Loan Amount And Terms

(1) All loans shall be evidenced by promissory notes payable to TSAC. (2) Funds will be sent by Automated Clearing House (ACH) to the institution’s financial aid office or business office in the recipient’s name and shall be disbursed on a semester pro rata basis. The institution will be directed to deliver the funds to the recipient. The maximum award for a recipient and opportunities for renewal shall be as described in T.C.A. § 49-4- 706. If the recipient receives other educational assistance for the same period(s), the total assistance including this award is limited to the recipient’s cost of attendance, as determined by the institution’s financial aid office. MINORITY TEACHING FELLOWS PROGRAM CHAPTER 1640-01-13 (3) The awards may be transferred from one eligible institution of higher education to another provided that a TSAC-approved transfer form is submitted to TSAC. (4) Cancellation (a) For each year of full-time teaching service at an eligible school, as defined in these regulations, the recipient shall receive cancellation credit of one (1) academic year’s award (the equivalent of two (2) semesters) toward repayment of the loan. If a recipient teaches in an eligible school that is high priority or on warning status as designated by the Tennessee Department of Education or the State Board of Education, the recipient’s obligation will be canceled at a rate of one and one-third ( 1 1/3) of the total annual award. (b) Fractions of a year may be credited in one (1) semester or one-half (1/2) year increments toward cancellation for recipients who begin or end full time teaching in the middle of an academic year in a Tennessee public school. At the end of such period, cancellation will be applied upon receipt of verification of the completion of such service. (c) A grace period of one (1) year will be granted to allow the recipient opportunity to secure employment to begin cancellation credit. When a recipient has obtained a full- time teaching position at an eligible school, some or all of the grace period may be waived at the recipient’s written request. (d) Recipients in teaching positions, which qualify them for cancellation credit, must notify TSAC of that teaching status. Individuals whom TSAC has determined to be in a full- time teaching position at an eligible school shall be granted a postponement on repayment to allow them the opportunity to complete a full year of teaching. At the end of such period, cancellation credit will be applied upon receipt of the verification of such service. (e) The debt shall be canceled due to the death of the recipient upon documentation deemed acceptable by TSAC. (f) If a recipient is determined to be totally and permanently disabled under the standards established by T.C.A., Title 8, Chapter 36, Part 5, for determining disability for members of the Tennessee Consolidated Retirement System, the outstanding debt shall be canceled. A recipient is not considered totally and permanently disabled on the basis of a condition that existed prior to his or her application unless the recipient’s condition has substantially deteriorated since he or she submitted the application. If at any time subsequent to an initial determination of disability the recipient’s condition improves to the point where a total and permanent disability no longer exists, TSAC may reinstate any outstanding debt previously canceled. (5) Repayment (a) Repayment for recipients who complete the plan of study shall begin in the first month following the end of the grace period or upon demand by TSAC should TSAC determine that the recipient will not fulfill the service requirement. Interest shall begin to accrue September 1 after completion of the program. The interest shall accrue at a rate of nine percent (9%) per annum. Repayment may be in whole or in monthly installments of at least one hundred dollars ($100) over a period of not more than ten (10) years from the end of the grace period. Payments of less than the amount required to amortize the loan within ten (10) years may be made only if the recipient documents to TSAC’s satisfaction his or her inability to make payments of that MINORITY TEACHING FELLOWS PROGRAM CHAPTER 1640-01-13 amount. All interest shall be based upon the unpaid balance of the loan. The accrued interest may be capitalized (b) Repayment for recipients who fail to complete the funded plan of study shall begin upon demand by TSAC, or in the first month after TSAC has determined that the student is no longer enrolled in a teacher education program or other failure to comply with the terms of the agreement. Repayment will include the full amount of the loan funds received plus interest accrued from the date TSAC has determined that the student is no longer enrolled in a teacher education program or other failure to comply with the terms of the agreement and shall be based upon an interest rate of nine percent (9%) per annum. Repayment may be made in whole or monthly installments over a period of not more than ten (10) years from the date of failure to complete the plan of study. All interest shall be based upon the unpaid balance of the loan. The accrued interest may be capitalized. If a borrower issues a check, draft, or warrant, which is subsequently returned to TSAC for reason of insufficient funds, a stop payment order by the issuer, or other reason, the payment to which these funds was applied shall be reversed on the borrower’s account and interest shall continue to accrue from the date of the last valid payment. (c) Repayment of principal and interest will be prorated for partial service cancellation to reflect each full academic year taught. Such repayment shall begin upon demand by TSAC, or in the first month following termination of the creditable teaching service. Repayment of the non-canceled portion of the loan may be made in whole or in monthly installments over the remaining months of the ten (10) year repayment period. All interest shall be based upon the unpaid balance of the loan. The accrued interest may be capitalized. Minimum monthly payments of one hundred dollars ($100) will be required unless an exception as described in (5)(a) of this rule is granted. (d) If a recipient should re-enter teaching at an eligible school after commencing monetary repayment, the repayments already made cannot be returned to the recipient. However, additional repayment balances that were not in arrears at the time of the reentry into teaching may be ‘‘forgiven’’ by subsequent teaching service. (6) Repayment of principal may be deferred, but interest shall accrue, during any period while the recipient is enrolled as a full-time student in an accredited institution of higher learning, or other extenuating circumstances as determined by the Associate Executive Director for Grant and Scholarship Programs of TSAC. To be eligible for deferment the recipient must request a deferment in writing and complete a TSAC-approved deferment form on a semi-annual basis. (7) Deferments must be verified on a semi-annual basis and supporting documentation shall be provided to TSAC if requested. A student may be granted a deferment based on one or more of the following reasons: (a) Enrollment not seeking a teaching certificate: The student is still enrolled in an accredited institution, but is no longer seeking a teaching licensure, and shall not exceed three (3) years. (b) Enrollment seeking a teaching certificate: The student has not yet completed the requirements for a teaching licensure, is still enrolled at least half-time at an accredited postsecondary institution, is making satisfactory progress toward a teacher licensure, and shall not exceed four (4) years. (c) Hardship: A period of time in which the recipient is unable to make payments due to financial, medical, or personal circumstances beyond the recipient’s control, or other MINORITY TEACHING FELLOWS PROGRAM CHAPTER 1640-01-13 extenuating circumstances approved by the Associate Executive Director for Grant and Scholarship Programs. Such period of hardship shall not exceed two (2) years. (d) Military duty: The student has been called into active duty and shall not exceed the time of deployment.