Temple University's Office of Student Financial Services

Loan Deferments and Cancellations

Both the Federal Stafford and Federal Perkins loan programs offer borrowers the opportunity to defer payment for a variety of reasons. The Deferment Table attached details the circumstances in which loan payment may be deferred. In some cases if you are working in the area of Law Enforcement, Education, Social Work, Nursing, your Federal Perkins or Federal Stafford loans may be eligible for cancellation in full or in part, below are the details on How to Apply for the cancellation provisions. Those working in the field of education may also want to check out the provisions offered in the Federal Stafford Loan Program or U.S. Department of Education. And in all circumstances your student loans will be canceled in cases of Permanent and Total Disability or Death.

LAW ENFORCEMENT CANCELLATION GUIDELINES

The Department of Education has published new guidelines concerning law enforcement cancellations for Federal Perkins loan borrowers. This new benefit was enacted with the Crime Control Act of 1990, for full-time law enforcement or corrections agencies. It is applicable to all Federal Perkins and Direct Student Loan recipients.

The cancellation rate is 15% of the principle amount of the loan for the first and second years of service. 20% for each of the third and fourth years, and 30% for the fifth year of service.

To qualify for the new loan cancellation, a full-time employee of an eligible agency must be a sworn officer or person whose principal responsibilities are unique to the criminal justice system and are essential in the performance of the agency's primary mission. The agency must be able to document the employee'' functions.

Eligible full-time law enforcement or corrections agencies must be publicly funded unit including local, state, and federal agencies. Their principle activities must include the following:
Working for campus police or security
Serving as military police
The prevention, control, or reduction of crime, or the enforcement of the criminal law including police efforts to prevent, control, or reduce crime or to apprehend criminals
Activities of courts having criminal jurisdiction and related agencies
The prevention, control, or reduction of juvenile delinquency and narcotics addiction

Agencies that are primarily responsible for enforcement of civil, regulatory, or administrative law are ineligible.

SOCIAL WORK CANCELLATION GUIDELINES

Family Service Provider

To receive loan cancellation for being employed at a child or family service agency, you must be providing services only to high-risk children who are from low-income communities. You may also receive this cancellation if you are providing services to adults but these adults must be members of the families of the children for whom the services are provided. The services provided to adults must be secondary to the services provided to high-risk children. The Department of Education has determined that an elementary or secondary school system or hospitals are not eligible employing agencies.

High-risk children: Individuals under the age of 21 who are low-income or at risk of abuse or neglect, have been abused or neglected, have serious emotional, mental, or behavioral disturbances, reside in a placement outside their homes, or are involved in the juvenile justice system.

Low-income communities: Communities in which there are a high concentration of children eligible to be counted under Title I of the Elementary and Secondary Education Act of 1965, as amended.

Early Intervention Provider

You qualify for the above cancellation if you are providing service to infants and toddlers from birth to age two, inclusive, who need early intervention services for specified reasons. This group may also include infants and toddlers that the state has decided would be at risk of having substantial developmental delays if early intervention is not provided. The Individuals with Disabilities Education Act describes this group of children as those who:

Have a diagnosed physical or mental condition which has a high probability of resulting in developmental delay; or
Are expecting developmental delays, as measured by appropriate diagnostic instruments and procedures in one or more of the following areas: cognitive, physical, or psychosocial development, or self-help skills.

Early Intervention Cancellation

To qualify for this cancellation you must be providing developmental services that are

provided under public supervision;
provided at no cost, except where federal and state law provides for system of payment by families, including a schedule of sliding fees;
designed to meet a handicapped infant's or toddler's developmental needs in any one or more of the following areas:

1. physical development
2. cognitive development
3. language and speech development
4. psychosocial development; or
5. self-help skills

in accordance with the standards of the state you are working, including requirements of:

1. family training, counseling, and home visits
2. special instruction
3. speech pathology and audiology
4. occupational therapy
5. physical therapy
6. psychological services
7. case management services
8. medical services only for diagnostic or evaluation purposes
9. early identification, screening, and assessment services;
10. and health services necessary to enable the infant or toddler to benefit from the other early intervention services
provided by qualified personnel, including

1. special educators
2. speech and language pathologists and audiologists
3. occupational therapists
4. physical therapists
5. social works
6. nurses, or
7. nutritionists
provided in conformity with an individualized family service plan adopted in accordance with Section 677 of the Individuals with Disabilities Education Act.

