To amend the Higher Education Act of 1965 to expand the loan forgiveness and loan cancellation programs for teachers, to provide loan forgiveness and loan cancellation programs for nurses, and for other purposes.

April 6, 2005

Mrs. MCCARTHY (for herself, Mr. HINCHEY, Mr. OWENS, Mr. CHANDLER, Mr. PAYNE, Mr. CLYBURN, Mr. GARRETT of New Jersey, and Mr. GRIJALVA) introduced the following bill; which was referred to the Committee on Education and the Workforce

To amend the Higher Education Act of 1965 to expand the loan forgiveness and loan cancellation programs for teachers, to provide loan forgiveness and loan cancellation programs for nurses, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Teacher and Nurse Support Act of 2005'.

SEC. 2. FINDINGS AND PURPOSE.

(a) Findings- Congress finds the following:

(1) According to the National Center for Education Statistics, over the next 10 years, the United States will need more than 2,000,000 new teachers to replace the teachers who are retiring or leaving the classroom for other careers.

(2) The Hart-Rudman National Security Report on education recommended that the President direct the Department of Education to work with the States to devise a comprehensive plan to avert a looming shortage of high-quality teachers.

(3) According to the National Center for Education Statistics, 20 percent of all new teachers leave the teaching profession within 3 years. Providing loan forgiveness or loan cancellation is one step that would help retain high-quality teachers in schools that need teachers.

(4) The American Hospital Association has reported more than 126,000 unfilled registered nurse positions in hospitals in the United States. Additionally, the vacancy rate for registered nurse positions at nursing homes throughout the Nation is approaching 20 percent.

(5) College loans are more of a burden than ever for students and families. According to a recent United States Public Interest Research Group report, average student loan debt almost doubled from $9,200 in 1992-1993 to $16,928 in 1999-2000.

(b) Purpose- The purpose of this Act is to improve access to, and the delivery of, high-quality educational and health services throughout the United States by reducing the shortage of qualified teachers and nurses.

SEC. 3. LOAN FORGIVENESS AND CANCELLATION.

(a) Loan Forgiveness- Section 428J of the Higher Education Act of 1965 (20 U.S.C. 1078-10) is amended to read as follows:

`SEC. 428J. LOAN FORGIVENESS FOR TEACHERS AND NURSES.

`(a) Statement of Purpose- It is the purpose of this section to encourage individuals to enter and continue in the teaching and nursing professions.

`(b) Program Authorized- The Secretary shall carry out a program, through the holder of the loan, of assuming the obligation to repay a qualified loan amount for a loan made under section 428 or 428H, in accordance with subsection (c), for any borrower who has 1 or more loans made under section 428 or 428H after October 1, 1998, and who--

`(1) has been employed--

`(A) as a full-time teacher--

`(i) in a school that qualifies under section 465(a)(2)(A) for loan cancellation for Perkins loan recipients who teach in those schools;

`(ii) if employed as a secondary school teacher, is teaching a subject area that is relevant to the borrower's academic major as certified by the chief administrative officer of the public or nonprofit private secondary school in which the borrower is employed; and

`(iii) if employed as an elementary school teacher, has demonstrated, as certified by the chief administrative officer of the public or nonprofit private elementary school in which the borrower is employed, knowledge and teaching skills in reading, writing, mathematics, and other areas of the elementary school curriculum; or

`(B) as a full-time eligible nurse--

`(i) in a clinical setting; or

`(ii) as a member of the nursing faculty at an accredited school of nursing (as those terms are defined in section 801 of the Public Health Service Act (42 U.S.C. 296)); and

`(2) is not in default on a loan for which the borrower seeks forgiveness.

`(c) Qualified Loan Amount-

`(1) IN GENERAL-

`(A) AGGREGATE AMOUNT- The Secretary shall, in installments in accordance with subparagraph (B), repay not more than $17,500 in the aggregate of the loan obligation on a loan made under section 428 or 428H that is outstanding after the completion of each complete--

`(i) school year of teaching described in subsection (b)(1)(A); or

`(ii) year of nursing described in subsection (b)(1)(B).

`(B) ANNUAL INSTALLMENTS- The Secretary shall repay the loan obligation on such a loan in annual installments after each of 5 years of such service not to exceed the lesser of the remaining outstanding obligation or--

`(i) $2,000 at the completion of the first year of such service;

`(ii) $2,500 at the completion of the second year of such service;

`(iii) $3,500 at the completion of the third year of such service;

`(iv) $4,500 at the completion of the fourth year of such service; and

`(v) $5,000 at the completion of the fifth year of such service.

`(C) RELATION TO LOAN CANCELLATION- No borrower may receive a reduction of loan obligations under both this section and section 460.

