Federal

Loan Forgiveness for Educators Act

Source: Congress.gov · 8,453 words in original text

What This Bill Does

This bill creates two new loan forgiveness programs for teachers and early childhood educators who work in high-need schools or early childhood education programs. Qualifying educators can have their federal student loans forgiven either by completing 5 years of service or through monthly payments during their service. The bill applies to both types of federal student loans: FFEL loans (older loans made through private lenders) and Direct loans (newer loans made directly by the federal government). ##

Who It Affects

- Elementary and secondary school teachers with full state or tribal certification - School leaders (principals, assistant principals) with full state or tribal certification - Early childhood educators who provide care or instruction to children - Early childhood education program directors, including family child care providers - Educators teaching Native American, Alaska Native, or Native Hawaiian languages (regardless of certification status) - Parents who borrowed federal student loans to pay for a child's education, if the parent is a qualifying educator - Parents who borrowed federal student loans on behalf of children who are qualifying educators - High-need schools and early childhood education programs - The U.S. Department of Education - State educational agencies and local school districts ##

Key Provisions

- After completing 5 years of qualifying service in a high-need school or early childhood education program, a qualifying educator receives full forgiveness of all outstanding loan obligations, including interest and fees (Sec. 2(a), 428J(c)(1)(A) and Sec. 2(b), 460(c)(1)(A)) - During each month of qualifying service, the government assumes the educator's minimum monthly loan payment based on their chosen repayment plan, and this payment counts toward loan forgiveness programs (Sec. 2(a), 428J(c)(2) and Sec. 2(b), 460(c)(2)) - The years of service do not have to be consecutive, and educators can choose which years count toward the 5-year requirement (Sec. 2(a), 428J(c)(1)(B) and Sec. 2(b), 460(c)(1)(B)) - Educators must apply for the programs through applications developed and made publicly available by the Secretary of Education, with verification of service provided by school or program administrators (Sec. 2(a), 428J(c)(3) and Sec. 2(b), 460(c)(3)) - Educators who leave their position before completing a full school or program year do not have to repay amounts the government paid on their behalf (Sec. 2(a), 428J(c)(6) and Sec. 2(b), 460(c)(6)) ##

What Changes

If enacted, two existing federal loan forgiveness provisions in the Higher Education Act of 1965 (sections 428J and 460) are completely rewritten. These sections currently offer limited forgiveness; the new law greatly expands who qualifies, what types of service count, and how much debt gets forgiven. The bill also allows loans borrowed before the bill's enactment to qualify for forgiveness, and counts service performed before enactment toward the 5-year requirement. Additionally, educators in Direct Loans will have interest stop accruing (building up) during their qualifying service, which does not happen under the old rules. ##

Important Definitions

- **Qualifying educator**: Teachers and school leaders with full state or tribal certification who have not had certification waived on an emergency or temporary basis; early childhood educators; and early childhood program directors or family child care providers - **High-need school**: A public elementary or secondary school where more than 30 percent of enrolled children meet a poverty measure, or schools identified by the state for improvement support, or Bureau of Indian Education schools, or schools operated by tribal educational agencies, or Native Hawaiian education systems - **Qualifying service**: Full-time employment in a high-need school (for teachers and school leaders) or full-time employment in an early childhood education program (for early childhood educators and directors) - **Early childhood education program**: Head Start and Early Head Start programs, Bureau of Indian Education early childhood programs, Native Hawaiian education system programs, or tribal early childhood education programs - **Covered loan**: Any federal student loan made, insured, or guaranteed under the federal student loan programs ##

Effective Date

The programs begin 270 days after the bill becomes law (Sec. 2(b)(b) for Direct Loans and Sec. 2(a)(b) for FFEL loans). The amendments take effect 180 days after enactment (Sec. 2(c)(1)).

