Loan Forgiveness Progrmas

You asked for a description of other states’ loan forgiveness programs for in-state residents.

This report describes 12 loan forgiveness programs in nine randomly selected states: Georgia, Iowa, Kentucky, Maine, Maryland, Missouri, New Mexico, North Carolina, and Wisconsin. Some of these states, including Pennsylvania, have several programs, not all of which are included in this report.

Typically, the programs provide loans, all or part of which are forgiven if recipients provide designated service after they complete the programs for which the loans were granted. Almost all of the programs require service in a shortage or underserved area. Most are designed for teachers.

Some programs, such as Georgia’s HOPE Teacher Scholarship Program, provide loans on a first-come, first-served basis. Kentucky’s Higher Education Assistance Authority Teacher Scholarship Program requires that applicants prove financial need.

In addition to residency requirements, all the programs require applicants to meet other criteria, including academic ones.

Georgia’s HOPE Teacher Scholarship Program provides forgivable loans to students who want to pursue advanced education degrees in critical shortage areas. Applicants must be legal Georgia residents admitted into a graduate school and pursuing an advanced degree leading to teacher certification in a critical shortage area.

Eligible students receive $ 125 per semester hour at public colleges and $ 200 at private colleges. Awards are made on a first-come, first-served basis.

Recipients get a one-year grace period after they complete their studies to begin making repayments. After that, they must teach in their critical shortage area in a Georgia public school for one academic year for each $ 2,500 they received. If they are unable to complete their program or meet their teaching obligation, they must repay the state any outstanding loan amounts, plus interest.

This program is aimed at attracting undergraduates into the engineering profession. It provides forgivable loans of up to $ 3,500 per academic year and up to $ 17,500 in total to Georgia residents who plan to study engineering at Georgia’s Mercer University. To be eligible for a loan, an applicant must:

1. be enrolled full-time in an undergraduate degree program accredited by the Engineering Accreditation Commission or, if a freshman, be fully accepted into an engineering program;

2. maintain satisfactory academic progress;

3. be legal residents of Georgia and U. S. citizens or permanent resident aliens; and

4. meet Selective Service requirements.

Loan recipients must work one year in an engineering-related field in Georgia for each $ 3,000 they get from SEE. They have one year after completing graduation to begin their required service. After that, they have six years to fulfill their service obligations. Recipients who fail to do fulfill their service obligations must repay any outstanding loan amounts, plus interest.

The program is funded by lottery proceeds and administered by the Georgia Student Finance Authority.

The Iowa Teacher Shortage Forgivable Loan Program provides forgivable loans to students who currently teach and are continuing their academic studies in designated shortage areas provided they agree to teach in a shortage area upon graduation. Qualified applicants can get up to $ 1,500 per semester, $ 3,000 per academic year, and up to $ 9,000 in total.

To qualify for a loan, an applicant must (1) live in Iowa and attend an eligible college or university and (2) be at the sophomore, junior, senior or graduate level and enrolled at least half-time in an accredited education program leading to a degree and teaching certification in a shortage area. The recipient must agree to teach in Iowa for at least five years in the shortage area for which a loan was received. Twenty-percent of the loan is forgiven for each year the recipient teaches in a shortage area. Recipients who fail to teach in Iowa in shortage areas upon must repay any outstanding loan amounts, plus interest.

The Higher Education Assistance Authority Teacher Scholarship Program provides financial assistance in the form of conversion scholarship/loans to highly qualified, financially needy Kentucky

students pursuing initial teacher certification at participating institutions. The program is administered by the Kentucky Higher Education Assistance Authority (KHEAA).

College freshmen or sophomores may receive up to $ 625 each semester. Juniors, seniors, and graduate students may receive up to $ 2,500 each semester, up to $ 5,000 per year. If funds remain, freshmen and sophomores may receive up to $ 1,250 (exclusive of a summer session); $ 625 each semester; and $ 325 for each summer session. Summer session awards are also available. The total amount an undergraduate student may receive is $ 12,500; a graduate student may receive up to $ 7,500.

To be eligible for an award, an applicant must (1) be a U. S. citizen and Kentucky resident; (2) be enrolled or accepted for enrollment as a full-time student, unless enrolled for the final term and less than full-time enrollment is required to complete the teacher certification; (4) not be enrolled in a program that leads to a certificate, diploma, or degree in theology, divinity, or religious education; and (5) demonstrate financial need. An applicant does not qualify to receive loans if he has defaulted on a financial obligation to KHEAA.

Award recipients must provide one semester of qualified teaching service for each semester or summer session award. Those teaching in critical shortage areas have two semesters or summer terms cancelled for each semester of teaching service. If a recipient does not complete the program or does not render qualified teaching service, the scholarship becomes a loan and the recipient must repay any outstanding loan balance with 12% interest.

The Educators for Maine Program is a merit-based, forgivable loan program for Maine residents pursuing initial teacher certification. Loan awards are based on academic achievement, activities, and community service.

The program is open to (1) graduating high school seniors who graduate in the top 25% of their class (2) full-time undergraduate students who maintain a GPA of at least 3. 0, and (3) post-graduate students who are enrolled in or applied for enrollment in a post-graduate teacher certification program and who maintain at least a 3. 0 GPA. Undergraduates are eligible for up to $ 3,000 per year, up to a total of $ 12,000. Post-graduate students are eligible for up to $ 1,500 per year, up to a total of $ 6,000.