TEACHING CANCELLATION GUIDELINES

Head Start Teacher

Someone who is regularly employed in a full-time professional capacity to carry out the educational part of a Head Start program. The program must operate for a full academic year, or its equivalent, and the borrower's salary may not be more than that of a comparable employee working in the local educational agency.

The cancellation rate is 15% of the original principle loan amount plus the interest that accrued during the year for each completed school year.

Elementary, Secondary or Special Education School Teacher

You are eligible to have your loan canceled up to 100% for qualifying service as

A full-time teacher in a public or nonprofit elementary or secondary school serving students from low-income families (an official directory of designated low-income schools is published annually by the Department of Education); or
A full-time teacher of handicapped students in a public or nonprofit elementary or secondary school. The majority of the students you teach must be handicapped children. Handicapped students include those who are mentally retarded, hard of hearing, deaf, speech and language impaired, visually disabled, seriously emotionally disturbed, orthopedically impaired, autistic, have traumatic brain injury or specific learning disabilities, or are otherwise health-impaired children who require special education and related services because of their disabilities. A teacher of handicapped students/special education teacher is not required to teach in a low-income school to be eligible or cancellation
¨ A full-time teacher in a public or other non-profit elementary or secondary school in fields of mathematics, science, foreign languages, or bilingual education or in any other field of expertise that is determined by a state agency to have a shortage of qualified teachers in that state (for loans disbursed after July 1992).

The cancellation rate per completed academic year of teaching is:

15% of the original principle loan amount plus the interest that accrued during the year - for each of the first and second years;
20% of the original principle loan amount plus the interest that accrued during the year - for each of the third and fourth years;
30% of the original principle loan amount plus the interest that accrued during the year - for the fifth year.

Criteria for Teaching Cancellation

Eligibility for teacher cancellation is based on the duties presented in the official position description, not on the position title. To receive a cancellation you must meet the following guidelines:

Be directly employed by the school system
Provide direct classroom teaching; classroom-type teaching in a non-classroom setting; or educational services directly related to classroom teaching. This would include librarians and guidance counselors
Be a full-time teacher for the purposes of salary, tenure, retirement benefits, etc
Teach a full academic year or its equivalent. An academic year or its equivalent for teacher cancellation purposes is defined as one complete school year or two half years that are different school years, excluding summer sessions, complete, consecutive, and generally fall within a 12-month period

A supervisor, administrator, researcher, or curriculum specialist is not a teacher unless they primarily provide direct and personal educational services to students.

A person who provides on of the following services does not qualify as a teacher unless 1) they are licensed, certified, or registered by the appropriate state education agency for that area in which they are providing related special educational services, and 2) the services provided by them are part of the educational curriculum for handicapped children:

Speech and language pathology and audiology
Physical therapy
Occupational therapy
Psychological and counseling services
Recreational therapy

NURSING LOAN FORGIVENESS PROGRAM

Pennsylvania Higher Education Assistance Agency (PHEAA) announces a new Pennsylvania Nursing Loan Forgiveness Program for recently graduated nursing students.

The application deadline is December 31st.
The program may forgive up to 50 percent of a borrower's outstanding PHEAA administered federally insured student loan debt over a period of three years, not to exceed $50,000.
To participate in the program, borrowers must agree to practice professional nursing in Pennsylvania for at least three consecutive years.
If the borrower is an unlicensed recipient, they must agree to apply for a Registered Nurse's License to practice in Pennsylvania as soon as possible after completing their degree in nursing.Within six months after licensure, the borrower must begin to practice nursing in Pennsylvania on a full time basis.
In order to qualify the borrower must graduate from an approved nursing program at an approved institution after July 1, 2001 and be a Pennsylvania resident.

