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Board Report #02-1

Teacher Education Loan Program and
Teacher of the Visually Impaired Loan Program

 

The Teacher Education Loan Program was established in 1997. The program provides for forgivable loans to Wisconsin residents enrolled in the teacher education program of the Milwaukee Teacher Education Center (MTEC). HEAB administers this program under s. 39.395. The attached proposed rules would be the final administrative rules for this program. The student who receives this award must agree to teach in the Wisconsin school district operating under Chapter 119 of Wisconsin State Statutes, First Class System. For each year the student teaches in an eligible school district, 50% of the loan is forgiven. If the student does not teach in an eligible school district, the loan must be repaid at an interest rate of 5%. The proposed rules contain provisions for a maximum and minimum award amount, an application process, terms of loan forgiveness, terms of repayment and terms for the deferment of repayment for borrowers. The proposed administrative rules will not affect expenditures of State funds for the Teacher Education Loan Program.

The Teacher of the Visually Impaired Loan Program was established in 1999. The program provides for forgivable loans to Wisconsin residents enrolled in an eligible in-state or out-of-state institution that prepares them to be licensed as teachers of the visually impaired or orientation and mobility instructors. HEAB administers this program under s. 20.005. The attached proposed rules would be the final administrative rules for this program. The student who receives this award must agree to be a licensed teacher of the visually impaired or an orientation and mobility instructor in a Wisconsin school district, the Wisconsin Center for the Blind and Visually Impaired or a cooperative service agency. For each of the first two years the student teaches and meets the eligibility criteria, 25% of the loan is forgiven. For the third year, 50% is forgiven. If the student does not teach and/or meet the eligibility criteria, the loan(s) must be repaid at an interest rate of 5%. The proposed rules contain provisions for a maximum and minimum award amount, an application process, terms of loan forgiveness, terms of repayment and terms for the deferment of repayment for borrowers. The proposed administrative rules will not affect expenditures of State funds for the Teacher of the Visually Impaired Loan Program.

State Statutes that regulate each of these programs are also attached.

 

PROPOSED
CHAPTER HEA 13
Administrative Procedures for the
Teacher Education Loan Program

HEA 13.01 Purpose
To define the various aspects of the Teacher Education Loan Program authorized by State Statute 39.395, as created by 1997 Wisconsin Act 27, as to the awarding of loans, their forgiveness, or their repayment.

HEA 13.02 Definitions

  1. "MTEC" is the abbreviation for the Milwaukee Teacher Education Center; a non-stock, non-profit corporation organized under Chapter 181 of State Statutes.

  2. "Board" means the Higher Educational Aids Board.

  3. "Loan" means the Teacher Education Loan Program.

  4. "Eligible school district" means the Wisconsin school district operating under Chapter 119 of State Statutes, First Class City School System (currently only the Milwaukee Public Schools).

HEA 13.03 Borrower Eligibility

  1. The borrower shall be a resident of the United States either a citizen or an alien lawfully admitted for permanent residence by the Federal Immigration and Naturalization Service.

  2. The borrower shall be a Wisconsin resident as determined by the board using the residency standards of s. 36.27, Stats.

  3. The borrower shall be enrolled in a teacher education program at MTEC.

HEA 13.04 Terms of Loan

  1. Eligible borrowers may receive a minimum award is $250. The maximum award amount will be set annually. The exact amount of the award will be up to the borrower's cost of education minus need-based aid and any other educational cost related resources.

  2. For loans that are not forgiven and must be repaid, the interest rate shall be 5% annually on the unpaid principal balance with accrual beginning upon the initial date of repayment. Interest shall not accrue during periods of full-time enrollment, employment for forgiveness, or during board-authorized periods of deferment from repayment.

  3. The initial date of repayment will be determined by the board in each instance beginning no sooner than the day after the borrower withdraws or graduates from school.

