September 21, 2000 

TO THE SUPERINTENDENT ADDRESSED:

SUBJECT: Designated Subject-Matter Teacher Shortage Areas for Texas and Information About Student Loan Deferment and Cancellation Opportunities for Teachers With Certain Types of Student Loans.

The Texas Education Agency (TEA) has been working with the U.S. Department of Education to develop a list of subject-matter teacher shortage areas for Texas. Teachers serving in a designated low-income school or in a subject-matter shortage area may have the opportunity to cancel or defer student loans, depending on the type of loans (see below and attachments A and B) and when the loans were made. Recipients of the Paul Douglas Teacher Scholarship may reduce the years of service they must perform by teaching in a subject-matter shortage area. Important warning: Teachers should be careful about consolidating student loans because consolidation may mean loss of loan cancellation and deferment benefits, as well as loss of low interest rates! (A loan that is paid off by another loan loses its identity, its benefits, and its interest rate). To find out, teachers should check with the holder of their individual loans.

· Perkins cancellation provisions. Teachers who have a loan from the Federal Perkins Loan Program may be eligible for loan cancellation for full-time teaching in a designated low-income school or in a subject-matter shortage area.

· FFEL/Direct Loans deferment and cancellation provisions. Full-time teachers with a loan or multiple loans from the Federal Direct Loan Program or the Federal Family Education Loan Program (FFEL) may be eligible for deferment if teaching in a subject-matter shortage area. [These loans include Federal Stafford Loans, Federal Supplemental Loans for Students (SLS), Federal PLUS Loans, Federal Consolidation Loans, and loans offered in earlier years through the Guaranteed Student Loan Program]. The deferment programs for these loans are only available to teachers whose first loan was made on or after July 1, 1987 but before July 1, 1993, along with any additional FFEL they may have taken out at later dates. NEW: Only teachers who took out their first Stafford Loan after October 1, 1998 may be eligible for loan cancellation benefits. (See attachment for details)

· Douglas Scholarship reduced service. Teachers with a Paul Douglas Teacher Scholarship may be eligible for reduced service obligations (only one year of service per year of scholarship assistance) [Note: the last scholarships were awarded in 1995-96. Scholarships are no longer being granted under the Douglas Program.]

The following are the Texas designated subject-matter teacher shortage areas for the year 2000-2001:

· Mathematics
· Special Education
· Bilingual / ESL
· Science
· Foreign Language (languages other than English)
· Technology Applications

This letter authorizes school principals to act on behalf of the Chief State School Officer and certify, by signature on the teacher's form requesting deferment of Federal Stafford or other FFEL loans, that the borrower is a full-time teacher and serves in one or more of the subject-matter shortage areas listed.

Teachers are responsible for obtaining the appropriate form, requesting the principal's certification by signature on the form, and sending the signed form to their lenders (not to TEA). When submitting a signed form to their lenders, teachers may want to include a copy of this letter as documentation that the principal's certification was authorized by the Texas Education Agency (TEA).

FORMS: A copy of the form that borrowers with Federal Stafford or SLS loans may use to request a deferment is also enclosed (Attachment B). This form may be photocopied for application purposes. Forms regarding the Paul Douglas Scholarship can be obtained from the Texas Higher Education Coordinating Board. Perkins Loan borrowers should contact the administrator of their loan for forms.

The TEA encourages principals to notify teachers of these opportunities for loan deferment or cancellation, or for reduction of a teaching obligation, by providing them with the enclosed information about the shortage areas, possible loan benefits, and the application process.

ADDITIONAL INFORMATION: A four-page Fact Sheet, providing additional detailed information is enclosed (Attachment A). The following websites may also provide information:
Texas Education Agency -- http://www.tea.state.tx.us
US Dept. Of Ed Office of Student Financial Aid Programs -- http://www.ed.gov/offices/OSFAP

Sincerely,
Jim Nelson
Commissioner of Education

Attachment A: Teaching Service - Loan Cancellation/Deferment Opportunities Fact Sheet (four-pages) - MS Word Version of document

Attachment B: Deferment Request Form (three pages)
cc: ISD Personnel Directors

For further information on this topic, contact Div. of Educator Development Projects at (512) 264-3939.

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