To learn more about the Pennsylvania Nursing Loan Forgiveness Program contact PHEAA at 800-692-7392 or online at www.pheaa.org.

HOW TO APPLY

You are eligible for postponement of payment if you are performing duties, which will subsequently qualify you for cancellation of all or part of your loan. Your postponement must be applied for at the beginning of each year of service to prevent payments from becoming past due. Interest continues to accrue during the postponement period and there is no grace period following the postponement. A postponement is not entitlement. If you do not complete the service required to receive the cancellation, you will be required to make all payments that were postponed during the partial period of service. These payments become due and payable immediately upon cessation of service.

To apply for cancellation of your loan you must complete at least one year of service as described above, prior to any payments becoming past. An authorized official of the Head Start program or an authorized official from the school district must certify all forms. They will be required to provide documentation of your duties with the certified cancellation form.

NOTE:

No portion of any loan may be canceled for services the borrower performed either before the date the loan was disbursed or during the enrollment period covered by the loan
Defaulted loan amounts are not eligible for cancellation unless the only reason for the default is failure to file for cancellation. However if the College has accelerated your account by the time you file the necessary forms, only the eligible service performed before the date of acceleration can be considered for cancellation. You will not be entitled to cancellation for any eligible service performed after the date of acceleration.
No repayment made by you during a period for which you qualify for cancellation will be refunded unless the borrower made the payment because of the School's error.
No borrower who has received an education benefit under Subtitle D of Title I of the National and Community Service Act of 1990 may receive a cancellation of a Perkins Loan.

All additional information regarding the above cancellation provisions or exceptions can be obtained from your College or the agency servicing your loan.

FEDERAL STAFFORD LOAN PROGRAM CANCELLATION PROVISIONS

Early Childhood Education Professional Loan Forgiveness Program

Provides student loan forgiveness up to $2,500 per year, and up to a total of $10,000, for qualified applicants who:

Have a Bachelor's degree and Pennsylvania early childhood certification, or an Associate's degree in early childhood education or child development
Have undergraduate student loans guaranteed by PHEAA (private and personal loans are not eligible)
Are not in default on a student loan or delinquent in any payment due any Pennsylvania agency
Are residents of Pennsylvania
Receives a salary of less than $18,500 per year in a PA DPW approved child day care center or group child day care home
Is employed as a full-time professional by a PS DPW approved child day care center or group child day care home at the time of application

For each year that you work in a PA DPW approved child day care center or group child day care home, and are selected as a participant, PHEAA will pay off up to 25% of your indebtedness, or the minimum annual payment required in order to keep the loan in good standing, whichever is larger. In no case will the annual repayment exceed $2,500 and no more than $10,000 total for any applicant. Also to keep your loan in good standing, PHEAA will make a payment twice a year for each year that you are selected following the conformation of your employment for that half of the year. Student Loan forgiveness payments are made directly to the lender of your student loans. You are responsible for making your student loan payments until PHEAA makes the first payment on your behalf.

Loan forgiveness payments are made to the extent that funds are appropriated by the Pennsylvania General Assembly. In the event that funding is insufficient for all eligible applicants, a random lottery will be used to determine which applicants will receive awards.

Any applications received after December 1, 1995 will be considered only if funds are available. To request an application or if there are any questions, please contact:

PHEAA
Special Services
PO Box 8114
Harrisburg, PA 17105-8114
(717) 720-3600

Elementary and Secondary School Teachers

Federal Stafford Loans, Federal PLUS Loans and Federal Consolidation Loans currently have no cancellation provisions for teaching. These loans cannot be canceled or reduced because you are teaching in a teacher shortage area. However, repayment of one of these loans may be deferred for full-time teaching service in a federally designated teacher shortage area for a maximum of three years if:

the borrower had originally received a FFELP loan for an enrollment period beginning on or after July 1, 1987, that was disbursed before July 1, 1993, and
had no outstanding balance on a FFELP loan made prior to July 1, 1987

If you meet the above criteria and received FFELP loans after June 30, 1993, those loans may also be deferred. If you borrowed unsubsidized loans, you may still pay the interest that accumulates on the loan during eligible periods of deferment, either during the deferment period or as an increase in the amount or number of your monthly payments when they resume.