HEA 13.05 Application Process

  1. A borrower seeking a loan shall contact MTEC.

  2. MTEC shall determine the borrower's cost of education within the requirements set by the Board. MTEC shall decide if the borrower shall receive a loan under this program.

  3. MTEC shall notify the board of the loan amount for the borrower. The board shall voucher a check for the borrower's loan after the borrower's signed agreement form has been received by the board. The agreement form shall set forth the terms of the loan, the terms of forgiveness, the terms of repayment, and the borrower's rights and responsibilities.

  4. All borrower's contact concerning forgiveness and repayment shall be with the board. After leaving MTEC the borrower is required to maintain contact with the board until the loan is either forgiven or repaid. The borrower is required to forward all name, address, and telephone number changes to the board.

HEA 13.06 Loan Forgiveness

  1. Loans shall be forgiven when the borrower is employed as a full-time teacher in the eligible school district. For every academic year of employment, 50% of the principal and accrued interest, if any, shall be forgiven, with the amount to be prorated in cases where fewer months are worked. The borrower shall be given a maximum of 3 years to work the required 2 years.

  2. The maximum of 3 years allowed for forgiveness shall be extended by the board for up to a total of 3 additional years for active duty military service, peace corps, and vista; and for such time periods approved by the board for pregnancy or temporary physical and emotional disability. In no instance shall the term of forgiveness exceed 6 years including extensions authorized by the board. The executive secretary may allow additional periods of deferment in exceptional situations.

  3. Any loan principal remaining unforgiven either because the forgiveness period as defined in (1) and (2) is over, or because the borrower has not been employed for forgiveness as defined in (1) or has moved out of state, shall be repaid to the State of Wisconsin with interest accrued from the date on which the forgiveness period ended.

  4. Only borrowers who have completed the teacher education program at MTEC and who are licensed to teach by the Wisconsin Department of Public Instruction are eligible for forgiveness.

  5. No interest shall be charged to the borrower during the forgiveness period.

HEA 13.07 Terms of Repayment

  1. The borrower shall repay the loan if not employed as a full-time teacher in the eligible school district. Repayment shall be required of borrowers who are employed for periods of time but who do not complete their forgiveness within the time allowed.

  2. The minimum monthly payment shall be $50 including principal and accrued interest. Accrued interest shall be paid first each month from the payment received. The board shall determine the monthly repayment schedule, although the borrower may request a schedule with a higher monthly payment.

  3. The borrower shall repay the loan within a maximum of 6 years not counting periods of deferment granted by the board. Interest shall not accrue during periods of deferment authorized by the board.

  4. The borrower may prepay any or all of the loan without penalty whether the borrower is in forgiveness, repayment, or deferment.

  5. If the borrower dies or becomes totally and permanently disabled, all obligation to make any further payment of principal and interest on the loan is canceled.

HEA 13.08 Deferment of Loan Repayment for Borrowers

  1. Borrowers who return to school on a full-time basis in any course of study at an accredited institution shall be deferred from repayment by the board for the period of enrollment.

  2. Borrowers who enter the military on active duty shall be deferred from repayment by the board for up to 3 years. National Guard and reserve duty are not eligible for deferment.

  3. Borrowers who enter the peace corps or vista shall be deferred from repayment by the board for up to 3 years. Employment with a similar private agency is eligible for deferment if the agency is federally tax exempt.

  4. Borrowers who are unemployed may be deferred from repayment by the board for up to 6 months at a time, up to a maximum of 24 months, as long as they provide proof, satisfactory to the board, that they are actively seeking employment.

  5. Borrowers who become pregnant, give birth or legally adopt a child shall be deferred from repayment by the board for up to 12 months.

  6. In order to receive a deferment, the borrower shall apply to the board. If the borrower submits written evidence that verifies eligibility for the deferment, the board shall approve of and grant the deferment.

