A new bipartisan bill would make sure government and nonprofit workers can get student-loan forgiveness — even if they leave public service after 10 years

• Sen. Bob Menendez and a bipartisan group of lawmakers introduced a new bill to expand PSLF.
• The bill would eliminate the requirement to be working in public service at the time of debt relief.

A new bipartisan bill would make it easier for student-loan borrowers who worked in public service to get the debt relief they deserve.

On Thursday, a bipartisan group of lawmakers — Sens. Bob Menendez and Mike Braun, and Reps. Chrissy Houlahan and Brian Fitzpatrick — reintroduced a bill called the PSLF Payment Completion Fairness Act, which would remove the requirement for borrowers to be working in public service at the time they apply for and receive debt relief.

The Public Service Loan Forgiveness, or PSLF, program was created in 2007 to give government and nonprofit workers student-loan forgiveness after 10 years, or 120 qualifying payments. But, according to Federal Student Aid's website, borrowers "must be working for a qualifying employer at the time you submit the form for forgiveness and at the time the remaining balance on your loan is forgiven."

That means that even if borrowers completed their ten years of qualifying payments, they would have to remain in their public-service job to actually get relief through the program. The lawmakers' bill would get rid of that provision, according to the press release.

"Since its creation, the Public Service Loan Forgiveness program has had persistent issues that have made it difficult for public-service employees to access student debt relief in exchange for their dedicated service to our nation," Menendez said in a statement. "This is a common-sense, bipartisan solution that will remove a needless provision in federal law that will transform the lives of law enforcement, firefighters, teachers, and other public-service employees by making it easier for them to receive relief under the PSLF program."

Braun, who is a Republican, also said in a statement that he's hoping to "cut burdensome provisions in the Public Service Loan Forgiveness (PSLF) program and ensure that whenever they go next, their service isn't forgotten."

Over the past two years, President Joe Biden's Education Department has taken a number of steps to reform the PSLF process. In October 2021, the department implemented a limited-time waiver that allowed past payments — even those previously deemed ineligible — to count toward loan forgiveness. And, upon the waiver's expiration on October 31, 2022, the department announced permanent reforms to the program, including a one-time account adjustment to give borrowers one more chance to ensure their payments are up to date.

But there are still a number of hurdles that could get in the way of implementing those changes. Due to a lack of congressional funding for the office of Federal Student Aid, the department pushed back the deadline for borrowers to see the impact of the account adjustment to 2024. The lack of funding could also present issues for the student-loan payment resumption expected to happen this fall, along with carrying out Biden's plan to cancel up to $20,000 in student debt for federal borrowers if the Supreme Court upholds that relief.

Still, while it's unclear how the reforms will be implemented over the next year, recent data from the Education Department shows the waiver is continuing to work for borrowers. Through early February 2023, per the department, 453,000 borrowers have qualified for loan forgiveness due to the reforms — and applications submitted before the October 31 deadline are still being processed.

The bipartisan legislation would expand on those reforms and build on Menendez and his colleagues' past efforts to ensure PSLF works as intended.

"Our public servants, like police officers and teachers, rightfully have access to student loan forgiveness after ten years of public service," Houlahan said in a statement. "However, due to the way the policy is currently written, borrowers must still be working in public service while their paperwork is processed for forgiveness, which can sometimes take several months. Fixing this oversight is necessary so public servants who've completed the ten years they need to qualify but have retired or moved on from their career can still receive these well-deserved benefits."