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Update: Loan forgiveness for nonprofit employees

It hasn’t been in the news too much, but the College Cost Reduction and Access Act of 2007 was a significant piece of legislation that will impact many peoples’ lives. The House Education and Labor Committee described it as “the single largest investment in higher education since the GI Bill” [source]. The President signed the bill into law on September 27, 2007.

Overall, the legislation seems like a rather mixed bag to me, but I am definitely in favor of increasing Pell Grant funds, lowering student loan interest rates, and offering student loan forgiveness to “public service employees”; it’s a step, however small, to making education more accessible for the millions of people who aren’t wealthy and have not chosen professions that will ever make them wealthy.

Of particular interest here is the section related to nonprofit workers. The final language of that section of the bill (ah, the search for an unbowdlerized version can be hard) is included below, however appalling the format may be.

TITLE IV–LOAN FORGIVENESS

SEC. 401. LOAN FORGIVENESS FOR PUBLIC SERVICE EMPLOYEES.

    Section 455 (20 U.S.C. 1087e) is further amended by adding at the end the following:
    `(m) Repayment Plan for Public Service Employees-
    • `(1) IN GENERAL- The Secretary shall cancel the balance of interest and principal due, in accordance with paragraph (2), on any eligible Federal Direct Loan not in default for a borrower who–
      • `(A) has made 120 monthly payments on the eligible Federal Direct Loan after October 1, 2007, 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); and
      • `(B)(i) is employed in a public service job at the time of such forgiveness; and
      • `(ii) has been employed in a public service job during the period in which the borrower makes each of the 120 payments described in subparagraph (A).
    • `(2) LOAN CANCELLATION AMOUNT- After the conclusion of the employment period described in paragraph (1), the Secretary shall cancel the obligation to repay the balance of principal and interest due as of the time of such cancellation, on the eligible Federal Direct Loans made to the borrower under this part.
    • `(3) DEFINITIONS- In this subsection:
      • `(A) ELIGIBLE FEDERAL DIRECT LOAN- The term `eligible Federal Direct Loan’ means a Federal Direct Stafford Loan, Federal Direct PLUS Loan, or Federal Direct Unsubsidized Stafford Loan, or a Federal Direct Consolidation Loan.
      • `(B) PUBLIC SERVICE JOB- The term `public service job’ means–
        • `(i) a full-time job in emergency management, government, military service, public safety, law enforcement, public health, public education (including early childhood education), social work in a public child or family service agency, public interest law services (including prosecution or public defense or legal advocacy in low-income communities at a nonprofit organization), public child care, public service for individuals with disabilities, public service for the elderly, public library sciences, school-based library sciences and other school-based services, or at an organization that is described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code; or
        • `(ii) teaching as a full-time faculty member at a Tribal College or University as defined in section 316(b) and other faculty teaching in high-needs areas, as determined by the Secretary.’.

        Initial post on topic here.

Comments

Pingback from HR 2699 provides student loan forgiveness for non-profit employees at Nonprofit Girl
Time: July 25, 2008, 2:01 pm

[…] HR 2699 provides student loan forgiveness for non-profit employees September 17th, 2007 Looking for a status update on this legislation? See here. […]