Public Service Reward Act
Bill: H.R.9097 | Sponsor: Rep. Clyburn, James E. (D-SC)
Policy area: Education

Summary:
Public Service Reward Act
This bill makes changes to the Public Service Loan Forgiveness (PSLF) program. Among these changes, the bill (1) directs the Department of Education to provide partial loan forgiveness to a borrower for every 12 months of qualifying payments and employment, and (2) makes additional loan types (e.g., Federal Family Education Loans and Perkins Loans) eligible for forgiveness under the PSLF program.

To expand and improve the Public Service Loan Forgiveness Program, 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 ``Public Service Reward Act''.

SEC. 2. PUBLIC SERVICE LOAN FORGIVENESS EXPANSION AND IMPROVEMENTS.

    Section 455(m) of the Higher Education Act of 1965 (20 U.S.C. 
1087e(m)) is amended--
            (1) by amending paragraph (1) to read as follows:
            ``(1) Forgiveness for public service.--
                    ``(A) In general.--The Secretary shall forgive the 
                appropriate amount of the balance due (as determined in 
                accordance with paragraph (2)) on any eligible Federal 
                loan not in default for a borrower who, after October 
                1, 2007--
                            ``(i) has been employed full-time in a 
                        public service job for 12 months; and
                            ``(ii) for each of the 12 months of 
                        employment described in clause (i), has made a 
                        monthly payment on the eligible Federal loan.
                    ``(B) Method of loan forgiveness.--To provide loan 
                forgiveness under this paragraph, the Secretary is 
                authorized to carry out a program--
                            ``(i) through the holder of the loan, to 
                        assume the obligation to repay a qualified loan 
                        amount for a loan made, insured, or guaranteed 
                        under part B of this title;
                            ``(ii) to cancel a qualified loan amount 
                        for a loan made under this part; and
                            ``(iii) to cancel a qualified loan amount 
                        for a loan made under part E, and to make 
                        payments to institutions of higher education 
                        for an amount equal to the aggregate of the 
                        amounts of loans from its student loan fund 
                        which are canceled pursuant to this subsection, 
                        in accordance with the requirements of section 
                        465(b).
                    ``(C) Special rules.--
                            ``(i) Forgiveness of parent plus loans.--A 
                        borrower of a loan under section 428B, or a 
                        Federal Direct PLUS loan, made on behalf of a 
                        dependent student may receive loan forgiveness 
                        under this subsection for such loan made on 
                        behalf on a dependent student if the borrower 
                        meets the requirements under this subsection.
                            ``(ii) No disruption for consolidation.--
                        With respect to a borrower who is employed 
                        full-time in a public service job, monthly loan 
                        payments made by the borrower on an eligible 
                        Federal loan before such loan is consolidated 
                        into a consolidation loan that is an eligible 
                        Federal loan under this subsection shall be 
                        considered to be qualifying monthly loan 
                        payments on such consolidation loan for the 
                        purpose of calculating the number of months 
                        that the borrower has been making qualifying 
                        payments on such consolidation loan under 
                        subparagraph (A)(ii).
                    ``(D) Rules of construction.--Nothing in this 
                subsection shall be construed to--
                            ``(i) require that a borrower perform the 
                        12 months of employment or make the 12 monthly 
                        payments described in subparagraph (A) 
                        consecutively in order to qualify for loan 
                        forgiveness under this subsection;
                            ``(ii) require that a borrower be employed 
                        in a public service job at the time that the 
                        borrower receives forgiveness under this 
                        subsection; or
                            ``(iii) authorize the refunding of any 
                        repayment of a loan, except that a borrower may 
                        be reimbursed for any payment made after the 
                        date on which the borrower has been approved 
                        for forgiveness under this subsection and 
                        before the date on which the Secretary carries 
                        out such forgiveness.
                    ``(E) Loan forgiveness not taxable income.--The 
                amount of a loan, including interest on a loan, 
                forgiven under this subsection shall not be considered 
                income for purposes of the Internal Revenue Code of 
                1986.
