How is the loan forgiven?
Participants who earn their doctorate and subsequently obtain a teaching position at a CSU campus are eligible to have their loan cancelled at the rate of 20% of the loan principal for each year of full-time teaching service after the degree. Individuals in CSU teaching positions who teach at least half time may earn 10% forgiveness of their original loan principal for each year of postdoctoral teaching service. These loan cancellations are subject to Federal income taxes. Participants who do not obtain CSU faculty positions will repay the loan over a 15-year period.
A portion of the loan may be forgiven (see loan forgiveness schedule). The forgivable portion of the loan will be reduced in equal amounts over a 5 year period provided the borrower is in compliance with all loan covenants (including but not limited to job creation). Or, if the borrower repays the non-forgivable portion of the loan on or before the project completion date the entire forgivable portion of the loan will be forgiven upon such repayment; however, if the borrower does not comply with all loan covenants within a 5 year period the forgivable portion will be reinstated and be immediately due and payable.
Related Questions
- ADDED January 8, 2009. If I enter a loan from a candidate that is forgiven on Schedule D, does the CFS automatically create an entry on Schedule C, Other Receipts, to off-set the expenditure?
- Is it true that a borrower can get taxed for the debt forgiven through loan write-offs, write-downs and foreclosures?
- How is the Vacant Property Initiative loan forgiven?
