[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2829 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 2829
To amend the Higher Education Act of 1965 to improve the Public Service
Loan Forgiveness program and reduce interest rates.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 10, 2025
Mr. Courtney (for himself and Mr. DeSaulnier) introduced the following
bill; which was referred to the Committee on Education and Workforce
_______________________________________________________________________
A BILL
To amend the Higher Education Act of 1965 to improve the Public Service
Loan Forgiveness program and reduce interest rates.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Strengthening Efforts for Relief and
Vital Incentives for Community Service and Engagement Act'' or the
``SERVICE Act''.
SEC. 2. AMENDMENTS TO TERMS AND CONDITIONS OF PUBLIC SERVICE LOAN
FORGIVENESS.
(a) Number of Monthly Payments.--Paragraph (1) of section 455(m) of
the Higher Education Act of 1965 (20 U.S.C. 1087e(m)) is amended--
(1) in the matter preceding subparagraph (A), by striking
``a borrower who'' and inserting ``a borrower'';
(2) by amending subparagraph (A) to read as follows:
``(A) who--
``(i) has made 96 qualifying monthly
payments on the eligible Federal Direct Loan
after October 1, 2007; and
``(ii) has been employed in a public
service job during the period in which the
borrower makes each of the 96 qualifying
monthly payments; and''; and
(3) by amending subparagraph (B) to read as follows:
``(B) without regard to the employment status of
the borrower at the time of such cancellation.''.
(b) Redesignations.--Section 455(m) of the Higher Education Act of
1965 (20 U.S.C. 1087e(m)) is further amended by redesignating
paragraphs (2), (3), and (4), as paragraphs (3), (6), and (7),
respectively;
(c) Monthly Payments.--Section 455(m) of the Higher Education Act
of 1965 (20 U.S.C. 1087e(m)) is further amended--
(1) by inserting after paragraph (1), as so amended, the
following:
``(2) Monthly payments.--
``(A) Qualifying monthly payments.--For the purpose
of determining under paragraph (1) the number of
qualifying monthly payments made by a borrower on an
eligible Federal Direct Loan, the Secretary shall
consider the borrower to have made a qualifying monthly
payment for each month that--
``(i) the borrower pays (as a lump sum or
in multiple installments) an amount that is not
less than the monthly payment amount due on the
eligible Federal Direct Loan pursuant to any
one or a combination of the following--
``(I) payments under an income-
based repayment plan under section
493C;
``(II) payments under a standard
repayment plan under subsection
(d)(1)(A), based on a 10-year repayment
period;
``(III) monthly payments under a
repayment plan under subsection (d)(1)
or (g) of not less than the monthly
amount calculated under subsection
(d)(1)(A), based on a 10-year repayment
period; or
``(IV) payments under an income
contingent repayment plan under
subsection (d)(1)(D); or
``(ii) in lieu of a payment described in
clause (i), the borrower is in one of the
following periods of deferment or forbearance--
``(I) cancer treatment deferment
under section 427(a)(2)(C)(iv),
428(b)(1)(M)(v), or 455(f)(3);
``(II) rehabilitation training
program deferment under section
427(a)(2)(C)(i)(II),
428(b)(1)(M)(i)(II), or
455(f)(2)(A)(ii);
``(III) military service deferment
under section 428(b)(1)(M)(iii) or
455(f)(2)(C);
``(IV) unemployment deferment under
section 427(a)(2)(C)(ii),
428(b)(1)(M)(ii), 428B(d)(1)(A)(i), or
455(f)(2)(B);
``(V) deferment due to an economic
hardship described in section
427(a)(2)(C)(iii), section
428(b)(1)(M)(iv), section
428B(d)(1)(A)(i), section 435(o), or
section 455(f)(2)(D);
``(VI) Peace Corps service
deferment under section
682.210(b)(2)(ii) or 682.210(k) of
title 34, Code of Federal Regulations
(or successor regulations), as made
applicable to Direct Loan borrowers
under section 685.204(j) of such title
34;
``(VII) post-active-duty student
deferment under section 493D;
``(VIII) AmeriCorps forbearance
under section 428(c)(3)(A)(i)(III);
``(IX) National Guard Duty
forbearance under section
682.211(h)(2)(iii) or 685.205(a)(7) of
title 34, Code of Federal Regulations
(or successor regulations);
``(X) Department of Defense student
loan repayment program forbearance
under section 428(c)(3)(A)(i)(IV);
``(XI) administrative forbearance
or mandatory administrative forbearance
under section 428(c)(3)(D) or
428H(e)(7); or
``(XII) student loan debt burden
forbearance under section
428(c)(3)(A)(i)(II).
