Blumenthal proposes reforms to Public Service Loan Forgiveness Program

FILE - In this May 18, 2010 file photo, Connecticut Democratic Senate candidate, Attorney General Richard Blumenthal speaks in West Hartford, Conn. The dirty laundry is piling up this campaign season. The revelations about the personal and professional lives of congressional candidates aren't just fodder for "Saturday Night Live" parodies and Twitter feeds. They can become campaign wild cards, yanking the spotlight from big issues like the economy and impacting races as the midterm election nears. less FILE - In this May 18, 2010 file photo, Connecticut Democratic Senate candidate, Attorney General Richard Blumenthal speaks in West Hartford, Conn. The dirty laundry is piling up this campaign season. The ... more Image 1 of / 1 Caption Close Blumenthal proposes reforms to Public Service Loan Forgiveness Program 1 / 1 Back to Gallery

HARTFORD -- Sen. Richard Blumenthal is looking to make revisions to the existing Public Service Loan Forgiveness Program, which forgives student loan debt after 10 years of public service.

Blumenthal unveiled new legislation Wednesday that would help alleviate portions of student loan debt after intervals of public service work.

Currently, under the Public Service Loan Forgiveness Program (PSLF), borrowers may qualify for forgiveness of the remaining balance of their Direct Loans making 120 qualifying payments -- or 10 years of payments -- while employed full time by certain public service employers.

Blumenthal's proposal, the Strengthening Forgiveness for Public Servants Act, recommends college grads receive loan forgiveness in proportion to their years of public service.

The plan would allow new PSLF participants to have their eligible loans placed in deferment during their public service employment.

The revised program would then cancel a percentage of participants' loan balances after every two years of public service.

The proposal states:

After 2 years of service, 15 percent of the original loan balance, along with any accrued interest, is cancelled.

After 4 years, an additional 15 percent of the original loan balance, along with any accrued interest, is cancelled.

After 6 years, an additional 20 percent of the original loan balance, along with any accrued interest, is cancelled.

After 8 years, an additional 20 percent of the original loan balance, along with any accrued interest, is cancelled.

After 10 years, the remaining 30 percent of the original loan balance, along with any accrued interest, is cancelled.

"Teachers, police officers, public health workers and other public servants should be applauded and supported--and not drowned in debt to pay for the degrees many such jobs require," said Blumenthal.

"The current Public Service Loan Forgiveness program should be expanded and made more flexible to enable student debt to be worked down or off completely. My bill strengthens the Public Service Loan Forgiveness program to ensure that it enables repayment assistance proportional to years of service. We should reward public service--particularly as the need for talented and dedicated public servants grows," he added.

Blumenthal said if approved, this new PSLF program will eliminate the old "all-or-nothing deal" where public servants are ineligible to receive loan forgiveness if they lose their jobs before the ten-year mark.

"Even if you lose your job after nine years and eleven months, you don't receive any relief from your student loan debt," he said.