I 

116TH CONGRESS 

1ST SESSION H. R. 4851 

To amend the Higher Education Act of 1965 to carry out a State workforce 

incentive program. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 23, 2019 

Ms. STEFANIK (for herself and Mr. KELLER) introduced the following bill; 

which was referred to the Committee on Education and Labor 

A BILL 

To amend the Higher Education Act of 1965 to carry out 

a State workforce incentive program. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘State Workforce Incen5 tive Act’’. 

6 SEC. 2. STATE WORKFORCE INCENTIVE PROGRAM. 

7 Part G of title IV of the Higher Education Act of 

8 1965 (20 U.S.C. 1088 et seq.) is amended by adding at 

9 the end the following: 


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1 ‘‘SEC. 493E. STATE WORKFORCE INCENTIVE PROGRAM. 

2 ‘‘(a) PURPOSE.—The purpose of this section is to 

3 support the workforce in State-determined high-need or 

4 public-service occupations, and to encourage individuals to 

5 pursue and maintain employment in such occupations 

6 through annual incentive payments towards their eligible 

7 Federal loans. 

8 ‘‘(b) ALLOTMENT AND ALLOCATIONS OF CREDITS

9 FOR REDUCING FEDERAL LOAN DEBT.— 

10 ‘‘(1) IN GENERAL.—From the amount appro11 priated under subsection (e), the Secretary shall an12 nually allot, in accordance with paragraph (2), loan 

13 repayment credits to each State with an approved 

14 State implementation plan, which may be allocated 

15 to eligible borrowers in such State for the purpose 

16 of reducing the amount owed on the eligible Federal 

17 loans of such borrowers. 

18 ‘‘(2) ALLOTMENT OF LOAN REPAYMENT CRED19 ITS TO STATES.— 

20 ‘‘(A) IN GENERAL.—Each State with an 

21 approved State implementation plan shall re22 ceive an allotment of loan repayment credits on 

23 July 1 of each year, as follows: 

24 ‘‘(i) 0.50 of the amount appropriated 

25 under subsection (e) shall be allotted on 

26 the basis of the relative population of the 


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1 State, compared to the total population in 

2 all States with an approved State imple3 mentation plan. 

4 ‘‘(ii) 0.25 of the amount appropriated 

5 under subsection (e) shall be allotted on 

6 the basis of the relative amount of individ7 uals in poverty in the State, compared to 

8 the total amount of individuals in poverty 

9 in all States with an approved State imple10 mentation plan. 

11 ‘‘(iii) 0.25 of the amount appropriated 

12 under subsection (e) shall be allotted on 

13 the basis of the relative excess number of 

14 individuals in poverty in the State, com15 pared to total excess number of individuals 

16 in poverty in all States with an approved 

17 State implementation plan. 

18 ‘‘(B) DEFINITIONS.—For purposes of this 

19 paragraph: 

20 ‘‘(i) INDIVIDUALS IN POVERTY.—The 

21 term ‘individuals in poverty’ means the 

22 number of individuals who are living below 

23 100 percent of the poverty line. 

24 ‘‘(ii) EXCESS NUMBER.—The term 

25 ‘excess number’, when used with respect to 


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1 the excess number of individuals in poverty 

2 in a State, means the number that rep3 resents the number of individuals in pov4 erty in the State in excess of 8 percent of 

5 the total number of individuals in the 

6 State for whom the poverty status is deter7 mined. 

8 ‘‘(C) CARRYOVER OF LOAN REPAYMENT

9 CREDITS.—Any loan repayment credits allotted 

10 to a State and not obligated to a borrower dur11 ing the award year during which such credits 

12 were allotted shall— 

13 ‘‘(i) be retained by the State during 

14 the period covered by the State plan; and 

15 ‘‘(ii) may be allocated by the State to 

16 a borrower at any point during such pe17 riod. 

18 ‘‘(3) MANDATORY FUNDS FOR FISCAL YEAR

19 2021.—For fiscal year 2021, there shall be available 

20 to the Secretary, from funds not otherwise appro21 priated, funds to be obligated to States receiving an 

22 allotment under this section for administrative costs 

23 under this section not to exceed $50,000,000. 

24 ‘‘(c) STATE IMPLEMENTATION PLAN.— 


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1 ‘‘(1) IN GENERAL.—To be eligible for an allot2 ment of loan repayment credits under this section, 

3 a State shall submit to the Secretary a State imple4 mentation plan every 5 years. 

5 ‘‘(2) CONTENTS.—Each State implementation 

6 plan shall cover a period of 5 award years and in7 clude the following: 

8 ‘‘(A) The State entity responsible for ad9 ministering the program under this section. 

