S. 3277 — Strengthening Loan Forgiveness for Public Service Workers Act

This section modifies the Public Service Loan Forgiveness (PSLF) program, under which the Secretary of Education cancels the remaining balance due on a borrower's eligible Federal Direct Loans after 120 separate monthly payments under a qualifying repayment plan made while employed full-time in a public service job (i.e., with a government or nonprofit organization). It (1) limits the existing full forgiveness provision to eligible loans other than those specified in new paragraph (5); (2) requires such forgiveness only if the borrower was employed in a public service job during the period of each of the 120 payments; and (3) for eligible Federal Direct Loans made after the date of enactment, establishes incremental cancellation of the total amount due on the date repayment began—15% after 24 qualifying payments in public service, an additional 15% (to 30%) after 48 payments, an additional 15% (to 45%) after 72 payments, an additional 15% (to 60%) after 96 payments, and the full remaining principal and interest balance after 120 payments—provided employment is certified by the Secretary (automatically if possible or via a form with self- and employer certification); also cancels all interest accrued during each forgiveness year and, for full cancellation, during processing (with automatic deferment).