The purpose of the teacher incentive loan program for teachers of mathematics and science is to provide financial support in the form of long-term educational loans to applicants with demonstrated academic competency and financial need who intend to pursue a teaching career in mathematics or science in Washington public schools. The program is also intended to offer a financial incentive to those individuals by providing for the forgiveness of loan repayments in recognition of teaching service.

The higher education coordinating board (HECB) is charged with the administration of the teacher incentive loan program for teachers of mathematics and science. When a responsibility of the HECB or board is referenced in these regulations, the authority needed to discharge that responsibility lies with the executive director or his or her designee.

(1) Initial eligibility. For a student to receive a mathematics/science loan, he or she must:

(a) Be a "needy student" as defined by the higher education coordinating board;

(b) Be a resident of Washington [as defined in WAC 250-18-010 through 250-18-060];

(c) Be enrolled or accepted for enrollment as a student at a participating institution;

(d) Be registered for at least ten credit hours or the equivalent for each term in which a loan is received;

(e) Have satisfied the institution's requirements for formal acceptance as a declared major in a program of teacher education in a field of mathematics or science leading to a degree, certificate, or primary endorsement;

(f) Demonstrate the capability of maintaining a 3.0 grade point average (on a 4.0 scale);

(g) Certify that he or she does not owe a refund on a state need grant, a Pell grant or a supplemental educational opportunity grant, and is not in default on a loan made, insured, or guaranteed under the national direct student loan, guaranteed student loan [programs], or mathematics/science loan program[s];

(h) [Have attained junior status or higher; or]

[(i)] Be a certificated teacher who satisfies (a), (b), (c), (d), and (g) of this subsection and has been formally accepted into a program in teacher education leading to a degree, certificate[,] or primary endorsement in a field of science or mathematics.

(2) Continuing eligibility. For a student to maintain continuing eligibility for additional mathematics/science loans, he or she must:

(a) Continue to meet the basic eligibility requirements listed under subsection (1) of this section;

(b) Not have reached the ten thousand dollar cumulative borrowing limit of the program; and

(c) Satisfy academic progress requirements of the program by maintaining a 3.0 grade point average (on a 4.0 scale) for the time period the loan was received and successfully complete the required number of credit hours.

For an institution of higher education to be eligible to participate in the mathematics/science loan program, the institution must:

(1) Be a college or university in the state of Washington which is a member institution of an accrediting association recognized as such by rule of the higher education coordinating board; and

(2) Be approved by the state board of education for offering an academic program leading to a teacher's certificate with an endorsement in a field of science or mathematics or be participating in a cooperative or joint teacher education program with another accredited institution that meets the requirements of this section.

In order to participate in the program a postsecondary institution must annually file an "agreement to participate" [supplying the following information: Name and address of school (including central office and all campus sites), the date on which the school officially began instruction if in the last five years, type and date of last accreditation, enrollment information (unless reported to the state of Washington or in the higher education general information survey) and such other information as may be required to assure proper administration of the program. In addition the "agreement to participate" will also] [to] indicate the institution's agreement to abide by all program rules, regulations, and guidelines, to maintain and provide all pertinent information, records, and reports requested by the board, and to notify the board within thirty days of any change [(other than student enrollment)] to information reported on the agreement form.

(1) Financial aid terms:

(a) "Needy student" shall mean a post-high school student of an institution of postsecondary education who demonstrates to the board the financial inability, either parental, familial, or personal, to bear the total cost of education for any semester or quarter.

(b) "Financial need" shall be the difference between the budgetary cost to the student attending [an] [the] institution of postsecondary education and the total applicant resources which the institutional financial aid officer determines can reasonably be expected to be available to the student for meeting such costs.

(c) "Budgetary cost" of attending an institution shall consist of that amount required to support the individual and his or her dependents during the period in which that individual is enrolled as a student. Budgets will reflect the latest recognized cost levels for room and board, transportation, books, supplies, personal expenses, and other cost factors deemed necessary for consideration[, consistent with WAC 250-40-040 (2)(a)].

(d) "Total applicant resources" for the dependent student shall mean the sum of the amounts which reasonably may be expected from the student and his or her parent(s) inclusive of expected summer savings to meet the student's cost of education, and the amount which reasonably may be expected to be made available to the student by his or her parent(s) for such purpose. For the self-supporting student total applicant resources shall mean the amount which reasonably may be expected from the [student and his or her spouse inclusive of expected] summer savings to meet the student's cost of education.