10 ‘‘(B) A description of how the State will 

11 identify the workforce and public service needs 

12 (as defined by the State) to be addressed 

13 through the program, including descriptions of 

14 how the State— 

15 ‘‘(i) will use State, regional, or local 

16 labor market data to determine workforce 

17 needs; 

18 ‘‘(ii) will consider particular occupa19 tions that support the economic develop20 ment of rural and underserved commu21 nities (which may include farmers), as de22 termined by the State; 

23 ‘‘(iii) will determine the occupations 

24 for which borrowers shall be eligible to re25 ceive loan repayment credits; 


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1 ‘‘(iv) will determine the amount of 

2 loan repayment credits to be annually allo3 cated to borrowers in each occupation de4 termined under clause (iii); and 

5 ‘‘(v) will project the total amount of 

6 loan repayment credits to be awarded an7 nually to borrowers eligible for such cred8 its, and use this projection to ensure the 

9 State has been allotted sufficient loan re10 payment credits to meet the State’s obliga11 tions under clauses (iii) and (iv). 

12 ‘‘(C) A description of how the State will 

13 administer the program under this section, in14 cluding descriptions of— 

15 ‘‘(i) how the State will promote such 

16 program, and publicly announce to the 

17 general public in the State the list of eligi18 ble occupations and the annual amount of 

19 loan repayment credits to be awarded for 

20 such occupations during the period covered 

21 by the plan; 

22 ‘‘(ii) the borrower-friendly application 

23 process for borrowers to apply to the State 

24 for loan repayment credits; 


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1 ‘‘(iii) the process the State will use to 

2 verify the State-determined eligibility fac3 tors of each applicant and how such appli4 cation will be seamlessly submitted under 

5 subsection (d)(1)(C) to the Secretary for 

6 Federal verification of the State’s deter7 mination of the amount of loan repayment 

8 credits to be allocated; and 

9 ‘‘(iv) how the State will determine if 

10 the State has sufficient loan repayment 

11 credits to add occupations to the list of eli12 gible occupations or increase the amount of 

13 loan repayment credits to be awarded to 

14 borrowers in eligible occupations, and how 

15 the State will inform the general public in 

16 the State of such changes. 

17 ‘‘(D) An assurance that following the pub18 lic release of the State determined eligible occu19 pations and loan repayment credit amounts, 

20 such occupations and credit amounts will not be 

21 reduced or become unavailable for allocation to 

22 borrowers eligible for such credits in the State 

23 for the period covered by the plan. 

24 ‘‘(E) An assurance that the State will com25 ply with subsection (d)(2)(C) to use non-FedVerDate Sep 11 2014 02:52 Oct 30, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H4851.IH H4851

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1 eral funds to provide the full State-determined 

2 amount of loan repayment credits in accordance 

3 with such subsection. 

4 ‘‘(F) An assurance that no borrower will 

5 receive more than $10,000 in loan repayment 

6 credits for an award year. 

7 ‘‘(3) PLAN APPROVAL.—The Secretary shall ap8 prove a plan submitted under this section that meets 

9 the requirements of paragraph (2). 

10 ‘‘(d) BORROWER APPLICATION PROCESS.— 

11 ‘‘(1) STATE REQUIREMENTS.—Each State re12 ceiving an allotment of loan repayment credits under 

13 this section shall— 

14 ‘‘(A) upon receipt of approval of the 

15 State’s plan under subsection (c)(3), carry out 

16 the announcement and promotion requirements 

17 described in subsection (c)(2)(C)(i); 

18 ‘‘(B) require each borrower seeking such 

19 credits to submit an application to the State at 

20 such time, in such manner, and containing such 

21 information as may be required by such State; 

22 and 

23 ‘‘(C) upon State verification of eligibility of 

24 a borrower for an allocation of loan repayment 

25 credits (including employment in an eligible ocVerDate Sep 11 2014 02:52 Oct 30, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H4851.IH H4851

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1 cupation and the application requirements 

2 under subparagraph (B)), the State shall sub3 mit to the Secretary— 

4 ‘‘(i) the application of the borrower; 

5 and 

6 ‘‘(ii) a determination of the number of 

7 such credits that should be allocated to the 

8 borrower. 

9 ‘‘(2) SECRETARY APPROVAL.— 

10 ‘‘(A) FULL AMOUNT.— 

11 ‘‘(i) IN GENERAL.—Subject to sub12 paragraphs (B) and (C), upon a deter13 mination that a borrower meets the re14 quirements of clause (ii), the Secretary 

15 shall cancel an amount equal to the 

16 amount of credits allocated to the borrower 

17 under paragraph (1)(C)(ii) of the out18 standing balance of principal or interest on 

19 the eligible Federal loans of such borrower. 