  7. The board may grant forbearance from repayment for the benefit of the borrower. Forbearance means an extension of time for making loan payments or the acceptance of smaller payments than were previously scheduled. The board may grant forbearance whenever unemployment, health, other personal problems, or study that is ineligible for deferment temporarily affects the borrower's ability to make scheduled payments.

Wisconsin State Statutes

39.395 Teacher Education Loan Program.

39.395 - ANNOT.
History: 1997 a. 27.

 

PROPOSED
CHAPTER HEA 14
Administrative Procedures for the
Teacher of the Visually Impaired Loan Program

HEA 14.01 Purpose
To define the various aspects of the Teacher of the Visually Impaired Loan Program authorized by s. 39.398, Stats., as created by 1999 Wisconsin Act 629 as to the awarding of the loans; their forgiveness; or their repayment.

HEA 14.02 Definitions

  1. "Eligible institution" means a non-profit, private institution of higher education in Wisconsin or a physically adjacent state [(as defined in s. 175.46 (1)(d)] which is accredited by a national or state accrediting agency, and which provides a program that prepares persons to be licensed as teachers of visually impaired pupils or as orientation and mobility instructors.

  2. "Board" means the Higher Educational Aids Board

  3. "Loan" means the Teacher of the Visually Impaired Loan Program.

HEA 14.03 Borrower Eligibility

  1. The borrower shall be a resident of the United States, either a citizen or an alien lawfully admitted for permanent residence by the federal immigration and naturalization service.

  2. The borrower shall be a Wisconsin resident as determined by the board using the residency standards of s. 36.27, Stats.

  3. The borrower shall be enrolled at least part-time in an eligible institution in a program that prepares persons to be licensed as teachers of the visually impaired or as orientation and mobility instructors.

  4. To the extent possible, preference shall be given to persons who are likely to remain or return to Wisconsin to work with visually impaired persons.

HEA 14.04 Terms of Loans

  1. Eligible borrowers may receive up to $10,000 a year with a minimum of $250. The exact loan amount will be equal to the borrower's cost of education minus the need-based aid the borrower is offered. The Teacher of the Visually Impaired Loan Program may replace loans for students that are need-based in the package of aid. The total the borrower receives under this program shall not exceed $40,000 in outstanding principal.

  2. For loans that are not forgiven but must be repaid, the interest rate shall be 5% annually on the unpaid principal balance with accrual beginning upon the initial date of repayment. Interest shall not accrue during periods of at least half-time enrollment; grace period, employment for forgiveness; or during board authorized periods of deferment from repayment.

  3. The initial date of repayment will be determined by the board in each instance beginning no sooner than the day after the borrower withdraws or graduates from school. There will be a six-month grace period that will start the day after the person withdraws or graduates from school. The borrower will not be required to make payment during the grace period.

HEA 14.05 Application Process

  1. A borrower seeking a loan shall contact the eligible institution's financial aid office.

  2. The eligible institution's financial aid office shall determine the borrower's cost of education within the requirements set by the board. The board shall decide if the borrower shall receive a loan under this program.

  3. The eligible institution's financial aid office shall notify the board of the loan amount for the borrower. The board shall voucher a check for the borrower's loan after the borrower's signed agreement form has been received by the board. The agreement form shall set forth the terms of the loan; the terms of forgiveness; the terms of repayment; and the borrower's rights and responsibilities.

  4. All borrower contact concerning forgiveness and repayment shall be with the board. After leaving school the borrower shall maintain contact with the board until the loan is either forgiven or repaid. The borrower is required to forward all name, address and telephone number changes to the board.

HEA 14.06 Loan Forgiveness

  1. Loans shall be forgiven when the borrower is licensed and employed, at least part-time, in Wisconsin as a teacher of visually impaired pupils or as orientation and mobility instructor by a Wisconsin school district, the Wisconsin Center for the Blind and Visually Impaired or a cooperative educational service agency. For the first academic year of full-time employment, 25% of the principal and accrued interest, if any, shall be forgiven, with the amount to be prorated in cases where less time has been worked. For the second academic year of full-time employment, 25% of the principal and accrued interest, if any, shall be forgiven, with the amount pro-rated in cases where less time has been worked. For the third academic year of full-time employment, 50% of the principal and accrued interest, if any shall be forgiven, with the amount pro-rated in cases where less time has been worked. The borrower shall be given a maximum of 6 years to work the required 3 years for full forgiveness.

