Public Service Loan Forgiveness — the program that cancels student debt for people who work in government or nonprofits — would get a major overhaul. The required number of qualifying monthly payments would drop from 120 (10 years) to 96 (8 years), and borrowers would no longer need to still be in a public service job at the time of cancellation. The bill also creates a "buyback" option for months when you were working in public service but weren't on the right repayment plan, and it counts periods of military deferment, unemployment hardship, and other approved forbearances as qualifying months. Independent contractors doing public service work would qualify too, and the Department of Education would be required to build an online portal where borrowers can track their progress in real time.
Congressional Summary
Strengthening Efforts for Relief and Vital Incentives for Community Service and Engagement Act or the SERVICE ActThis bill makes changes to the Public Service Loan Forgiveness (PSLF) program.Under the current PSLF program, the Department of Education (ED) must cancel the balance of interest and principal due on a borrower's Federal Direct Loans after the borrower makes 120 monthly loan payments while employed in a public service job and, at the time of loan forgiveness, the borrower is employed in a public service job.Among other changes to the PSLF program, this bill reduces from 120 to 96 the number of monthly payments required for loan forgiveness;expands qualifying monthly payments, deferments, and forbearances allowed under the PSLF program;removes the requirement that a borrower must be employed in a public service job at the time of loan forgiveness;establishes a reconsideration process for borrowers who have their initial PSLF application denied; andprohibits interest capitalization on loans after deferment or forbearance.The bill directs ED to (1) establish an online portal that provides borrowers with information on loans and the PSLF program, and (2) establish and regularly update a database listing public service jobs.The bill allows an eligible teacher to use the same teaching service to qualify for both the Teacher Loan Forgiveness program and the PSLF program.The Government Accountability Office must study and report on the feasibility of establishing data matching agreements for PSLF that allows borrowers to forgo requesting employment certification from their employer.
Details
- Congress
- 119th
- Chamber
- House
- Status
- summarized
- Action
- Introduced in House
- Action Date
- 2025-04-10
- Date Added
- 2026-03-30