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 and has been employed full-time in public service (beginning on or after January 1, 1994) for 10 years or more 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: Sen. Menendez, Robert [D-NJ]
Target Audience
Population: Individuals with Federal Direct Loans working in public service for 10 years or more since 1994
Estimated Size: 2000000
- Since the bill makes changes to the PSLF program, it targets individuals with federal student loans, specifically those with Federal Direct Loans.
- The bill focuses on borrowers who have been employed full-time in public service for 10 years or more, starting from January 1, 1994.
- Full-time public service is defined as at least 30 hours per week of employment.
- Eligible populations also include teachers who can use their teaching service to qualify for both the Teacher Loan Forgiveness program and the PSLF program.
- Public service employees include those working in federal, state, local, or tribal government organizations, non-profit organizations, and other designated public service fields.
- The PSLF program is historically known to have a broad potential audience within the US, comprising public service employees who may have struggled with the strict PSLF program requirements.
Reasoning
- This policy primarily affects those who have been employed in the public service sector for at least 10 years and have Federal Direct Loans. Those in teaching positions may see the greatest benefit due to the dual qualification for forgiveness programs.
- We estimate a varied impact across different demographics, influenced by their current financial state, awareness of the PSLF, and job stability in public sectors.
- Not everyone who qualifies under these stipulations will be affected immediately, given that eligibility also depends on prior knowledge and enrollment in existing PSLF frameworks.
Simulated Interviews
Public School Teacher (New York, NY)
Age: 45 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 15/20
Statement of Opinion:
- I wasn't aware I could qualify for both loan programs before this.
- Relieved to potentially receive financial relief after years of service.
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 | 10 | 6 |
| Year 20 | 9 | 5 |
Social Worker at a Non-Profit Organization (Chicago, IL)
Age: 34 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 18/20
Statement of Opinion:
- I've been hopeful about PSLF, but the clarity on eligibility is much needed.
- This bill might actually help me finish the process of forgiveness.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 9 | 5 |
| Year 20 | 8 | 5 |
Public Health Nurse (Austin, TX)
Age: 50 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 15.0 years
Commonness: 12/20
Statement of Opinion:
- I've been anticipating loan forgiveness for years, seems like a dream to have a second chance at it.
- I hope this actually simplifies the process.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 7 |
Police Officer (Los Angeles, CA)
Age: 29 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 7.0 years
Commonness: 20/20
Statement of Opinion:
- I haven't reached the necessary 10 years yet, but it seems this policy would be a great boost once I do.
- It's encouraging knowing that my public service will be acknowledged and rewarded.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 4 |
| Year 2 | 4 | 4 |
| Year 3 | 5 | 4 |
| Year 5 | 5 | 4 |
| Year 10 | 8 | 4 |
| Year 20 | 8 | 4 |
Retired City Planner (Seattle, WA)
Age: 62 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- I was never told about PSLF during my working years. It's bittersweet to finally be acknowledged for public service at retirement.
- Having this financial burden lift as I head into retirement is a relief.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Government Accountant (Phoenix, AZ)
Age: 40 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 10/20
Statement of Opinion:
- I completed my loan payments long before these forgiveness policies came into play.
- While it's great for others, it feels like a missed opportunity for me personally.
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 |
Public Defender (Denver, CO)
Age: 38 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 14/20
Statement of Opinion:
- Every little change in PSLF helps; the program has been my beacon of hope amidst the financial drag.
- I'm looking forward to a more seamless process.
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 | 6 | 5 |
Non-Profit Fundraiser (Miami, FL)
Age: 27 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 16/20
Statement of Opinion:
- I haven't hit the 10-year mark yet, but knowing about this policy motivates me to stay in public service.
- The potential for loan forgiveness impacts my career decisions significantly.
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 | 8 | 5 |
| Year 20 | 8 | 5 |
Librarian (Boston, MA)
Age: 44 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 15.0 years
Commonness: 13/20
Statement of Opinion:
- I'm cautiously optimistic about this bill; PSLF has been historically tough to navigate.
- But knowing there's a clear path forward is reassuring.
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 | 9 | 6 |
| Year 10 | 9 | 6 |
| Year 20 | 9 | 6 |
High School Teacher (Minneapolis, MN)
Age: 53 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 20.0 years
Commonness: 10/20
Statement of Opinion:
- Any change that makes forgiveness accessible is a massive relief after years of uncertainty.
- Teaching is rewarding, but the financial strain of student loans is heavy.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 7 | 4 |
| Year 3 | 8 | 4 |
| Year 5 | 9 | 4 |
| Year 10 | 10 | 4 |
| Year 20 | 9 | 4 |
Cost Estimates
Year 1: $350000000 (Low: $250000000, High: $450000000)
Year 2: $370000000 (Low: $260000000, High: $480000000)
Year 3: $390000000 (Low: $280000000, High: $500000000)
Year 5: $420000000 (Low: $300000000, High: $550000000)
Year 10: $470000000 (Low: $350000000, High: $600000000)
Year 100: $570000000 (Low: $450000000, High: $750000000)
Key Considerations
- The percentage of borrowers who qualify under the novel provisions versus historical program acceptance rates.
- Administrative efficiency and the cost of processing potentially numerous forgiveness claims.
- Potential fairness perceptions of allowing past borrowers a second chance without considering those who paid off their loans.
- Overall budgetary impact relative to the size of the current PSLF program.