                    ``(F) Standard procedures.--Not later than 180 days 
                after the date of enactment of the Public Service 
                Reward Act, the Secretary shall develop and make 
                publicly available the procedures the Secretary 
                (including the contractors and servicers involved) will 
                use to--
                            ``(i) determine whether a borrower meets 
                        the requirements for loan forgiveness under 
                        this subsection;
                            ``(ii) determine the amount of forgiveness 
                        for which a borrower is eligible under 
                        paragraph (2); and
                            ``(iii) inform any borrower who applies for 
                        and is denied loan forgiveness under this 
                        subsection of--
                                    ``(I) the reason the borrower's 
                                application was denied; and
                                    ``(II) the procedures necessary for 
                                the borrower to appeal the denial; and
                            ``(iv) accept and evaluate an appeal from a 
                        borrower who is denied loan forgiveness under 
                        this subsection.'';
            (2) by amending paragraph (2) to read as follows:
            ``(2) Loan forgiveness amounts.--
                    ``(A) In general.--After completion by a borrower 
                of 12 months of employment and qualifying payments 
                described in paragraph (1)(A), the Secretary shall 
                forgive an appropriate amount of the balance due on the 
                eligible Federal loans made to the borrower, as 
                determined in accordance with subparagraphs (B) and 
                (C), except that in no case shall the total amount 
                forgiven by the Secretary under this paragraph exceed 
                the outstanding balance of principal and interest due 
                on the eligible Federal loans of the borrower on the 
                date the borrower is approved for such forgiveness.
                    ``(B) Forgiveness amounts.--The appropriate amount 
                of forgiveness provided by the Secretary to a borrower 
                for completing 12 months of employment and qualifying 
                payments described in paragraph (1)(A) shall be--
                            ``(i) for each of the first, second, third, 
                        fourth, and fifth times the borrower completes 
                        12 months of such employment and qualifying 
                        payments, an amount equal to the total amount 
                        of interest that accrued on each of the 
                        eligible Federal loans of the borrower during 
                        each of such 12 months;
                            ``(ii) for each of the sixth, seventh, 
                        eighth, and ninth times the borrower completes 
                        12 months of such employment and qualifying 
                        payments, an amount equal to the sum of--
                                    ``(I) the total amount of interest 
                                that accrued on each of the eligible 
                                Federal loans of the borrower during 
                                each of such 12 months; and
                                    ``(II) 5 percent of the total 
                                amount outstanding (including principal 
                                and interest) on each of the eligible 
                                Federal loans of the borrower on the 
                                date each such loan first entered 
                                repayment; and
                            ``(iii) for the tenth time the borrower 
                        completes 12 months of such employment and 
                        qualifying payments, 100 percent of the 
                        outstanding balance of principal and interest 
                        due on each of the eligible Federal loans of 
                        the borrower on the date the borrower is 
                        approved for such forgiveness.
                    ``(C) Calculation of forgiveness amounts for past 
                public service.--In the case of a borrower who has 
                completed at least 12 months of employment and 
                qualifying payments described in paragraph (1)(A) 
                (including monthly loan payments before consolidation, 
                as described in paragraph (1)(C)(ii)) prior to the date 
                of enactment of this subsection, the appropriate amount 
                of forgiveness provided by the Secretary shall be--
                            ``(i) in the case of a borrower who has 
                        completed 12 months of such employment and 
                        qualifying payments at least 10 times, but who 
                        has not received loan cancellation under this 
                        subsection (as it was in effect on the day 
                        before the date of enactment of the Public 
                        Service Reward Act), 100 percent of the 
                        outstanding balance of principal and interest 
                        due on each of the eligible Federal loans of 
                        the borrower on the date the borrower is 
                        approved for such forgiveness; and
                            ``(ii) in the case of a borrower who has 
                        completed 12 months of such employment and 
                        qualifying payments at least one time but not 
                        more than 9 times, for each such time the 
                        borrower completed 12 months of such employment 
                        and qualifying payments in accordance with 
                        subparagraph (B), an amount equal to the total 
                        amount of interest that accrued on each of the 
                        eligible Federal loans of the borrower during 
                        each of such 12 months.
