Strengthening Loan Forgiveness for Public Servants During the COVID–19 Crisis Act

II 116TH CONGRESS 2D SESSION S. 3760 To amend the Higher Education Act of 1965 to provide for a percentage of student loan forgiveness for public service employment, and for other purposes. IN THE SENATE OF THE UNITED STATES MAY 19, 2020 Mr. BLUMENTHAL (for himself, Mr. UDALL, Mr. BOOKER, Ms. WARREN, Ms. SMITH, Mr. CARDIN, Mr. MARKEY, Mrs. FEINSTEIN, Ms. HIRONO, and Mr. LEAHY) introduced the following bill; which was read twice and re- ferred to the Committee on Health, Education, Labor, and Pensions A BILL To amend the Higher Education Act of 1965 to provide for a percentage of student loan forgiveness for public service employment, and for other purposes. 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 ‘‘Strengthening Loan 4 Forgiveness for Public Servants During the COVID–19 5 Crisis Act’’. 6 SEC. 2. SENSE OF THE SENATE. 7 It is the sense of the Senate that— 8 VerDate Sep 11 2014 01:16 Jun 11, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S3760.IS S3760 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 3760 IS (1) the novel coronavirus of 2019 (COVID–19) 1 is imposing a burden on many individuals, including 2 doctors, nurses, and teachers, who are participating 3 in the public service loan forgiveness program under 4 section 455(m) of the Higher Education Act of 1965 5 (20 U.S.C. 1087e(m)); and 6 (2) restructuring the loan forgiveness provided 7 through such program and accommodating disrup- 8 tions that might occur due to the impact of the novel 9 coronavirus of 2019 (COVID–19) are necessary. 10 SEC. 3. PUBLIC SERVICE LOAN FORGIVENESS PROGRAM. 11 (a) IN GENERAL.—Section 455(m) of the Higher 12 Education Act of 1965 (20 U.S.C. 1087e(m)) is amend- 13 ed— 14 (1) in paragraph (1), in the matter preceding 15 subparagraph (A), by inserting ‘‘, except as provided 16 in paragraph (5),’’ after ‘‘on any eligible Federal Di- 17 rect Loan not in default’’; and 18 (2) by adding at the end the following: 19 ‘‘(5) LOAN CANCELLATION FOR NEW LOANS.— 20 ‘‘(A) IN GENERAL.—Beginning after the 21 date of enactment of the Strengthening Loan 22 Forgiveness for Public Servants During the 23 COVID–19 Crisis Act, after the conclusion of 24 each employment period in a public service job, 25 VerDate Sep 11 2014 01:16 Jun 11, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3760.IS S3760 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 3760 IS as described in subparagraph (B), the Secretary 1 shall cancel the percent specified in such sub- 2 paragraph of the total amount due on any eligi- 3 ble Federal Direct Loan made after the date of 4 enactment of the Strengthening Loan Forgive- 5 ness for Public Servants During the COVID–19 6 Crisis Act for a borrower who is employed in 7 such public service job and submits an employ- 8 ment certification form described in subpara- 9 graph (C). 10 ‘‘(B) PERCENT AMOUNT.—The percent of 11 a loan that shall be canceled under subpara- 12 graph (A) is as follows: 13 ‘‘(i) In the case of a borrower who 14 completes 2 years of employment in a pub- 15 lic service job, 15 percent of the total 16 amount due on the eligible Federal Direct 17 Loan on the date the borrower commenced 18 employment in such public service job. 19 ‘‘(ii) In the case of a borrower who 20 completes 4 years of employment in a pub- 21 lic service job, 15 percent of the total 22 amount due on the eligible Federal Direct 23 Loan on the date the borrower commenced 24 employment in such public service job. 25 VerDate Sep 11 2014 01:16 Jun 11, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3760.IS S3760 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 3760 IS ‘‘(iii) In the case of a borrower who 1 completes 6 years of employment in a pub- 2 lic service job, 20 percent of the total 3 amount due on the eligible Federal Direct 4 Loan on the date the borrower commenced 5 employment in such public service job. 6 ‘‘(iv) In the case of a borrower who 7 completes 8 years of employment in a pub- 8 lic service job, 20 percent of the total 9 amount due on the eligible Federal Direct 10 Loan on the date the borrower commenced 11 employment in such public service job. 12 ‘‘(v) In the case of a borrower who 13 completes 10 years of employment in a 14 public service job, 30 percent of the total 15 amount due on the eligible Federal Direct 16 Loan on the date the borrower commenced 17 employment in such public service job. 18 ‘‘(C) EMPLOYMENT CERTIFICATION 19 FORM.— 20 ‘‘(i) IN GENERAL.