(1) Candidates selected must have taught in a Delaware public elementary or secondary school for at least 1 year prior to the year in which the scholarship is to be used.

(2) A teacher participating in this Loan Program shall execute a promissory note, in the amount of the loan, to the State Treasurer. This note shall be forgiven at a rate of 1/3 of the loan for each of 3 years of teaching in a Delaware public school after completion of the study authorized. In any year that the teacher fails to meet the teaching obligation, the loan shall be due and payable for the unpaid balance.

(3) Such loan shall be interest free to persons who meet the teaching obligation.

(4) Necessary repayment procedures and interest requirements for persons who do not teach, or do not complete their teacher obligation as provided in paragraph (2) of this section, shall be established by the Department of Education with State Board approval.

(5) A teacher to whom a loan is granted shall also be paid during the year of study 1 year's salary and benefits based upon the prescribed state salary schedule for 185 teaching days as found in Chapter 13 of this title. A teacher to whom such a loan is granted may be granted a leave of absence by a school district upon agreement that the teacher will return to that district for assignment upon completion of the year of study. In the case of such leave of absence, nothing herein contained shall prevent the school district from providing local salary supplement and other district benefits.

(6) The amount of the loan will be determined by the Department of Education with State Board approval and may be applied to the cost of tuition, books and supplies for instruction at the institution in which the teacher is to be enrolled.