``(B) Prepayments.--
``(i) In general.--Subject to clause (ii),
if, for any month, a borrower makes a
qualifying monthly payment on an eligible
Federal Direct Loan in an amount that exceeds
the monthly payment amount due on such loan for
such month, the Secretary shall--
``(I) if the excess amount is less
than the monthly payment amount due for
the subsequent month on such loan,
apply the excess amount toward the
monthly payment amount due for such
subsequent month;
``(II) if the excess amount is
equal to the monthly payment amount due
for the subsequent month on such loan,
treat the excess amount as the monthly
payment for such subsequent month;
``(III) if the excess amount is
greater than the monthly payment amount
due for the subsequent month on such
loan, but less than the total monthly
payment amounts due for the 2
subsequent months on such loan--
``(aa) treat the portion of
the excess amount that covers
the monthly payment amount due
for the subsequent month as the
monthly payment for such
subsequent month; and
``(bb) apply the remainder
of the excess amount toward the
monthly payment amount due for
the second subsequent month;
``(IV) if the excess amount is
equal to or greater than the monthly
payment amount due for the 2 subsequent
months on such loan, but less than the
total monthly payment amounts due for
the 3 subsequent months on such loan--
``(aa) treat the portion of
the excess amount that covers
the monthly payment amounts due
for the subsequent month and
the second subsequent month as
the monthly payments for such
months; and
``(bb) apply any remainder
of such excess amount toward
the monthly payment amount due
for the third subsequent month;
``(V) if the excess amount is equal
to the monthly payment amounts due for
the 3 subsequent months on such loan,
treat the excess amount as the monthly
payments for such months;
``(VI) if the excess amount is
greater than the monthly payment
amounts due for the 3 subsequent months
on such loan--
``(aa) treat the portion of
the excess amount that covers
the monthly payment amounts due
for the 3 subsequent months as
the monthly payments for such
months; and
``(bb) apply any remainder
of such excess amount to the
principal balance of the
eligible Federal Direct loan;
and
``(VII) notwithstanding subclauses
(I) through (VI), if the borrower has a
monthly payment amount due on such loan
for such month that is equal to $0,
apply any excess amount for such month
to the principal balance of the
eligible Federal Direct loan.
``(ii) Alternative application.--Prior to
or at the time of making a payment that exceeds
the monthly payment amount due on an eligible
Federal Direct Loan for such month, a borrower
may request that any excess amount for such
month be applied to the principal balance of an
eligible Federal Direct loan in lieu of such
excess amount being applied in accordance with
clause (i).
``(C) Buyback payment process.--
``(i) In general.--The Secretary shall
establish a buyback payment process under which
a qualified borrower of an eligible Federal
Direct Loan may make a buyback payment in order
to have eligible months of the borrower's
public service employment period during which
the borrower did not make a qualifying monthly
payment on such loan be treated as if the
borrower had made a qualifying monthly payment
on such loan.
``(ii) Qualified borrower.--A borrower is a
qualified borrower for the purposes of making a
buyback payment in accordance with this
subparagraph if the borrower--
``(I) has an eligible Federal
Direct Loan that is not in default;
``(II) has been employed in a
public service job for not less than a
96 month employment period, but during
such employment period has made fewer
than 96 qualifying monthly payments on
an eligible Federal Direct Loan; and
``(III) requests to make a buyback
payment in accordance with this
subparagraph.
``(iii) Eligible month.--For the purposes
of this subparagraph, an eligible month means a
month during which a qualified borrower was
employed in a public service job, was not in an
in-school deferment or grace period, and did
not make a qualifying monthly payment on an
eligible Federal Direct Loan for such month--
``(I) because the borrower made a
monthly payment on such eligible
Federal Direct Loan pursuant to a
repayment plan that is not a qualifying
repayment plan;
``(II) because the borrower was in
a period of deferment or forbearance
other than a period described in clause
(ii) of subparagraph (A); or
``(III) for another reason
determined appropriate by the
Secretary.
``(iv) Buyback payment requirements.--A
buyback payment made in accordance with this
subparagraph--
``(I) shall be made by a qualified
borrower as a lump sum payment amount,
and in an amount that equals the total
amount the borrower would have paid in
qualifying monthly payments on the
eligible Federal Direct Loan for all
eligible months the borrower is
requesting to buyback, pursuant to a
qualifying repayment plan applicable to
the borrower, in accordance with
section 685.219(g)(6) of title 34, Code
of Federal Regulations (as such section
is in effect on the date of enactment
of this paragraph) or any other
relevant regulations in effect on such
date;
``(II) may not be made with respect
to an eligible Federal Direct Loan that
has been paid off, discharged, or
cancelled; and
``(III) with respect to an eligible
Federal Direct Loan that is a
consolidation loan, may not be used to
buyback eligible months that occurred
before the date of the consolidation of
such loan.
``(D) Hold harmless against retroactive
determinations.--For purposes of determining under
paragraph (1) the number of qualifying monthly payments
made by a borrower, any payment or period of deferment
or forbearance that is determined to be a qualifying
monthly payment may not, at a later time, be determined
not to be a qualifying monthly payment.''; and
(2) in paragraph (6), as redesignated by section 2(b), by
adding at the end the following:
``(C) Qualifying repayment plan.--The term
`qualifying repayment plan' means any of the repayment
plans listed in clause (i) of paragraph (2)(A).''.
(d) Loan Cancellation.--Paragraph (3) of section 455(m) of the
Higher Education Act of 1965 (20 U.S.C. 1087e(m)), as redesignated by
subsection (b), is amended to read as follows:
``(3) Loan cancellation amount.--Upon certification by a
borrower of completion of 96 qualifying monthly payments by the
borrower, the Secretary shall determine whether the borrower
meets each of the requirements of paragraph (1), and--
``(A) if the Secretary determines that the borrower