                    ``(D) Past service determination.--A borrower who 
                has completed at least 12 months of employment and 
                qualifying payments described in subparagraph (C) shall 
                be eligible for forgiveness under this subsection 
                regardless of whether the borrower would have been 
                eligible for cancellation as a result of such 
                employment and payments under this subsection as it was 
                in effect on the day before the date of enactment of 
                the Public Service Reward Act.'';
            (3) in paragraph (3)--
                    (A) by amending subparagraph (A) to read as 
                follows:
                    ``(A) Eligible federal loan.--The term `eligible 
                Federal Loan' means any loan made, insured, or 
                guaranteed under part B, this part, or part E.'';
                    (B) by redesignating subparagraph (B) as 
                subparagraph (C), and by inserting before subparagraph 
                (C) (as so redesignated) the following:
                    ``(B) Monthly payment.--The term `monthly payment' 
                means a loan payment of not less than the minimum 
                monthly amount due, as required by law or the terms of 
                the loan, based on the repayment plan applicable to the 
                loan.''; and
                    (C) by adding at the end the following:
                    ``(D) Temporary expanded pslf program.--The term 
                `temporary expanded PSLF program' includes each loan 
                cancellation program under the following provisions of 
                law:
                            ``(i) section 315 of title III of division 
                        H of the Consolidated Appropriations Act, 2018 
                        (Public Law 115-141; 132 Stat. 752 et seq.);
                            ``(ii) section 313 of title III of division 
                        B the Department of Defense and Labor, Health 
                        and Human Services, and Education 
                        Appropriations Act, 2019 and Continuing 
                        Appropriations Act, 2019 (Public Law 115-245);
                            ``(iii) section 312 of title III of 
                        division A of the Further Consolidated 
                        Appropriations Act, 2020 (Public Law 116-94); 
                        and
                            ``(iv) section 310 of Title III of division 
                        H of the Omnibus Appropriations Act, 2021 
                        (Public Law 116-260).''; and
            (4) by adding at the end the following new paragraphs:
            ``(5) Notices regarding pslf expansion and requirements.--
                    ``(A) General notice.--Not later than one year 
                after the date of enactment of the Public Service 
                Reward Act, the Secretary shall make publicly 
                available, in simple and understandable terms, 
                information about the loan forgiveness program under 
                this subsection, the changes made to the program by the 
                Public Service Reward Act, and how such changes may 
                affect the eligibility of borrowers of eligible Federal 
                loans for loan forgiveness under this subsection. Such 
                information shall be easily accessible through the 
                website of the Department of Education.
                    ``(B) Notice to all eligible federal loan 
                borrowers.--Not later than 6 months after the date of 
                enactment of the Public Service Reward Act, the 
                Secretary of Education shall notify all eligible 
                Federal loan borrowers of the changes made to the 
                program under this subsection by the Public Service 
                Reward Act, and how such changes may affect the 
                eligibility of borrowers for loan forgiveness under 
                this subsection.
                    ``(C) Notices for borrowers denied loan 
                cancellation or loan forgiveness.--Not later than 6 
                months after the date of enactment of the Public 
                Service Reward Act, the Secretary shall--
                            ``(i) identify and inform each borrower who 
                        applied for and was denied loan cancellation 
                        under this subsection (as in effect on the day 
                        before the date of enactment of the Public 
                        Service Reward Act) of--
                                    ``(I) the reason the borrower's 
                                application was denied; and
                                    ``(II) the changes made to the 
                                program under this subsection by the 
                                Public Service Reward Act, and how such 
                                changes may affect the eligibility of 
                                the borrower for loan forgiveness under 
                                this subsection;
                            ``(ii) determine whether each such borrower 
                        qualifies for loan forgiveness under this 
                        subsection, and if so, forgive the borrower's 
                        loans in accordance with this subsection (as in 
                        effect on the date of such forgiveness);
                            ``(iii) in the case of such a borrower who 
                        does not qualify for loan forgiveness under 
                        this subsection, notify the borrower of--
                                    ``(I) any options to qualify for 
                                loan forgiveness under this subsection, 
                                and how to successfully pursue such 
                                options; and
                                    ``(II) the procedures necessary for 
                                the borrower to appeal the 
                                determination that the borrower does 
                                not qualify for such loan forgiveness; 
                                and
                            ``(iv) develop a process to inform any 
                        borrower who applies for and is denied loan 
                        forgiveness under this subsection after the 
                        date of enactment of the Public Service Reward 
                        Act of--
                                    ``(I) the reason the borrower's 
                                application was denied; and
                                    ``(II) the procedures necessary for 
                                the borrower to appeal the denial.
                    ``(D) Notice to employers.--With respect to each 
                employer listed in the database described in paragraph 
                (6), the Secretary shall, on an annual basis and in a 
                manner that is consistent with Federal laws on data 
                privacy--
                            ``(i) provide each such employer with 
                        standardized information on the program under 
                        this subsection, including eligibility 
                        requirements; and
                            ``(ii) encourage the employer to provide 
                        such information to employees.
                    ``(E) Notice to institutions of higher education.--
                With respect to each institution of higher education 
                participating in any program under this title, the 
                Secretary shall, on an annual basis, provide each such 
                institution with standardized information on the 
                program under this subsection, including eligibility 
                requirements for loan forgiveness.