The principal at the school where you are teaching must certify the deferment form that you are teaching in a federally designated teacher shortage area. If the State Education Agency has not informed principal that their schools were designated as having a shortage of teachers, you should contact your State Education Agency to get the form certified. Please remember that you must reapply each school year for this deferment.

For more information about teaching deferments for the Stafford Loan program, you should consult your promissory note, and contact the lender or guarantor holding your loan or the State Education Agency in the state where you are teaching. Direct Loan borrowers should contact the Direct Loan Servicing Center at 1-800-848-0979.

FEDERAL TEACHER LOAN FORGIVENESS

Individuals who teach full time for one consecutive complete academic year in certain public and nonprofit private elementary and secondary schools and meet other qualifications may be eligible for forgiveness of a total of $5,000 in principal and interest of their Federal Stafford and Direct Loans.

The administrative officer of the school at which you performed your qualifying service must certify your completion and other qualifying attributes.

Definitions

An academic year is:
One complete school year at the same school, or two complete and consecutive half years at different schools. Half years exclude summer sessions and a minimum of nine months is considered a year.
Full-time means the standard used by the State in defining full-time employment.
Loans that are eligible for forgiveness are Federal Stafford Loans, Federal Direct Loans and that portion of consolidated loans that was used to pay off a Stafford or Direct Loan.
A teacher is a person who provides direct classroom teaching; this includes Special Education teachers. A school librarian counselor is not considered a teacher for the purposes of this loan forgiveness.

Eligibility Requirements

To qualify for loan forgiveness under this program, you must not have had an outstanding balance on a Stafford or Direct loan as of October 1, 1998 or on the date that you obtained a Direct or Federal Stafford loan after October 1, 1998.
You must not have received a benefit through the AmeriCorps Program for the same teaching service you are using to seek qualification for forgiveness.
You must have been employed as a full-time teacher for five consecutive complete years, at least one of which was after the 1997-98 academic year.

Terms and Conditions

You are not eligible for forgiveness if you are in default on a Federal Stafford or Direct loan unless you have made satisfactory repayment arrangements with the holder of your loan.
Payments that have already been made on your loan will not be refunded.
The maximum benefit under this program is $5,000 in principal and interest.
You will be responsible for repayment of any balance remaining.

Applying for Federal Teacher Loan Forgiveness

Applications should be available September 2001 from the US Department of Education's website: www.ed.gov.

FEDERAL STAFFORD & FEDERAL PERKINS LOAN PROGRAM CANCELLATION PROVISIONS

Total Permanent Disability

You are entitled to 100% cancellation of the balance of your Federal Perkins and Federal Stafford Student Loans in the event of your permanent and total disability. Permanent and total disability is defined as being unable to engage in gainful employment of any kind or attend school because of a medically determinable impairment which is expected to continue for a long and indefinite period of time or result in death. The final determination is made by the College in conjunction with a second opinion from our physician.

To claim cancellation for disability, you should submit a Medical Report form to Temple University's office of Credit and Collections with a letter indicating:

the dates entered and graduated, or date studies terminated;
total amount of loans obtained;
amount of unpaid balance;
nature and onset of the disability; and
consent for the release of any required information regarding the disability.

Note:

A 95% disability does not qualify you for a disability cancellation.
Receiving social security disability does not automatically qualify you for this type of cancellation.
Any payments made by you during a period in which you qualified for cancellation will be refunded
Therefore, all questions should be directed to Temple University.

Death Cancellation

Your loans will be canceled 100% in event of your death. In the case of death, your family or executor is required to submit a copy of your death certificate with a request to cancel the loan addressed to the billing servicer or Temple University.

DEFERMENT TABLE

Deferment options for borrowers whose first loan was disbursed prior to July 1, 1993, also applies to loans made after July 1, 1993 if the borrower has outstanding loans made prior to that date.

