Child Care Provider Loan Forgiveness Demonstration (84.355)

 

Program

84.355 Child Care Provider Loan Forgiveness Demonstration

 

Federal Agency

OFFICE OF STUDENT FINANCIAL ASSISTANCE PROGRAMS, DEPARTMENT OF EDUCATION

 

Authorization

Higher Education Act of 1965, Title IV, Part B, Section 428K as amended, 20 U.S.C. 1078-11.

 

Program Number

84.355

 

Last Known Status

Deleted 04/29/2005 (The program was not funded in 04-06 and no additional funding is expected in the future.)

 

Objectives

To bring more highly trained individuals into the early child care profession and to retain those providers for longer periods of time.

 

Types of Assistance

Project Grants (Discretionary).

 

Uses and Use Restrictions

Contingent on the availability of funds, forgiveness is provided to a borrower for eligible loans under the Federal Family Education Loan (FFEL) and Direct Loan programs for child care providers working fulltime in certain child care facilities that serve low-income families and meet certain other qualifications. Forbearance is provided to a borrower upon certification by the borrower that the borrower can be expected to qualify as an eligible borrower for forgiveness.

 

Eligibility Requirements

Applicant Eligibility

A borrower is eligible for child care provider forgiveness for the borrower's eligible loans, if he or she: is a new borrower in the FFEL or Direct Loan program; has received an associate or bachelor's degree in the field of early childhood education or child care that was awarded by an institution of higher education (includes only public and private, nonprofit institutions); has worked full-time for two consecutive years (24 months) after receiving his or her degree as a child care provider in a facility that serves a low-income community; and is not receiving benefits for the same child care service under both subtitles D of title 1 of the National and Community Service Act of 1990 (Americorps) and this demonstration program. A new borrower is a borrower (a) who has an outstanding loan balance on any loan under the FFEL or Direct Loan programs (including PLUS and Consolidation) on October 7, 1998, or (b) who has no outstanding loan balance on an FFEL or Direct loan on the date that he or she obtains a loan after October 7, 1998. An eligible loan includes only a loan made after October 7, 1998 to a new borrower under the subsidized and unsubsidized Federal Stafford Loan, Direct Subsidized Loan, and Direct Unsubsidized Loan program (does not include PLUS and Consolidation loans); is a loan that a borrower received before beginning qualifying service and for the purpose of completing the borrower's degree in early childhood education or child care; and if a borrower secures a degree in early childhood education or child care after previously graduating from an institution of higher education, only includes the eligible loans received for a maximum of two academic years in pursuit of the early childhood education or child care degree.

Beneficiary Eligibility

Eligible borrowers.

Credentials/Documentation

To receive forgiveness, a borrower must submit an application including a certification by the director of the facility that the borrower has provided the qualifying child care. To receive forbearance, the borrower must submit a forbearance application.

 

Application and Award Process

Preapplication Coordination

Not applicable. This program is excluded from coverage under E.O. 12372.

Application Procedure

Applications for forgiveness and forbearance are submitted directly to the Department of Education. Contact the Program Office for additional information.

Award Procedure

Applications for forgiveness are approved on a first-come, first-served basis, contingent upon the availability of annual appropriations. Priority for loan forgiveness in subsequent fiscal years is given to borrowers who received loan forgiveness for the preceding fiscal year.

Deadlines

The deadline date is published in the Federal Register.

Range of Approval/Disapproval Time

Notification usually is made not later than 2 months after the application deadline for forgiveness. Notification regarding forbearance is usually given within 1 month of application.

Appeals

None.

Renewals

Applications for renewal of forgiveness and forbearance must be submitted annually. Applications for renewal of forbearance are subject to the availability of funds.

 

Assistance Considerations

Formula and Matching Requirements

This program has no statutory formula or matching requirements.

Length and Time Phasing of Assistance

Loan forgiveness is provided to eligible borrowers on a progressive basis (i.e., 20 percent of the total amount of loans following two years of service; 20 percent following the third year of service; and 30 percent following each of the fourth and fifth years of service) following completion of consecutive years of full-time child care employment serving a low- income community. Forbearance is granted annually.

 

Post Assistance Requirements

Reports

Requirements will be outlined in the award documents.

Audits

Not applicable.

Records

Not applicable.

 

Program Accomplishments

There were approximately 75 recipients in fiscal year 2002.

 

Financial Information

Account Identification

91-0200-0-1-502.

Obligations

(Grants) FY 02 $1,000,000; FY 03 est $994,000; and FY 04 est $0.

Range and Average of Financial Assistance

The average loan obligation forgiven in fiscal year 2002 was $13,333.

 

Regulations, Guidelines and Literature

A fact sheet about the program will be available from the program office. Also, information about the program will also be published in the Federal Register.

 

Related Programs

84.007, Federal Supplemental Educational Opportunity Grants; 84.032, Federal Family Education Loans; 84.033, Federal Work-Study Program; 84.038, Federal Perkins Loan Program_Federal Capital Contributions; 84.063, Federal Pell Grant Program; 84.268, Federal Direct Student Loans.

 

Information Contacts

Regional or Local Office

None.

Headquarters Office

Department of Education, Office Student Financial Assistance Programs, Child CareProvider Loan Forgiveness Demonastration Program, 400 Maryland Avenue, SW, Washington, DC 20202.

Web Site Address

http://www.ed.gov/offices/FSA/Students/

 

Examples of Funded Projects

Not available.

 

Criteria for Selecting Proposals

Not applicable.