My application for Teacher Loan Forgiveness was recently denied because my first student loan was dispersed on October 1, 1998, the same exact date that the program uses for eligibility.  My lender insists that the verbiage on the application for laon forgiveness:
  YOU MAY QUALIFY FOR LOAN FORGIVENESS ONLY IF YOU HAD NO OUTSTANDING BALANCE ON A FEDERAL FAMILY EDUCATION LOAN (FFEL) PROGRAM LOAN OR A WILLIAM D. FORD FEDERAL DIRECT LOAN (DIRECT LOAN) PROGRAM LOAN ON OCTOBER 1, 1998, OR HAD NO OUTSTANDING BALANCE ON A
FFEL PROGRAM LOAN OR A DIRECT LOAN ON THE DATE YOU OBTAINED A LOAN AFTER OCTOBER 1, 1998.

My argument is that the actual wording in the legislation (P.L. 105-244) states that:
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 new borrower on or after October 1, 1998.

My interpretation is that the inclusion of the word “on” in that law should make me eligible for forgiveness.  I contacted my lender and they stated that my case had been reviewed and denied and that there was nothing more that I could do about it.  I contacted the Department of Education who told me that my lender was interpreting the law in such a way that did not include October 1, 1998.  I asked her if individual lending institutions were allowed to interpret the law as they wish and woman said, “Basically, yes”. 
Do I have any options at this point?  Should I be contacting my senator?
Also, just out of curiosity, is it just an unfortunate coincidence that my loan happened to disperse on the same day as the program began?

Thomas,

Thank you for being a teacher.  I hate that you’re dealing with this.  Holy smokes.  OK be sure you understand the following before reading my thoughts on your situation:

  As an attorney, I must be very careful not to inadvertently establish a client-lawyer relationship with the folks using this forum.  Although I may give a response to a specific question, there may be other facts and law relevant to the issue that I don’t know. You must make your own decisions based on all the information.  You should not base any decision on an answer I give you.  It is important for you to understand and agree that no client-lawyer relationship has been established between you and me.

The “new borrower” language comes up a lot.  It’s about money.  Extending benefits to all borrowers would cost the government significantly more.  That’s why benefits are often limited to “new borrowers”.  As for the October 1 date, it’s the start of the federal fiscal year.  You would think the Dept of Ed would look at an academic year, but using the fiscal year further reduces costs by narrowing the class of eligible borrowers.

The statute governing Teacher Loan Forgiveness is here: http://www.law.cornell.edu/cfr/text/34/682.216

And the regulations here:  http://www.gpo.gov/fdsys/pkg/CFR-2009-title34-vol3/pdf/CFR-2009-title34-vol3-sec682-216.pdf

I’m going to send you a note directly.

Heather

I am in the very same situation as Thomas. My first loan, before I consolidated, was disbursed on October 1, 1998.  I worked very hard to finish 5 years in a title-one school.  It appears the wording varys between “after 10-1-1998” and “on or before 10-1-1998”.  Depending on who I talk to, I get different answers.  What can I do? I am so very frusturated.

I’m at such a breaking point and I don’t know what to do. I have been denied for the 3rd time for the teacher loan forgiveness forms. They are stating reasons I have denied that are clear lies.  One said I didn’t have the school address on there, weird how they attached my completed form with the address clearly on there. Another time they denied me saying my school wasn’t title one. I was still denied when I faxed them proper paperwork. Can anyone help. How can they do this?

Stephanie,

Which loan servicer do you have?

Heather

I’ve read the statute and the regulations and to me it looks like the statute permitted regulators to choose either “on” or “after” Oct 1, 1998 and they went with “on”, which means people who had balances “on” Oct 1, 1998 are excluded.  I’m trying to do some advocacy with folks in DC and will provide any updates I learn.

Hi Heather.  I have taught special education in a Title 1 school for 10 plus years.  I had an outstanding balance on Direct Loans or Federal Family Education Loan (FFEL) Program loans on Oct. 1, 1998.  I am SO frustrated that I am not able to qualify for a teacher loan forgiveness.  Is there any relief for me and others like me?  I work just as hard as the ‘new’ teachers that qualify for the forgiveness.  Please tell me there is hope for me… Thanks for your time.

I had the loan prior to the Oct. 1, 1998 date. (I had a balance on that date). Just wanted to make it clear.  Also, I graduated in 2001 with a degree in Speech Pathology and Audiology.  I am a lateral entry teacher.  The degree was not in education.  I don’t know if that would make a difference.

Hi Heather,

I am in somewhat of a similar situation. I have been denied 5 times for my Teacher Loan Forgiveness Application. I read the description of the qualifications and have met each one. I have taught consecutively for 7 years at a title 1 school and am a highly qualified special education teacher. My disbursements were also after 1998. Now, they are denying my application for silly reasons such as not writing the date in correct formation (mm/dd/yyyy). I sent back all the forms each time correcting everything. The most recent denial was because I did not teach an a TITLE 1 school. I have checked the website with the TITLE 1 schools and it was on there. As well as one of my co-teachers recently got approved. They are giving me a hard time and I don’t know who to contact. Should I bring it up to the department of education? Or should I find myself a lawyer to interpret everything. I’m frustrated. My loan holder is Wells Fargo and my loans are being managed by ACS education.

Any help would be great. Thank you.

My first loan was APPROVED by the processor on September 30, 1998, and sent to the bank that cut the check on Oct. 1st.  I have applied and been denied teacher loan forgiveness three times because of the approval date.

I contacted the FedLoan/DOE Ombudsmen in December 2013 on the bases that the check that was cut on 10/01/98 could not have been cashed on that date since the funds were not electronically deposited back then, and we all know the funds are still in the original account until the check is cashed.  Initially the Ombudsmen was NOT much help, so in July I finally contacted and attorney.  For $200 he wrote a letter and had several phone conversations with the Ombudsmen, Connie Jesse. 

Today I received a letter from FedLoan stating my loans were pain in full.  Last month my balance was around $4700, so I did not receive the full $5000, but it was still a nice Christmas present! 

Good luck people - don’t give up!

Dawn

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