20 ‘‘(ii) BORROWER REQUIREMENTS.—A 

21 borrower meets the requirements of this 

22 clause if the borrower— 

23 ‘‘(I) has entered repayment on 

24 any eligible Federal loan and such 


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1 loans are less than 90 days delin2 quent; 

3 ‘‘(II) whose total number of loan 

4 repayment credits under this section 

5 has resulted in the cancellation of less 

6 than $50,000 on the borrower’s eligi7 ble Federal loans; and 

8 ‘‘(III) earned an adjusted gross 

9 income of less than $120,000 during 

10 the prior calendar year. 

11 ‘‘(B) PARTIAL AMOUNT.— 

12 ‘‘(i) IN GENERAL.—In the case of a 

13 borrower whose allocation amount under 

14 subparagraph (A) would result in the bor15 rower receiving greater than a total of 

16 $50,000 in loan repayment credits under 

17 the program under this section, the Sec18 retary shall cancel an amount described in 

19 clause (ii) of the outstanding balance on 

20 the eligible Federal loans of the borrower. 

21 ‘‘(ii) AMOUNT.—The amount de22 scribed in this clause is an amount that 

23 would result in the borrower receiving a 

24 total of $50,000 in loan cancellation under 

25 this section. 


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1 ‘‘(C) INSUFFICIENT CREDITS.—In the case 

2 of a State that does not have a sufficient allot3 ment of loan repayment credits to allocate the 

4 number of credits to a borrower in an amount 

5 determined under paragraph (1)(C)(ii) for such 

6 borrower, the Secretary shall, with respect to 

7 the outstanding balance of the borrower’s eligi8 ble Federal loans— 

9 ‘‘(i) cancel an amount equal to the 

10 amount of such credits that are remaining 

11 in the State’s allotment; and 

12 ‘‘(ii) notify the State of its obligation 

13 to use non-Federal funds to cancel an 

14 amount equal to the difference between the 

15 allocation amount determined for the bor16 rower and the amount cancelled under 

17 clause (i). 

18 ‘‘(e) FUNDING.—There are authorized to be appro19 priated, and there are appropriated to carry out this sec20 tion (in addition to any other amounts appropriated to 

21 carry out this section and out of any money in the Treas22 ury not otherwise appropriated)— 

23 ‘‘(1) for each of the first and second award 

24 years that begin on or after the date of enactment 

25 of the State Workforce Incentive Act, an amount 


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1 equal to 0.01 of the loans made under part D and 

2 first disbursed during the preceding award year; 

3 ‘‘(2) for each of the third and fourth award 

4 years that begin after the date of enactment of the 

5 State Workforce Incentive Act, an amount equal to 

6 0.02 of the loans made under part D and first dis7 bursed during the preceding award year; 

8 ‘‘(3) for each of the fifth and sixth award years 

9 that begin after the date of enactment of the State 

10 Workforce Incentive Act, an amount equal to 0.03 of 

11 the loans made under part D and first disbursed 

12 during the preceding award year; and 

13 ‘‘(4) for the seventh award year that begins 

14 after the date of enactment of the State Workforce 

15 Incentive Act and each succeeding award year, an 

16 amount equal to 0.04 of the loans made under part 

17 D and first disbursed during the preceding award 

18 year. 

19 ‘‘(f) DEFINITIONS.—In this section: 

20 ‘‘(1) LOAN REPAYMENT CREDIT.—The term 

21 ‘loan repayment credit’ means a credit for the out22 standing balance of principal or interest on eligible 

23 Federal loans that shall be cancelled on such loans, 

24 at the rate of 1 credit equals $1 of such principal 

25 or interest. 


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1 ‘‘(2) ELIGIBLE FEDERAL LOAN.—The term ‘eli2 gible Federal loan’ means a loan made under part 

3 D, other than— 

4 ‘‘(A) a Federal Direct PLUS Loan made 

5 on behalf of a dependent student; or 

6 ‘‘(B) a Federal Consolidation Loan, if the 

7 proceeds of such loan were used to discharge 

8 the liability on a loan described in subpara9 graph (A).’’. 

10 SEC. 3. SUNSET OF PUBLIC SERVICE LOAN FORGIVENESS. 

11 Section 455(m) of the Higher Education Act of 1965 

12 (20 U.S.C. 1087e(m)) is amended by adding at the end 

13 the following: 

14 ‘‘(5) SUNSET.—The Secretary shall not have 

15 the authority to cancel under this subsection the ob16 ligation to repay the balance of principal and inter17 est due on the eligible Federal Direct Loans made 

18 under this part to a new borrower on or after July 

19 1, 2020.’’. 

Æ 


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