(e) "Washington resident" shall be defined as an individual who satisfies the requirements of WAC 250-18-010 through 250-18-060 pertaining to the determination of residency.

(f) "Dependent student" shall mean any post-high school student attending an eligible institution of postsecondary education who does not qualify as a independent student in accordance with (g) of this subsection.

(g) [has established a bona fide independent relationship and who demonstrates compliance with criteria for determining self-supporting status as contained in the program guidelines for the state work-study program.] "Independent student" shall mean any student who has either:

(i) Reached his or her twenty-fourth birthday before January 1st of the aid year; or,

(ii) Is a veteran of the United States armed forces; or,

(iii) Is an orphan or ward of the court; or,

(iv) Has legal dependents other than a spouse; or,

(v) Is a married student or a graduate/professional student and will not be claimed by parents as a U.S. income tax exemption in 1988; or,

(vi) Was not claimed by parents as a U.S. income tax exemption in either 1986 or 1987 and had a total income and benefits for those two years equal to or greater than $4,000.

(2) Academic and program requirements:

(a) Minimum credit hour requirement[s]:

(i) Normal progress. Students receiving mathematics/science loans must be registered for a minimum of ten credit hours (per term) or the equivalent for each academic year for which a loan is received except as specified in [(a)](iii) of this subsection.

(ii) Calculation of equivalency. In recognition of the fact that participating institutions have different academic calendars and apply different full-time enrollment definitions to graduate and undergraduate students, the 10 credit hour equivalent standard is defined as follows: As 10 credit hours is 5/6ths (10/12) of the minimum 12 credit hours required for full-time undergraduate enrollment, a course load that by institutional standard is the equivalent of 5/6ths of a minimum full-time graduate course load satisfies the threshold course load requirement of the mathematics/science loan program.

(iii) Exceptions: Institutions may grant a one-year exception to the requirement for successful completion of 10 credit hours or equivalent per term of mathematics/science loan recipients when, in the institution's evaluation, special circumstances prevented the student from completing the required number of courses.

Each institution must send the board a copy of its policy for reawarding aid to mathematics/science loan recipients who have not satisfactorily completed the required number of credit hours the prior payment period. Each institution's policy must be approved by board staff before warrants will be sent to the institution.

If a student is reawarded a mathematics/science loan after having not completed a full-time course load the prior term, documentation must be maintained by the institution indicating that its [CPE] board-approved policy has been followed.

(b) Grade point average requirement[s]:

(i) Initial loans:

(A) General. First-time borrowers must demonstrate the capacity for academic achievement at a 3.0 or better grade point average in the qualifying program.

(B) Prior achievement of a 3.0 cumulative grade point average is considered to be a demonstration of capacity.

(C) Absence of a 3.0 grade point average. Institutions may certify applicants as meeting the demonstrated academic achievement criteria if, in the institution's judgment, additional factors, e.g., current academic average, faculty evaluation, test scores, job related success, etc., indicate the probability of a student meeting the 3.0 standard. Institutions must place a statement in the loan applicant's file specifying the basis for their judgment.

(D) Subsections (A) through [(C)][(D)] above do not apply to first-time borrowers who are currently certificated to teach in Washington state.

(ii) Subsequent loans. All borrowers are expected to earn a 3.0 or equivalent grade point average for those academic years for which they have received a mathematics/science loan. A one-year exception may be granted to an otherwise eligible borrower when, in the evaluation of the institution, the grade point average earned was due to special circumstances and is not indicative of the borrower's academic capability. Such an exception must be based on criteria no less stringent than the institution would apply to institutionally controlled aid awards with similar academic standards. A borrower must maintain an on-going 3.0 average for all terms completed during the exception year. Successful maintenance of the 3.0 average must be demonstrated for each term before funds for the following term can be released.

(c) Approved academic program:

Approved mathematics and science programs for the sole purpose of loan eligibility will be established by the higher education coordinating board with the advice of the mathematics/science loan advisory committee, and in accordance with the state board of education regulations and guidelines concerning subject field teacher endorsements.

