Bill Overview
Title: Simplifying and Strengthening Public Service Loan Forgiveness Act
Description: This bill makes changes to the Public Service Loan Forgiveness (PSLF) program, including by (1) lowering the number of monthly payments required for loan forgiveness from 120 to 60; and (2) making permanent certain limited waivers, such as a waiver that allowed certain late or partial loan payments to count as qualifying payments for PSLF loan forgiveness.
Sponsors: Sen. Whitehouse, Sheldon [D-RI]
Target Audience
Population: People with student loans, particularly those in public service roles
Estimated Size: 2000000
- The PSLF program is available to borrowers who are working full-time for a qualifying employer, such as government or non-profit organizations.
- It requires individuals to make a number of qualifying monthly payments (120 previously and now reduced to 60) under a specified repayment plan while working for a qualifying employer.
- The changes will increase the number of individuals who qualify for loan forgiveness, including reducing the payment period and making certain temporary waivers permanent.
- This impacts the subset of the global population who have taken out student loans in the U.S. and are employed in public service roles, specifically those who might benefit from reaching loan forgiveness sooner.
Reasoning
- The PSLF program is primarily aimed at individuals working in public service, such as those employed by the government or non-profit organizations.
- Lowering the qualifying payments from 120 to 60 will significantly reduce the time it takes for many borrowers to become eligible for loan forgiveness, thereby reducing their financial burden more quickly.
- The interviewees must vary in terms of their current level of debt, type of employment, age, and other factors to adequately capture the diverse impact of the policy.
- The policy budget limitations imply a need to prioritize those closest to achieving forgiveness under the new rules and possibly limit the number of beneficiaries to maintain fiscal sustainability.
Simulated Interviews
Public School Teacher (New York, NY)
Age: 28 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 2.0 years
Commonness: 7/20
Statement of Opinion:
- The policy could really change my life by allowing me to pay off loans more quickly.
- I always worried about making exactly 120 payments, so having more flexibility helps.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 5 |
| Year 2 | 8 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 9 | 6 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 8 |
Non-Profit Manager (Austin, TX)
Age: 35 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 6/20
Statement of Opinion:
- It's a huge relief that the required payments are now 60 instead of 120.
- Counting partial payments also helps me since I've struggled with full payments occasionally.
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 | 8 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 8 |
City Government Employee (Seattle, WA)
Age: 41 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- The permanent waivers will finally allow me to count missed payments from years ago.
- I was losing hope that I'd ever get out from under this debt.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 7 |
Public Health Worker (Chicago, IL)
Age: 25 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 1.0 years
Commonness: 5/20
Statement of Opinion:
- This gives me hope I can actually pay off my loans.
- I'm not sure how realistic 10 years was initially, so this change is welcome.
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 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 8 |
University Professor (Maplewood, NJ)
Age: 50 | Gender: male
Wellbeing Before Policy: 3
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- I'm almost close to forgiveness and this change will ensure it happens sooner rather than later.
- Having partial payments count is a blessing.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 3 |
| Year 2 | 6 | 4 |
| Year 3 | 7 | 4 |
| Year 5 | 8 | 5 |
| Year 10 | 9 | 6 |
| Year 20 | 9 | 7 |
Social Worker (San Francisco, CA)
Age: 31 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 2.0 years
Commonness: 5/20
Statement of Opinion:
- I was really worried I'd never achieve loan forgiveness because of the missed year.
- This policy is directly addressing my most pressing concern.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 7 | 4 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 6 |
| Year 20 | 9 | 7 |
Research Scientist in a Non-Profit Organization (Boston, MA)
Age: 29 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 4/20
Statement of Opinion:
- The waiver for partial payments means I can plan my budget better.
- Cutting the payment period in half motivates me to continue in public service.
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 | 8 | 7 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Federal Employee (Houston, TX)
Age: 46 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 8.0 years
Commonness: 3/20
Statement of Opinion:
- Finally a policy where I can actually plan for a future without debt.
- I've invested so much earnings into these loans, I'm grateful for change.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 6 |
| Year 10 | 9 | 6 |
| Year 20 | 9 | 7 |
Firefighter (Public Servant) (Denver, CO)
Age: 38 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- I didn't know if I'd ever qualify for forgiveness, but this makes it feasible.
- Very relieved to hear late payments can count.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Nurse (Phoenix, AZ)
Age: 44 | Gender: other
Wellbeing Before Policy: 4
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- Job changes made me lose a few months of qualifying payments - thankfully this is addressed.
- It means a lot to stress less about debt as I near retirement planning.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 9 | 7 |
Cost Estimates
Year 1: $2000000000 (Low: $1500000000, High: $2500000000)
Year 2: $2200000000 (Low: $1700000000, High: $2700000000)
Year 3: $2400000000 (Low: $1900000000, High: $2900000000)
Year 5: $2800000000 (Low: $2300000000, High: $3300000000)
Year 10: $3000000000 (Low: $2500000000, High: $3500000000)
Year 100: $3500000000 (Low: $3000000000, High: $4000000000)
Key Considerations
- The estimated annual cost considers the rapidly increasing number of eligible borrowers due to reduced monthly payment requirements.
- The long-term economic benefits or drawbacks depend on how debt reduction impacts borrower behavior, including savings and consumption patterns.
- Potential administrative costs of implementing these changes are not included in the cost estimates.