Strengthening Loan Forgiveness for Public Servants During the COVID–19 Crisis 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 Strengthening Loan Forgiveness for Public Servants During the COVID–19 Crisis Act 2. Sense of the Senate It is the sense of the Senate that— (1) the novel coronavirus of 2019 (COVID–19) is imposing a burden on many individuals, including doctors, nurses, and teachers, who are participating in the public service loan forgiveness program under section 455(m) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(m) (2) restructuring the loan forgiveness provided through such program and accommodating disruptions that might occur due to the impact of the novel coronavirus of 2019 (COVID–19) are necessary. 3. Public service loan forgiveness program (a) In general 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 , except as provided in paragraph (5), on any eligible Federal Direct Loan not in default (2) by adding at the end the following: (5) Loan cancellation for new loans (A) In general Beginning after the date of enactment of the Strengthening Loan Forgiveness for Public Servants During the COVID–19 Crisis Act Strengthening Loan Forgiveness for Public Servants During the COVID–19 Crisis Act (B) Percent amount The percent of a loan that shall be canceled under subparagraph (A) 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, 30 percent of the total amount due on the eligible Federal Direct Loan on the date the borrower commenced employment in such public service job. (C) Employment certification form (i) In general 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. (ii) Deferment If a borrower submits to the Secretary the employment certification form described in clause (i), during the period in which the borrower is employed in a public service job for which loan cancellation is eligible under this paragraph, the borrower's eligible Federal Direct Loan shall be placed in deferment. (D) Interest canceled If a portion of a loan is canceled under this paragraph for any year, the entire amount of interest on such loan that accrues for such year shall be canceled. . (b) Special rule for COVID–19 employment disruptions (1) Definitions In this subsection: (A) Employment disruption The term employment disruption (B) Public service job The term public service job 20 U.S.C. 1087e(m)(3) (C) Qualifying emergency The term qualifying emergency Public Law 116–136 (D) Qualifying individual The term qualifying individual (i) has a loan that qualifies for public service loan forgiveness under section 455(m) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(m) (ii) during the qualifying emergency period— (I) was employed in a public service job; and (II) experiences an employment disruption with respect to the public service job and no longer is employed in a public service job. (2) In general Subject to paragraph (3), in administering the public service loan forgiveness program under section 455(m) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(m) (A) each qualifying individual shall be deemed an individual employed in a public service job during the period of the qualifying emergency for purposes of such program; and (B) any monthly payment made by a qualifying individual during the qualifying emergency (including a payment deemed made under section 3513(c) of the Coronavirus Aid, Relief, and Economic Security Act ( Public Law 116–136 (3) Special rule Paragraph (2) shall only apply to a qualifying individual who resumes employment in any public service job by the date that is 6 months after the last day of the qualifying emergency, except that any qualifying individual who, as a result of the application of paragraph (2), would have completed the requirements for full or partial loan cancellation under paragraph (2) or (5) of section 455(m) of the Higher Education Act of 1965 (as amended by this Act) during the qualifying emergency, shall receive such loan cancellation without any required resumption of public service job employment. (4) Guidance Not later than 30 days after the date of enactment of this Act, the Secretary of Education shall develop and make available guidance for qualifying individuals regarding the assistance available under this subsection.

Summary: Strengthening Loan Forgiveness for Public Servants During the COVID-19 Crisis Act This bill revises the Public Service Loan Forgiveness (PSLF) program to provide for partial loan cancellation based on the length of public service employment. It also allows public service employees who are impacted by the COVID-19 (i.e., coronavirus disease 2019) public health emergency to continue to participate, without disruption, in the PSLF program. First, the bill directs the Department of Education (ED) to cancel 15%, 15%, 20%, 20%, and 30% of the amount a borrower owes after 2, 4, 6, 8, and 10 years of public service employment, respectively, on Federal Direct Loans made after the bill's enactment. In addition, an individual who was employed in a public service job and who experiences lapse in employment (e.g., a furlough, a layoff, or the individual's resignation due to illness or caregiving responsibilities) because of the COVID-19 public health emergency may continue to participate in the PSLF program without disruption. The bill treats such an individual as employed in a public service job during the emergency and deems a monthly payment made by the individual as a qualifying monthly payment toward loan cancellation under the PSLF program. However, unless the individual would have completed requirements for partial or full loan cancellation during the public health emergency, the individual must resume employment in a public service job within six months after the end of the emergency. Finally, ED must develop and make available guidance related to certain assistance provided by the bill.