S. 5388: Student Loan Forgiveness for Farmers and Ranchers Act

This bill would create a new federal student loan forgiveness program for certain people who work in farming or ranching.

What the program would do

The Department of Education would be required to forgive the remaining principal and interest on certain federal student loans for borrowers who meet the bill’s requirements.

Who could qualify

To be eligible, a borrower would generally need to:

• Work full-time or part-time as a farmer or rancher, or work as an employee or manager of a qualified farm or ranch;
• Be in one of several groups the bill identifies, including:
  • a beginning farmer or rancher;
  • someone from an underrepresented group in agriculture, such as minorities or women;
  • a socially disadvantaged farmer or rancher; or
  • a veteran farmer or rancher;
• Make 120 monthly payments after the bill becomes law under certain repayment plans;
• Be employed full-time by a qualified farm or ranch when the forgiveness happens; and
• Have stayed employed full-time at a qualified farm or ranch during the entire period when the qualifying payments were made.

What counts as a qualified loan

The bill would apply only to certain federal student loans, including:

• Federal Direct Stafford Loans;
• Federal Direct PLUS Loans;
• Federal Direct Unsubsidized Stafford Loans; and
• Federal Direct Consolidation Loans.

How the 120 payments could be made

The required 120 monthly payments could be made under several repayment arrangements, including income-based repayment, standard 10-year repayment, certain other repayment plans, income-contingent repayment, or the Repayment Assistance Plan, as long as the payments meet the bill’s rules.

When someone could be removed from the program

A borrower could be removed from the program if they stop working full-time in a qualifying farm or ranch for too long after joining. The limit would depend on age at entry:

• Under age 40 at entry: can’t have more than 7 cumulative years out of full-time qualifying employment;
• Age 40 or older at entry: can’t have more than 3 cumulative years out of full-time qualifying employment.

Time spent on active duty during certain military service, qualifying National Guard duty, and the 180 days after demobilization would not count against those limits.

Other rules

If someone is removed from the program, they generally could not rejoin unless the Secretary of Education finds exceptional circumstances.

Implementation

The Secretary of Education, working with the Secretary of Agriculture, would have to issue final regulations within 180 days of enactment. Those regulations would include how to track and verify qualifying farm or ranch employment.

Relevant Companies

None found