The loans are forgiven if recipients teach in a Maine public school or Maine private school approved for tuition purposes. If they do not teach in approved schools, they must repay any outstanding loan balance, plus interest.

The Distinguished Scholar Award Program provides awards to recipients of the state’s distinguished scholar awards. The amount of award is $ 3,000 each year, up to $ 16,800 in total. Applicants must be enrolled full-time in an approved undergraduate teacher education degree program at a two- or four-year college and they and their parents must be Maryland residents. Priority is given to applicants planning to teach in a critical shortage area; other applicants are ranked on the basis of GPA by class standing.

Applicants must sign a promissory note agreeing to work as a full-time classroom teacher in a Maryland public school for one year for each year of the award, or repay the scholarship with interest.

The Missouri Professional and Practical Nursing Student Loan Program provides educational loans to professional nursing students (RN or higher) and practical nursing students (LPN) in exchange for service in an area of designated need in Missouri. To be eligible for a loan, an applicant (1) must be a Missouri resident for one year or longer for reasons other than attending an educational institution and (2) must have applied or been accepted to an approved nursing program in Missouri. Only full-time students are eligible to receive loans.

For professional nursing students, the maximum loan amount is $ 5,000 per school year. For licensed practical nursing (LPN) students, the maximum loan amount is $ 2,500 per school year.

Twenty-five percent of the loan is forgiven for each year of qualifying employment in public or nonprofit agencies or institutions in areas of defined need. Recipients who do not fulfill their service obligation must repay their loans with 9. 5% interest.

The Western Interstate Commission on Higher Education Loan for Service Program provides educational loans to New Mexico students wishing to enroll at selected out-of-state graduate or professional programs not offered at a New Mexico public university. The amount of the loan depends upon the program fee.

To be eligible for the loan, an applicant must (1) be a New Mexico resident who graduated from a New Mexico high school or have lived in New Mexico for three consecutive years before applying and (2) be enrolled in or accepted by an accredited eligible program and institution. Applicants must commit to return to New Mexico and practice in their licensed or chosen field.

One-year loans are forgiven after one year of qualified service. Fifty-percent of two-year loans is forgiven after the first year and the balance after the second year. For three-, four-, or five-year loans, three years of service are required. Forty-percent is forgiven after the first year of service, 30% at the end of the second year, and the balance after the third year.

The Prospective Teacher Scholarship Loan Program provides $ 2,500 per academic year for full-time undergraduate study leading to initial teacher licensure or to licensure in special services areas, including school psychology, school counseling, speech pathology, audiology, and library or media services. At the community college level, $ 900 per year is provided for undergraduate study transferable to an approved program

leading to licensure. Loans are for up to four years or the minimum number of years required to earn licensure. The program is funded by appropriations from the state legislature.

High school applicants must have a minimum SAT score of 900 and minimum 3. 0 GPA. College applicants must have a minimum 3. 0 GPA. All must be North Carolina residents. They must be enrolled full time or accepted for full-time enrollment in a North Carolina college or university with an approved teacher education program, or community college with a program transferable to an approved teacher education program. They must maintain a 2. 5 cumulative GPA during their freshman year and a 3. 0 cumulative GPA each year thereafter. All applicants must be state residents.

Award recipients must teach one year in a North Carolina public school for each year of assistance they receive. More favorable terms apply if they are employed in a school system designated as low-performing or on warning status when they are employed by the school. Recipients who do not fulfill their teaching obligation are required to repay the value of the assistance received plus interest.

This program provides loans to minority, undergraduate juniors or seniors enrolled full-time in programs leading to teacher licensure at an independent or University of Wisconsin institution. The maximum award per year is $ 2,500 with an overall maximum of $ 5,000. Applicants must live in Wisconsin and agree to teach in a Wisconsin school district in which minority students constitute at least 29% of total enrollment or in a school district participating in the state’s inter-district pupil transfer program. For each year the recipient teaches in an eligible school district, 25% of the loan is forgiven. Recipients who do not fulfill the program obligation must repay their loans with 5% interest.

This program provides loans to Wisconsin residents enrolled at least half-time at an eligible in-state institution that prepares them to be licensed as registered or practical nurses. The maximum award per year is $ 3,000 with an overall maximum of $ 15,000.

For each of the first two years that a participant works as a nurse and meets the eligibility criteria, 25% of the loan is forgiven. Any balance remaining after forgiveness must be repaid at an interest rate of 5%. Recipients who do not fulfill the program obligation must repay the loan with a 5% interest.

This program provides loans to Wisconsin residents enrolled at least half-time at an in-state or eligible out-of-state institution in a program that prepares them to be licensed as teachers of the visually impaired or as orientation and mobility instructors. The maximum award per year is $ 10,000 with an overall maximum of $ 40,000. Recipients must agree to work in a Wisconsin school district, the Wisconsin Center for the Blind and Visually Impaired or a cooperative educational service agency.

For each of the first two years the recipient teaches and meets the eligibility criteria, 25% of the loan is forgiven. For the third year, 60% is forgiven. Recipients who do not fulfill the program obligation must repay their loans with a 5% interest.


August 11, 2004		2004-R-0632
LOAN FORGIVENESS PROGRAMS

By: Veronica Rose, Principal Analyst