October 8, 2001 

TO THE SUPERINTENDENT ADDRESSED:

SUBJECT: Designated Subject-Matter Teacher Shortage Areas for Texas and Information About Student Loan Forgiveness, 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 and the date the loans were taken out (see below and 4-page fact sheet attachment). Recipients of the Paul Douglas Teacher Scholarship may reduce the years of service they must perform by teaching in a subject-matter shortage area. Teachers with only new Stafford loans (the first taken out after October 1, 1998) may have a partial forgiveness benefit. Important warning: Teachers should be careful about consolidating student loans because consolidation may result in loss of deferment benefits, as well as loss of Perkins loan cancellation benefits and low interest rates! (A loan that is paid off by another loan may lose certain aspects of its identity.) To find out if these issues are applicable, 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.

• FFELP / Direct Loans deferment and forgiveness provisions. FFELP loans include Federal Stafford and Federal Supplemental Loans for Students (SLS) loans. Full-time teachers with certain loans from the Federal Family Education Loan Program (FFELP) or the Federal Direct Loan Program (Direct) may be eligible for deferment if teaching in a subject-matter shortage area. The deferment program for these loans is only available to teachers whose first loan was made on or after July 1, 1987 but before July 1, 1993, along with any additional Stafford Loans they may have taken out at later dates. NEW: A teacher who has no outstanding balance under the FFELP or Direct Loan Programs on the date he or she obtains a loan on or after October 1, 1998 may be eligible for up to a $5,000 loan forgiveness benefit after teaching 5 years in a low-income school (shortage area not required). There are no benefits if first Stafford loans were made between July 1, 1993 and Sept 30, 1998. (See attachment)

• 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 2001-2002:

• 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 SLS loans, that the borrower is a full-time teacher and serves in one or more of the subject-matter shortage areas listed. Principals may also certify teacher service on forgiveness and forgiveness forbearance forms for eligible teachers.

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 loan holders (not to TEA). When submitting a signed form to their loan holders, 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: Forms that FFELP borrowers may use to request deferment, forgiveness or forgiveness forbearance are available from lenders, Texas Guaranteed Student Loan Corp., or the TEA website. Be sure to check eligibility! Forms regarding the Paul Douglas Scholarship can be obtained from the Texas Higher Education Coordinating Board. Perkins Loan borrowers should contact their loan holder for forms.

The TEA encourages principals to notify teachers of these opportunities for loan forgiveness, 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: See attached Four-page Fact Sheet with additional detailed information. The following websites may also provide information:
Texas Education Agency --http://www.tea.state.tx.us (Forms may be downloaded and copied)
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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