(3) Technical provisions:

General. In the drafting of specific loan definitions reference has been made to the Federal Guaranteed Student Loan Program (20 U.S.C. Sec. 1701 et. seq.) in order to establish consistency between programs and follow accepted loan program standards.

(a) In-school period. The period of time during which a student continues enrollment on at least a half-time basis at a school satisfying guaranteed student loan school eligibility requirements. Where a break in such enrollment is shorter than the length of the grace period stipulated in [a] [the] student's promissory note, the student remains in the in-school period upon return to half-time status at a school participating in the guaranteed student loan program.

(b) Grace period. The nine-month period of time between the end of the in-school period and the beginning of the repayment period. The grace period begins on the first day of the month following the month in which the borrower leaves school or drops below half-time status. The grace period ends on the last day of the ninth month as written on the promissory note.

(c) Default. The failure of a borrower to make an installment payment when due, or to meet other terms of the promissory note under circumstances where the board finds it reasonable to conclude that the borrower no longer intends to honor the obligation to repay, provided that this failure persists for one hundred eighty days.

(d) Capitalization of interest. Capitalization means increasing the principal of a loan through the addition of accrued interest to the unpaid principal balance. Only interest which accrued during a period of time between the date the first repayment installment was due and the date it was made, when the borrower was late in beginning to repay the loan, may be capitalized on mathematics/science loans. The board may add the interest which accrued during a period of forbearance to the principal no earlier than the date repayment of principal is required to resume, and may add the interest which accrued due to late commencement of repayment to the principal no earlier than the date repayment of principal actually begins.

(e) Totally and permanently disabled. Inability to engage in any substantial gainful activity because of a medically determinable impairment that is expected to continue for a long and indefinite period of time or to result in death.

(f) "Public school" means a middle school, junior high school, or high school within the public school system referred to in Article IX of the state Constitution.

(g) "Forgiven" [or] [to] "to forgive" means to collect service as a teacher in a field of science or mathematics at a public school in the state of Washington in lieu of monetary payment.

(h) "Satisfied" means paid-in-full.

(i) Borrowing limits:

(i) Annual. The amount of any mathematics/science loan shall not exceed the demonstrated financial need of the student or two thousand five hundred dollars for each [nine month] academic year, whichever is less. Cost effective annual minimum loan limits may be set by the higher education coordinating board.

(ii) Summer session eligibility. The $2,500 annual loan limit applies to a normal nine month academic year. An otherwise eligible borrower may also receive a mathematics/science loan for summer term attendance provided that the borrower will be registered for sufficient credit hours during the summer session to at least equal the 5/6ths of a full-time [academic] course load requirement for a regular [academic] term.

The higher education coordinating board will determine the availability of summer session loans and the maximum and minimum amount of said loans based upon available appropriations.

(iii) Cumulative. The total amount of such loans to an eligible student shall not exceed ten thousand dollars.

(j) Interest rate. The interest rate for the mathematics/science loan program shall be nine percent per annum on the unpaid balance of the loan.

(k) Repayment period. The period for repaying the loan principal and interest shall be ten years with payments accruing quarterly [beginning] nine months from the date the borrower graduated or failed to re-enroll as at least a half-time student in accordance with the provisions [established for the guaranteed student loan program]. However, where the borrower has received an authorized deferment or has been granted forbearance, the periods of deferment and/or forbearance are excluded from determination of the ten year repayment period.

(l) Forgiveness. Payments of loan principal and interest will be forgiven for any repayment period in which the borrower documents qualifying service as a teacher in a field of science or mathematics at a public school in the state of Washington in accordance with WAC 250-60-010.

(m) Loan cancellation. Where the borrower has died or become totally and permanently disabled, the loan is cancelled and the higher education coordinating board terminates all collection activity against the borrower or [his] [the] estate.

(n) Prepayment. A borrower may prepay the whole or any part of a loan at any time without penalty.

(o) Late charges. The higher education coordinating board may require that the borrower pay a late charge if the borrower fails to pay any or all of a required installment payment within thirty days after its due date or fails to provide written evidence that verifies eligibility for authorized deferment of the payment. A late charge may not exceed five cents for each dollar [or] [of] each installment [due or five dollars for each installment], whichever is less.

(p) Collection charges:

Permissible charges. The board may also require that the borrower pay for certain reasonable costs incurred by the board or its agent in collecting any installment not paid when due. These costs may include attorney's fees, court costs, and long-distance phone calls.

