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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 10477 Introduced in House (IH)]
<DOC>
118th CONGRESS
2d Session
H. R. 10477
To amend the Higher Education Act of 1965 to improve the Public Service
Loan Forgiveness program and reduce interest rates.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 18, 2024
Mr. Courtney (for himself, Mr. Sarbanes, and Mr. DeSaulnier) introduced
the following bill; which was referred to the Committee on Education
and the Workforce
_______________________________________________________________________
A BILL
To amend the Higher Education Act of 1965 to improve the Public Service
Loan Forgiveness program and reduce interest rates.
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 ``Strengthening Efforts for Relief and
Vital Incentives for Community Service and Engagement Act'' or the
``SERVICE Act''.
SEC. 2. AMENDMENTS TO TERMS AND CONDITIONS OF PUBLIC SERVICE LOAN
FORGIVENESS.
(a) Number of Monthly Payments.--Paragraph (1) of section 455(m) of
the Higher Education Act of 1965 (20 U.S.C. 1087e(m)) is amended--
(1) in subparagraph (A), by striking ``120 monthly
payments'' and all that follows and inserting ``96 qualifying
monthly payments on the eligible Federal Direct Loan after
October 1, 2007; and''; and
(2) by amending subparagraph (B) to read as follows:
``(B) has been employed in a public service job
during the period in which the borrower makes each of
the 96 qualifying monthly payments.''.
(b) Redesignations.--Section 455(m) of the Higher Education Act of
1965 (20 U.S.C. 1087e(m)) is further amended by redesignating
paragraphs (2), (3), and (4), and as paragraphs (3), (6), and (7),
respectively;
(c) Monthly Payments.--Section 455(m) of the Higher Education Act
of 1965 (20 U.S.C. 1087e(m)) is further amended--
(1) by inserting after paragraph (1), as so amended, the
following:
``(2) Monthly payments.--
``(A) Qualifying monthly payments.--For the purpose
of determining under paragraph (1) the number of
qualifying monthly payments made by a borrower on an
eligible Federal Direct Loan, the Secretary shall
consider the borrower to have made a qualifying monthly
payment for each month that--
``(i) the borrower pays (as a lump sum or
in multiple installments) an amount that is not
less than the monthly payment amount due on the
eligible Federal Direct Loan pursuant to any
one or a combination of the following--
``(I) payments under an income-
based repayment plan under section
493C;
``(II) payments under a standard
repayment plan under subsection
(d)(1)(A), based on a 10-year repayment
period;
``(III) monthly payments under a
repayment plan under subsection (d)(1)
or (g) of not less than the monthly
amount calculated under subsection
(d)(1)(A), based on a 10-year repayment
period; or
``(IV) payments under an income
contingent repayment plan under
subsection (d)(1)(D); or
``(ii) in lieu of a payment described in
clause (i), the borrower is in one of the
following periods of deferment or forbearance--
``(I) cancer treatment deferment
under section 427(a)(2)(C)(iv),
428(b)(1)(M)(v), or 455(f)(3);
``(II) rehabilitation training
program deferment under section
427(a)(2)(C)(i)(II),
428(b)(1)(M)(i)(II), or
455(f)(2)(A)(ii);
``(III) military service deferment
under section 428(b)(1)(M)(iii) or
455(f)(2)(C);
``(IV) unemployment deferment under
section 427(a)(2)(C)(ii),
428(b)(1)(M)(ii), 428B(d)(1)(A)(i), or
455(f)(2)(B);
``(V) deferment due to an economic
hardship described in section
427(a)(2)(C)(iii), section
428(b)(1)(M)(iv), section
428B(d)(1)(A)(i), section 435(o), or
section 455(f)(2)(D);
``(VI) Peace Corps service
deferment under section
682.210(b)(2)(ii) or 682.210(k) of
title 34, Code of Federal Regulations
(or successor regulations), as made
applicable to Direct Loan borrowers
under section 685.204(j) of such title
34;
``(VII) post-active-duty student
deferment under section 493D;
``(VIII) AmeriCorps forbearance
under section 428(c)(3)(A)(i)(III);
``(IX) National Guard Duty
forbearance under section
682.211(h)(2)(iii) or 685.205(a)(7) of
title 34, Code of Federal Regulations
(or successor regulations);
``(X) Department of Defense student
loan repayment program forbearance
under section 428(c)(3)(A)(i)(IV);
``(XI) administrative forbearance
or mandatory administrative forbearance
under section 428(c)(3)(D) or
428H(e)(7); or
``(XII) student loan debt burden
forbearance under section
428(c)(3)(A)(i)(II).
