PA 17-206—sHB 7212

Higher Education and Employment Advancement Committee

AN ACT CONCERNING THE PROMOTION OF LOAN FORGIVENESS PROGRAMS

SUMMARY: This act requires public service employers that have more than 10 full-time employees to provide (1) informational material about certain federal student loan forgiveness programs to new hires two weeks after their start date and (2) certain loan forgiveness certification forms to current employees upon request. The Office of Higher Education (OHE) must create or copy informational material, make it available online, and distribute it to public service employers.

The act defines “public service employers” as organizations, agencies, or entities that are public service organizations (see BACKGROUND), including local and regional boards of education. The act does not apply to federal or tribal nation government organizations, agencies, or entities; or tribal nation institutions of higher education.

The act specifies that it (1) allows public service employees to report their employers to OHE for alleged violations and (2) does not affect the attorney general's authority to pursue an action to enforce the act.

EFFECTIVE DATE: July 1, 2017

LOAN FORGIVENESS INFORMATIONAL MATERIAL

OHE Duties

The act requires OHE to distribute to public service employers informational material that increases awareness of the federal Public Service Loan Forgiveness (PSLF) and Teacher Loan Forgiveness (TLF) programs (see BACKGROUND). At a minimum, the material must include the following:

1. a standardized letter notifying employees of the PSLF or TLF program eligibility and participation requirements and recommending that employees contact a student loan servicer for additional information,

2. a detailed fact sheet describing the PSLF or TLF program that also contains OHE's telephone number and email address for reporting alleged employer violations, and

3. a “frequently asked questions” document about the PSLF or TLF program.

Under the act, OHE must either create the material or use federal agency-designed documents that meet the above requirements. The act also requires OHE to make the material available on its website and, every two years, verify its accuracy and update any incorrect or obsolete information.

Public Service Employer Duties

The act requires public service employers that employ more than 10 full-time employees to disseminate the OHE-provided informational material to new employees two weeks after their start date. Dissemination may occur by mail, email, or in person. Employers must also (1) conspicuously display the OHE-provided fact sheet on their premises and (2) provide the PSLF employment certification form to current employees on request. The act defines this form as the one used by the U.S. Department of Education to certify an individual's employment at a public service organization for purposes of the PSLF program.

Under the act, if OHE receives a complaint of an alleged violation by an employer, it must be investigated within 30 days and made publicly available. OHE must order corrective actions to an employer for a violation, and the employer may contest such actions ordered within 15 days after their issuance.

BACKGROUND

Public Service Organization

As defined in federal regulation, a “public service organization” for purposes of public service loan forgiveness is any of the following:

1. a federal, state, local, or tribal government organization, agency, or entity;

2. a public child or family service agency;

3. a tribal college or university;

4. a federally tax-exempt, nonprofit organization that does not engage in religious activities, unless they are qualifying activities unrelated to religious instruction, worship services, or proselytizing; or

5. a private organization that provides certain public services.

Such public services include emergency management, military service, public safety, public interest law, early childhood education, public services for individuals with disabilities and the elderly, public health, public education, and public library services (34 C.F.R. 685.219(b)).

Public Service Loan Forgiveness

This federal program forgives the remaining balance of certain federal student loans upon application after 10 years of monthly payments for individuals who work full-time for public service employers. The first group of individuals will be eligible for loan forgiveness in October 2017 (34 C.F.R. 685.219).

Teacher Loan Forgiveness

This federal program forgives up to $17,500 for certain federal student loans for individuals who teach full-time for five consecutive academic years in certain elementary and secondary schools and educational service agencies that serve low-income families and meet other qualifications (34 C.F.R. 685.217).