered and passed House.
Oct. 9, considered and passed Senate.
(c) INFORMATION ON BENEFITS TO RURAL SCHOOL DISTRICTS.—
The Secretary shall—
(1) notify local educational agencies eligible to participate
in the Small Rural Achievement Program authorized under
subpart 1 of part B of title VI of the Elementary and Secondary
Education Act of 1965 of the benefits available under the
amendments made by this section; and
(2) encourage such agencies to notify their teachers of
such benefits.
Approved October 30, 2004.
20 USC 1078–10
note.
Notification.
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