Federal Student Aid - IFAP
AwardYear: 1997-1998
EnterChapterNo: 9
EnterChapterTitle: State Grant Programs
SectionNumber: 3
SectionTitle: Paul Douglas Teacher Scholarship Program
PageNumbers: 21-26

As stated in the introduction of this chapter, funding for the Paul
Douglas Teacher Scholarship Program (Douglas Scholarship) has not
been authorized for the 1997-98 award year. While no new
scholarships will be awarded, students who have outstanding
Douglas Scholarships must continue to fulfill the scholarship
agreement they entered into with their state agencies (to teach upon
completion of their degree program). If a student is still enrolled and
working toward his or her degree, that student will need to fulfill the
agreement upon completion of the degree for the number of Douglas
Scholarships received. A Douglas Scholar who needs assistance in
finding alternative sources of aid to complete his or her degree
program or has further questions about the program may wish to
contact the Douglas Program representative listed in Section 5 of this

[[Scholar agrees to teach]]
This section covers the teaching agreement in detail (for example,
how many years the Douglas Scholar must teach depending on the
number of scholarships received) and explains the repayment
procedures that are used if the agreement is not followed.


Any individual who received scholarships entered into an agreement
with his or her state agency stating that upon completing his or her
degree program, he or she will teach

- full time in any state at the public or private nonprofit preschool,
elementary, or secondary level in a school; or

- full time in a private nonprofit institution, children with
disabilities or with limited English proficiency.

[[Determining full-time teacher status]]
In determining that a scholar has taught full time, the chief state
school officer (CSSO),*1* school principal, or a designee of these
officials should consider the following:

- Any activities required to support classroom teaching, such as
testing and evaluation of students, a reasonable allowance for
"prep time," or other required activities may be considered in
addition to classroom hours.

- Full-time substitute teaching may be credited toward the teaching
obligation, provided that the scholar teaches a minimum of one
term each school year. Credit for one term or more of teaching
will be prorated if it is less than a full school year.

- Scholars who are technically classified as part time but whose
teaching schedule is the equivalent to the typical full-time teacher
may receive credit as having taught full time.

- If a scholar teaches less than a full school year, then teaching
during summer school may be credited toward the teaching
obligation. Other conditions contained in this section apply to
teaching summer school.

- A teaching contract is not required in the employment situations
listed previously in order to receive credit toward the teaching

- Scholars who are still teaching may receive credit previously
denied for prior years under the liberalized conditions of this
section. The state is encouraged to advise scholars of these
changes so that the scholar may request review of teaching credit
by the state or request a revised teaching certification form (or
forms) for reevaluation by the school principal or CSSO's office.

Activities not acceptable as credit toward the teaching obligation

- serving as a teacher's assistant or teacher's aide,

- serving a teaching internship (student teaching), and

- teaching overseas (including in U.S. Department of Defense
Dependent schools).

Furthermore, volunteer activities may not be credited in classifying
the scholar as teaching full time.


The requirement to teach two years for each year of scholarship
assistance is reduced by half if the scholar teaches on a full-time
basis in a teacher shortage area that is designated as such by the
Secretary of Education (the Secretary). States may propose for the
Secretary's consideration teacher shortage areas at the preschool,
elementary, and secondary school levels.

Also, if a scholar teaches full time and also teaches at least one class
per day in a teacher shortage area, the scholar may receive the
reduction of teaching obligation allowed for teaching in a shortage
area. (This liberalization does not apply to Stafford or SLS loan


For Douglas Scholars, teaching in a teacher shortage area is
described further in Section 653.61 of the August 11, 1993 Douglas
Program regulations. The term "teacher shortage area" is defined in
¤682.210(q)(5) through (7) of the Federal Family Education Loan
Program (FFELP) regulations published on December 18, 1992.
Douglas Scholars teaching in a shortage area may obtain certification
in one of two ways:

- If the CSSO in the state where the scholar is teaching has
previously notified the Secretary that a listing of teacher shortage
areas will be provided to the school principal, then the school
principal can certify that the scholar is

- teaching full time and

- teaching in a federally approved teacher shortage area.

- If the CSSO in the state where the scholar is teaching did not
delegate certification authority to the school principals, then the
CSSO's office will provide the certification.

[[Scholars teaching in designated areas continue to qualify]]
The FFEL regulations also describe other procedures necessary to
establish teacher shortage areas. The teacher shortage areas are
designated on an annual basis. However, a scholar who teaches in an
area designated as a teacher shortage area in one year will continue
to qualify for the teaching reduction even if that area is not
designated as a teacher shortage area in subsequent years. In this
case, the scholar must provide the state agency with a statement from
the principal of the school in which he or she is teaching. This
statement must certify that he or she continues to be employed as a
full-time teacher in the same area in which he or she was teaching
when the teaching obligation was originally reduced.