II 118TH CONGRESS 1ST SESSION S. 963 To provide enhanced student loan relief to educators. IN THE SENATE OF THE UNITED STATES MARCH 23, 2023 Mr. LUJA´N (for himself, Ms. BALDWIN, Mr. BOOKER, Mr. BROWN, Mr. BLUMENTHAL, Mr. CASEY, Ms. DUCKWORTH, Mrs. FEINSTEIN, Mr. HEINRICH, Mr. KAINE, Mr. KELLY, Mr. MARKEY, Mr. MENENDEZ, Mr. MERKLEY, Mr. PADILLA, Mr. REED, Mr. VAN HOLLEN, and Mr. WYDEN) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions A BILL To provide enhanced student loan relief to educators. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Loan Forgiveness for 4 Educators Act’’. 5 SEC. 2. LOAN FORGIVENESS AND CANCELLATION FOR EDU- 6 CATORS. 7 (a) ENHANCED TEACHER LOAN FORGIVENESS 8 UNDER THE FFEL PROGRAM.—Section 428J of the 9 VerDate Sep 11 2014 22:18 Apr 05, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S963.IS S963 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •S 963 IS Higher Education Act of 1965 (20 U.S.C. 1078–10) is 1 amended to read as follows: 2 ‘‘SEC. 428J. LOAN FORGIVENESS FOR EDUCATORS. 3 ‘‘(a) PURPOSE.—It is the purpose of this section to 4 enhance student access to a well-prepared, diverse, and 5 stable educator workforce by eliminating debt burdens for 6 educators in return for service teaching and leading in 7 high need schools or early childhood education programs. 8 ‘‘(b) PROGRAM AUTHORIZED.—Not later than 270 9 days after the date of enactment of the Loan Forgiveness 10 for Educators Act, the Secretary shall carry out a pro- 11 gram, through the holder of the loan, of assuming, as re- 12 quired under subsection (c), the obligation to repay a cov- 13 ered loan for qualifying educators engaged in qualifying 14 service. A qualifying educator may apply for the program 15 under this section after the Secretary has begun carrying 16 out the program. 17 ‘‘(c) FORGIVENESS OF COVERED LOANS.— 18 ‘‘(1) FORGIVENESS OF LOANS UPON COMPLE- 19 TION OF QUALIFYING SERVICE.— 20 ‘‘(A) IN GENERAL.—For each qualifying 21 educator who has completed 5 years of quali- 22 fying service (including any qualifying service, 23 as defined under this section as in effect after 24 the date of implementation of the Loan For- 25 VerDate Sep 11 2014 22:18 Apr 05, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S963.IS S963 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •S 963 IS giveness for Educators Act, that may have been 1 completed or performed before or after such 2 date of implementation, or a combination of 3 qualifying service), the Secretary shall assume 4 the obligation to repay an amount equal to 100 5 percent of the aggregate of the loan obligations 6 (including interest and fees) on all covered 7 loans that are outstanding as of the date of 8 completion of such fifth year of qualifying serv- 9 ice. 10 ‘‘(B) TIMING.—The years of qualifying 11 service required under subparagraph (A) may 12 be consecutive or nonconsecutive, and the quali- 13 fying educator may elect which years of quali- 14 fying service to use for purposes of subpara- 15 graph (A). 16 ‘‘(2) MONTHLY LOAN FORGIVENESS.—Upon ap- 17 plication by any qualifying educator who has a cov- 18 ered loan and who is engaged in qualifying service, 19 and in addition to any loan forgiveness under para- 20 graph (1), the Secretary shall enter into an agree- 21 ment with such qualifying educator, under which— 22 ‘‘(A) during the period of qualifying service 23 (for qualifying service that occurs after the date 24 of implementation of this Act), the Secretary 25 VerDate Sep 11 2014 22:18 Apr 05, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S963.IS S963 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •S 963 IS agrees to assume the obligation to repay the 1 minimum monthly obligation on all covered 2 loans of the qualifying educator, based on the 3 repayment plan selected by the qualifying edu- 4 cator, for— 5 ‘‘(i) each month of qualifying service; 6 and 7 ‘‘(ii) any summer or other school or 8 program year calendar breaks scheduled by 9 a high need school or early childhood edu- 10 cation program during a school or program 11 year in which the qualifying educator is en- 12 gaged in qualifying service; 13 ‘‘(B) during the period of qualifying serv- 14 ice, the assumption of the monthly loan obliga- 15 tion provided will serve as a monthly payment, 16 considered paid in full by the qualifying educa- 17 tor, based on the repayment plan selected by 18 the qualifying educator (which, if the qualifying 19 educator chooses, shall include any income driv- 20 en repayment plan); and 21 ‘‘(C) during the period of qualifying serv- 22 ice, each monthly obligation that is repaid by 23 the Secretary under this paragraph on a cov- 24 ered loan shall be deemed to be a qualifying 25 VerDate Sep 11 2014 22:18 Apr 05, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S963.IS S963 pbinns on DSKJLVW7X2PROD with $$_JOB 5 •S 963 IS monthly payment made by the qualifying educa- 1 tor for purposes of the loan forgiveness pro- 2 gram under section 455(m), if applicable. 