(Hartford, CT) - U.S. Senator Richard Blumenthal (D-Conn.) unveiled new legislation today to expand the existing Public Service Loan Forgiveness program, providing meaningful student debt relief to teachers, police officers, public health workers and others who dedicate their careers to public service.
The Public Service Loan Forgiveness (PSLF) program provides an important incentive for graduates to enter public service occupations by offering relief from student loan debt. Because of the increasing frequency of graduates facing crushing amounts of student loan debt, that incentive is more important than ever.
Unfortunately, the current PSLF program is structured as an all-or-nothing deal; unless you complete ten years of public service, even if you lose your job after nine years and eleven months, you don't receive any relief from your student loan debt. For PSLF participants whose loans continued to accrue interest over those years, losing a public service job could feel like being forced to start repayment efforts from scratch.
The Strengthening Forgiveness for Public Servants Act would enhance the incentive to enter public service by allowing graduates to receive loan forgiveness in proportion to their years of public service. The legislation would:
· Allow new PSLF participants to have their eligible loans placed in deferment (meaning participants would not make payments on their loans) during their public service.
· Allow new PSLF participants to have a certain percentage of their eligible loan balance cancelled after every two years of public service:
o After 2 years: 15 percent of the original loan balance, along with any accrued interest, is cancelled
o After 4 years: an additional 15 percent of the original loan balance, along with any accrued interest, is cancelled
o After 6 years: an additional 20 percent of the original loan balance, along with any accrued interest, is cancelled
o After 8 years: an additional 20 percent of the original loan balance, along with any accrued interest, is cancelled
o After 10 years: the remaining 30 percent of the original loan balance, along with any accrued interest, is cancelled
“Teachers, police officers, public health workers and other public servants should be applauded and supported—and not drowned in debt to pay for the degrees many such jobs require. The current Public Service Loan Forgiveness program should be expanded—and made more flexible—to enable student debt to be worked down or off completely. My bill strengthens the Public Service Loan Forgiveness program to ensure that it enables repayment assistance proportional to years of service. We should reward public service—particularly as the need for talented and dedicated public servants grows,” Blumenthal said.