`(2) TREATMENT OF CONSOLIDATION LOANS- A loan amount for a loan made under section 428C may be a qualified loan amount for the purposes of this subsection only to the extent that the loan amount was used to repay a Federal Direct Stafford Loan, a Federal Direct Unsubsidized Stafford Loan, or a loan made under section 428 or 428H for a borrower who meets the requirements of subsection (b), as determined in accordance with regulations prescribed by the Secretary.

`(3) FORBEARANCE ON QUALIFIED LOAN AMOUNT- A holder of a loan on which a borrower is seeking forgiveness under this section--

`(A) shall grant forbearance, at the request of the borrower, in annual increments for each of the years of qualifying service if the holder believes, at the time of the borrower's annual request, that the amount expected to be forgiven under this section at the completion of the period of qualifying service will satisfy the anticipated remaining outstanding balance on the loan; and

`(B) may offer other forbearance options to the borrower.

`(d) Regulations- The Secretary is authorized to issue such regulations as may be necessary to carry out the provisions of this section.

`(e) Construction- Nothing in this section shall be construed to authorize any refunding of any repayment of a loan.

`(f) List of Schools- If the list of schools in which a teacher may perform service pursuant to subsection (b)(1)(A) is not available before May 1 of any year, the Secretary may use the list for the year preceding the year for which the determination is made to make the service determination.

`(g) Additional Eligibility Provisions-

`(1) CONTINUED ELIGIBILITY FOR TEACHERS- Any teacher who performs service in a school that--

`(A) meets the requirements of subsection (b)(1)(A)(i) in any year during such service; and

`(B) in a subsequent year fails to meet the requirements of that subsection,

may continue to teach in the school and shall be eligible for loan forgiveness pursuant to subsection (b).

`(2) PREVENTION OF DOUBLE BENEFITS- No borrower may, for the same service, receive a benefit under both this subsection and--

`(A) subtitle D of title I of the National and Community Service Act of 1990 (42 U.S.C. 12571 et seq.); and

`(B) section 846 of the Public Health Service Act (42 U.S.C. 297n).

`(h) Definitions- In this section:

`(1) ELIGIBLE NURSE- The term `eligible nurse' means a nurse who meets all of the following:

`(A) The nurse graduated from--

`(i) an accredited school of nursing (as those terms are defined in section 801 of the Public Health Service Act (42 U.S.C. 296));

`(ii) a nursing center; or

`(iii) an academic health center that provides nurse training.

`(B) The nurse holds a valid and unrestricted license to practice nursing in the State in which the nurse practices in a clinical setting.

`(C) The nurse holds 1 or more of the following:

`(i) A graduate degree in nursing or equivalent degree.

`(ii) A nursing degree from a collegiate school of nursing (as defined in section 801 of the Public Health Service Act (42 U.S.C. 296)).

`(iii) A nursing degree from an associate degree school of nursing (as defined in section 801 of the Public Health Service Act (42 U.S.C. 296)).

`(iv) A nursing degree from a diploma school of nursing (as defined in section 801 of the Public Health Service Act (42 U.S.C. 296)).

`(2) YEAR- The term `year', where applied to service as a teacher (or service as a member of an accredited school of nursing (as those terms are defined in section 801 of the Public Health Service Act (42 U.S.C. 296))), means an academic year as defined by the Secretary.'.

(b) Loan Cancellation- Section 460 of the Higher Education Act of 1965 (20 U.S.C. 1087j) is amended to read as follows:

`SEC. 460. LOAN CANCELLATION FOR TEACHERS AND NURSES.

`(a) Statement of Purpose- It is the purpose of this section to encourage individuals to enter and continue in the teaching and nursing professions.

`(b) Program Authorized-

`(1) IN GENERAL- The Secretary shall carry out a program of canceling the obligation to repay a qualified loan amount in accordance with subsection (c) for Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans made under this part for any borrower who has 1 or more loans made under this part after October 1, 1998, and who has been employed--

`(A) as a full-time teacher--

`(i) in a school that qualifies under section 465(a)(2)(A) for loan cancellation for Perkins loan recipients who teach in those schools;

`(ii) if employed as a secondary school teacher, is teaching a subject area that is relevant to the borrower's academic major as certified by the chief administrative officer of the public or nonprofit private secondary school in which the borrower is employed; and

`(iii) if employed as an elementary school teacher, has demonstrated, as certified by the chief administrative officer of the public or nonprofit private elementary school in which the borrower is employed, knowledge and teaching skills in reading, writing, mathematics, and other areas of the elementary school curriculum; or

`(B) as a full-time eligible nurse--

`(i) in a clinical setting; or

`(ii) as a member of the nursing faculty at an accredited school of nursing (as those terms are defined in section 801 of the Public Health Service Act (42 U.S.C. 296)); and

`(2) is not in default on a loan for which the borrower seeks forgiveness.

