Public Service Pays Off Act

To amend the Higher Education Act of 1965 to provide for a percentage of student loan forgiveness for public service employment, and for other purposes. 1. Short title This Act may be cited as the Public Service Pays Off Act 2. Public service loan forgiveness program Section 455(m) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(m) (1) in paragraph (1), in the matter preceding subparagraph (A), by inserting or paragraph (5), as applicable, paragraph (2) (2) in paragraph (2), by striking After Except as provided in paragraph (5), after (3) by adding at the end the following: (5) Loan cancellation for partial service (A) In general Notwithstanding paragraph (2), beginning on the date of enactment of the Public Service Pays Off Act (B) New monthly payments For a borrower of an eligible Federal Direct Loan who begins making qualifying monthly payments under paragraph (1) on or after the date of enactment of the Public Service Pays Off Act clause (F) clause (D) (i) the percent specified in such subclause (D) (ii) the applicable amount of interest that accrued during such employment period, in accordance with subclause (E) (C) Prior monthly payments (i) Election A borrower of an eligible Federal Direct Loan who has made one or more monthly payments under paragraph (1) before the date of enactment of the Public Service Pays Off Act clause (F) (ii) No double cancellation A borrower shall not have eligible Federal Direct Loans cancelled under both paragraph (2) and this paragraph, but a borrower who was determined to be ineligible for cancellation under paragraph (2) before the date of enactment of the Public Service Pays Off Act clause (F) (D) Percent amount The percent of a loan that shall be canceled under this paragraph for an employment period is as follows: (i) In the case of a borrower who completes 2 years of employment in a public service job, 15 percent of the total amount due on the eligible Federal Direct Loan on the date the borrower commenced employment in such public service job. (ii) In the case of a borrower who completes 4 years of employment in a public service job, 15 percent of the total amount due on the eligible Federal Direct Loan on the date the borrower commenced employment in such public service job. (iii) In the case of a borrower who completes 6 years of employment in a public service job, 20 percent of the total amount due on the eligible Federal Direct Loan on the date the borrower commenced employment in such public service job. (iv) In the case of a borrower who completes 8 years of employment in a public service job, 20 percent of the total amount due on the eligible Federal Direct Loan on the date the borrower commenced employment in such public service job. (v) In the case of a borrower who completes 10 years of employment in a public service job, the amount remaining of the total amount due on the eligible Federal Direct Loan on the date the borrower commenced employment in such public service job. (E) Interest canceled If a portion of a loan is canceled under this paragraph for a period of employment in a public service job, the entire amount of interest on such loan that accrued during such period shall be canceled. (F) Employment certification form In order to receive loan cancellation under this paragraph, a borrower shall submit to the Secretary an employment certification form that is developed by the Secretary and includes self-certification of employment and a separate part for employer certification that indicates the dates of employment. .

Summary: Public Service Pays Off Act This bill requires the Department of Education to incrementally cancel a percentage of the obligation to repay the balance on eligible Federal Direct Loans for a borrower who, while employed in public service,&nbsp;makes qualifying payments for 2, 4, 6, 8, and 10 years.