Bill Overview
Title: Public Service Reward Act
Description: This bill makes changes to the Public Service Loan Forgiveness (PSLF) program. Among these changes, the bill (1) directs the Department of Education to provide partial loan forgiveness to a borrower for every 12 months of qualifying payments and employment, and (2) makes additional loan types (e.g., Federal Family Education Loans and Perkins Loans) eligible for forgiveness under the PSLF program.
Sponsors: Rep. Clyburn, James E. [D-SC-6]
Target Audience
Population: People with student loans in public service positions
Estimated Size: 500000
- The bill impacts borrowers who are part of the Public Service Loan Forgiveness (PSLF) program, which is aimed at individuals working in public service.
- Public service employees such as teachers, nurses, and government employees are the primary candidates who often have loans eligible for forgiveness under PSLF.
- By allowing partial forgiveness every 12 months and including additional loan types, the bill broadens the scope of individuals who can benefit from loan relief.
Reasoning
- The PSLF program serves around 500,000 people, suggesting a focus on public service jobs across various sectors in the US.
- Key populations include teachers, nurses, and government workers, who often rely on such programs for financial relief.
- The range of people before and after this policy change will include those who benefit directly due to having eligible loans or work in qualified roles.
- Budget constraints allow for significant loan forgiveness, but carefully selected populations will be prioritized to maximize impact without exceeding the budget.
- By interviewing a diverse range of borrowers, including those ineligible or minimally impacted, we gain insight into the broader community sentiment and potential pitfalls.
Simulated Interviews
High School Teacher (New York, NY)
Age: 34 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 8/20
Statement of Opinion:
- The policy makes me feel more secure about my long-term financial situation.
- Knowing that I'll get partial forgiveness is motivating to stay in my job.
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 |
Registered Nurse (Columbus, OH)
Age: 41 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 6/20
Statement of Opinion:
- It feels good to see nurses finally included in such policies.
- This will definitely help ease my financial burden over time.
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 |
Social Worker (Austin, TX)
Age: 29 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 15.0 years
Commonness: 4/20
Statement of Opinion:
- This bill could change everything for me in terms of financial freedom.
- Partial forgiveness is exactly what I need to better manage my finances.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 7 | 4 |
| Year 10 | 8 | 4 |
| Year 20 | 8 | 4 |
Government Employee (Los Angeles, CA)
Age: 50 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- Finally, my type of loans will be eligible, which is a huge relief.
- I was worried about retiring with debt, and this policy alleviates that fear.
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 |
Firefighter (Seattle, WA)
Age: 38 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- It's unfortunate that refinancing left me partially out, but the policy will still help a bit.
- I'm happy for my colleagues who benefit more.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Public Librarian (Chicago, IL)
Age: 25 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 6/20
Statement of Opinion:
- This policy provides a clearer path for financial planning right from the start.
- I'm glad to be entering the public sector with this safety net.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 9 | 6 |
| Year 20 | 9 | 6 |
Non-Profit Director (Phoenix, AZ)
Age: 47 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- It's reassuring to know my loan types will now be covered.
- This takes a load off my mind for future financial planning.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 7 |
Environmental Scientist (Miami, FL)
Age: 31 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- The inclusion of different loans is a big win for someone like me with mixed loans.
- I can finally see a light at the end of the tunnel.
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 |
Police Officer (Denver, CO)
Age: 27 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 5/20
Statement of Opinion:
- I'm glad to see police officers included in this bill.
- I was uncertain about managing my debt, but this policy gives me hope.
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 |
Retired Teacher (Boston, MA)
Age: 60 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 3/20
Statement of Opinion:
- I'm one of the older individuals with loan debt, so this policy could help clear remaining amounts as I move fully into retirement.
- It’s a little late for me, but it still makes a difference for my peace of mind.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
Cost Estimates
Year 1: $2500000000 (Low: $1500000000, High: $3500000000)
Year 2: $2600000000 (Low: $1600000000, High: $3600000000)
Year 3: $2700000000 (Low: $1700000000, High: $3700000000)
Year 5: $2900000000 (Low: $1900000000, High: $3900000000)
Year 10: $3500000000 (Low: $2500000000, High: $4500000000)
Year 100: $3900000000 (Low: $2900000000, High: $4900000000)
Key Considerations
- The broader inclusion of loan types expands the eligible base for forgiveness, raising costs.
- Changes may prompt revisions of financial strategies among borrowers leading to potential increases in application backlog and processing delays.
- Annual federal budget considerations should account for the incremental costs impacting education budget allocations.