(q) Deferments. For reasons of public policy and congruence with federal student aid program provisions, a borrower is entitled to have scheduled payments of principal deferred when engaged in certain activities during the repayment period. Interest shall not accrue during periods of deferment officially granted by the board or its agent. Should a borrower enter a status which normally entitles him/her to a deferment of repayment, prior to the expiration of the grace period (e.g., he/she serves in the armed forces or an action program, or is unemployed), the deferment period will not commence until the expiration of the grace period. Repayment of the loan resumes immediately after the deferment period is over without any additional grace period.

Deferment is authorized during periods when a borrower is engaged in at least one of the following activities:

(i) Full-time study at a school participating in the federal guaranteed student loan program.

(ii) Full-time study at a school which meets the definition of an institution of higher education or a vocational school and is operated by an agency of the federal government (e.g., the service academies).

(iii) Study under an eligible graduate fellowship program approved by the United States secretary of education.

(iv) Study under a rehabilitation training program approved by the secretary for disabled individuals.

(v) For a period not in excess of three years during which the borrower is a member of the armed forces of the United States, or is an officer in the commissioned corps of the United States Public Health Service.

(vi) For a period not in excess of three years during which the borrower serves as a volunteer under the Peace Corps Act.

(vii) For a period not in excess of three years during which the borrower serves as a full-time volunteer under Title I of the Domestic Volunteer Service Act of 1973 (action programs).

(viii) For a period not in excess of three years during which the borrower is in service comparable to the service referred to in (q)(vi) and (vii) of this subsection as a full-time volunteer for an organization which is exempt from taxation under Section 501(c)(3) of the Internal Revenue Code of 1954.

(ix) For a period not in excess of three years during which the borrower is temporarily totally disabled, or during which the borrower is unable to secure employment because he or she is caring for a spouse who is temporarily totally disabled.

(x) For a period not in excess of two years during which the borrower is serving an internship, the successful completion of which is required in order to receive recognition required to begin professional practice or service.

(xi) For a period not in excess of twelve months during which the borrower is conscientiously seeking and is unable to find full-time employment.

(r) Forbearance. A forbearance is a flexible, limited type of deferment or postponement granted by the board for the benefit of a borrower in order to prevent a default on a loan when the borrower is willing but temporarily unable to make scheduled payments or where the forgiveness provisions of the mathematics/science loan program would be ill served by requiring scheduled repayments. A forbearance postpones principal payments but does not stop the accruing of interest. The board may require the borrower to pay the interest which will accrue on the loan during a period of forbearance prior to approving the forbearance; or the board may add the interest which accrued during the period of forbearance to the principal amount of the loan on the date that repayment is required to resume.

A forbearance may, at the board's discretion, be granted when the borrower's economic circumstances demonstrate a current inability to make scheduled repayments if the board believes that the borrower is willing to and will be more able to resume repayment in the future. Forbearances may also be granted to those borrowers who though teaching in eligible Washington public schools, are temporarily unable to meet the course load or subject matter criteria for loan forgiveness.

A cumulative maximum for all forbearances is set at two years or eight quarterly repayments.

(s) Repayment of loans. Commencement of the repayment period:

(i) The repayment period begins [on the day following the day the grace period ends] [the first day of the full repayment quarter following the grace period]. Interest accrues from the first day of the first scheduled repayment period.

[Borrowers who have been granted deferments or forbearances will also reenter the repayment cycle on the same basis.]

(ii) Scheduling of repayments. In order to implement the forgiveness provisions of the mathematics/science loan program, standardized loan repayment quarterly schedules are established for all borrowers as follows:

The borrower will be placed in the repayment cycle starting with the first day of the first full repayment quarter following the commencement of his/her repayment period. Borrowers who have been granted deferments or forbearances will also reenter the repayment cycle on the same basis.

(1) Student. In order to be eligible for a mathematics/science loan, a student must:

(a) Meet all program eligibility requirements as established by program regulations and guidelines.

(b) Submit annually, in accordance with institutional and board deadlines, a completed mathematics/science loan application form.

(c) Meet institutional requirements for the submission of a financial aid form or comparable financial aid status documents.