``(B) Prepayments.--
``(i) In general.--Subject to clause (ii),
if, for any month, a borrower makes a
qualifying monthly payment on an eligible
Federal Direct Loan in an amount that exceeds
the monthly payment amount due on such loan for
such month, the Secretary shall--
``(I) if the excess amount is less
than the monthly payment amount due for
the subsequent month on such loan,
apply the excess amount toward the
monthly payment amount due for such
subsequent month;
``(II) if the excess amount is
equal to the monthly payment amount due
for the subsequent month on such loan,
treat the excess amount as the monthly
payment for such subsequent month;
``(III) if the excess amount is
greater than the monthly payment amount
due for the subsequent month on such
loan, but less than the total monthly
payment amounts due for the 2
subsequent months on such loan--
``(aa) treat the portion of
the excess amount that covers
the monthly payment amount due
for the subsequent month as the
monthly payment for such
subsequent month; and
``(bb) apply the remainder
of the excess amount toward the
monthly payment amount due for
the second subsequent month;
``(IV) if the excess amount is
equal to or greater than the monthly
payment amount due for the 2 subsequent
months on such loan, but less than the
total monthly payment amounts due for
the 3 subsequent months on such loan--
``(aa) treat the portion of
the excess amount that covers
the monthly payment amounts due
for the subsequent month and
the second subsequent month as
the monthly payments for such
months; and
``(bb) apply any remainder
of such excess amount toward
the monthly payment amount due
for the third subsequent month;
``(V) if the excess amount is equal
to the monthly payment amounts due for
the 3 subsequent months on such loan,
treat the excess amount as the monthly
payments for such months;
``(VI) if the excess amount is
greater than the monthly payment
amounts due for the 3 subsequent months
on such loan--
``(aa) treat the portion of
the excess amount that covers
the monthly payment amounts due
for the 3 subsequent months as
the monthly payments for such
months; and
``(bb) apply any remainder
of such excess amount to the
principal balance of the
eligible Federal Direct loan;
and
``(VII) notwithstanding subclauses
(I) through (VI), if the borrower has a
monthly payment amount due on such loan
for such month that is equal to $0,
apply any excess amount for such month
to the principal balance of the
eligible Federal Direct loan.
``(ii) Alternative application.--Prior to
or at the time of making a payment that exceeds
the monthly payment amount due on an eligible
Federal Direct Loan for such month, a borrower
may request that any excess amount for such
month be applied to the principal balance of an
eligible Federal Direct loan in lieu of such
excess amount being applied in accordance with
clause (i).
``(C) Buyback payment process.--
``(i) In general.--The Secretary shall
establish a buyback payment process under which
a qualified borrower of an eligible Federal
Direct Loan may make a buyback payment in order
to have eligible months of the borrower's
public service employment period during which
the borrower did not make a qualifying monthly
payment on such loan be treated as if the
borrower had made a qualifying monthly payment
on such loan.
``(ii) Qualified borrower.--A borrower is a
qualified borrower for the purposes of making a
buyback payment in accordance with this
subparagraph if the borrower--
``(I) has an eligible Federal
Direct Loan that is not in default;
``(II) has been employed in a
public service job for not less than a
96 month employment period, but during
such employment period has made fewer
than 96 qualifying monthly payments on
an eligible Federal Direct Loan; and
``(III) requests to make a buyback
payment in accordance with this
subparagraph.
``(iii) Eligible month.--For the purposes
of this subparagraph, an eligible month means a
month during which a qualified borrower was
employed in a public service job, was not in an
in-school deferment or grace period, and did
not make a qualifying monthly payment on an
eligible Federal Direct Loan for such month--
``(I) because the borrower made a
monthly payment on such eligible
Federal Direct Loan pursuant to a
repayment plan that is not a qualifying
repayment plan;
``(II) because the borrower was in
a period of deferment or forbearance
other than a period described in clause
(ii) of subparagraph (A); or
``(III) for another reason
determined appropriate by the
Secretary.
