HR2829-119

What This Bill Does

The SERVICE Act rewrites Public Service Loan Forgiveness rules in the Higher Education Act. It lowers the qualifying-payment count from 120 to 96 monthly payments and removes the requirement that the borrower still be employed in public service at cancellation. It treats specified deferments and forbearances as qualifying months, including cancer treatment, rehabilitation training, military service, unemployment, economic hardship, Peace Corps, post-active-duty student deferment, AmeriCorps, National Guard duty, Defense Department student-loan repayment, administrative forbearance, and student-loan debt-burden forbearance. It creates rules for applying prepayments for up to three later months, a buyback process for eligible public-service months, a hold-harmless rule against later reversing qualifying-payment determinations, automatic cancellation after certification, denial notices with 90-day forbearance, a reconsideration process with a six-month decision deadline, independent-contractor treatment where State law bars employee status, a 30-hour full-time standard including nontenure-track higher education teaching conversion, an online portal with payment counts, eligible-loan explanations, forms, denial notices, reconsideration, buyback information, and consolidation effects, a public-service job database with Labor consultation, no capitalization after forbearance, weighted-average qualifying-payment counts for Direct Consolidation Loans, teacher-loan forgiveness coordination, and a GAO study on data matching for PSLF including military and veteran borrowers.

Who Benefits and How

Public service borrowers benefit because loan cancellation would require 96 qualifying payments instead of 120 and would not require current public-service employment at forgiveness. Military borrowers benefit because military service deferment, National Guard duty forbearance, Defense Department repayment forbearance, and data-matching study requirements are included. Nontenure-track higher education instructors benefit because full-time status must account for credit or contact hours using a Secretary-determined multiplier. Teachers benefit because the bill changes coordination between PSLF and teacher loan forgiveness provisions.

Who Bears the Burden and How

The Department of Education must rebuild PSLF servicing, payment-count, buyback, reconsideration, portal, public-service database, and consolidation rules. Student loan servicers must apply new qualifying-payment, deferment, forbearance, prepayment, and no-capitalization rules. Federal taxpayers bear the cost of faster and broader loan cancellation. Public service employers must support electronic certification through the new portal and job database.

Key Provisions

• Reduces PSLF cancellation from 120 to 96 qualifying monthly payments and removes current-employment-at-cancellation status.
• Credits specified deferments and forbearances, including military service, unemployment, economic hardship, Peace Corps, AmeriCorps, and administrative forbearance.
• Creates prepayment, buyback, hold-harmless, denial forbearance, and reconsideration processes.
• Requires an online PSLF portal and public-service job database maintained by the Department of Education.
• Modifies consolidation-loan payment counts, teacher-forgiveness coordination, and GAO data-matching review.