Type of Deferment	Deferment Period	Loans Eligible
In-school full-time	No time limit	Subsidized Stafford, Unsubsidized Stafford, SLS, PLUS, Perkins , Consolidation, HPSL , and HEAL loans
In-school half-time	No time limit	Subsidized Stafford, Unsubsidized Stafford, SLS, PLUS, Perkins , and Consolidation loans
Enrolled in an approved graduate fellowship program	No time Limit	Subsidized Stafford, Unsubsidized Stafford, SLS, PLUS, Perkins , and Consolidation loans and up to two years on HEAL loans
Enrolled in approved rehabilitation training program	No time limit	Subsidized Stafford, Unsubsidized Stafford, SLS, PLUS, Perkins , and Consolidation loans
Temporary Total Disability	3-year limit	Subsidized Stafford, Unsubsidized Stafford, SLS, PLUS, Perkins , and Consolidation loans
Full-time active duty in Armed Forces or commissioned officer in Public Health Service	3-year limit (combination of this deferment and NOAAC deferment cannot exceed 3 years)	Subsidized Stafford, Unsubsidized Stafford, SLS, PLUS, Perkins , Consolidation, HPSL , and HEAL loans and PLUS loans disbursed before 8/15/83

Deferment options for borrowers whose first loan was disbursed on or after July 1, 1993.

Type of Deferment	Deferment Period	Loans Eligible
In-school half-time	No time limit	Subsidized Stafford, Unsubsidized Stafford, SLS, PLUS, Perkins , and Consolidation loans
Enrolled in an approved graduate fellowship program	No time Limit	Subsidized Stafford, Unsubsidized Stafford, SLS, PLUS, Perkins , and Consolidation loans and up to two years on HEAL loans
Enrolled in approved rehabilitation training program	No time limit	Subsidized Stafford, Unsubsidized Stafford, SLS, PLUS, Perkins , and Consolidation loans
Unemployment	3-year limit (granted for 3 months at a time to a maximum of 36 months)	Subsidized Stafford, Unsubsidized Stafford, SLS, PLUS, Perkins , and Consolidation loans
Economic Hardship	3-year limit	Subsidized Stafford, Unsubsidized Stafford, SLS, PLUS, Perkins , and Consolidation loans
Full-time duty in National Oceanic and Atmospheric Administration Corps	3-year limit (combination of this deferment and Armed Forces/Public Health Service deferments above cannot exceed 3 years)	Subsidized Stafford, Unsubsidized Stafford, SLS, PLUS, Perkins , and Consolidation loans and HPSL loans
Full-time volunteer in Peace Corps or ACTION program	3-year limit	Subsidized Stafford, Unsubsidized Stafford, SLS, PLUS loans disbursed before 8/15/83, Perkins , HPSL and HEAL loans
Participating in an eligible residency or internship program (not leading to a degree or certificate)	2-year limit (combination of this deferment and residency/internship deferment cannot exceed 2 years; HPSL up to 5 years; HEAL up to four years	Subsidized Stafford, Unsubsidized Stafford, SLS, PLUS loans disbursed before 8/15/83, Perkins , HPSL and HEAL loans
Residency or internship program (leading to a degree or certificate)	3-year limit	Subsidized Stafford, Unsubsidized Stafford, SLS, PLUS loans disbursed before 8/15/83, Perkins , HPSL and HEAL loans
Full-time volunteer in a tax-exempt organization	3-year limit	Subsidized Stafford, Unsubsidized Stafford, SLS, PLUS loans disbursed before 8/15/83, and Perkins loans
Full-time teacher in a teacher shortage area (public or private nonprofit schools)	3-year limit	Subsidized Stafford, Unsubsidized Stafford, SLS, and Perkins loans
Parental Leave	6-month limit	Subsidized Stafford, Unsubsidized Stafford, SLS, and Perkins loans
Mother of preschool aged child who is entering or reentering workforce at not more than $1 above minimum wage	1-year limit	Subsidized Stafford, Unsubsidized Stafford, SLS, PLUS, Perkins , Consolidation, HPSL , and HEAL loans