(2) Academic certification:

(a) The designated academic official must certify that the applicant satisfies the grade point average and approved academic program requirements of the mathematics/science loan program.

(b) The institution may prioritize eligible applicants in terms of academic [success] [achievement], degree of financial need, appropriateness of educational program, and/or promise of teaching success as demonstrated by successful completion of objective institutional teacher education requirements.

(c) Notwithstanding financial need ranking criteria, otherwise eligible renewal loan applicants may be awarded subsequent mathematics/science loans up to their demonstrated financial need (within program limits).

(3) Criteria for institutional determination of financial need and the making of awards:

(a) Budgetary costs will be determined by the institution subject to approval by the higher education coordinating board. [In view of the self-help nature of this program, the state work-study advisory committee will review each budget for reasonableness and make recommendations to the council for approval or disapproval.]

(b) Total applicant resources shall be determined according to the congressional methodology system of need analysis. Institutional financial aid officers may make reasonable adjustments to the computed total applicant resources if individual circumstances warrant such adjustments. In addition, nonliquid assets in the form of equity in the primary residence and net worth of business or farm may be disregarded in the computation of total applicant resources.

Any adjustments must be documented and placed in the student's financial aid file.

(c) The mathematics/science loan award shall be designed in such a manner that the sum total of financial aid awarded any one student will not exceed the difference between the total applicant's resources and the budgetary cost of education.

(d) In the case of students attending private institutions, all state funds, when combined, may not exceed the nontuition and required fees portion of the student's budgetary cost.

(4) Impact of student withdrawal:

(a) Should a student recipient leave school by reason of failure or withdrawal at the end of the grading period, the unused portion of the loan will remain with the state [where it will be credited to borrower's account as a prepayment].

(b) Should a student totally withdraw from school during a term in which a mathematics/science loan had been disbursed, the following rules shall prevail:

(i) The student's eligibility for the mathematics/science loan program is terminated and no further disbursements under the program may be made without written approval of the higher education coordinating board.

(ii) If the student is entitled to a refund from the institution, that portion of the refund attributable (on a proportionate basis) to the mathematics/science loan program will be refunded to the higher education coordinating board where it will be credited to the borrower's loan account as an early repayment.

(iii) A student may regain eligibility by [repaying the loan amount owed for the academic term (of withdrawal) or by] special appeal for reinstatement to the [post secondary] institution with the concurrence of the board.

(1) General. The higher education coordinating board is responsible for the disbursement of loan funds to individual students under the mathematics/science loan program. As warrants will be made payable to the individual students, no transfer of funds to participating postsecondary institutions will be made. [However,] Institutions will be allocated a commitment funding level that establishes the annual aggregate loan dollars available for award to their students.

(2) Institutional funding request. Each eligible institution desiring to participate in the mathematics/science loan program must apply annually to the higher education coordinating board's financial aid section for an allocation of funds. The institutional request must be submitted by the appropriate deadline and contain any information requested by the board.

(3) If an institution can utilize more funds than were allocated for the fiscal year, it should apply for supplemental funds. A request for supplemental funds should be filed as soon as the need is known and may be filed at any time throughout the fiscal year. Such requests must be in writing and must include justification regarding the need for additional funds. Supplemental awards may be made periodically throughout the year on a funds available basis.

(4) If an institution is unable to expend its full allocation, it must deobligate that portion of funds which will be unutilized. Written notification of deobligation must be submitted to the board as soon as the institution has determined its inability to fully expend its mathematics/science loan program funds.

The board is responsible for collection of loans made and shall exercise due diligence in such collection to ensure that maximum repayments are made. The board is responsible to forgive all or parts of such loans under the criteria established in these rules and regulations.

Receipts from the payment of principal or interest or any other subsidies to which the board as lender is entitled, which are paid by or on behalf of borrowers, shall be deposited with the higher education coordinating board and shall be used to cover the costs of making the loans, maintaining necessary records and making collections. All receipts beyond those necessary to pay such costs shall be used to make loans to eligible students.

(1) General. In order to be granted loan forgiveness in lieu of repayment, a borrower, for each repayment period for which forgiveness is sought, must:

(a) Be teaching in an eligible Washington public school.

(b) Be teaching qualifying mathematics/science courses equal to at least one-half of a full-time teaching assignment as defined by the employing school district.

(c) Complete and submit, in a timely manner, the documentation necessary to support the forgiveness request.