                    ``(F) Accessibility of notices to borrowers.--In 
                carrying out subparagraphs (A), (B), and (C), the 
                Secretary shall--
                            ``(i) in conjunction with the Bureau of the 
                        Census, determine the most common languages 
                        spoken by English learner students and their 
                        parents in the United States;
                            ``(ii) develop and make publicly available 
                        versions of such notices in not fewer than 5 of 
                        the most common languages determined under 
                        clause (i) and make such versions available and 
                        accessible to borrowers in paper and electronic 
                        formats; and
                            ``(iii) ensure that such notices are 
                        available in formats accessible to individuals 
                        with disabilities and compliant with the most 
                        recent Web Content Accessibility Guidelines, or 
                        successor guidelines.
            ``(6) Database of public service jobs; data matching.--
                    ``(A) Database.--Not later than 18 months after the 
                date of enactment of the Public Service Reward Act, the 
                Secretary shall establish and maintain a publicly 
                accessible database of employers that employ 
                individuals in public service jobs. In establishing 
                such database, the Secretary shall consult with 
                relevant Federal agencies that possess records about 
                the status of borrowers of eligible Federal loans as 
                employees in public service jobs.
                    ``(B) Data matching agreements.--
                            ``(i) In general.--The Secretary shall 
                        enter into data matching agreements with 
                        relevant Federal agencies that possess records 
                        about the status of borrowers of eligible 
                        Federal loans as employees in public service 
                        jobs for the purpose of eliminating, to the 
                        extent practicable, the need for a borrower or 
                        an employer to submit a certification of 
                        employment to the Secretary. Such data matching 
                        agreements may--
                                    ``(I) permit the Secretary to 
                                identify and notify borrowers of 
                                potential eligibility for loan 
                                forgiveness under this subsection; and
                                    ``(II) include identifying 
                                borrowers using employer identification 
                                numbers.
                            ``(ii) Specific federal agencies.--
                        Notwithstanding any Federal law, the Secretary 
                        of Labor, the Commissioner of Internal Revenue, 
                        and the Commissioner of Social Security shall 
                        disclose any relevant records to the Secretary 
                        for the purposes of meeting the Secretary's 
                        obligations to reduce barriers to certification 
                        of employment as described in subparagraph (A).
                            ``(iii) Notice to borrowers.--If the 
                        Secretary receives employer or employment 
                        information regarding a borrower from a Federal 
                        agency pursuant to this paragraph, the 
                        Secretary shall timely notify the borrower that 
                        the Secretary received such information.
                    ``(C) Report.--Not later than 180 days after the 
                date of enactment of the Public Service Reward Act, the 
                Secretary, jointly with the heads of relevant Federal 
                agencies, shall report to the authorizing committees on 
                the progress being made to create the database required 
                under subparagraph (A) and to implement the data 
                matching agreements required under subparagraph (B).
            ``(7) Online portal.--
                    ``(A) Borrowers.--Not later than 18 months after 
                the date of enactment of the Public Service Reward Act, 
                the Secretary shall ensure that borrowers have access 
                to an online portal that provides each borrower who 
                signs on to such portal with the following:
                            ``(i) Instructions on how to access the 
                        database under paragraph (6) so that the 
                        borrower can determine whether the borrower is 
                        employed in a public service job.
                            ``(ii) An identification of the loans of 
                        the borrower that are eligible Federal loans.
                            ``(iii) With respect to each such eligible 
                        Federal loan, the number of monthly payments on 
                        such loan that qualify as a monthly payment 
                        under paragraph (1)(A), and the estimated 
                        number of monthly payments under paragraph 
                        (1)(A) remaining on such loan before the 
                        borrower may be eligible for loan forgiveness 
                        under this subsection.
                            ``(iv) With respect to each loan of the 
                        borrower that is not eligible for loan 
                        forgiveness under this subsection, an 
                        explanation of why the loan is not so eligible 
                        and instructions on what, if anything, the 
                        borrower may do to make the loan so eligible.
                            ``(v) Instructions for the submission of 
                        any forms associated with such loan 
                        forgiveness, and an ability for the borrower to 
                        use the portal to electronically sign and 
                        submit such forms.
                    ``(B) Employers.--The Secretary shall ensure that 
                an employer of a borrower has the ability to 
                electronically sign and submit any forms associated 
                with loan forgiveness under this subsection.