``(iv) Buyback payment requirements.--A
buyback payment made in accordance with this
subparagraph--
``(I) shall be made by a qualified
borrower as a lump sum payment amount,
and in an amount that equals the total
amount the borrower would have paid in
qualifying monthly payments on the
eligible Federal Direct Loan for all
eligible months the borrower is
requesting to buyback, pursuant to a
qualifying repayment plan applicable to
the borrower, in accordance with
section 685.219(g)(6) of title 34, Code
of Federal Regulations (as such section
is in effect on the date of enactment
of this paragraph) or any other
relevant regulations in effect on such
date;
``(II) may not be made with respect
to an eligible Federal Direct Loan that
has been paid off, discharged, or
cancelled; and
``(III) with respect to an eligible
Federal Direct Loan that is a
consolidation loan, may not be used to
buyback eligible months that occurred
before the date of the consolidation of
such loan.
``(D) Hold harmless against retroactive
determinations.--For purposes of determining under
paragraph (1) the number of qualifying monthly payments
made by a borrower, any payment or period of deferment
or forbearance that is determined to be a qualifying
monthly payment may not, at a later time, be determined
not to be a qualifying monthly payment.''; and
(2) in paragraph (6), as redesignated by section 2(b), by
adding at the end the following:
``(C) Qualifying repayment plan.--The term
`qualifying repayment plan' means any of the repayment
plans listed in clause (i) of paragraph (2)(A).''.
(d) Loan Cancellation.--Paragraph (3) of section 455(m) of the
Higher Education Act of 1965 (20 U.S.C. 1087e(m)), as redesignated by
subsection (b), is amended to read as follows:
``(3) Loan cancellation amount.--Upon certification by a
borrower of completion of 96 qualifying monthly payments by the
borrower, the Secretary shall determine whether the borrower
meets each of the requirements of paragraph (1), and--
``(A) if the Secretary determines that the borrower
does meet such requirements, cancel the obligation to
repay the balance of principal and interest due as of
the time of such cancellation on the eligible Federal
Direct Loans made to the borrower under this part,
without further action by the borrower; or
``(B) if the Secretary determines that the borrower
does not meet such requirements, notify the borrower of
such determination in accordance with paragraph (4).''.
(e) Reconsideration Process.--Section 455(m) of the Higher
Education Act of 1965 (20 U.S.C. 1087e(m)), as redesignated by
subsection (b), is further amended by inserting after paragraph (3), as
so amended, the following:
``(4) Initial determination of ineligibility for loan
cancellation.--In a case in which the Secretary determines that
a borrower has not met the requirements of paragraph (1), the
Secretary shall--
``(A) notify the borrower that--
``(i) the borrower's application has been
denied, including the basis for such denial;
``(ii) the borrower is in a 90-day
forbearance period described in subparagraph
(B); and
``(iii) the Secretary will resume
collection of the eligible Federal Direct Loans
for which the borrower was seeking loan
cancellation under this subsection after such
90-day forbearance period, unless the borrower
opts to extend such forbearance period under
paragraph (5)(A)(ii); and
``(B) grant the borrower a 90-day forbearance
period, beginning on the date of the notice described
in subparagraph (A) provided to the borrower, and
during which--
``(i) payments of principal and interest
need not be made on the eligible Federal Direct
Loans for which the borrower was seeking loan
cancellation under this subsection; and
``(ii) any interest accrued and not paid
may not be capitalized.
``(5) Reconsideration process.--
``(A) Request for reconsideration.--Not later than
90 days after the date of the notice described in
paragraph (4)(A) provided to the borrower--
``(i) the borrower may request, on a form
approved by the Secretary, that the Secretary
reconsider the basis for the Secretary's denial
under paragraph (4)(A)(i); and
``(ii) if the Secretary grants the
borrower's reconsideration request, offer the
borrower an extension of the 90-day forbearance
period described in paragraph (4)(B), which
shall--
``(I) begin on the date of the
borrower's reconsideration request
under this subparagraph; and
``(II) end on the date of the
notice provided to the borrower under
subparagraph (C)(i)(I) of the
Secretary's reconsideration decision.
``(B) Consideration of reconsideration request.--In
evaluating a reconsideration request from a borrower,
the Secretary shall consider any relevant evidence or
supporting documentation that may assist the Secretary
in determining whether the borrower meets each of the
requirements of paragraph (1) to qualify for loan
cancellation under this subsection.
