Bill Overview
Title: ASAP Forgiveness Act
Description: This bill requires the Department of Education to cancel up to $30,000 of interest and principal due on any eligible Federal Direct Loan that is in repayment status for a borrower who (1) has made 60 monthly payments on the loan pursuant to any authorized repayment plan, and (2) has been employed for 10 years after graduating from or leaving the institution of higher education (IHE) for which the loan was made to enable the borrower to enroll at the IHE.
Sponsors: Sen. Whitehouse, Sheldon [D-RI]
Target Audience
Population: Student loan borrowers meeting repayment and employment criteria
Estimated Size: 6000000
- The target population is individuals who have federal student loans, specifically Federal Direct Loans.
- The borrowers need to have started repayment and made 60 monthly payments, which implies they have been repaying for 5 years.
- Affected individuals must have completed at least 10 years of employment after exiting the educational institution the loan was intended for, which suggests a stable employment history post-graduation.
- This would include a wide range of professions as long as employment has been continuous post-graduation from the qualified institution.
- Not all student loan holders are eligible, only those meeting the specified time in repayment and employment criteria.
Reasoning
- The policy targets a subset of individuals with Federal Direct Loans who have been repaying for at least 5 years and have a stable employment history for 10 years post-graduation. This suggests that these individuals are likely in their late 30s to early 40s, depending on when they started college and the length of their chosen programs.
- The budget constraints mean that not all eligible individuals will receive the benefits immediately. Thus, we need to assess a range of impacts, from significant to none, based on various factors such as loan sizes, current employment and financial situations.
- A distribution of interviews will provide a broad perspective, including those significantly impacted by debt relief and those who might barely notice its effects. We anticipate a mixture of feelings towards the policy, from relief to neutrality.
- We include some individuals who are not impacted to understand the population segment's sentiments unaffected by the policy.
Simulated Interviews
High School Teacher (New York, NY)
Age: 35 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- Relief about the potential reduction in loan burden.
- Concerned about future budgets covering all eligible individuals.
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 | 7 |
| Year 20 | 8 | 7 |
Software Developer (Austin, TX)
Age: 42 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 2/20
Statement of Opinion:
- Glad for others who will benefit from relief.
- Personally unaffected, already debt-free.
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 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Nurse (Chicago, IL)
Age: 38 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 15.0 years
Commonness: 7/20
Statement of Opinion:
- Loan forgiveness will ease financial stress significantly.
- Allows focus on savings and retirement.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 6 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 8 |
Startup Entrepreneur (San Francisco, CA)
Age: 40 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- Financially buoyed by potential forgiveness, though not critical.
- Focus remains on business growth.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 7 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Accountant (Miami, FL)
Age: 36 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 7.0 years
Commonness: 9/20
Statement of Opinion:
- Concerned about policy application given high demand.
- Expects improvements if covered.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 7 |
Artist (Seattle, WA)
Age: 44 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 5/20
Statement of Opinion:
- Not directly affected but supportive of peer benefits.
- Creative funding remains personal focus.
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 | 7 | 7 |
| Year 20 | 7 | 7 |
Civil Engineer (Portland, OR)
Age: 39 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- Appreciates reduced financial obligations.
- Focus can shift to homeownership.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 8 | 8 |
Research Scientist (Boston, MA)
Age: 47 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- Loan forgiveness supports family financial planning.
- Optimistic about academic savings for children.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 9 |
Market Analyst (Dallas, TX)
Age: 33 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 8.0 years
Commonness: 10/20
Statement of Opinion:
- Relief for shared household finances.
- Could expedite broader life plans.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 8 |
| Year 20 | 8 | 8 |
Graphic Designer (Denver, CO)
Age: 29 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 5/20
Statement of Opinion:
- Policy doesn't impact due to private loans.
- Motivates advocacy for broader reforms.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Cost Estimates
Year 1: $15000000000 (Low: $12000000000, High: $18000000000)
Year 2: $15000000000 (Low: $12000000000, High: $18000000000)
Year 3: $18000000000 (Low: $15000000000, High: $21000000000)
Year 5: $18000000000 (Low: $15000000000, High: $21000000000)
Year 10: $9000000000 (Low: $6000000000, High: $12000000000)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- The policy's success is contingent on accurate borrower identification to ensure efficient processing of loan forgiveness.
- Changes in the macroeconomic environment (e.g., inflation rates) could affect both cost and impact estimates.
- The administrative capability of the Department of Education will play a critical role in efficiently rolling out this loan forgiveness initiative.