UHEAA Bulletin Vol. 2002 Issue 42

September 19, 2002
Volume 2002 - Issue 42

Child Care Provider May Receive Benefit from Loan Forgiveness Program

The U. S. Department of Education (ED) recently released a Federal Register, dated August 29, 2002, announcing eligibility criteria and procedures regarding the Child Care Provider Loan Forgiveness Demonstration Program for Fiscal Year 2002. (A copy of this Federal Register is provided as an attachment in PDF format.) Congress began this program last year and appropriated $1 million for FY 2001 on a "first-come, first-served basis". Another $1 million has been appropriated for new applicants this year. Borrowers receiving loan forgiveness under this program last year must renew their application each year.

Eligibility for this program is limited to individuals who have worked full-time for at least two consecutive years in eligible child care facilities that serve low-income families and who meet these qualifications:

The individual had no outstanding student loan debt on October 7, 1998, or has no outstanding loan balance on the date the individual obtains a loan after October 7, 1998.
The individual obtained an associate's or bachelor's degree in early childhood education.
The individual has worked full-time as a child care provider for two consecutive years in an eligible facility, including a home, that serves low-income children. (At least 70 percent of the individuals the facility serves are from families that earn less than 85 percent of the State median household income.)
The individual has not received benefits under the AmeriCorps program for the same service.

Those who meet the eligibility requirements will receive up to 100% student loan forgiveness, beginning with 20% loan forgiveness after two consecutive years of employment and increasing to 100% after five years of full-time employment. Funds for the demonstration program are limited to $1 million, so it is important to apply early.

The application form is attached and is also available at www.uheaa.org or in the Forms Library at ED's web site at: http://www.ed.gov/offices/OSFAP/Students/. Borrowers can also contact UHEAA at 801.321.7200, or the Child Care Provider Loan Forgiveness support desk at 1.888.562.7002. Applications must be submitted to the U.S. Department of Education. For additional information about the Child Care Provider Loan Forgiveness Program, please contact ED at 1.888.562.7002.

Federal Register, August 29, 2002, pp. 55385-55388 (PDF)
Child Care Provider Loan Forgiveness Application (PDF)