This bill — known as the Help Encourage a Lifetime of Public Service, or HELPS Act — would eliminate federal student loan interest for borrowers working in public service professions enrolled in the Public Service Loan Forgiveness Program (PSLF). It’d also extend eligibility for the program to eligible volunteer first responders and first-time farmers. Currently, the Public Service Loan Forgiveness PSLF Program currently eliminates the balance of individuals’ federal student loan debt if they work in a public service profession for 10 years and make 120 qualifying payments on their federal loans.
What is Senate Bill S. 3124?
Cost of Senate Bill S. 3124
In-Depth: Sen. Heidi Heitkamp (D-ND) introduced this bill to encourage more graduates to pursue public service careers by allowing them to pay off their student loan debt more quickly:
“Millennials are racking up disproportionately high levels of student debt, and the earnings of recent college graduates haven't kept up with the costs of steep loan and interest payments. This scenario has crippled the ability of rural areas to recruit new doctors, firefighters, farmers, and other public servants, as many capable young people are prevented from returning to their hometowns and using their skills to improve their communities… Public servants often sacrifice a higher salary somewhere else to stay in our communities and keep them strong and safe. I'm proud to strengthen the Public Service Loan Forgiveness program's benefits for teachers, nurses, and other professionals, but my bill also makes sure that volunteer first responders and farmers are recognized for their extremely important contributions to our state and our rural economy. Debt shouldn't be a barrier to our young people who want to serve our communities.”
Critics of the public service student loan forgiveness program argue that enrollees in the program have disproportionately high loan balances, with nearly 30% of enrollees having racked up more than $100,000 in student loan debt — many of whom obtained graduate degrees. In an economic analysis written for the Brookings Institute, Jason Delisle argues that the PSLF program distorts incentives for students to attend graduate school:
“Students who might balk at the high price of a graduate degree that is not likely to lead to a large increase in their earnings now face much lower effective prices for the degree — even a price of zero. That is bound to allow schools to set prices higher than they otherwise would and offer degrees with questionable value in the labor market. And the effect goes beyond tuition. Thanks to PSLF, a student like the hypothetical one… who is faced with the choice of borrowing $10,000 to live frugally while enrolled in graduate schools or $20,000 to support a more comfortable lifestyle is probably inclined to choose the latter. If he is likely to have the first $10,000 forgiven, then he is even more likely to have the next $10,000 forgiven.”
There is one cosponsor of the bill, Sen. Jon Tester (D-MT). The National Volunteer Fire Council, National Young Farmers Coalition, American Indian Higher Education Consortium, and the North Dakota branch of the National Education Association support this bill.
Of Note: The Public Service Loan Forgiveness (PSLF) Program currently eliminates the balance of individuals’ federal student loan debt if they work in a public service profession for 10 years and make 120 qualifying payments on their federal loans.
The rising burden of student loan debt currently presents a major obstacle to those interested in careers positively benefiting the general public, such as public service or farming. According to the National Young Farmers Coalition, 53% of farmers have a difficult time making student loan payments — and 30% of young farmers put off full-time farming careers because of their debt. Student loan debt also often pushes qualified graduates out of jobs in public service professions in rural communities, as nursing, education, law enforcement, and agriculture jobs in smaller, rural communities often pay less than the same jobs in larger, urban areas.
- Sponsoring Sen. Heidi Heitkamp (D-ND) Press Release
- Statements of Support
- Brookings Institution (Opposed - Context)
- National Volunteer Fire Council (NVFC) Press Release (In Support)
Summary by Lorelei Yang(Photo Credit: zimmytws / iStock)
Help Encourage a Lifetime of Public Service Act
A bill to amend the Higher Education Act of 1965 to provide for no accrual of interest on Federal Direct Loans for individuals employed in public service.
- Not enactedThe President has not signed this bill
- The house has not voted
- The senate has not voted
Committee on Health, Education, Labor, and PensionsIntroducedJune 25th, 2018
- senate Committees