Child-care-provider forgiveness

Who is eligible?

• The child-care provider must have been a new borrower as of Oct. 7, 1998, who had no outstanding loan balance on a Federal Family Education Loan Program (FEELP) or William D. Ford Federal Direct Loan Program loan as of that date or the date the borrower obtained a loan after Oct. 7, 1998.
• The child-care provider must have received an associate or bachelor's degree in early-childhood education or child care from a higher-education institution.
• The child-care provider must have worked full time (at least 30 hours per week) for at least two consecutive years at a child-care facility that provides for the education and care of children through age 5 and meets applicable state or local government licensing, certification, approval or registration requirements. At least 70 percent of the children served by the facility must come from households that earn less than 85 percent of the state median household income.

 

How much of the outstanding loan amount can be forgiven?

• Up to 100 percent of the outstanding balance of a qualified Stafford loan may be forgiven in increments based on the child-care provider's term of qualified employment, according to the following schedule:
  • 20 percent after two consecutive years of qualified employment.
  • 20 percent after three consecutive years of qualified employment.
  • 30 percent after each of the fourth and fifth consecutive years of qualified employment.
• The program forgives only the eligible outstanding balances of qualified federal education loans. Amounts previously paid by the child-care provider will not be refunded.
• Borrowers who are engaged in qualified child-care employment also may apply to their lender or loan servicer for forbearance to suspend payments on qualified education loans for up to a year at a time.

 

How does a child-care provider apply for loan forgiveness?

• New applications for Child-Care-Provider Loan Forgiveness will be accepted on a first-come, first-served basis until the annual congressional appropriation for the program is committed. Child-care workers must re-apply each year to be considered for additional loan forgiveness.
• Download a Child-Care-Provider Loan Forgiveness Program Application or Forbearance Form.
• For more information, call the Child-Care-Provider Loan Forgiveness support desk at (888) 562-7002, or write to: Child-Care Provider Loan Forgiveness Program, PO Box 4639, Utica, NY 13504-4639.