S. 1863: Veteran and Active Loan Obligation Relief Act of 2025

The Veteran and Active Loan Obligation Relief Act of 2025 (also known as the VALOR Act of 2025) aims to modify certain eligibility requirements for the Public Service Loan Forgiveness (PSLF) program specifically for members of the Armed Forces, the National Guard, and the commissioned corps of the National Oceanic and Atmospheric Administration (NOAA). This bill proposes the following key changes:

Modification of Loan Forgiveness Eligibility

The bill seeks to amend section 455(m) of the Higher Education Act of 1965 to establish special rules for borrowers whose public service includes covered active duty service. The proposed modifications are as follows:

• Count Deferred Payments as Qualifying Payments: For borrowers in covered active duty service, the bill would allow monthly payments that were deferred or forborne (meaning they weren’t required during certain periods) to be counted as qualifying payments towards loan forgiveness. This means that even if payments weren’t made during specific deferment periods, they would still count towards the total required for loan forgiveness.
• Waive Certain Employment Requirements: The bill would waive the typical requirement that borrowers must be employed full-time in a qualifying public service job while in the program. If a borrower has completed a total of 10 years of full-time employment in covered active duty service during the time they hold loans, they would still be eligible for loan forgiveness.
• Inclusivity of Enrollment Timing: The bill ensures that borrowers who served in covered active duty roles can receive forgiveness under the PSLF program, irrespective of when they enrolled in the program. This provision is aimed at offering more flexibility and ensuring that members of the military are not penalized based on the timing of their application.

Definition of Covered Active Duty Service

Under this bill, “covered active duty service” is defined to include:

• Active Service: This refers to the definition provided in Title 10 of the United States Code regarding active military service.
• Full-time Duty with NOAA: This includes full-time active duty within the commissioned corps of the NOAA, which encompasses specific federal roles related to oceanic and atmospheric science.

Overall, the VALOR Act of 2025 is designed to provide more straightforward access to loan forgiveness for military service members and those engaged in certain national service roles, by acknowledging the unique circumstances they face with respect to student loan repayment and forgiveness.

Relevant Companies

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