[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 4581 Introduced in Senate (IS)]
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117th CONGRESS
2d Session
S. 4581
To improve the public service loan forgiveness program under section
455(m) of the Higher Education Act of 1965, to improve loan forgiveness
eligibility provisions under such Act for teachers, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 21, 2022
Mr. Menendez introduced the following bill; which was read twice and
referred to the Committee on Health, Education, Labor, and Pensions
_______________________________________________________________________
A BILL
To improve the public service loan forgiveness program under section
455(m) of the Higher Education Act of 1965, to improve loan forgiveness
eligibility provisions under such Act for teachers, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Second Chance at Public Service Loan
Forgiveness Act''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) The public service loan forgiveness program under
section 455(m) of the Higher Education Act of 1965 (20 U.S.C.
1087e(m)) was created in 2007 to attract individuals to public
service by forgiving an individual's Federal loans under part D
of title IV of the Higher Education Act of 1965 (20 U.S.C. 1071
et seq.; 20 U.S.C. 1087a et seq.) after 10 years of employment
in areas of national need.
(2) These public service careers, which include employment
in military, emergency management, government, public safety,
law enforcement, public health, education, child care, social
work, services for individuals with disabilities, services for
the elderly, public interest legal services, and library
sciences, pay substantially less than similar careers in the
private sector.
(3) The public sector also repeatedly experiences workforce
shortages, especially following the COVID-19 pandemic.
(4) An undergraduate degree, certification, or advanced
degree is a prerequisite to enter or advance in these public
service careers. Yet, research suggests that the prospect of
several decades of student loan payments often deters
individuals from pursuing careers in public service.
(5) The public service loan forgiveness program has
substantially failed. In 2018, 99 percent of the borrowers who
applied for relief under the program were denied due to
improper type of loans, employment, or repayment plan, or the
number of payments that they had made.
(6) Advocates and enforcement agencies, including 38 State
Attorneys General and the Bureau of Consumer Financial
Protection, have repeatedly found that all of the major Federal
student loan servicers provided inaccurate information to
borrowers who were interested in or relying upon the public
service loan forgiveness program. They also found that
servicers repeatedly steered borrowers away from public service
loan forgiveness into higher monthly payments and into
deferment and forbearances.
(7) This has caused millions of public servants irreparable
economic harm, including preventing them from buying a home,
opening a small business, starting a family, or retiring,
because of their student debt.
(8) Despite the recent actions of President Biden's
administration to improve the public service loan forgiveness
program, these actions are limited and will not fully atone for
the repeated, pervasive, and systemic actions by Federal
student loan servicers to prevent public servants from fully
benefitting from this program.
SEC. 3. MAKING FORGIVENESS ATTAINABLE FOR PUBLIC SECTOR WORKERS.
Section 455(m) of the Higher Education Act of 1965 (20 U.S.C.
1087e(m)) is amended--
(1) by striking paragraph (1) and inserting the following:
``(1) In general.--The Secretary shall cancel the balance
of interest and principal due, in accordance with paragraph
(2), on any eligible Federal Direct Loan not in default for a
borrower who--
``(A) obtained an eligible Federal Direct Loan; and
``(B) has been employed full-time in public
service, beginning on or after January 1, 1994, for a
total period of 10 years or more after the date on
which the first eligible Federal Direct Loan was
obtained.'';
(2) by redesignating paragraphs (3) and (4) as paragraphs
(5) and (6), respectively;
(3) by inserting after paragraph (2) the following:
``(3) Special rules relating to employment.--For purposes
of this subsection, volunteer service as an AmeriCorps or Peace
Corps volunteer, as described in subclause (III) or (IV) of
paragraph (5)(C)(i), shall be deemed to be employment.
``(4) Special rule for certain loans and borrowers.--
``(A) Parent plus loans.--In the case of a borrower
of an eligible Federal Direct Loan that is on behalf of
a student, any public service employment required under
this subsection may be completed by the borrower or by
the student on whose behalf the loan was made.
``(B) Special rules for federal direct
consolidation loans.--
``(i) In general.--A borrower who has
obtained an eligible Federal Direct Loan that
is a Federal Direct Consolidation Loan that
includes a loan made, insured, or guaranteed
under part B or part E shall receive credit
under paragraph (1) for any years of full-time
employment in public service that occurred
while the borrower had a component loan of the
Federal Direct Consolidation Loan.
``(ii) Special rules for joint borrowers.--
The Secretary shall allow the borrowers of a
Joint Consolidation Loan or a Joint Direct
Consolidation Loan who are employed in a public
service job to consolidate such loan into a
Federal Direct Consolidation Loan in order to
receive loan cancellation pursuant to this
subsection.''; and
(4) by striking paragraph (5), as redesignated by paragraph
(2), and inserting the following:
``(5) Definitions.--In this subsection:
``(A) Eligible federal direct loan.--The term
`eligible Federal Direct Loan' means a Federal Direct
Stafford Loan, Federal Direct Unsubsidized Loan,
Federal Direct PLUS Loan (including such loan made on
behalf of a student), or Federal Direct Consolidation
Loan.
``(B) Full-time.--The term `full-time', when used
with respect to employment in public service, means
working in public service employment in one or more
jobs for a total of--
``(i) not less than 30 hours a week;
``(ii) in the case of any form of
educational public service employment that is
under a contract for not less than 8 months,
not less than 30 hours per week during the
contract period; or
``(iii) in the case of employment as an
adjunct, contingent, or part-time faculty
member, teacher, or lecturer who is paid solely
for the credit hours taught at an institution
of higher education, the equivalent of 30 hours
per week determined by multiplying each credit
or contract hour taught per week by 3.35.