3 ‘‘(3) APPLICATION.—The Secretary shall de- 4 velop and make publicly available an application for 5 qualifying educators who wish to receive loan for- 6 giveness under this subsection. The application 7 shall— 8 ‘‘(A) be available for qualifying educators 9 to file for loan forgiveness under paragraph (1) 10 and for monthly loan forgiveness under para- 11 graph (2); 12 ‘‘(B) include any certification requirements 13 that the Secretary determines are necessary to 14 verify qualifying service; and 15 ‘‘(C) allow for the verification of the quali- 16 fying service— 17 ‘‘(i) in the case of an early childhood 18 educator or an elementary or secondary 19 school teacher serving in a high need 20 school, by a school leader or the adminis- 21 trator of a local educational agency, edu- 22 cational service agency, Bureau of Indian 23 Education, Native Hawaiian education sys- 24 tem, or State educational agency that 25 VerDate Sep 11 2014 22:18 Apr 05, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S963.IS S963 pbinns on DSKJLVW7X2PROD with $$_JOB 6 •S 963 IS serves the school (or the administrator’s 1 designee); 2 ‘‘(ii) in the case of an early childhood 3 educator serving in an early childhood edu- 4 cation program, by the director of that 5 program (or the director’s designee); 6 ‘‘(iii) in the case of a school leader 7 serving in a high need school, by the ad- 8 ministrator of a local educational agency, 9 educational service agency, Bureau of In- 10 dian Education, Native Hawaiian edu- 11 cation system, or State educational agency 12 that serves the school (or the administra- 13 tor’s designee); 14 ‘‘(iv) in the case of a director of an 15 early childhood education program, a lead- 16 er of the entity overseeing the early child- 17 hood education program; and 18 ‘‘(v) in the case of a family child care 19 provider or the director of an early child- 20 hood education program that operates as a 21 standalone center-based program (for ex- 22 ample, a case in which the center is not 23 part of a larger company) that is an early 24 childhood education program, by self-cer- 25 VerDate Sep 11 2014 22:18 Apr 05, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S963.IS S963 pbinns on DSKJLVW7X2PROD with $$_JOB 7 •S 963 IS tification with supporting documents, such 1 as a business license, a listing with a pub- 2 lic Child Care Resources and Referral 3 website, or proof of participation in a Fed- 4 eral child care or preschool subsidy pro- 5 gram. 6 ‘‘(4) PARENT PLUS LOANS.— 7 ‘‘(A) PARENT PLUS LOAN ON BEHALF OF 8 A STUDENT WHO IS A QUALIFYING EDUCA- 9 TOR.—A borrower of a parent loan under sec- 10 tion 428B issued on behalf of a student who is 11 a qualifying educator shall qualify for loan for- 12 giveness and any other benefits under this sec- 13 tion for the qualifying service of the student in 14 the same manner and to the same extent as the 15 student borrower qualifies for such loan forgive- 16 ness and other benefits. 17 ‘‘(B) PARENT PLUS LOAN BORROWED BY A 18 PARENT WHO IS A QUALIFYING EDUCATOR.— 19 The borrower of a parent loan under section 20 428B issued on behalf of a student who is not 21 a qualifying educator shall also qualify for loan 22 forgiveness and any other benefits under this 23 section for qualifying service if that parent bor- 24 VerDate Sep 11 2014 22:18 Apr 05, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S963.IS S963 pbinns on DSKJLVW7X2PROD with $$_JOB 8 •S 963 IS rower is engaged in qualifying service and 1 meets the requirements of this section. 2 ‘‘(5) RECIPIENTS OF PRIOR FORGIVENESS.—A 3 qualifying educator who received loan forgiveness 4 under this section as in effect before the date of en- 5 actment of the Loan Forgiveness for Educators Act 6 of 2022— 7 ‘‘(A) shall be eligible for loan forgiveness 8 of covered loans in accordance with paragraph 9 (1), including any remaining covered loans; and 10 ‘‘(B) may count the service completed that 11 qualified the qualifying educator for previous 12 loan forgiveness as qualifying service for pur- 13 poses of paragraph (1). 14 ‘‘(6) PROHIBITION ON REQUIRING REPAY- 15 MENT.—A qualifying educator shall not be required 16 to repay any amounts paid under this subsection if 17 that qualifying educator who engages in qualifying 18 service ends the qualifying service before the end of 19 a school or program year, or before the end of the 20 5-year period described in paragraph (1). 21 ‘‘(d) REGULATIONS.—The Secretary is authorized to 22 issue such regulations as may be necessary to carry out 23 the provisions of this section. 24 VerDate Sep 11 2014 22:18 Apr 05, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S963.IS S963 pbinns on DSKJLVW7X2PROD with $$_JOB 9 •S 963 IS ‘‘(e) CONSTRUCTION.