[[Establishing teacher shortage areas]]
When establishing a teacher shortage area, the Secretary must give
special consideration to

- areas in which emergency teacher certifications are being used to
correct teacher shortages, and

- states that have retirement laws permitting early retirement.


[[Repayment includes interest]]
If the state finds that a Douglas Scholar has not complied with the
scholarship agreement or is no longer pursuing a course of study
leading to certification as a teacher at the public or private nonprofit
preschool, elementary, or secondary level, the scholar must repay the
amount of the scholarship received. The repayment is prorated
according to the fraction of the teaching obligation not completed (as
determined by the state agency). The scholar, in this case, is also
responsible for paying a simple, annual interest charge on the
outstanding principal, and all reasonable collection costs as
determined by the state agency.

The state agency capitalizes any accrued interest at the time it
establishes the scholar's repayment schedule. By statute, the interest
rate charged must be the greater of the rate charged to new borrowers
under the Stafford Loan Program or the rate charged to new
borrowers under the PLUS Program. During 1996-97, for loans
made from July 1, 1996 through June 30, 1997, the rate was 8.72
percent. For 1997-98, the rate will be adjusted on July 1, 1997.

Simple interest accrues

- from the date of the initial scholarship payment if the state agency
has determined that the scholar

- is no longer pursuing a course of study leading to certification
as a teacher at the preschool, elementary, or secondary level; or

- has completed a course of study leading to certification as a
teacher at the preschool, elementary, or secondary level, but
never taught; and

- from the day after that portion of the scholarship period for which
the teaching obligation has been fulfilled. (The scholarship period
is the original postsecondary academic year for which the
scholarship was awarded.)

[[Minimum yearly repayment]]
The scholarship must be repaid in monthly or quarterly payments
that cover principal, interest, and collection costs, according to a
schedule established by the state. The minimum yearly repayment is
$1,200 or the unpaid balance (whichever is less).

[[Time allotted for Scholarship repayment]]
The scholarship must be completely repaid within 10 years after the
scholar enters repayment status, and the state may require the scholar
to repay more than the minimum yearly repayment if needed to
complete the entire repayment within the 10 year period.

[[Exceptions to repayment]]
The 10-year repayment period may be extended if the scholar meets
an "exceptions to repayment" condition. The state agency shall not
consider that the scholar has violated the repayment schedule if he or
she does not meet the payments during the time he or she is

- engaged in a full-time course of study at a postsecondary

- serving up to a maximum of three years as an active duty member
of the armed forces of the United States;

- serving as a member of the Peace Corps or VISTA for a period of
not more than three years;

- temporarily totally disabled for a period not to exceed three years
(as established by sworn affidavit of a qualified physician);

- seeking but unable to find full-time employment for a single
period not to exceed 12 months;

- unable to secure employment for a period not to exceed 12 months
while caring for a disabled child, spouse, or parent; or

- unable to satisfy the terms of the repayment schedule while
seeking but unable to find full-time employment as a teacher in a
public or private nonprofit preschool, elementary, or secondary
school for a single period not to exceed 27 months.

[[Qualifying for more than one exception]]
A scholar may potentially qualify for more than one of the above
exceptions to repayment, provided that the exception is adequately
documented as determined by the state agency. Scholars residing
overseas may apply for any of the exceptions listed, but the scholar
must provide documentation deemed acceptable by the state.

[[Notifying the state agency]]
To qualify for any of the previously listed exceptions, the scholar
must notify the state agency of his or her claim and provide
supporting documentation as required by the state agency. If the
scholar qualifies under any of the exceptions, he or she will not be
required to make repayments--NOR WILL INTEREST ACCRUE--
on the outstanding balance. The state agency will notify the scholar
about its determination of the scholar's qualification for the exception
for which he or she petitioned the state.

[[Length of extension]]
The state agency shall extend the 10-year scholarship repayment
period by a period equal to the length of time a scholar

- meets any of the "exceptions to repayment" conditions previously
listed; or

- is unable to complete the scholarship repayments within
this 10-year period because of his or her financial condition (as
established to the state's satisfaction).

The state agency shall cancel a scholar's repayment obligation if the
state determines

- on the basis of a sworn affidavit by a qualified physician, that the
scholar is unable to teach on a full-time basis because he or she is
totally and permanently disabled; or

- on the basis of a death certificate or other evidence, conclusive
under state law, that the scholar has died.

*1* The CSSO is the highest ranking educational official for
elementary and secondary education for the state.