110 HR 2661 IH: Education for Public Service Act of 2007 U.S. House of Representatives 2007-06-11 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I 110th CONGRESS 1st Session H. R. 2661 IN THE HOUSE OF REPRESENTATIVES June 11, 2007 Mr. Sarbanes introduced the following bill; which was referred to the Committee on Education and Labor A BILL To make careers in public service more feasible for students with high educational debt.

1.

Short title

This Act may be cited as the Education for Public Service Act of 2007.

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 after which loans are forgiven for borrowers who have made ten years of monthly repayments on their loans while serving in full time jobs in governmental or non-profit agencies. (5)Some borrowers are discouraged from using the income-contingent 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.

Improvements in the income-contingent repayment option

(a)

Forgiveness for public service

Section 455(e) of the Higher Education Act of 1965 (20 U.S.C. 1087e(e)) is amended by adding at the end the following: (7)

Repayment plan for public sector employees

(A)

In general

The Secretary shall forgive the balance due on any loan made under this part or section 428C(b)(5) for a borrower— (i)who has made 120 payments on such loan pursuant to income contingent repayment; and (ii)who was employed for the ten-year period during which the borrower made the 120 payments described in clause (i), in a public sector job. (B)

Public sector job

In this paragraph, the term ‘public sector job’ means a full-time job in which the employer is a Federal, State, or local government agency or intergovernmental authority, or an organization that is described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Act. (8)

Return to standard repayment

A borrower who is repaying a loan made under this part or section 428C(b)(5) may choose, at any time, to terminate repayment pursuant to income contingent repayment and repay such loan under the standard repayment plan.. (b)

Treatment of married borrower’s income

Section 455(e)(2) of the Higher Education Act of 1965 (20 U.S.C. 1087e(e)(2)) is amended by striking the phrase on the adjusted gross income of the borrower and the borrower’s spouse and inserting the phrase on half of the total of the adjusted gross income of the borrower and the adjusted gross income of the borrower’s spouse.