Bill Overview
Title: To limit eligibility for public service loan forgiveness to borrowers of Federal student loans with incomes below a certain maximum threshold, and for other purposes.
Description: This bill limits eligibility for the Public Service Loan Forgiveness (PSLF) program to borrowers with adjusted gross incomes below a certain maximum threshold. Under the current PSLF program, the Department of Education 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. This bill specifies that, in order to count as a qualifying monthly loan payment under the PSLF program, the borrower must have an adjusted gross income that does not exceed $173,000.
Sponsors: Rep. Buck, Ken [R-CO-4]
Target Audience
Population: People with federal student loans working in public service jobs
Estimated Size: 9000000
- The PSLF program is intended for individuals who have federal student loans and work in public service jobs.
- The current PSLF program forgives loans after 120 qualifying payments.
- This bill restricts the eligibility based on the income of the borrowers.
- Income threshold set at $173,000 targets individuals with incomes higher than the average for public service jobs.
- According to the U.S. Census Bureau, the median income is well below $173,000, indicating that a significant portion of the population may still qualify.
- The global population of public service employees is large since it includes government, education, and non-profit sectors.
Reasoning
- The policy targets individuals earning below $173,000 in public service jobs which is above median public service wages, so majority won't be impacted by the restriction.
- Many people in public service may still benefit from PSLF, but the high earners will not. This affects both the attractiveness of public service jobs and debt relief for these workers.
- Public service workers in education, government, and non-profit sectors are distributed across various income levels.
- Several individuals will experience no change, while high-income earners are impacted by losing eligibility for one of the major debt relief pathways.
- It's important to consider that only a portion of public service workers have student loans, and even fewer will be earning above the threshold.
Simulated Interviews
Public School Teacher (Seattle, WA)
Age: 35 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 8/20
Statement of Opinion:
- The policy won't impact me since my income is well below the threshold.
- I think it's fair to limit the program to those who need it the most.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Police Officer (Los Angeles, CA)
Age: 42 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- This policy change could disqualify me from PSLF, which was a financial relief plan for my family.
- It's disappointing as it's aimed at higher income, yet my expenses for family and housing are high.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 7 |
| Year 2 | 5 | 7 |
| Year 3 | 5 | 7 |
| Year 5 | 7 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 7 | 8 |
Non-Profit Manager (Denver, CO)
Age: 29 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 6/20
Statement of Opinion:
- I'm relieved since my salary is well under $173,000.
- This keeps my eligibility for PSLF intact, providing significant financial relief potential.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 7 | 7 |
| Year 10 | 8 | 8 |
| Year 20 | 9 | 9 |
University Professor (Houston, TX)
Age: 50 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- I believe the policy is fair, but it makes my retirement planning complex.
- I've been relying on the PSLF, which now won't be available; could mean working longer.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 7 | 8 |
| Year 5 | 7 | 9 |
| Year 10 | 8 | 9 |
| Year 20 | 8 | 9 |
City Planner (Boston, MA)
Age: 26 | Gender: other
Wellbeing Before Policy: 4
Duration of Impact: 0.0 years
Commonness: 5/20
Statement of Opinion:
- My income is far from the threshold, so the policy doesn't affect me.
- It's sensible to reserve loan forgiveness for those heavily burdened by debt.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 7 | 7 |
| Year 10 | 8 | 8 |
| Year 20 | 9 | 9 |
Healthcare Administrator (Chicago, IL)
Age: 45 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 6/20
Statement of Opinion:
- I appreciate that I'm still eligible despite this change.
- However, I understand the frustrations of those who are no longer eligible.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Public Defender (New York, NY)
Age: 38 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 15.0 years
Commonness: 2/20
Statement of Opinion:
- As my salary increases, I fear losing eligibility just when it's most needed.
- High-pressure job means student debt relief is crucial and a primary reason I chose public service.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 6 |
| Year 2 | 4 | 6 |
| Year 3 | 5 | 7 |
| Year 5 | 6 | 8 |
| Year 10 | 7 | 9 |
| Year 20 | 8 | 9 |
Social Worker (Raleigh, NC)
Age: 31 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 6/20
Statement of Opinion:
- I'll remain eligible, which is a relief considering my career is underpaid relative to my education level.
- I feel people should not be penalized for public service work.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 8 | 8 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Firefighter (Austin, TX)
Age: 46 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 6/20
Statement of Opinion:
- Good to see we are still covered, though it's close to the cap.
- Our dual-income family just makes it.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Public Health Official (Phoenix, AZ)
Age: 55 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- This feels like a penalty for working hard over my career to advance into a better paying position.
- Eligibility loss is unfortunate, but I understand the policy needs focus on those who need it most.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 6 | 7 |
| Year 5 | 6 | 7 |
| Year 10 | 7 | 8 |
| Year 20 | 7 | 8 |
Cost Estimates
Year 1: $400000000 (Low: $300000000, High: $500000000)
Year 2: $380000000 (Low: $280000000, High: $480000000)
Year 3: $360000000 (Low: $260000000, High: $460000000)
Year 5: $320000000 (Low: $220000000, High: $420000000)
Year 10: $260000000 (Low: $160000000, High: $360000000)
Year 100: $100000000 (Low: $50000000, High: $150000000)
Key Considerations
- The target population is specifically federal loan borrowers working in public service jobs, with income threshold enforcement.
- Estimated cost and savings take into account fluctuations in the program's participation, income levels, and federal loan balances impacted by this limitation.