Public service loan forgiveness program

Section 455(m) of the Higher Education Act of 1965 (20 U.S.C. 1087e(m)) is amended— (1)in paragraph (1), in the matter preceding subparagraph (A), by inserting or paragraph (5), as applicable, after paragraph (2); (2)in paragraph (2), by striking After and inserting Except as provided in paragraph (5), after; and (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, the Secretary shall cancel the obligation to repay the balance of principal and interest due on the eligible Federal Direct Loans made to a borrower under this part in accordance with this paragraph. (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 and who is employed in a public service job and submits an employment certification form described in clause (F), the Secretary shall cancel, after the conclusion of each employment period in such public service job, as described in clause (D)— (i)the percent specified in such subclause (D) of the total amount due on the eligible Federal Direct Loans made to the borrower under this part, based on the length of such employment period; and (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 and who is employed in a public service job may elect to have the Secretary cancel such eligible Federal Direct Loan through partial repayments after completion of each employment period in accordance with this paragraph (including submission of an employment certification form described in clause (F)), or in full after the completion of the required employment period and 120 monthly payments in accordance with paragraph (2). (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 may submit an employment certification form described in clause (F) and request cancellation for a public service job under this paragraph. (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.