Child Care Provider Loan Forgiveness Demonstration


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

General information about this opportunity
Last Known Status
Deleted 04/29/2005 (The program was not funded in 04-06 and no additional funding is expected in the future.)
Program Number
Federal Agency/Office
Type(s) of Assistance Offered
Project Grants (Discretionary).
Program Accomplishments
There were approximately 75 recipients in fiscal year 2002.
Higher Education Act of 1965, Title IV, Part B, Section 428K as amended, 20 U.S.C. 1078-11.
Who is eligible to apply/benefit from this assistance?
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.
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.
What is the process for applying and being award this assistance?
Pre-Application Procedure
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.
The deadline date is published in the Federal Register.
Approval/Disapproval Decision 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.
Applications for renewal of forgiveness and forbearance must be submitted annually. Applications for renewal of forbearance are subject to the availability of funds.
How are proposals selected?
Not applicable.
How may assistance be used?
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.
What are the requirements after being awarded this opportunity?
Requirements will be outlined in the award documents.
Not applicable.
Not applicable.
Other 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.
Who do I contact about this opportunity?
Regional or Local Office
Headquarters Office
Department of Education, Office Student Financial Assistance Programs, Child CareProvider Loan Forgiveness Demonastration Program, 400 Maryland Avenue, SW, Washington, DC 20202.
Website Address
Financial Information
Account Identification
(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.
Examples of Funded Projects
Not available.