To authorize funding for student loan repayment for public attorneys.

Summary: Prosecutors and Defenders Incentive Act - Amends the Higher Education Act of 1965 (HEA) to establish a program of student loan forgiveness for borrowers who agree to remain employed, for at least three years, as public attorneys who are: (1) State or local criminal prosecutors; or (2) State, local, or Federal public defenders in criminal cases.

Directs the Secretary of Education to provide such student loan repayment benefits for such public attorneys on a first-come, first-served basis, and subject to the availability of appropriations. Requires priority to be given to borrowers who received repayment benefits for the preceding fiscal year and have completed less than three years of the first required service period. Allows the borrower and the Secretary to enter into an additional agreement, after the required three-year period, for a successive period of service which may be less than three years. Limits the amount paid under such program on behalf of any borrower to $6,000 per calendar year and $40,000 total.Includes public defenders among those eligible under a current HEA program of cancellation of student loans for certain public service.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Prosecutors and Defenders Incentive 
Act''.

SEC. 2. STUDENT LOAN REPAYMENT FOR PUBLIC ATTORNEYS.

    (a) In General.--The Higher Education Act of 1965 is amended by 
inserting after section 428K (20 U.S.C. 1078-11) the following:

``SEC. 428L. LOAN FORGIVENESS FOR PUBLIC ATTORNEYS.

    ``(a) Purpose.--The purpose of this section is to encourage 
qualified individuals to enter and continue employment as prosecutors 
and public defenders.
    ``(b) Definitions.--In this section:
            ``(1) Prosecutor.--The term `prosecutor' means a full-time 
        employee of a State or local agency who--
                    ``(A) is continually licensed to practice law; and
                    ``(B) prosecutes criminal cases at the State or 
                local level.
            ``(2) Public defender.--The term `public defender' means an 
        attorney who--
                    ``(A) is continually licensed to practice law; and
                    ``(B) is a full-time employee of a State or local 
                agency, or of a nonprofit organization operating under 
                a contract with a State or unit of local government or 
                as a full time Federal defender attorney employed in a 
                defender organization established pursuant to 
                subsection (g) of section 3006A of title 18, United 
                States Code, which provides legal representation 
                services to indigent persons in criminal cases.
            ``(3) Student loan.--The term `student loan' means--
                    ``(A) a loan made, insured, or guaranteed under 
                this part; and
                    ``(B) a loan made under part D or E.
    ``(c) Program Authorized.--For the purpose of encouraging qualified 
individuals to enter and continue employment as prosecutors and public 
defenders, the Secretary shall carry out a program, through the holder 
of a loan, of assuming the obligation to repay (by direct payments on 
behalf of a borrower) a qualified loan amount for a loan made under 
section 428 or 428H, in accordance with subsection (d), for any 
borrower who--
            ``(1) is employed as a prosecutor or public defender; and
            ``(2) is not in default on a loan for which the borrower 
        seeks forgiveness.
    ``(d) Terms of Agreement.--
            ``(1) In general.--To be eligible to receive repayment 
        benefits under this section, a borrower shall enter into a 
        written agreement that specifies that--
                    ``(A) the borrower will remain employed as a 
                prosecutor or public defender for a required period of 
                service specified in the agreement (but not less than 3 
                years), unless involuntarily separated from that 
                employment;
                    ``(B) if the borrower is involuntarily separated 
                from that employment on account of misconduct, or 
                voluntarily separates from that employment, before the 
                end of the period specified in the agreement, the 
                borrower will repay the Secretary the amount of any 
                benefits received by such employee under this section;
                    ``(C) if the borrower is required to repay an 
                amount to the Secretary under subparagraph (B) and 
                fails to repay the amount described in subparagraph 
                (B), a sum equal to the amount is recoverable by the 
                Government from the employee (or such employee's 
                estate, if applicable) by such method as is provided by 
                law for the recovery of amounts owing to the 
                Government;
                    ``(D) the Secretary may waive, in whole or in part, 
                a right of recovery under this subsection if it is 
                shown that recovery would be against equity and good 
                conscience or against the public interest; and
                    ``(E) the Secretary shall make student loan 
                payments under this section for the period of the 
                agreement, subject to the availability of 
                appropriations.
            ``(2) Repayments.--Any amount repaid by, or recovered from, 
        an individual (or an estate) under this subsection shall be 
        credited to the appropriation account from which the amount 
        involved was originally paid. Any amount so credited shall be 
        merged with other sums in such account and shall be available 
        for the same purposes and period, and subject to the same 
        limitations (if any), as the sums with which the amount was 
        merged.
            ``(3) Limitations.--
                    ``(A) Student loan payment amount.--Student loan 
                payments made by the Secretary under this section shall 
                be made subject to such terms, limitations, or 
                conditions as may be mutually agreed to by the borrower 
                concerned and the Secretary in the agreement described 
                in this subsection, except that the amount paid by the 
                Secretary under this section may not exceed--
                            ``(i) $6,000 for any borrower in any 
                        calendar year; or
                            ``(ii) a total of $40,000 in the case of 
                        any borrower.
                    ``(B) Beginning of payments.--Nothing in this 
                section shall be construed to authorize the Secretary 
                to pay any amount to reimburse a borrower for any 
                repayments made by such borrower prior to the date on 
                which the Secretary entered into an agreement with the 
                employee under this subsection.
    ``(e) Additional Agreements.--On completion of the required period 
of service under such an agreement, the borrower concerned and the 
Secretary may enter into an additional agreement described in 
subsection (d) for a successive period of service specified in the 
agreement (which may be less than 3 years).
    ``(f) Award Basis; Priority.--
            ``(1) Award basis.--The Secretary shall provide repayment 
        benefits under this section on a first-come, first-served basis 
        (subject to paragraph (2)) and subject to the availability of 
        appropriations.
            ``(2) Priority.--The Secretary shall give priority in 
        providing repayment benefits under this section for a fiscal 
        year to a borrower who--
                    ``(A) received repayment benefits under this 
                section for the preceding fiscal year; and
                    ``(B) has completed less than 3 years of the first 
                required period of service specified for the borrower 
                in an agreement entered into under subsection (d).
    ``(g) Regulations.--The Secretary is authorized to issue such 
regulations as may be necessary to carry out the provisions of this 
section.
    ``(h) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $20,000,000 for fiscal year 2006 
and such sums as may be necessary for each succeeding fiscal year.''.
    (b) Cancellation of Loans.--
            (1) Amendment.--Section 465(a)(2)(F) of the Higher 
        Education Act of 1965 (20 U.S.C. 1087ee(a)(2)(F)) is amended by 
        inserting ``, as a public defender (as defined in section 
        428L), or as a full time Federal defender attorney employed in 
        a defender organization established pursuant to subsection (g) 
        of section 3006A of title 18, United States Code'' after 
        ``agencies''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to--
                    (A) eligible loans made before, on, or after the 
                date of enactment of this Act; and
                    (B) service as a prosecutor or public defender that 
                is provided on or after the date of enactment of this 
                Act.
            (3) Construction.--Nothing in this subsection or the 
        amendment made by this subsection shall be construed to 
        authorize the Secretary to pay any amount to reimburse a 
        borrower for any repayments made by such borrower prior to the 
        date on which the borrower became eligible for cancellation 
        under section 465(a) of such Act (20 U.S.C. 1087ee(a)).