Child Care Provider Loan Forgiveness
Certain child care providers who have an outstanding subsidized or unsubsidized Stafford Loan from either the Federal Family Education Loan (FFEL) Program or Federal Direct Program may be eligible to have a portion of the loan forgiven. In other words, you will not have to repay a portion of the outstanding amount.
To be eligible for child care provider loan forgiveness all of the following criteria must be met. You must have:
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No outstanding balance on any FFEL Program or Federal Direct Program loan on October 7, 1998 or on the date you obtained a FFEL Program of Federal Direct Program loan after October 7, 1998.
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Received the outstanding Stafford Loan on which you are requesting forgiveness for the purpose of completing your associate's or bachelor's degree in early childhood education or child care. If you originally received a degree in another area, but later obtained a degree in early childhood education, forgiveness is limited to eligible loans you obtained for a maximum of two of the academic years required to obtain the early childhood education degree.
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Received the outstanding Stafford Loan on which you are requesting forgiveness before you began your qualifying employment as a child care provider.
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Worked full time as a child care provider in a facility that serves a low-income community for the two consecutive years preceding the year during which you requested loan forgiveness. At least 70 percent of the individuals that the facility serves must be from families that earn less than 85 percent of the state median household income.
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Not received benefits for the same child care service under the National and Community Service Act of 1990 (AmeriCorps).
Forgiveness Amounts
To be eligible for forgiveness, you must maintain full time employment for successive, uninterrupted 12-month periods. A proportion of the balance of your subsidized or unsubsidized FFEL Program or Federal Direct Program Stafford Loans (including accrued interest) may be forgiven in the following amounts:
- 20 percent after completing two consecutive years of qualifying employment.
- 20 percent after completing the third consecutive year of qualifying employment.
- 30 percent after completing the fourth consecutive year of qualifying employment.
- 30 percent after completing the fifth consecutive year of qualifying employment.
While new applicants are not being accepted into the program because no additional funding has been provided, applications for renewal benefits are available for those borrowers who have previously been granted forgiveness under the Child Care Provider Loan Forgiveness Program. Complete the application if you think you qualify.
Child Care Provider Forbearance
If you meet the qualifications for loan forgiveness for child care providers and you do not currently have a deferment on your qualifying loans, you may be eligible for forbearance (i.e., postponement of repayment), granted annually, while you are engaged in qualifying child care provider employment. To be eligible, you must
- Provide your beginning and anticipated ending dates of employment for the year to your loan holder
- Certify that you will meet the employment eligibility criteria for the requested forbearance period, and
- Certify that you understand that if your loan holder grants you a forbearance for the eligible service, there is no guarantee that your loan will be forgiven.
Forbearance Application Procedures
For more information about loan forgiveness for child care providers, contact the U.S. Department of Education's Child Care Provider Loan Forgiveness support desk at (888) 562-7002.
