H.R. 5084: Teacher Loan Forgiveness Enhancement Act

This bill, titled the Teacher Loan Forgiveness Enhancement Act, aims to provide loan forgiveness for public school teachers who have completed eight consecutive years of teaching. Below is a detailed summary of its main provisions.

Loan Forgiveness for Teachers

The core provision of the bill establishes a program under which public school teachers can have their eligible federal undergraduate loans forgiven after they have served as teachers for at least eight consecutive years. The process includes:

• The Secretary of Education will manage the forgiveness process.
• Eligible loans will include federal undergraduate loans that are insured, guaranteed, or issued as part of specific federal loan programs.
• Upon completion of the eight years of teaching, the balance of principal and interest on these loans will be forgiven.

Loan Forgiveness is Non-Taxable

Any amounts forgiven under this program will not be considered taxable income under the Internal Revenue Code. This means that teachers will not face tax penalties for having their loans forgiven.

Double Benefits Allowed

Teachers who qualify for loan forgiveness under this act are also permitted to receive similar benefits under other specified programs. This includes loan forgiveness structures established under existing laws that are designed to assist educators.

Deferment Options for Teachers

The bill also provides for deferment of loan payments for teachers during their period of service. Key features include:

• Teachers are eligible for deferment of their loan payments while they are serving in their capacity as public school teachers.
• Interest will not accrue during the deferment period.
• The deferment covers the six months following the completion of their teaching service.

Disclosure Authorization

The bill allows for disclosures necessary to administer the program, which may include information about the teachers from the Internal Revenue Service (IRS) to verify employment history. This ensures that only eligible individuals benefit from the loan forgiveness provisions.

Effective Date

The provisions of this bill will take effect upon enactment, applying to loans made on or after this date, as well as those in repayment at the time of enactment.

Relevant Companies

• PLR - A potential indirect impact through educational technology partnerships.
• AAP - May be affected by changes in the educational supply market.