Cybersecurity Bill Offers $25K Loan Forgiveness for Working in Distressed Areas, Plus $5K Tax Credit for Employer Training

The New Collar Jobs Act of 2025 is aiming squarely at the massive skills gap in cybersecurity, particularly in the manufacturing sector and critical infrastructure. The bill’s core action is to use a mix of tax incentives, student loan forgiveness, and increased government funding to rapidly train and place skilled tech workers. It’s a direct response to the fact that while factory output has jumped 21% since 2009, the workforce has only grown 5%—meaning we need people who can manage high-tech, automated systems safely, especially given the 250% spike in industrial cyberattacks seen between 2011 and 2015 (SEC. 2).

The Employer Playbook: Tax Breaks for Training

For employers, the bill introduces a significant incentive to upskill their teams: a new tax credit covering 50% of the cost of qualified cybersecurity education, capped at $5,000 per employee annually (SEC. 3). This isn't for a quick online course; the training must result in an undergraduate or graduate degree, or an industry-recognized certification, all tied to the specific job roles defined in the NIST Cybersecurity Workforce Framework. Think of it this way: if your company pays $10,000 for an employee to get a high-level certification like a CISSP, the company gets $5,000 back on its taxes. This provision is designed to make sure the training is legitimate and directly applicable to the current threat landscape.

Student Debt Relief for Working Where It Matters

This might be the biggest deal for recent grads and mid-career changers with student debt. The Act creates a program offering up to $25,000 in student loan forgiveness for those working in cybersecurity jobs located in “economically distressed areas” (SEC. 4). To qualify, you need to make 36 consecutive monthly payments on your Federal Direct Loan while working in a cybersecurity role. The catch is that for at least 12 of those 36 months, your job must be in an area defined as economically distressed, and 60% of your total work hours during that three-year period must be spent there. This is a targeted effort to steer high-value tech talent into communities that need economic development and better infrastructure security. However, you can’t double-dip—if you take this relief, you can’t claim loan forgiveness under other federal programs.

Doubling Down on Government Talent

The bill also significantly scales up the government’s own pipeline for cyber talent. Starting in fiscal year 2026, the National Science Foundation (NSF) must aim to double the number of scholarships awarded under the CyberCorps Scholarship-for-Service program compared to 2024 levels (SEC. 5). This program funds students’ education in exchange for a commitment to work for the government afterward. Critically, the bill removes the existing rule that gave priority to placing graduates in federal government jobs. Now, service can be fulfilled by teaching a cybersecurity course, opening up new career paths for program graduates and potentially helping fill the massive shortage of qualified instructors.

The Federal Contract Advantage

Finally, the Act ties these training incentives directly to federal procurement. Any company bidding on a competitive federal contract worth more than $5 million automatically gets a five percent score increase if they have claimed the new cybersecurity education tax credit at least once in the preceding three years (SEC. 7). This is a smart move that leverages the government’s massive buying power to incentivize private companies to invest in their workforce. If you’re a business owner, this means that skimping on training could literally cost you a multi-million dollar contract, making that $5,000 tax credit look like a small price to pay for a competitive edge.