                    ``(C) Information.--The Secretary shall ensure that 
                any information provided through the online portal 
                described in this paragraph--
                            ``(i) is up-to-date information; and
                            ``(ii) is provided in a written format, 
                        through email or regular mail, if so requested 
                        by the borrower or employer.
            ``(8) Reports.--
                    ``(A) Final report on loan cancellation.--Not later 
                than 180 days after the date of enactment of the Public 
                Service Reward Act, the Secretary shall submit to the 
                authorizing committees and make publicly available a 
                final report on loan cancellation under this subsection 
                on and before such date of enactment, including--
                            ``(i) the number of borrowers who received 
                        loan cancellation under this subsection (as in 
                        effect on the day before such date of 
                        enactment) on or before such date of enactment, 
                        and the number and percentage of such borrowers 
                        whose application for such loan cancellation 
                        had been previously denied before receiving 
                        such cancellation;
                            ``(ii) the total number of borrowers whose 
                        application for loan cancellation under this 
                        subsection (as in effect on the day before such 
                        date of enactment) that was submitted on or 
                        before such date of enactment was denied, and a 
                        description of why each such application was so 
                        denied;
                            ``(iii) the number of borrowers described 
                        in clause (ii) who contacted the Secretary (on 
                        or before such date of enactment) to determine 
                        how to qualify for such loan cancellation or 
                        for loan cancellation under the temporary 
                        expanded PSLF program; and
                            ``(iv) a list of reasons why certain 
                        payments made on eligible Federal Direct loans 
                        did not qualify as one of the monthly payments 
                        described in paragraph (1)(A) (as such 
                        paragraph was in effect on the day before such 
                        date of enactment).
                    ``(B) Annual report on loan forgiveness.--Beginning 
                in fiscal year 2024 and annually thereafter, the 
                Secretary shall submit to the authorizing committees an 
                annual report with respect to the preceding fiscal 
                year, on--
                            ``(i) the number of borrowers who received 
                        loan forgiveness under this subsection after 
                        the date of enactment of the Public Service 
                        Reward Act;
                            ``(ii) the number and percentage of 
                        borrowers described in clause (i) whose 
                        application for loan cancellation under this 
                        subsection (as in effect on the day before such 
                        date of enactment) was denied on or before such 
                        date of enactment; and
                            ``(iii) the number and percentage of 
                        borrowers whose application for loan 
                        forgiveness under this subsection was denied, 
                        including--
                                    ``(I) a description of why each 
                                such application was so denied; and
                                    ``(II) whether each such borrower 
                                had, on or before such date of 
                                enactment, submitted an application for 
                                loan cancellation under this subsection 
                                (as in effect on the day before such 
                                date of enactment) that was denied.''.

SEC. 3. AUTHORIZATION OF DISCLOSURE BY SECRETARY OF THE TREASURY.

    (a) In General.--Section 6103(l)(13) of the Internal Revenue Code 
of 1986 is amended by adding at the end the following new subparagraph:
                    ``(G) Public service loan forgiveness.--The 
                Secretary shall, upon written request from the 
                Secretary of Education, disclose to any authorized 
                person, only for the purpose of (and to the extent 
                necessary in) discharging loans, maintaining the public 
                service jobs database, and entering into data matching 
                agreements under section 455(m) of the Higher Education 
                Act of 1965, the following return information from 
                returns (for any taxable year specified by the 
                Secretary of Education as relevant to such purpose) of 
                an individual:
                            ``(i) The return information described in 
                        clauses (i) and (vi) of subparagraph (A).
                            ``(ii) The employer identification number 
                        of each employer employing the individual 
                        during a specified taxable year.
                            ``(iii) Verification of whether an 
                        individual was employed by an employer during a 
                        specified taxable year.
                            ``(iv) The name of each employer employing 
                        the individual during a specified taxable year.
                            ``(v) The type indicator of the employer 
                        employing the individual during a specified 
                        taxable year.''.
    (b) Conforming Amendments.--
            (1) Section 6103(p) of such Code is amended--
                    (A) in paragraph (3)(A), by inserting ``(13)(G),'' 
                before ``(14)'', and
                    (B) in paragraph (4) by inserting ``(13)(G),'' 
                after ``(13)(D)(i),'' each place it appears.
            (2) Section 7213(a)(2) of such Code is amended by inserting 
        ``(13)(G),'' after ``(10), (12),''.
    (c) Effective Date.--The amendments made by this section shall 
apply to disclosures made on or after the date of the enactment of this 
Act.
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