Stefanik Introduces PSLF Reform, the State Workforce Incentive Act
Washington, D.C. – Today, Congresswoman Elise Stefanik introduced the State Workforce Incentive Act along with Congressman Fred Keller (PA-12.) This legislation reforms the Public Service Loan Forgiveness (PSLF) program, shifting it to a state-directed program of annual loan repayment benefits for workers in high-need occupations.
“While too many hardworking Americans carry the burden of student debt, the broken PSLF program has only sown confusion and frustration for borrowers seeking relief,” said Congresswoman Stefanik. “Fundamental flaws in the current program’s design limit it from providing a straightforward incentive to pursue in-demand jobs. I was recently asked by constituents about how we can fix and modernize this program at my Coffee With Your Congresswoman in Lowville. My legislation levels the playing field for borrowers and targets loan relief to low- and middle-income households. Further, it empowers states to address the workforce and public-service needs in their communities, such as beginning farmers or childcare professionals. It’s time for a new approach, and this bill delivers a state-led solution to the $1.5 trillion student debt problem facing our nation.”
“Government is most responsive when it is closest to the people, not in Washington. There is no doubt that the Public Service Loan Forgiveness program is broken and in need of more local control so that our students can find in-demand jobs and recover financially from the burdens of student debt,” said Congressman Keller. “This bill will bring much needed changes to the program and provide for greater clarity, and better meet state workforce development and public service needs.”
PSLF was created in 2007, yet the program has failed to deliver meaningful benefits to the average worker while providing massive loan forgiveness to a limited few. Under the State Workforce Incentive Act, borrowers would earn an annual credit against their loan balance each year they work in a state-determined occupation and make loan payments. The legislation ends the confusing federal requirements on eligible employment, instead leaving it up to states to determine which jobs should qualify for this repayment incentive. States will consider local and regional labor market data, as well as the needs of rural and underserved communities, when they determine which occupations to make eligible and how much loan repayment of offer borrowers employed in these occupations. All current borrowers will retain access to the current PSLF program, but may also receive benefits under the new State Workforce Incentive Program. In shifting away from the deeply flawed PSLF program, the legislation will simplify the process for borrowers while brining fiscal certainty to the program.