``(C) Public service.--
``(i) In general.--The term `public
service' means--
``(I) employment with a qualifying
employer described in clause (i) or
(ii) of subparagraph (D);
``(II) employment with a qualifying
employer described in subparagraph
(D)(iii) that--
``(aa) provides direct
services to the public through
its employees; and
``(bb) has devoted a
majority of its full-time
equivalent employees to working
in not less than 1 of the
following areas:
``(AA) Early
childhood education
programs.
``(BB) Emergency
management.
``(CC) Law
enforcement.
``(DD) Military
service.
``(EE) Other
school-based services.
``(FF) Public
education (including
higher education).
``(GG) Public
health.
``(HH) Public
interest law services.
``(II) Public
library services.
``(JJ) Public
safety.
``(KK) Public
services for
individuals with
disabilities or public
services for the
elderly.
``(LL) School
library services;
``(III) satisfactory service as a
Peace Corps volunteer in accordance
with section 5 of the Peace Corps Act
(22 U.S.C. 2504); or
``(IV) successful service as a
participant in a position described in
section 123 of the National and
Community Service Act of 1990 (42
U.S.C. 12573).
``(ii) Additional definitions.--For
purposes of clause (i):
``(I) Emergency management
services.--The term `emergency
management services' means services
that help remediate, lessen, or
eliminate the effects or potential
effects of emergencies that threaten
human life or health or real property.
``(II) Law enforcement.--The term
`law enforcement' means services
performed by an employee of a public
service organization that is publicly
funded and whose principal activities
pertain to crime prevention, control or
reduction of crime, or the enforcement
of criminal law.
``(III) Military service.--The term
`military service' means providing
service to or on behalf of members,
veterans, or the families or survivors
of members or veterans of the Armed
Forces, including the National Guard,
that is provided to a person because of
the person's status in the Armed Forces
or National Guard.
``(IV) Other school-based
services.--The term `other school-based
services' means an employee of a State,
or of any political division of a
State, or an employee of a nonprofit
organization, who works in any grade
from prekindergarten through grade 12
in any of the following occupational
specialties:
``(aa) Paraprofessional
services, including
paraeducator services.
``(bb) Clerical and
administrative services.
``(cc) Transportation
services.
``(dd) Food and nutrition
services.
``(ee) Custodial and
maintenance services.
``(ff) Security services.
``(gg) Health and student
services.
``(hh) Technical services.
``(ii) Skilled trades.
``(V) Public education.--The term
`public education' means--
``(aa) the provision of
educational enrichment or
support to students in a school
or a school-like setting,
including teaching; and
``(bb) teaching as a full-
time faculty member at a Tribal
College or University, as
defined in section 316(b), and
other faculty teaching in high-
needs subject areas or areas of
shortage (including nurse
faculty, foreign language
faculty, and part-time faculty
at community colleges), as
determined by the Secretary.
``(VI) The term `public health'
means--
``(aa) services provided by
physicians, nurses (including
nurses in a clinical setting),
and nurse practitioners; and
``(bb) services provided by
health care practitioner
occupations, health care
support occupations, and
counselors, social workers, and
other community and social
service specialist occupations,
as those terms are defined by
the Bureau of Labor Statistics.
``(VII) The term `public interest
law' means legal services or legal
advocacy provided by a nonprofit
organization, but excludes services
provided by individuals who are
registered lobbyists at the Federal,
State, or local level.
``(VIII) The term `public library
services' means the operation of public
libraries or services that support
their operation.
``(IX) The term `public safety
services' means services that seek to
prevent the need for emergency
management services.
``(X) The term `public services for
individuals with disabilities' means
services performed for, or to assist,
individuals with disabilities (as
defined in section 3 of the Americans
with Disabilities Act of 1990 (42
U.S.C. 12102)) that is provided to an
individual because of the individual's
status as an individual with a
disability.
``(XI) The term `public service for
the elderly' means services that are
provided to individuals who are aged
59.5 years or older and that are
provided to an individual because of
the individual's status as an
individual of that age, including
services related to retirement plans,
pensions, social security, retiree
health plans, or Medicaid.
``(XII) The term `school library
services' means the operations of
school libraries or services that
support their operation.
``(D) Qualifying employer.--The term `qualifying
employer' means--
``(i) a Federal, State, Tribal, local,
intergovernmental, or regional governmental
organization, agency, or entity based or
headquartered in the United States, including
the Armed Forces, National Guard, Merchant
Marines, or Coast Guard;
``(ii) a nonprofit organization that is
qualified under section 501(c)(3) of the
Internal Revenue Code of 1986; or
``(iii) a nonprofit organization that is
qualified under section 501(a) of such Code,
with respect to an employee in public service
employment.''.
SEC. 4. LOAN FORGIVENESS FOR TEACHERS.
The Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) is
amended--
(1) in section 428J(g)(2) (20 U.S.C. 1078-10(g)(2))--
(A) in subparagraph (A), by inserting ``or'' after
the semicolon at the end;
(B) by striking subparagraph (B); and
(C) by redesignating subparagraph (C) as
subparagraph (B);
(2) in paragraph (7) of section 455(m) (20 U.S.C.
1087e(m)), as amended by section 3(2), by striking ``both this
subsection and section 428J, 428K, 428L, or 460'' and inserting
``both this subsection and section 428K or 428L''; and
(3) in section 460(g)(2) (20 U.S.C. 1087j(g)(2))--
(A) in subparagraph (A), by inserting ``or'' after
the semicolon at the end;
(B) by striking subparagraph (B); and
(C) by redesignating subparagraph (C) as
subparagraph (B).
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