H.R.2829 - Strengthening Efforts for Relief and Vital Incentives for Community Service and Engagement Act; SERVICE Act (119th Congress)
Summary
H.R.2829, the SERVICE Act, aims to amend the Higher Education Act of 1965 to improve the Public Service Loan Forgiveness (PSLF) program and reduce interest rates. The bill seeks to make the PSLF program more accessible and beneficial to public service employees by modifying the terms and conditions for loan forgiveness. It also addresses issues related to monthly payments, loan consolidation, and the treatment of independent contractors.
The bill introduces provisions for a buyback payment process, allowing borrowers to make payments for months where they didn't make qualifying payments. It also establishes an online portal and database of public service jobs to help borrowers navigate the PSLF program more effectively.
Furthermore, the act includes measures to treat periods of deferment and forbearance more favorably and provides loan forgiveness for teachers by amending sections 428J(g)(2) and 460(g)(2) of the Higher Education Act of 1965.
Expected Effects
The SERVICE Act is likely to increase the number of individuals eligible for and benefiting from the Public Service Loan Forgiveness program. By reducing the required number of monthly payments from 120 to 96 and expanding the types of payments and deferments that qualify, more public service employees may have their student loan debt forgiven.
The establishment of an online portal and database will provide greater transparency and ease of access to information about the PSLF program. This will help borrowers better understand their eligibility and manage their loan repayment process.
The changes regarding the treatment of deferment, forbearance, and consolidated loans will provide additional relief and flexibility to borrowers, potentially reducing the overall burden of student loan debt for those in public service.
Potential Benefits
- Easier Qualification for Loan Forgiveness: Reducing the number of required monthly payments to 96 makes loan forgiveness more attainable.
- Expanded Definition of Qualifying Payments: Including certain deferment and forbearance periods as qualifying payments broadens eligibility.
- Buyback Payment Process: Allows borrowers to make up for past non-qualifying months of public service employment.
- Online Portal and Database: Provides greater transparency and access to information about eligible jobs and loan status.
- Improved Treatment of Consolidated Loans: Ensures borrowers receive credit for payments made on loans before consolidation.
Potential Disadvantages
- Potential for Increased Program Costs: Expanding eligibility and forgiveness may increase the overall cost of the PSLF program to taxpayers.
- Complexity of New Provisions: The buyback payment process and other new rules may be complex and difficult for borrowers to navigate without assistance.
- Risk of Mismanagement: The online portal and database require ongoing maintenance and updates, which could be subject to errors or delays.
- Limited Scope: The bill primarily focuses on improving the PSLF program and does not address broader issues related to student loan debt or college affordability.
- GAO Study Delay: The GAO study on data matching agreements delays immediate implementation of automated employment verification.
Constitutional Alignment
The SERVICE Act appears to align with the constitutional principle of promoting the general welfare, as it aims to provide relief to public service employees burdened by student loan debt. By incentivizing individuals to work in public service, the act could indirectly support various essential government functions and services.
Congress has the power to enact this legislation under Article I, Section 8, Clause 1 of the Constitution, which grants Congress the power to lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defense and general welfare of the United States. The Higher Education Act of 1965, which this bill amends, falls under this constitutional authority.
There are no apparent conflicts with specific constitutional amendments or limitations on federal power. The act does not infringe upon individual liberties, rights, or privacy, nor does it establish or endorse any particular religion.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).