``(C) Decision by the secretary.--
``(i) In general.--Not later than 6 months
after receipt of a borrower's reconsideration
request, the Secretary shall--
``(I) notify the borrower of the
reconsideration decision and the reason
for the Secretary's determination;
``(II) in a case in which the
reconsideration request is granted,
adjust the borrower's number of
qualifying monthly payments under
paragraph (1) or cancel the loan under
paragraph (3); and
``(III) in a case in which the
Secretary denies the reconsideration
request, with respect to a borrower who
agrees to the forbearance extension
described in subparagraph (A)(ii),
include in the notice provided to the
borrower under subclause (I), a
reminder that the Secretary will resume
collection of the eligible Federal
Direct Loans for which the borrower was
seeking loan cancellation under this
subsection as of the date of such
notice.
``(ii) Final decision.--After the Secretary
makes a decision on the borrower's
reconsideration request, the Secretary's
decision is final, and the borrower will not
receive additional reconsideration.''.
SEC. 3. TERMS AND CONDITIONS OF EMPLOYMENT.
(a) Independent Contractors.--Section 455(m) is further amended by
adding at the end the following:
``(8) Treatment of independent contractors.--For purposes
of this subsection, each reference to `employment' and
`employed' shall be treated as including work as an independent
contractor.''.
(b) Definitions.--Paragraph (6) of section 455(m) of the Higher
Education Act of 1965 (20 U.S.C. 1087e(m)), as redesignated by section
2(b), is further amended by adding at the end the following:
``(D) Full-time.--The term `full-time' means, with
respect to a public service job, working 1 or more such
jobs--
``(i) a minimum average of 30 hours per
week during the period being certified;
``(ii) a minimum of 30 hours per week
throughout a contractual or employment period
of at least 8 months in a 12-month period; and
``(iii) with respect to an individual who
is in nontenure track employment at an
institution of higher education, the equivalent
of 30 hours per week as determined by
multiplying each credit or contact hour taught
by such individual per week by a number to be
determined by the Secretary.
``(E) Independent contractor.--The term
`independent contractor' means an individual who is not
an employee and who is working in a public service job
in a position or providing services which, under
applicable State law, cannot be filled or provided by
an employee of the public service job.''.
SEC. 4. ONLINE PORTAL AND DATABASE OF PUBLIC SERVICE JOBS.
Section 455(m) of the Higher Education Act of 1965 is further
amended by adding at the end the following:
``(9) Online portal and database of public service jobs.--
``(A) Online portal.--
``(i) Borrowers.--The Secretary shall
establish an online portal that provides to
borrowers of eligible Federal Direct Loans the
following information:
``(I) Instructions on how to access
the database established under
subparagraph (B) 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 Direct Loans, and an
identification of the qualifying
repayment plans for which such eligible
Federal Direct Loans qualify.
``(III) With respect to each such
eligible Federal Direct Loan--
``(aa) the number of
qualifying monthly payments the
borrower has made in accordance
with paragraph (1); and
``(bb) the estimated number
of qualifying monthly payments
under such paragraph remaining
on such loan before the
borrower may be eligible for
loan cancellation under this
subsection.
``(IV) With respect to each loan of
the borrower that is not eligible for
loan cancellation under paragraph (3)
of this subsection, an explanation of
why the loan is not so eligible and
instructions on how 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 cancellation, and an ability
for the borrower to use the portal to
electronically sign and submit such
forms.
``(VI) In a case in which a
borrower submits to the Secretary an
application for loan cancellation under
this subsection that is denied by the
Secretary--
``(aa) a notice of such
denial that meets each of the
requirements of paragraph
(4)(A), including an
explanation of the 90-day
forbearance period;
``(bb) a form that meets
each of the requirements of
paragraph (5)(A), which the
borrower may use to request
reconsideration of such denial,
including accepting an
extension of the 90-day
forbearance period; and
``(cc) a notice of the
Secretary's reconsideration
decision, which meets each of
the requirements of paragraph
(5)(C).
``(VII) An explanation of the
buyback payment process described in
paragraph (2)(C), and a form to request
such a buyback, including the eligible
months for which the borrower may
request a buyback, and the amount that
the borrower would be required to pay
for such buyback.
``(VIII) An explanation of how
consolidating one or more Direct Loans
into a Direct Consolidation Loan,
including a Direct PLUS Loan made to a
parent borrower, will affect the number
of qualifying monthly payments
attributed to the borrower.
