The key is that the school has to certify the program as TEACH-Grant-eligible: “Additionally, even if a program meets the eligibility requirements to be a TEACH-Grant-eligible program, it may not be designated as TEACH-Grant-eligible by the school.” You can get the grant for all 4 years, if your school considers you to be in a qualifying program.
Your D needs to find out exactly what is going on. It’s weird that she would be told after the fact that her program didn’t qualify last year & that she now needs to repay the money. The school had all of her info last year, so they should have caught it then. It sounds like they never did catch it … they are telling her this based on the fact that she is now asking about the lack of a grant for this year. She should find the person who actually administers the grant & ask them about it.
For what it’s worth, we used to call them “Groans” when I worked at an undergrad school. Grant that too often becomes a loan. One of the requirements of the program is that the student has to sign a new agreement to serve every year … because it’s a really tricky grant-that-turns-into-an-unsubsidized-loan-if-you-don’t-do-everything-required. We encouraged our students to wait until junior year to apply for a TEACH grant, because too many students changed their minds about teaching before they got to that point. By the way, we did not award the TEACH grant in students’ financial aid packages - we waited until they came to request the grant. We then went through all of the requirements with them so they could make an informed decision.