Policy Update

HR 1859: New legislation to encourage young professionals to enter public service

4/26/2005

Source: Society of Students for Public Administration (SOSPA)

Loan Repayment
http://www.fendonline.com/youngfeds/2005/YF051805.htm

Rep. Rick Renzi, R-Ariz., on April 26 introduced new legislation to encourage young professionals to enter public service. The bill, the Education for Public Service Act of 2005, H.R. 1859, assists those entering a career in public service with advanced education debt.

The measure will provide partial loan forgiveness for professionals with advanced or graduate educations who spend eight of 15 years in a public service career. The bill applies to all public service professionals such as lawyers, doctors, nurses and social workers.

“This bill will help tear down part of the barrier to public service built by high educational debts,” said Renzi. He added that his legislation provides only partial forgiveness after a significant time in public service—therefore it is affordable even in tight budget times.

Renzi noted that the debt often incurred by those seeking higher education can be a major obstacle in choosing a career.

In 1993, Congress authorized a loan repayment option that forgave educational debt only after 25 years of public service. But it did not succeed—its long repayment plan discouraged people from entering public service.

According to Renzi’s bill, the problem for borrowers who elect the option authorized in 1993 is that they do not receive debt forgiveness until they have been paying for 25 years. Graduates are unable to contemplate such a long period of repayment before their educational debts are forgiven.

The goal of income-contingent repayment can be better achieved by reducing the option’s period of loan repayment and forgiveness, Renzi asserted.

Furthermore, Renzi said some borrowers are discouraged from using the income-continent repayment option because it includes a severe “marriage penalty.” It attributes the incomes of both spouses to each borrower spouse, so that when a borrower marries, the amount of repayment due under the option is increased.

The option can be made more equitable by attributing only half of the income of a couple to each spouse, Renzi’s bill states.

“Serving the public and giving back to your community and your country is an honorable and noble pursuit. At the very least, governments should help to remove some of these barriers to public service,” said Renzi.

The bill was referred to the House Committee on Education and the Workforce.