To qualify, basically you must work as a full-time teacher for five consecutive years in an elementary or secondary school that has been designated as a "low-income" school.

Additional conditions:

• At least one of the five qualifying years of teaching must occur after the 1997-98 academic year.
• The loan must have been made before the end of the fifth year of qualifying teaching.
• The elementary school must be public or private nonprofit.
• A defaulted loan cannot be cancelled for teacher service unless you've made satisfactory repayment arrangements with the holder of the loan.

A borrower may not receive loan forgiveness for qualifying teaching service if the borrower receives an Americorps benefit for the same teaching service. For more information on AmeriCorps, click here.

Each year, the U.S. Department of Education publishes a list of low-income elementary and secondary schools. To find out if the school that employs you is classified as a low-income school, you can check our online database for the   year(s) you have been employed as a teacher. Usually, you will want to check the database for the most recent years in which you taught at the school. Questions about the inclusion or omission of a particular school must be directed to the state education agency contact in the state where the school is located and not to the U.S. Department of Education. Following is the list of low-income schools by year, up to the most recent year available:

School Years: 1997-1998 | 1998-1999 | 1999-2000 | 2000-2001 | 2001-2002 | 2002-2003 | 2003-2004 |

Your school does not have to be designated a low-income school in each of the five consecutive years. If you are teaching at a school listed as a low-income school for at least one year (during your employment), your subsequent years of service at that school can be counted in the five consecutive years, even if the school is not designated as a low-income school in every subsequent year. For example, if you began teaching at a secondary school in the 1994-95 academic year, and it was designated as a low-income school in 1996-97, you may count your five consecutive years of service at that school starting with the 1996-97 academic year, even if the school is not designated as a low-income school in subsequent years.

Your five consecutive years won't necessarily be interrupted if you were unable to teach a full year because of a family or medical leave condition,* if you went back to school (at least half-time) for reasons directly related to the performance of your teaching service, or if you were called or ordered to active duty status for more than 30 days as a member of a reserve component of the Armed Forces.** If you completed at least one-half of the academic year, and your employer considers you to have fulfilled your contract requirements for the academic year for the purposes of salary increases, tenure, and retirement, that academic year can be counted as one of your qualifying years of teaching service.

You apply for cancellation after completing the five-year teaching requirement. From the lender or servicer holding your loan, obtain an application, complete it, and give it to the chief administrative officer at your school. That individual must certify on the application that you have taught full-time for five consecutive years at that school, and

• if you're teaching in an elementary school, that you have knowledge of--or teaching skills in--reading, writing, mathematics, and other areas of the elementary curriculum;
• if you're teaching in a secondary school, that you are teaching in a subject area relevant to your academic major.

After the application is complete, submit it to your lender.

You can get forbearance for up to 60 days while you're getting the required information for your application and during the time it takes for the lender and guarantor to review it.

The loan holder and guaranty agency must notify you within 135 days of the decision on your application, and if it is approved, must provide new repayment terms based on any remaining loan balances. The lender may cancel up to $5,000 of the aggregate loan amount that is outstanding after you've finished your fifth year of teaching. (The aggregate loan amount includes both principal and interest.) However, the lender cannot refund the payments you made before you completed the fifth year of teaching service.

Your lender can grant forbearance for each year of your qualifying teaching service if the expected cancellation amount will satisfy the anticipated remaining outstanding balance on the loan at the time of the expected cancellation. Unless you give your lender or servicer other instructions, your unsubsidized Stafford Loan balance will be cancelled first, followed by any outstanding subsidized Stafford Loan balances, and then any eligible outstanding Consolidation Loan balances. The lender may cancel only the outstanding portion of the Consolidation Loan that was used to repay subsidized or unsubsidized Stafford Loans that qualified for loan forgiveness.

• "Academic year" means one complete school year at the same school, or two complete and consecutive half years at different schools, or two complete and consecutive half years from different school years (at either the same school or different schools). Half years exclude summer sessions and generally fall within a 12-month period. For schools that have a year-round program of instruction, 9 months is considered an academic year.
• "Elementary school" or "secondary school" means a public or nonprofit private school that provides elementary education or secondary education as determined by state law (or by the U.S. Department of Education if the school is not in a state).
• "Full-time employment as a teacher" is determined by the state's standard. For a borrower teaching in more than one school, the determination of full time is based on the combination of all qualifying employment.
• "Teacher" means a person who provides direct classroom teaching or classroom-type teaching in a non-classroom setting, including Special Education teachers.

You can download and print out information in a convenient Portable Document Format (PDF), which requires the Adobe Acrobat Reader. (You can download the Reader for free at the Adobe Web site.) The color PDF version works best if printed as a two-sided sheet and then folded into a brochure. This brochure can be duplicated but not sold.

This provision excludes from income any student loan amounts forgiven by non-profit, tax-exempt charitable or educational institutions for borrowers who take community service jobs that address unmet community needs. For example, a recent graduate who takes a low-paying job in a rural school will not owe any additional income tax if, in recognition of this service, his or her college or another charity forgives a loan it made to him or her to help pay her college costs. This provision applies to loans forgiven after August 5, 1997.

• inpatient care (i.e., an overnight stay) in a hospital, hospice, or residential medical-care facility. This includes any period of incapacity (defined to mean the inability to work, attend school, or perform other regular daily activities; includes pregnancy).
• continuing treatment by (or under the supervision of) a health care provider for a period of incapacity (see above). It also includes a chronic or long-term health condition that is incurable or so serious that, if not treated, would likely result in a period of incapacity of more than three calendar days. Includes prenatal care.

For complete information, check with the holder of your loan.

**Army National Guard, Army Reserve, Marine Corps Reserve, Air National Guard, Air Force Reserve, and Coast Guard Reserve