  2. The maximum of 6 years allowed for forgiveness shall be extended by the board for up to a total of 3 years for active duty military service; peace corps and vista; and a year for pregnancy, childbirth or the legal adoption of a child or for temporary physical or emotional disability. In no instance shall the term of forgiveness exceed 9 years including periods of deferments authorized by the board. The executive secretary may allow additional periods of deferment in exceptional situations.

  3. Any loan principal remaining unforgiven either because the forgiveness period as defined in (1) and (2) is over, or because the borrower has not been employed for forgiveness as defined in (1) or has moved out of state, shall be repaid to the State of Wisconsin with interest accrued from the date on which the forgiveness period ended.

  4. Only borrowers holding a license in teaching visually impaired pupils or as an orientation and mobility instructor shall be eligible for forgiveness.

  5. No interest shall be charged the borrower during the forgiveness period.

HEA 14.07 Terms of Repayment

  1. Borrowers shall repay a loan if not employed, at least part-time, as a teacher of visually impaired pupils or as an orientation and mobility instructor in a Wisconsin school district, the Wisconsin Center for the Blind or an educational service agency. Repayment shall be required of borrowers who are employed for periods of time but who do not complete their forgiveness within the time allowed.

  2. The monthly payment shall be a minimum of $50 including principal and accrued interest. Accrued interest shall be paid first each month from the payment received. The board shall determine the monthly repayment schedule, although a borrower may request a schedule with a higher monthly payment.

  3. A borrower shall repay the loan within a maximum of 15 years not counting periods of deferment granted by the board. Interest shall not accrue during periods of deferment authorized by the board.

  4. Borrowers may prepay any or all of their loan account without penalty whether the borrower is in school, forgiveness, repayment or deferment.

  5. If the borrower dies or becomes totally and permanently disabled, all obligation to make any further payment of principal and interest on the loan is canceled.

HEA 14.08 Deferment of Loan Repayment for Borrowers

  1. Borrowers who return to school on a full-time basis in any course of study at an accredited institution shall be deferred by the board from repayment for the period of enrollment.

  2. Borrowers who enter the military on active duty shall be deferred by the board from repayment for up to 3 years. Students on national guard or on reserve duty for training are not eligible for deferment.

  3. Borrowers, who enter the peace corps or vista, shall be deferred by the board from repayment for up to 3 years. Employment with similar private agencies is eligible for deferment if the agency is federally tax exempt.

  4. Borrowers who are unemployed may be deferred from repayment by the board for up to 6 months at a time, up to a maximum of 24 months, as long as they provide proof, satisfactory to the board, of actively seeking employment.

  5. Borrowers who become pregnant, give birth or legally adopt a child shall be deferred from repayment by the board for up to 12 months.

  6. The board may grant forbearance from repayment for the benefit of the borrower. Forbearance means an extension of time for making loan payments or the acceptance of smaller payments than were previously scheduled. The board may grant forbearance whenever unemployment, health, other personal problems, or educational study that is ineligible for deferment temporarily affects the borrower's ability to make scheduled payments on the loan. Periods of forbearance shall not exceed 6 months for each approved request, up to a maximum total of 24 months.

  7. In order to receive a deferment, a borrower shall apply to the board. If the borrower submits written evidence, which verifies eligibility for the deferment, the board shall approve the deferment.

Wisconsin State Statutes

39.398 Teachers and Orientation and Mobility Instructors of Visually Impaired Pupils Loan Program.

39.398 - ANNOT.
History: 1999 a. 144.

 

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