(2) Identification of qualifying mathematics and science courses:

Subordinate to specific regulations, determination of qualifying courses is the responsibility of the employing school district. The superintendent of schools of the employing district or his/her designee(s) is responsible for certifying qualifying courses.

(a) Supplementary criteria for qualifying courses will be issued as necessary by the higher education coordinating board after consultation with the mathematics/science loan advisory committee.

(b) At the secondary school level, courses which satisfy state graduation requirements in mathematics or science are eligible courses.

(c) At the middle school and junior high level, courses which have been traditionally viewed as science or mathematics foundation[s] courses are eligible.

(3) Calculating qualifying teacher service under the mathematics/science loan program:

The superintendent of schools of the employing district or his/her designee(s) is responsible for calculating qualifying teacher service.

(a) General. In order to obtain forgiveness of scheduled repayments, a borrower must, for the repayment period, be employed at least half-time as a teacher of qualifying mathematics or science courses.

A borrower may be employed in any status half-time or greater so long as the number of qualifying mathematics or science courses taught are themselves equal to a half-time assignment.

In calculating teaching days, paid sick leave covered under a teacher's contract are considered as teaching days.

(b) Calculation of eligibility. The following formula shall be used to determine teacher eligibility for forgiveness:

(i) Calculate the number of teaching days in the repayment quarter (x).

(ii) Determine the average number of hours per day required for full-time teaching status (y).

(iii) Multiply (x) time[s] (y) to establish a full teaching load for the repayment period; fifty percent of that total establishes the qualifying teaching load.

(iv) Calculate the number of class hours taught in the repayment period in qualifying mathematics or science courses. If it equals or exceeds the qualifying teaching load (iii) of this subsection), the borrower can be certified for forgiveness.

(c) Exceptions. In the case of schools that because of size or geography are restricted to limited course offerings that make it a practical impossibility for a borrower to obtain a teaching assignment that qualifies for forgiveness, an appeal process is available. The higher education coordinating board may grant forgiveness in those individual cases where the borrower is teaching a fair share of the available qualifying courses even if the total qualifying hours fall below the half-time standard.

(1) The staff of the higher education coordinating board, under the direction of the executive director, will manage the administrative functions relative to this program.

(2) The board shall appoint an advisory committee comprised of representatives of eligible institutions and of other professionals in the field of education with the interest and expertise to assist board staff:

(a) In the drafting of program rules and guidelines;

(b) In the establishment of student award priorities;

(c) In setting criteria for the allotment of funds to participating institutions; and

(d) In general program oversight and administration.

(3) The higher education coordinating board will review institutional administrative practices to determine institutional compliance with rules and regulations and program guidelines. If such a review determines that an institution has failed to comply with program rules and regulations or guidelines, the board may suspend, terminate, or place conditions upon the institution's participation in the program and/or require reimbursement to the program for any funds lost or improperly expended.

(4) Any student who has obtained a mathematics/science loan through means of a wilfully false statement or failure to reveal any material fact, condition, or circumstance affecting eligibility will be subject to applicable civil or criminal penalties.

Upon receipt of a complaint or other evidence that an institution has failed or is failing to comply with program rules and regulations, the board staff shall notify the institution by mail of the nature of such allegations and conduct a review of the alleged violations.

If preliminary findings indicate that a violation or violations may have occurred or are occurring, the board staff shall attempt, through mediation and conciliation, to effect corrections and/or secure reimbursement from the institution in the event any funds were expended out of compliance with the provisions of WAC 250-60-030 through 250-60-080.

If no agreement is reached through the mediation and conciliation process, the executive director shall file a formal complaint with the [council] board and notify the institution of the conduct which warrants the complaint. Based upon a finding pursuant to RCW 34.04.170, the complaint may include an order for a summary suspension pending proceedings for termination, suspension, reimbursement[,] or other action.

The executive director or a designated hearing officer shall conduct a hearing and make findings and conclusions in accordance with the Administrative Procedure Act, chapter 34.04 RCW. The findings, conclusions[,] and any recommendations for action shall be submitted to the board for final action pursuant to RCW 34.04.110. The board may accept or reject, in whole or in part, any recommendations made by the hearing officer, may remand for further findings and/or take any other action the board deems appropriate under the circumstances.