(1) (a) The general assembly hereby authorizes the commission to develop and maintain a teacher loan forgiveness pilot program for implementation beginning in the 2001-02 academic year for payment of all or part of the principal and interest of the educational loans of a first-year teacher who is hired for a qualified position. Beginning in the 2004-05 academic year, the commission is authorized to extend the teacher loan forgiveness pilot program to include payment of all or part of the principal and interest of the educational loans of a teacher who is hired to teach in a qualified position after the teacher's first year of teaching. Repayment of loans through the teacher loan forgiveness pilot program may be made using moneys in the teacher loan forgiveness fund, created in paragraph (b) of this subsection (1), or moneys allocated to the program by collegeinvest. The commission is authorized to receive and expend gifts, grants, and donations for the teacher loan forgiveness pilot program. Only graduates of institutions of higher education whose loans have collegeinvest eligibility may receive repayment of their loans using moneys allocated to the program by collegeinvest.

(b) There is hereby created the teacher loan forgiveness fund, which shall consist of all moneys appropriated thereto by the general assembly for the teacher loan forgiveness pilot program and any gifts, grants, and donations received for said purpose. Moneys in the fund are hereby continuously appropriated to the department of higher education for the teacher loan forgiveness pilot program. At the end of any fiscal year, all unexpended and unencumbered moneys in the fund shall remain therein and shall not be credited or transferred to the general fund or any other fund.

(2) In addition to any qualifications specified by the commission, to qualify for the teacher loan forgiveness pilot program, a teacher shall:

(a) Graduate from an approved program of preparation;

(b) Meet licensure requirements pursuant to section 22-60.5-201 (1)(b) or (1)(c) or 22-60.5-210, C.R.S.;

(c)

(I) Demonstrate professional competencies consistent with state board of education rules in the subject matter in which the teacher obtains a qualified position; or

(II) Be fully qualified under a training program approved by a federal court or agency or the state department of education;

(d)

(I) Contract for the teacher's first year of teaching in a qualified position, as defined in section 23-3.9-101 (4)(b), no earlier than June 2001 and no later than the end of the 2008-09 academic year; or

(II) If the teacher is not a first-year teacher, contract to teach in a qualified position, as defined in section 23-3.9-101 (4)(b), no earlier than June 2004 and no later than the end of the 2008-09 academic year; or

(III) Initially apply to participate in the program and teach in a qualified position, as defined in section 23-3.9-101 (4)(a), on or after June 1, 2005, and no later than the end of the 2012-13 academic year;

(e) Work at least half-time in a qualified position if employed in a rural school district, or, beginning with the fall semester of the 2005-06 academic year, full-time in a qualified position if employed in a school district other than a rural school district; and

(f) Be liable for an outstanding balance on a collegeinvest loan or a loan through a lender with an agreement with collegeinvest to offer loans.

(3) A teacher who qualifies under subsection (2) of this section may be eligible for up to two thousand dollars in loan forgiveness for the first year of teaching in a qualified position and up to two thousand dollars in loan forgiveness for each of the next three years of teaching in a qualified position.

(3.5) Notwithstanding the provisions of subsection (3) of this section, a teacher who qualifies under subsection (2) of this section, initially applies to participate in the program in any of academic years 2009-10 to 2012-13, and teaches in a high-poverty elementary school in a rural school district shall be eligible for up to four thousand dollars in loan forgiveness for each of the first two years of teaching in a qualified position and up to one thousand dollars in loan forgiveness for each of the next two years of teaching in a qualified position.

(4) If a teacher qualifies for the teacher loan forgiveness pilot program through employment in a high-poverty elementary school in a rural school district and in a subsequent academic year the school no longer meets the criteria to be classified as a high-poverty elementary school in a rural school district, the teacher may continue to participate in the teacher loan forgiveness pilot program if he or she continues to teach at the same school.

(5) If a teacher qualifies for the teacher loan forgiveness pilot program through employment in a high-poverty elementary school in a rural school district and subsequently transfers to a nonqualifying school, he or she forfeits participant status under this section.

(6) The department of education shall annually identify the public schools in the state that qualify as high-poverty elementary schools in rural school districts.