Heather,
Thank you for doing this! It is such a wonderful resource for people like me!
To start off, I am a special education teacher in a Title 1 school and have been serving in the same capacity here in North Carolina for 11 years.  Recently (2006), I completed a graduate degree in education and applied for loan forgiveness in the amount of $17,500.  I met all of the qualifications in the law, but they seemed to find a loophole to deny me the forgiveness in that i had an undergraduate loan not completely paid off by October of 1998 (it has since been paid off) I see this nowhere in the law as a disqualifying factor.

I called Sallie Mae to dispute this and even though they pulled up and read the law and could not find grounds for disqualification within the law, they stated that their policy was to disqualify for this reason.  I asked also about PSLF and was told that I did not qualify as my loan was not a “direct loan”.  They then told me that my title 1 school and years of service in special education did not count for anything and that I was not at all eligible for any type of loan forgiveness whatsoever, and would not be eligible at all in the future during the life of the loan.  To make matters worse, my wife teaches in my school with me and has the same debt as I do, consuming over $600 a month from us combined.

Do I have any recourse in this?  Should I switch to direct loans and begin PSLF eligibility? I have 34k left after paying over 20k in payments since 2007 and have only lowered my principle by about $4k.  I have no clue what to do and cant sustain these payments.
Thanks,
Tom

Hi, Tom!  Thank you for the important work you do!  I’m in NC too—in Wilmington.

Teacher Loan Forgiveness provides cancellation of up to $5000 for “highly qualified” teachers who teach five consecutive years in eligible schools. 

But yes, unfortunately, to qualify for loan forgiveness under this program, a borrower must not have had an outstanding balance on a federal student loan as of October 1, 1998.  The statute is 20 USC sec. 1078-10 explicit in this regard: http://www.law.cornell.edu/uscode/text/20/1078-10  Borrowers who had any balance on a federal loan ON THAT DATE just aren’t eligible. 

Sorry!  Often when programs are created they are only available for new borrowers, but not always.  This is all about money. When legislation is moving through Congress, they come up with estimated costs, and limit who is eligible in order to limit costs.  Legislation that covers more people and costs more does more good, but has a harder time becoming law, since the government is broke like the rest of us.

Look into PSLF for sure.