`(c) Qualified Loan Amounts-

`(1) IN GENERAL-

`(A) AGGREGATE AMOUNT- The Secretary shall, in installments in accordance with subparagraph (B), cancel not more than $17,500 in the aggregate of the loan obligation on a Federal Direct Stafford Loan or a Federal Direct Unsubsidized Stafford Loan that is outstanding after the completion of each complete--

`(i) school year of teaching described in subsection (b)(1)(A); or

`(ii) year of nursing described in subsection (b)(1)(B).

`(B) ANNUAL INSTALLMENTS- The Secretary shall repay the loan obligation on such a loan in annual installments after each of 5 years of such service not to exceed the lesser of the remaining outstanding obligation or--

`(i) $2,000 at the completion of the first year of such service;

`(ii) $2,500 at the completion of the second year of such service;

`(iii) $3,500 at the completion of the third year of such service;

`(iv) $4,500 at the completion of the fourth year of such service; and

`(v) $5,000 at the completion of the fifth year of such service.

`(C) RELATION TO LOAN REPAYMENT- No borrower may receive a reduction of loan obligations under both this section and section 428J.

`(2) TREATMENT OF CONSOLIDATION LOANS- A loan amount for a Federal Direct Consolidation Loan may be a qualified loan amount for the purposes of this subsection only to the extent that the loan amount was used to repay a Federal Direct Stafford Loan, a Federal Direct Unsubsidized Stafford Loan, or a loan made under section 428 or 428H, for a borrower who meets the requirements of subsection (b), as determined in accordance with regulations prescribed by the Secretary.

`(3) FORBEARANCE ON QUALIFIED LOAN AMOUNT- A holder of a loan on which a borrower is seeking cancellation under this section--

`(A) shall grant forbearance, at the request of the borrower, in annual increments for each of the years of qualifying service if the holder believes, at the time of the borrower's annual request, that the amount expected to be canceled under this section at the completion of the period of qualifying service will satisfy the anticipated remaining outstanding balance on the loan; and

`(B) may offer other forbearance options to the borrower.

`(d) Regulations- The Secretary is authorized to issue such regulations as may be necessary to carry out the provisions of this section.

`(e) Construction- Nothing in this section shall be construed to authorize any refunding of any canceled loan.

`(f) List of Schools- If the list of schools in which a teacher may perform service pursuant to subsection (b)(1)(A) is not available before May 1 of any year, the Secretary may use the list for the year preceding the year for which the determination is made to make such service determination.

`(g) Additional Eligibility Provisions-

`(1) CONTINUED ELIGIBILITY FOR TEACHERS- Any teacher who performs service in a school that--

`(A) meets the requirements of subsection (b)(1)(A)(i) in any year during such service; and

`(B) in a subsequent year fails to meet the requirements of that subsection,

may continue to teach in the school and shall be eligible for loan cancellation pursuant to subsection (b).

`(2) PREVENTION OF DOUBLE BENEFITS- No borrower may, for the same service, receive a benefit under both this section and--

`(A) subtitle D of title I of the National and Community Service Act of 1990 (42 U.S.C. 12571 et seq.); and

`(B) section 846 of the Public Health Service Act (42 U.S.C. 297n).

`(h) Definitions- In this section:

`(1) ELIGIBLE NURSE- The term `eligible nurse' means a nurse who meets all of the following:

`(A) The nurse graduated from--

`(i) an accredited school of nursing (as those terms are defined in section 801 of the Public Health Service Act (42 U.S.C. 296));

`(ii) a nursing center; or

`(iii) an academic health center that provides nurse training .

`(B) The nurse holds a valid and unrestricted license to practice nursing in the State in which the nurse practices in a clinical setting.

`(C) The nurse holds 1 or more of the following:

`(i) A graduate degree in nursing or equivalent degree.

`(ii) A nursing degree from a collegiate school of nursing (as defined in section 801 of the Public Health Service Act (42 U.S.C. 296)).

`(iii) A nursing degree from an associate degree school of nursing (as defined in section 801 of the Public Health Service Act (42 U.S.C. 296)).

`(iv) A nursing degree from a diploma school of nursing (as defined in section 801 of the Public Health Service Act (42 U.S.C. 296)).

`(2) YEAR- The term `year', where applied to service as a teacher (or service as a member of an accredited school of nursing (as those terms are defined in section 801 of the Public Health Service Act (42 U.S.C. 296))), means an academic year as defined by the Secretary.'.

SEC. 4. PHASE OUT OF CURRENT PROGRAM.

An individual who began the required period of teaching described in section 428J(b)(1) or 460(b)(1)(A) of the Higher Education Act of 1965 (20 U.S.C. 1078-10 and 1087j) as such sections were in effect on the day before the date of enactment of this Act, shall--

(1) be eligible to receive loan forgiveness or loan cancellation in the amount described in, and in accordance with the requirements of, such sections as in effect on the day before the date of enactment of this Act; and

(2) not be eligible to receive loan forgiveness or loan cancellation under section 428J or 460 of the Higher Education Act of 1965 as in effect on the date of enactment of this Act.

END