—In order to receive 21 loan cancellation under this paragraph, a 22 borrower shall submit to the Secretary an 23 employment certification form that is de- 24 veloped by the Secretary and includes self- 25 VerDate Sep 11 2014 01:16 Jun 11, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S3760.IS S3760 pbinns on DSKJLVW7X2PROD with BILLS 5 •S 3760 IS certification of employment and a separate 1 part for employer certification that indi- 2 cates the dates of employment. 3 ‘‘(ii) DEFERMENT.—If a borrower 4 submits to the Secretary the employment 5 certification form described in clause (i), 6 during the period in which the borrower is 7 employed in a public service job for which 8 loan cancellation is eligible under this 9 paragraph, the borrower’s eligible Federal 10 Direct Loan shall be placed in deferment. 11 ‘‘(D) INTEREST CANCELED.—If a portion 12 of a loan is canceled under this paragraph for 13 any year, the entire amount of interest on such 14 loan that accrues for such year shall be can- 15 celed.’’. 16 (b) SPECIAL RULE FOR COVID–19 EMPLOYMENT 17 DISRUPTIONS.— 18 (1) DEFINITIONS.—In this subsection: 19 (A) EMPLOYMENT DISRUPTION.—The term 20 ‘‘employment disruption’’ means a lapse in an 21 individual’s employment that is related to the 22 novel coronavirus disease of 2019 (COVID–19), 23 such as a furlough or reduction in force by the 24 VerDate Sep 11 2014 01:16 Jun 11, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S3760.IS S3760 pbinns on DSKJLVW7X2PROD with BILLS 6 •S 3760 IS employer or the individual’s resignation due to 1 illness or family caregiving responsibilities. 2 (B) PUBLIC SERVICE JOB.—The term 3 ‘‘public service job’’ has the meaning given the 4 term in section 455(m)(3) of the Higher Edu- 5 cation Act of 1965 (20 U.S.C. 1087e(m)(3)). 6 (C) QUALIFYING EMERGENCY.—The term 7 ‘‘qualifying emergency’’ has the meaning given 8 the term in section 3502 of division A of the 9 Coronavirus Aid, Relief, and Economic Security 10 Act (Public Law 116–136). 11 (D) QUALIFYING INDIVIDUAL.—The term 12 ‘‘qualifying individual’’ means an individual 13 who— 14 (i) has a loan that qualifies for public 15 service loan forgiveness under section 16 455(m) of the Higher Education Act of 17 1965 (20 U.S.C. 1087e(m)); and 18 (ii) during the qualifying emergency 19 period— 20 (I) was employed in a public 21 service job; and 22 (II) experiences an employment 23 disruption with respect to the public 24 VerDate Sep 11 2014 01:16 Jun 11, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S3760.IS S3760 pbinns on DSKJLVW7X2PROD with BILLS 7 •S 3760 IS service job and no longer is employed 1 in a public service job. 2 (2) IN GENERAL.—Subject to paragraph (3), in 3 administering the public service loan forgiveness pro- 4 gram under section 455(m) of the Higher Education 5 Act of 1965 (20 U.S.C. 1087e(m)) with respect to 6 periods of employment and payments due during the 7 qualifying emergency— 8 (A) each qualifying individual shall be 9 deemed an individual employed in a public serv- 10 ice job during the period of the qualifying emer- 11 gency for purposes of such program; and 12 (B) any monthly payment made by a quali- 13 fying individual during the qualifying emer- 14 gency (including a payment deemed made under 15 section 3513(c) of the Coronavirus Aid, Relief, 16 and Economic Security Act (Public Law 116– 17 136)) shall be deemed to be a monthly payment 18 made by an individual employed in a public 19 service job for purposes of such program. 20 (3) SPECIAL RULE.—Paragraph (2) shall only 21 apply to a qualifying individual who resumes employ- 22 ment in any public service job by the date that is 6 23 months after the last day of the qualifying emer- 24 gency, except that any qualifying individual who, as 25 VerDate Sep 11 2014 01:16 Jun 11, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S3760.IS S3760 pbinns on DSKJLVW7X2PROD with BILLS 8 •S 3760 IS a result of the application of paragraph (2), would 1 have completed the requirements for full or partial 2 loan cancellation under paragraph (2) or (5) of sec- 3 tion 455(m) of the Higher Education Act of 1965 4 (as amended by this Act) during the qualifying 5 emergency, shall receive such loan cancellation with- 6 out any required resumption of public service job 7 employment. 8 (4) GUIDANCE.—Not later than 30 days after 9 the date of enactment of this Act, the Secretary of 10 Education shall develop and make available guidance 11 for qualifying individuals regarding the assistance 12 available under this subsection. 13 Æ VerDate Sep 11 2014 01:16 Jun 11, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\S3760.IS S3760 pbinns on DSKJLVW7X2PROD with BILLS