``(ii) Appropriate contacts.--The Secretary
shall ensure that an appropriate contact for a
public service job of a borrower has the option
to electronically sign and submit any forms
associated with loan cancellation under
paragraph (3) of this subsection.
``(iii) Information.--The Secretary shall
ensure that any information provided through
the online portal described in this
subparagraph contains up-to-date information.
``(B) Database of public service jobs.--
``(i) In general.--The Secretary, in
consultation with the Secretary of Labor, shall
establish and regularly update a database that
lists public service jobs.
``(ii) Public availability.--The database
established under clause (i) shall be made
available on a publicly accessible website of
the Department of Education in an easily
searchable format.''.
SEC. 5. TREATMENT OF PERIODS OF DEFERMENT AND FORBEARANCE.
(a) In General.--Section 455(f) of the Higher Education Act of 1965
(20 U.S.C. 1087e(f)) is amended--
(1) in the subsection heading, by inserting ``and
Forbearance'' at the end;
(2) in paragraph (1)(B), by striking ``capitalized or'';
and
(3) by adding at the end the following:
``(7) Forbearance.--With respect to a loan that is in a
period of forbearance, interest on such loan may not be
capitalized after the conclusion of such period.''.
(b) Application of Amendment.--The amendments made by subsection
(a) shall apply to any period of deferment or forbearance in effect as
of the date of the enactment of this Act, and any period of deferment
or forbearance beginning on or after such date of enactment.
SEC. 6. TREATMENT OF CONSOLIDATED AND REFINANCED LOANS.
Section 455(m)(2) of the Higher Education Act of 1965 (20 U.S.C.
1087e(m)(2)), as amended by the preceding provisions of this Act, is
further amended by inserting after subparagraph (D) the following:
``(E) Determination of number of qualifying monthly
payments for consolidation loans.--With respect to
determining the number of qualifying monthly payments
for a borrower seeking loan forgiveness under this
subsection who consolidates one or more Direct Loans
into a Direct Consolidation Loan, including a Direct
PLUS Loan made to a parent borrower, the Secretary
shall use the weighted average of the payments the
borrower made on the Direct Loans prior to
consolidating that met the criteria under this
subsection.''.
SEC. 7. LOAN FORGIVENESS FOR TEACHERS.
(a) In General.--The Higher Education Act of 1965 (20 U.S.C. 1001
et seq.) is further amended--
(1) in section 428J(g)(2) (20 U.S.C. 1078-10(g)(2))--
(A) in subparagraph (A), by inserting ``or'' after
the semicolon at the end;
(B) by striking subparagraph (B); and
(C) by redesignating subparagraph (C) as
subparagraph (B); and
(2) in section 460(g)(2) (20 U.S.C. 1087j(g)(2))--
(A) in subparagraph (A), by inserting ``or'' after
the semicolon at the end;
(B) by striking subparagraph (B); and
(C) by redesignating subparagraph (C) as
subparagraph (B).
(b) Conforming Amendment.--Section 455(m)(7) of the Higher
Education Act of 1965, as redesignated by section 2(b) of this Act, is
amended by striking ``section 428J, 428K, 428L, or 460'' and inserting
``section 428K or 428L''.
SEC. 8. GAO STUDY ON DATA MATCHING AGREEMENTS FOR PUBLIC SERVICE LOAN
FORGIVENESS.
(a) In General.--The Comptroller General of the United States shall
conduct a study on the feasibility of establishing data matching
agreements for public service loan forgiveness under section 455(m) of
the Higher Education Act of 1965 (20 U.S.C. 1087e(m)) that would allow
a borrower to forego requesting certification of employment from the
appropriate contact for the public service job of the borrower. The
study shall include an examination of the Department of Education and
the Department of Defense's progress towards automatic data matching
for military and veteran borrowers.
(b) Report.--Not later than 1 year after the date of enactment of
this Act, the Comptroller General shall submit a report to the
Committee on Education and the Workforce of the House of
Representatives and the Committee on Health, Education, Labor, and
Pensions of the Senate containing the findings and recommendations
resulting from the study required under subsection (a).
(c) Cooperation.--The head of each relevant Federal agency,
including the Secretary of Education, Secretary of Defense, and
Commissioner of Internal Revenue, shall cooperate with the Comptroller
General to facilitate the completion of the study required under
subsection (a).
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Education and the Workforce.
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