I 108th CONGRESS 2d Session H. R. 5270 IN THE HOUSE OF REPRESENTATIVES October 7, 2004 Mr. Renzi introduced the following bill; which was referred to the Committee on Education and the Workforce A BILL To make careers in public service more feasible for students who graduate with high educational loan debt.

1.

Short title

This Act may be cited as the Education for Public Service Act of 2004.

2.

Findings

Congress finds the following: (1)The Nation benefits greatly from the contributions of persons who obtain higher education, including graduate and professional degrees, and then devote much of their careers to public service. High educational debt is an impediment that discourages borrowers from pursuing low-paying public service employment. (2)In 1993, Congress created the income-contingent loan repayment option to help high-debt borrowers to have lower-paying public service careers. (3)This plan has not yet succeeded in removing the barriers to public service created by high educational debt. The principal problem is that borrowers who elect this option do not receive debt forgiveness until they have been paying for 25 years. Graduates are unable to contemplate such a long period of repayment before their educational debts are forgiven. Many of them expect to be helping to pay for their children’s education within that period. (4)The goal of income-contingent repayment can be better achieved by reducing the option’s period of loan repayment and forgiveness so that public service professionals will not be forced to continue repaying their debt for 25 years after completion of graduate school. (5)Some borrowers are discouraged from using the income-continent repayment option because it includes a severe marriage penalty. It attributes the incomes of both spouses to each borrower spouse, so that when a borrower marries, the amount of repayment due under the option is vastly increased. The option can be made more equitable by attributing only half of the income of a couple to each spouse. (6)Making adjustments to the income-contingent repayment option will improve access to higher education opportunities and will enable more graduates to work in public service.

3.

Student loan repayment

(a)

In general

Section 455(d) of the Higher Education Act of 1965 (20 U.S.C. 1087e(d)(1)(D)) is amended— (1)in paragraph (1)(D), by inserting and subject to paragraph (6) after prescribed by the Secretary; and (2)by adding at the end the following new paragraph: (6)

Maximum repayment period for public service employees

(A)

Shortened period in recognition of service

For purposes of paragraph (1)(D), in the case of borrowers who, after electing to repay a loan on the income contingent repayment plan, have been employed by a qualified public service employer, whether or not continuously, for at least eight years on a full-time basis, the extended period of time prescribed by the Secretary shall not exceed 15 years. (B)

Definition

For purposes of this paragraph, the term qualified public service employer means any State, local government, Federal agency, or other organization (as such terms are defined by section 3371 of title 5, United States Code), any other office or entity of the legislative branch, and any employer that is exempt from taxation under section 501(c)(3) or section 501(c)(4) of title 26, United States Code.. (b)

Repayment schedules for married borrowers

Section 455(e)(2) of the Higher Education Act of 1965 (20 U.S.C. 1087e(e)(2)) is amended by— (1)by striking , or, if the borrower and all that follows and inserting a period; and (2)by adding at the end the following: If the borrower is married, one-half of the combined adjusted gross income of the borrower and of the borrower’s spouse shall be attributed to the borrower..