Courtney, DeSaulnier, Sarbanes Introduce Legislation to Institute Major Reforms to Public Service Loan Forgiveness Program
WASHINGTON, D.C. – Today, Rep. Joe Courtney (D-CT), a senior member of the Education and the Workforce Committee, Rep. Mark DeSaulnier (D-CA), Ranking Member of the Health, Employment, Labor, and Pensions (HELP) Subcommittee, and Rep. John Sarbanes (D-MD), introduced new legislation to institute major reforms to the Public Service Loan Forgiveness (PSLF) program.
In 2007, Rep. Sarbanes authored, and President George W. Bush enacted, the law creating PSLF to attract more Americans to careers like teaching, public health, and law enforcement by providing those who work in these critical professions with a mechanism to discharge the balance of their student loan following at least ten years of consistent, on-time payments.
Unfortunately, borrowers have faced significant challenges in navigating the program and accessing loan relief. While the Biden Administration has heeded Members’ calls to make several fixes, which Rep. Courtney has worked to make permanent, it is clear significant reforms are required to achieve the program’s intended promise.
The Strengthening Efforts for Relief and Vital Incentives for Community Service Engagement Act, or the SERVICE Act, achieves that goal by shortening the time to forgiveness from 120 payments (10 years) to 96 payments (eight years); providing borrowers with more flexibility to make qualifying payments; expanding deferment options in lieu of payments to include military service, cancer treatments, and other circumstances to count as qualifying months of payments; and improving borrowers’ rights and transparency.
“PSLF was established to reward Americans who entered careers that our communities depend on, like teachers, nurses, firefighters, and police officers. My office has heard from many people in these professions who worked hard, followed the rules, but were still denied the PSLF relief they were promised, and we've been pressing on their behalf to make the program more transparent and fairer. The SERVICE Act will make it easier for America's public service workers to qualify for, navigate, and benefit from this patriotic program. Today’s action will ensure we can hit the ground running in the next Congress to deliver on this goal,” said Rep. Courtney.
“The Public Service Loan Forgiveness Program (PSLF) began as a way for the federal government to recruit quality candidates, and for borrowers to access life-changing debt relief while also serving their communities,” said Ranking Member Robert C. “Bobby” Scott (VA-03). “The SERVICE Act builds on the improvements the Biden-Harris Administration made to PSLF by reducing the number of monthly payments and simplifying the process borrowers use to achieve debt relief. It also represents Congressional Democrats’ commitment to improving our nation’s higher education system for students and their families."
“America’s teachers, social workers, public defenders, service members, and community health care workers make tremendous contributions to our communities while being compensated far less than their counterparts in the private sector, and it’s time we do more to honor their sacrifices,” said Congressman DeSaulnier. “This bill would make long-overdue reforms to the PSLF system to create a clear path to student loan forgiveness for America’s valuable public servants.”
“When I authored the law creating the PSLF program in 2007, it was designed to make it easier for individuals to pursue public service. Unfortunately, technical challenges, servicer errors and bureaucratic hurdles prevented many eligible public servants from accessing relief," said Rep. Sarbanes. "That is why I have long advocated for improvements to PSLF to ensure that the program fulfills its promise. Now, thanks to the Biden Administration's tireless efforts to fix several implementation challenges, over 1 million public service workers have received relief, and many more have been brought closer to forgiveness. The SERVICE Act builds on this progress by codifying fixes, streamlining the path to forgiveness and easing the debt burden for those who serve our communities."
Specifically, the SERVICE Act:
- Reduces the number of qualifying payments from 120 payments to 96 payments
- Provides borrowers with streamlined pathways to debt relief by:
- Allowing up to three months of prepayment to help borrowers prepare for future expenses while still progressing towards 96 qualifying payments; and
- Codifying the Department of Education's (Department) buyback regulations which allows qualified borrowers who have completed 96 months of service, but not 96 payments to "buyback" the months they need to achieve debt relief.
- Fixes program eligibility issues by:
- Allowing independent contractors working public service jobs in states that cannot fill those roles with direct employees to qualify for PSLF; and
- Repealing the prohibition on receiving debt relief for the same service under PSLF and loan forgiveness for teachers.
- Expands the qualifying deferments and forbearances allowed to include military service, cancer treatments, economic hardships, unemployment, and more.
- Improves borrowers' rights and transparency by:
- Creating an online web portal for borrowers to receive information from the Department, review their status in the program, and submit forms to the Department; and
- Codifying the consideration process for borrowers to appeal to the Secretary if their loan cancellation is denied.
The lawmakers’ bill is a part of the Roadmap to College Student Success, House Democrats’ campaign to reform America’s higher education system for students and families. The “roadmap” brings together a series of bold proposals focused on bringing down the cost of college, helping students access a quality degree, and—once students are in school—providing them with the support they need to graduate. Learn more about the Roadmap to College Student Success here.
To read the fact sheet, click here
To read the bill text, click here.
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