Young Farmer Success Act of 2015 introduced in US Congress
Recently introduced legislation would ease financial burden on new and young farmers by providing access to Public Service Loan Forgiveness Program.
Recently introduced legislation called the Young Farmer Success Act of 2015 is looking to ease some of the financial burdens placed on college graduates employed as farmers. The Act would add farmers to a list of occupations that are considered public service and therefore eligible to participate in the Public Service Loan Forgiveness Program (PSLF).
The PSLF was established to allow recent graduates working in the public service sector a break in terms of how long and how much they are required to pay on federal student loans. After making 120 qualified payments (10 years) the remaining balance on the federal loan amount is forgiven. These forgiven amounts are not considered income and are therefore tax-free. The PSLF went into effect in 2007, meaning graduates paying back student loans since 2007 will be first eligible for forgiveness in 2017. This has the potential to save public service employees thousands of dollars on student loans and provides an incentive for young talented individuals to seek out public service jobs that often pay less.
Qualifying employment is not about the specific job that is done for the employer, but more about who the employer is. Employment with the following types of organizations qualifies for PSLF:
- Government organizations at any level (federal, state, local, or tribal)
- Tax exempt not-for-profit organizations
- Other types of not-for-profit organizations that provide certain types of qualifying public services.
So theoretically a farmer working for a tax-exempt non-profit or a local college or university would be eligible for this program, however a farmer working for a for-profit farm or who owns their own farm would not be eligible. The Young Farmer Success Act would change the PSLF program to ensure that all farms are included as a public service employer. The question then becomes whether or not farming should qualify as a “public service”. After asking this question to several farmers in the area the answers were a resounding yes, with most of the sentiment being that “I’m not doing it for the money”. Under this legislation, a qualified farm or ranch, is a farm or ranch whose earnings of gross revenue from the sale of agricultural products are equal or greater than $35,000 in 2015.
With each passing year, it becomes more and more apparent that we are facing an aging crisis in American agriculture. According to the 2014 US Ag Census, the average age of a farm principal operator was 58.3 years continuing a thirty-year trend of steady increase. Through innovative public policy like the Young Farmer Success Act of 2015 this trend can begin to be reverse. It will allow young farmers additional time and income to re-invest in nurturing their own farming operation.
Michigan State University Extension provides many other resources for young and beginning farmers through webinars, workshops, and small farm business development.