Bill Overview
Title: Second Chance at Public Service Loan Forgiveness Act
Description: This bill makes changes to the Public Service Loan Forgiveness (PSLF) program. Among other changes, the bill (1) allows a borrower who obtained an eligible Federal Direct Loan on or after January 1, 1994, to receive loan forgiveness under the PSLF program; (2) provides additional relevant definitions, including to specify that full-time employment is at least 30 hours a week; and (3) allows an eligible teacher to use the same teaching service to qualify for both the Teacher Loan Forgiveness program and the PSLF program.
Sponsors: Rep. Norcross, Donald [D-NJ-1]
Target Audience
Population: People with qualifying Federal Direct Loans working in public service or non-profit sectors
Estimated Size: 3000000
- The Public Service Loan Forgiveness program is available to individuals who work full-time for a government or non-profit organization, which means the target population includes such professionals.
- The bill affects those who have taken out eligible Federal Direct Loans on or after January 1, 1994. As of 2023, that's a span of 29 years, during which many students could have taken out such loans.
- By allowing teachers to use the same service for two loan forgiveness programs, the bill specifically targets teachers.
- Not all borrowers who have loans will work in public service or non-profit sectors, but those who do will be directly impacted by the changes.
- Education is one of the largest sectors employing public service workers, impacting a significant number of teachers.
- Given that a substantial number of students have taken loans in the US, this could impact a large segment of those employed by qualifying organizations.
Reasoning
- The policy primarily targets individuals with specific Federal Direct Loans employed in public service roles since 1994, suggesting a substantial yet specific population size impacted.
- While there are 20 million people working in government jobs and about 4 million teachers in the US, the policy will only affect those with qualifying loans, suggesting a significant yet not universal impact in these populations.
- The potential impact is major for those eligible because of the direct financial relief offered by loan forgiveness, which would significantly reduce personal debt burdens and improve financial wellbeing.
- Budget limitations suggest that not all qualifying individuals will benefit simultaneously, requiring potential prioritization based on factors like remaining loan amount and years of service.
- The bill's allowance for teachers to count the same service period for multiple forgiveness programs increases its impact among educators, one of the largest groups of public service employees.
- Wellbeing estimates before and after policy implementation consider economic relief through reduced debt and improved mental stress due to financial stability.
Simulated Interviews
High School Teacher (Chicago, IL)
Age: 45 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 12/20
Statement of Opinion:
- I think this bill is fantastic. It helps people like me who have been paying off loans for ages.
- I've been hoping for some kind of relief; my teaching salary makes it hard to pay off the entire loan.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 9 | 6 |
| Year 10 | 9 | 6 |
| Year 20 | 9 | 6 |
Social Worker (Los Angeles, CA)
Age: 34 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- This gives me a real chance to be debt-free while working in a job I love, helping people.
- Often thought I'd have to leave the non-profit sector to pay off my loans sooner.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 5 |
Public School Teacher (New York City, NY)
Age: 29 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 10/20
Statement of Opinion:
- Finally, a policy that acknowledges the financial burdens new teachers face.
- I'm grateful that my early years of teaching will count towards loan forgiveness.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 9 | 6 |
| Year 20 | 9 | 6 |
Firefighter (Houston, TX)
Age: 50 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 5.0 years
Commonness: 9/20
Statement of Opinion:
- It's a relief, knowing the rest of my loans might be forgiven sooner.
- I've worked hard my whole life, and this would mean a better retirement plan.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
Nurse (Seattle, WA)
Age: 39 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 15.0 years
Commonness: 8/20
Statement of Opinion:
- A second chance is exactly what I need, given my career in public health.
- It's a great opportunity for those stuck in financial burdens despite years of service.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 5 |
Police Officer (Miami, FL)
Age: 41 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- It's an overdue acknowledgment of what public sector workers contribute.
- I can see a future without the weight of my student loans.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 5 |
Public Librarian (Boston, MA)
Age: 52 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- The expansion can be life-changing for long-term public service employees.
- Important that it captures those who might have missed out before.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
Environmental Scientist (San Francisco, CA)
Age: 48 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- This policy can provide immense stability for non-profit workers like me.
- Relief from loan payments means focusing more on advancing my career.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Public Defender (Phoenix, AZ)
Age: 40 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- The bill gives public defenders like me a financial path forward.
- Managing both living expenses and loans has been difficult.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 5 |
Public Health Analyst (Denver, CO)
Age: 55 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- Eliminating outstanding loans can improve my retirement prospects.
- I've considered early retirement, but loans were holding me back.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 7 | 4 |
| Year 10 | 7 | 4 |
| Year 20 | 7 | 4 |
Cost Estimates
Year 1: $4000000000 (Low: $3200000000, High: $4800000000)
Year 2: $5000000000 (Low: $4000000000, High: $6000000000)
Year 3: $6000000000 (Low: $4800000000, High: $7200000000)
Year 5: $8000000000 (Low: $6400000000, High: $9600000000)
Year 10: $10000000000 (Low: $8000000000, High: $12000000000)
Year 100: $10000000000 (Low: $8000000000, High: $12000000000)
Key Considerations
- Potential strains on federal budgets with outflows compensating forgiven loans versus budget inclusions.
- Expected shifts in employment trends within public service sectors with enhanced program attractiveness.
- Evaluation concerning younger segments entering eligible service sectors incentivized via benefits.