Second Chance at Public Service Loan Forgiveness Act
Bill: H.R.8474 | Sponsor: Rep. Norcross, Donald (D-NJ)
Policy area: Education

Summary:
Second Chance at Public Service Loan Forgiveness Act
This bill makes changes to the Public Service Loan Forgiveness (PSLF) program. Among other changes, the bill (1) allows a borrower who obtained an eligible Federal Direct Loan on or after January 1, 1994, to receive loan forgiveness under the PSLF program; (2) provides additional relevant definitions, including to specify that full-time employment is at least 30 hours a week; and (3) allows an eligible teacher to use the same teaching service to qualify for both the Teacher Loan Forgiveness program and the PSLF program.

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 on 
                or after January 1, 1994;
                    ``(B) has been employed full-time in public service 
                for a total period of 10 years or more after the date 
                on which the first eligible Federal Direct Loan was 
                obtained; and
                    ``(C) while employed full-time in public service 
                during the period described in subparagraph (B), 
                completes 120 monthly payments on the eligible loans of 
                the borrower, pursuant to any one or a combination of 
                the following:
                            ``(i) Payments under an income-based 
                        repayment plan under section 493C.
                            ``(ii) Payments under a standard repayment 
                        plan under subsection (d)(1)(A), based on a 10-
                        year repayment period.
                            ``(iii) Monthly payments under a repayment 
                        plan under subsection (d)(1) or (g) of not less 
                        than the monthly amount calculated under 
                        subsection (d)(1)(A), based on a 10-year 
                        repayment period.
                            ``(iv) Payments under an income contingent 
                        repayment plan under subsection (d)(1)(D).
                            ``(v) Any monthly payment that would have 
                        otherwise been made by the borrower on 1 or 
                        more eligible loans during a period of 
                        forbearance, including--
                                    ``(I) discretionary or mandatory 
                                administrative forbearance;
                                    ``(II) forbearance described in 
                                section 428(c)(3)(A)(i), including 
                                forbearance because--
                                            ``(aa) the borrower is 
                                        serving in a medical or dental 
                                        internship or residency program 
                                        described in section 
                                        428(c)(3)(A)(i)(I);
                                            ``(bb) the borrower is 
                                        serving in a national service 
                                        position for which the borrower 
                                        receives a national service 
                                        educational award under the 
                                        National and Community Service 
                                        Trust Act of 1993 (42 U.S.C. 
                                        12501 et seq.); or
                                            ``(cc) the borrower is 
                                        eligible for interest payments 
                                        to be made on such loan for 
                                        service in the Armed Forces 
                                        under section 2174 of title 10, 
                                        United States Code, and, 
                                        pursuant to that eligibility, 
                                        the interest is being paid on 
                                        such loan under subsection (o);
                                    ``(III) forbearance provided 
                                because the borrower is serving in an 
                                educator residency program; and
                                    ``(IV) forbearance provided to a 
                                borrower due to the borrower's 
                                qualifying National Guard service.
                            ``(vi) Any monthly payment that would have 
                        otherwise been made by the borrower on 1 or 
                        more eligible loans during a period of 
                        deferment, including--
                                    ``(I) deferment relating to cancer 
                                treatment under subsection (f)(3) or 
                                section 427(a)(2)(C)(v);
                                    ``(II) deferment relating to active 
                                duty during a war or other military 
                                operation or national emergency, or 
                                performing qualifying National Guard 
                                duty during a war or other military 
                                operation or national emergency, under 
                                subsection (f)(2)(C) or section 
                                428(b)(1)(M)(iii);
                                    ``(III) deferment relating to a 
                                period of unemployment under subsection 
                                (f)(2)(B) or section 428(b)(1)(M)(ii), 
                                or of economic hardship under 
                                subsection (f)(2)(D) or section 
                                428(b)(1)(M)(iv);
                                    ``(IV) deferment provided in 
                                connection with services in the Peace 
                                Corps; and
                                    ``(V) deferment provided--
                                            ``(aa) while the borrower 
                                        is carrying at least one-half 
                                        the normal full-time work load 
                                        under subsection (f)(2)(A) or 
                                        section 427(a)(2)(C) and 
                                        employed full-time in public 
                                        service; or
                                            ``(bb) in connection with a 
                                        graduate student fellowship or 
                                        while employed by a qualifying 
                                        employer and pursuing a 
                                        graduate, professional, or 
                                        certificate program or in 
                                        connection with a 
                                        rehabilitation training program 
                                        under subsection (f)(2)(A) or 
                                        section 427(a)(2)(C).
                            ``(vii) Any monthly payment that otherwise 
                        would have been made by the borrower during a 
                        grace period lasting in excess of 6 consecutive 
                        months.'';
            (2) by redesignating paragraphs (3) and (4) as paragraphs 
        (6) and (7), respectively;
            (3) by inserting after paragraph (2) the following:
            ``(3) Special rules relating to employment.--
                    ``(A) Grace period public service employment.--The 
                Secretary shall include any payments made by a borrower 
                on an eligible Federal Direct Loan during a 6-month 
                grace period, as described in section 428(b)(7)(A), 
                while the borrower was employed full-time in public 
                service, upon notification by the borrower of such 
                employment and payments made.
                    ``(B) Americorps and peace corps service.--For 
                purposes of this subsection, volunteer service as an 
                AmeriCorps or Peace Corps volunteer, as described in 
                subclause (III) or (IV) of paragraph (6)(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--
                                    ``(I) 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; and
                                    ``(II) under paragraph (1)(C) for 
                                any monthly payment described in such 
                                paragraph that was made by, or credited 
                                to, the borrower on 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 (6), as redesignated by paragraph 
        (2), and inserting the following:
            ``(6) 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).
                                 <all>