—Nothing in this section shall 1 be construed to authorize any refunding of any repayment 2 of a loan. 3 ‘‘(f) LIST.— 4 ‘‘(1) IN GENERAL.—The Secretary, shall— 5 ‘‘(A) as soon as practicable, produce and 6 make publicly available a list of high need 7 schools for purposes of this section; and 8 ‘‘(B) annually update such list. 9 ‘‘(2) LIST FROM PREVIOUS YEAR.—If the list of 10 high need schools in which a qualifying educator 11 may perform qualifying service is not available be- 12 fore May 1 of any year, the Secretary may use the 13 list for the year preceding the year for which the de- 14 termination is made to make a determination about 15 whether an individual meets the requirements for 16 qualifying service. 17 ‘‘(g) ADDITIONAL ELIGIBILITY PROVISIONS.— 18 ‘‘(1) CONTINUED ELIGIBILITY.—Any qualifying 19 educator who performs qualifying service in a school 20 that— 21 ‘‘(A) is a high need school in any school 22 year during such service; and 23 ‘‘(B) in a subsequent school year fails to 24 meet the definition of a high need school 25 VerDate Sep 11 2014 22:18 Apr 05, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S963.IS S963 pbinns on DSKJLVW7X2PROD with $$_JOB 10 •S 963 IS may continue to serve in such school and shall be el- 1 igible for loan forgiveness pursuant to subsection 2 (b). 3 ‘‘(2) PREVENTION OF DOUBLE BENEFITS.—No 4 qualifying educator may, for the same service, re- 5 ceive a benefit under both this section and— 6 ‘‘(A) section 428K; or 7 ‘‘(B) subtitle D of title I of the National 8 and Community Service Act of 1990 (42 U.S.C. 9 12601 et seq.). 10 ‘‘(3) NO PENALTY FOR PROMOTIONS.—Any 11 qualifying educator who performs qualifying service 12 in an early childhood education program or high 13 need school and who is promoted to another position 14 within that early childhood program or high need 15 school after 1 or more years of qualifying service 16 may continue to be employed in such position in 17 such program or school and shall be eligible to count 18 the period of employment in such position as quali- 19 fying service for loan forgiveness pursuant to sub- 20 section (b). 21 ‘‘(h) DEFINITIONS.—In this section: 22 ‘‘(1) BUREAU OF INDIAN EDUCATION FUNDED 23 ELEMENTARY OR SECONDARY SCHOOL.—The term 24 VerDate Sep 11 2014 22:18 Apr 05, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S963.IS S963 pbinns on DSKJLVW7X2PROD with $$_JOB 11 •S 963 IS ‘Bureau of Indian Education funded elementary or 1 secondary school’ means— 2 ‘‘(A) an elementary or secondary school or 3 dormitory operated by the Bureau of Indian 4 Education; 5 ‘‘(B) an elementary or secondary school or 6 dormitory operated pursuant to a grant under 7 the Tribally Controlled Schools Act of 1988 (25 8 U.S.C. 2501 et seq.); and 9 ‘‘(C) an elementary or secondary school or 10 dormitory operated pursuant to a contract 11 under the Indian Self-Determination and Edu- 12 cation Assistance Act (25 U.S.C. 5301 et seq.). 13 ‘‘(2) BUREAU OF INDIAN EDUCATION EARLY 14 CHILDHOOD DEVELOPMENT PROGRAM.—The term 15 ‘Bureau of Indian Education early childhood devel- 16 opment program’ means— 17 ‘‘(A) a program operating under a grant 18 authorized by section 1139 of the Education 19 Amendments of 1978 (25 U.S.C. 2019); or 20 ‘‘(B) an early childhood education program 21 operated or funded by the Bureau of Indian 22 Education (including Family and Child Edu- 23 cation programs at schools funded by the Bu- 24 reau of Indian Education authorized under sec- 25 VerDate Sep 11 2014 22:18 Apr 05, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S963.IS S963 pbinns on DSKJLVW7X2PROD with $$_JOB 12 •S 963 IS tion 1121 of the Education Amendments of 1 1978 (25 U.S.C. 2001)). 2 ‘‘(3) COVERED LOAN.—The term ‘covered loan’ 3 means a loan made, insured, or guaranteed under 4 this part. 5 ‘‘(4) EARLY CHILDHOOD EDUCATION PRO- 6 GRAM.—The term ‘early childhood education pro- 7 gram’ means— 8 ‘‘(A) a high-need early childhood education 9 program as defined in section 200; 10 ‘‘(B) a Head Start program (including an 11 Early Head Start program) carried out under 12 the Head Start Act (42 U.S.C. 9831 et seq.); 13 ‘‘(C) an early childhood education pro- 14 gram, as defined in section 103; 15 ‘‘(D) a Bureau of Indian Education early 16 childhood development program; 17 ‘‘(E) a Native Hawaiian education system 18 early childhood education program; 19 ‘‘(F) a Tribal early childhood education 20 program; or 21 ‘‘(G) a consortium of entities described in 22 any of subparagraphs (A) through (F). 23 ‘‘(5) HIGH NEED SCHOOL.—The term ‘high 24 need school’ means— 25 VerDate Sep 11 2014 22:18 Apr 05, 2023 Jkt 039200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S963.IS S96 [Text truncated for display. Full text available on Congress.gov.]

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