Federal Issue Brief

 H.R. 4170, Student Loan Forgiveness Act of 2012

AVMA Position:



Among the bill’s provisions the following are of primary interest to veterinarians:

  • Caps the interest rates on federal student, including interest rate on Direct Consolidation Loans, at 3.4%.
  • Reduces the Public Service Loan Forgiveness requirement to 5 years from its current 10 years.
  • Create a new “10-10 standard” for student loan forgiveness.
    •  If you make payments equal to 10% of your discretionary income for 10 years, your remaining federal student loan debt (Federal Family Education Loans and Direct Loans) would be forgiven.  A borrower’s discretionary income is defined as any annual income exceeding 150 percent of the poverty line for an individual or family.
    • If you have already been making payments on your student loans, your repayment period would likely be shorter than 10 years. The amount you have already paid on your student loans over the past decade would be credited toward meeting the requirement for forgiveness.   
    • Credits the months during which you have been in deferment due to an economic hardship as months for which payment was made for purposes of “10/10”.

  • Promotes financial responsibility in higher education.
    • While current borrowers would be eligible for full forgiveness under the plan, future borrowers would be subject to a $45,520 cap on forgiveness (based on the average overall cost of a four-year degree at a public university).
    • The aim is to incentivize students to be mindful of educational costs and for colleges and universities to control tuition increases.

  • Allows certain borrowers to consolidate their private education loans as Direct Consolidation Loans, provided the private loans were made on or before the date of this Act's enactment.
    • Limits such borrowers to those who: (1) were students eligible for unsubsidized Stafford loans or PLUS loans under the FFEL or DL programs for their enrollment at an institution of higher education; (2) borrowed at least one private education loan for such enrollment; and (3) have an average adjusted gross income that does not exceed their total education debt.

Current Status:

H.R. 4170 was introduced on 3/8/2012 by Rep. Clarke Hansen (D-MI-13) and referred to the Committee on Education and the Workforce, as well as the Committees on Foreign Affairs, and Armed Services.

AVMA Contact:

Gina Luke, Assistant Director, Governmental Relations Division, 202-289-3204.