Teacher Loan Forgiveness Enhancement Act
The Teacher Loan Forgiveness Enhancement Act would create a new federal program under the Higher Education Act to forgive undergraduate student loans for public school teachers after eight consecutive years of full-time teaching. Eligible loans include federal undergraduate loans held by Direct, FFEL, or Perkins loan programs, and forgiveness would cover the remaining principal and interest at the time of forgiveness. The program can stack with existing loan forgiveness programs, meaning a teacher could receive multiple debt relief benefits for the same service. In addition, the bill adds a deferment option for teachers: while serving in public schools (and for six months after), payments of principal would be suspended and interest would not accrue on eligible loans. The bill also authorizes the Treasury to share certain return information with the Department of Education to administer the forgiveness program and includes related tax and administrative provisions. The bill would be implemented through loan holders and would involve payments to institutions for loans canceled under this program, subject to existing program rules. It defines “public school teacher” as a teacher at a public elementary or secondary school and clarifies what counts as an eligible undergraduate loan. The proposal is sponsored in the House and would take effect upon enactment, with accompanying amendments to deferment and disclosure provisions to support administration. Note: The text indicates the bill was introduced in the 119th Congress by a representative (named in the full text as Mr. Fields), though the header here lists Sponsor as Unknown.
Key Points
- 1New undergraduate loan forgiveness for public school teachers after 8 consecutive years of full-time service. The forgiven amount is the remaining principal and accrued interest on eligible federal undergraduate loans at the time of forgiveness.
- 2Eligible loans and recipients. Forgivable loans include federal undergraduate loans under Direct Loan Programs (and related parts) attributable to undergraduate study; the recipient must be a public school teacher at an elementary or secondary school.
- 3Deferment during teaching. While serving as a public school teacher (and for six months after), borrowers with Direct, FFEL, or Perkins loans can defer payments and prevent interest accrual on the loan.
- 4Administrative mechanism and double benefits. Forgiven amounts would be canceled through the loan holder or, for certain loan types, by cancellation and payments to higher education institutions for the amount of loans canceled. Borrowers may receive this benefit in addition to other existing loan forgiveness programs (i.e., stacking is allowed).
- 5Tax treatment and information sharing. Forgiven amounts would not be treated as taxable income. The Treasury could disclose specific return information to the Department of Education to administer the program, and the bill includes related conforming amendments.