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.

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(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.