College Debt Swap Act of 2011 - Amends title IV (Student Assistance) of the Higher Education Act of 1965 to allow certain borrowers to consolidate their private education loans as Direct Consolidation Loans.
Limits such borrowers to those who: (1) are not in default on a loan made, insured, or guaranteed under title IV, except in certain instances of economic hardship; (2) were enrolled, between July 1, 1994, and July 1, 2010, as students eligible for unsubsidized Stafford loans or PLUS loans under the Federal Family Education Loan or Direct Loan programs; (3) borrowed at least one private education loan during such enrollment period; (4) are repaying their private education loan or are in a grace period preceding such repayment; (5) do not have an adverse credit history with respect to Direct Plus loans; and (6) have not previously obtained a Direct Consolidated Loan under title IV.
Makes the program applicable only to private education loans disbursed to borrowers between July 1, 1994, and July 1, 2010.
Directs the Secretary of Education to inform and educate students and their families about this loan consolidation program.
Terminates the authority to make Consolidation loans under such program on June 30, 2012.
[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2410 Introduced in House (IH)]
112th CONGRESS
1st Session
H. R. 2410
To establish a temporary private education loan debt consolidation
program to assist eligible borrowers in refinancing all or a portion of
their private education debt as Federal Direct Consolidation Loans.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 6, 2011
Mr. Towns (for himself, Mr. Payne, Mr. Jackson of Illinois, Ms. Moore,
Mr. Johnson of Georgia, Ms. Fudge, Mr. Meeks, and Mr. Carson of
Indiana) introduced the following bill; which was referred to the
Committee on Education and the Workforce
_______________________________________________________________________
A BILL
To establish a temporary private education loan debt consolidation
program to assist eligible borrowers in refinancing all or a portion of
their private education debt as Federal Direct Consolidation Loans.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; PURPOSE.
(a) Short Title.--This Act may be cited as the ``College Debt Swap
Act of 2011''.
(b) Purpose.--The purpose of this Act is to establish a temporary
private education loan debt consolidation program to assist eligible
borrowers in refinancing all or a portion of their private education
debt as Federal Direct Consolidation Loans.
SEC. 2. CONSOLIDATION OF PRIVATE EDUCATION LOANS.
Section 455(g) of the Higher Education Act of 1965 (20 U.S.C.
1087e(g)) is amended--
(1) by striking ``A borrower'' and inserting the following:
``(1) In general.--A borrower'';
(2) by inserting ``, and any loan described in paragraph
(2),'' after ``July 1, 2010''; and
(3) by adding at the end the following new paragraph:
``(2) Consolidation of private education loans as a federal
direct consolidation loan.--
``(A) In general.--Notwithstanding any other
provision of law, a borrower who meets the eligibility
criteria described in paragraph (1) and subparagraph
(B) of this paragraph shall be eligible to obtain a
Federal Direct Consolidation loan under this paragraph
that--
``(i) shall include an eligible private
education loan; and
``(ii) may include a loan described in
section 428C(a)(4).
``(B) Eligible borrower.--A borrower of an eligible
private education loan is eligible to obtain a Federal
Direct Consolidation Loan under this paragraph if the
borrower--
``(i) is not in default on a loan made,
insured, or guaranteed under this title or in
default (as such term is defined in section
435(l)) on any eligible private education loan
that the borrower is seeking to consolidate
under this paragraph, except that a borrower
who entered such default at any time during the
period beginning on December 1, 2007, through
December 31, 2009, due to an economic hardship
(as such term is defined in section 435(o)), as
determined by the Secretary, shall not be
ineligible under this clause;
``(ii) was--
``(I) at any time on or after July
1, 1994, and before July 1, 2010,
enrolled as an undergraduate, graduate,
or professional student who was
eligible to borrow a loan under section
428H or a Federal Direct Unsubsidized
Stafford Loan; or
``(II) at any time on or after July
1, 2006, and July 1, 2010, enrolled as
a graduate or professional student who
was eligible to borrow a loan under
section 428B or a Federal Direct PLUS
loan;
``(iii) borrowed at least one eligible
private education loan for a period of
enrollment described in clause (ii);
``(iv) is in--
``(I) repayment status on the
eligible private education loan that
the borrower is seeking to consolidate
under this paragraph; or
``(II) a grace period preceding
repayment on such loan;
``(v) with respect to Federal Direct PLUS
loans, does not have an adverse credit history,
as such term is defined by the Secretary by
regulation; and
``(vi) has not previously obtained a
Federal Direct Consolidation Loan under this
paragraph.
``(C) Definition of eligible private education
loan.--For purposes of this paragraph, the term
`eligible private education loan' means a private
education loan (as such term is defined in section 140
of the Truth in Lending Act (15 U.S.C. 1650)) that was
disbursed to a borrower on or after July 1, 1994, and
before July 1, 2010.
``(D) Amount that may be consolidated.--The
aggregate maximum amount of eligible private education
loans that may be consolidated by a borrower under this
paragraph is--
``(i) for loans made to a borrower for a
period of enrollment described in subparagraph
(B)(ii)(I), an amount equal to the amount of
outstanding principal, accrued interest, and
related fees and costs (as determined by the
Secretary) owed by the borrower on eligible
private education loans, except that the
outstanding principal on the eligible private
education loans shall not exceed--
``(I) the maximum aggregate amount
of loans under section 428H, as of the
date of the enactment of the College
Debt Swap Act of 2011--
``(aa) for an undergraduate
dependent student, if the
borrower was enrolled as an
undergraduate dependent student
during the period of
enrollment;
``(bb) for an undergraduate
independent student, if the
borrower was enrolled as an
undergraduate independent
student during the period of
enrollment; or
``(cc) for a graduate or
professional student, if the
borrower was enrolled as a
graduate or professional
student during the period of
enrollment;
minus
``(II) the aggregate amount of
loans under section 428H and Federal
Direct Unsubsidized Stafford Loans
borrowed by the borrower for such
period of enrollment; plus
``(ii) for loans made to a borrower for a
period of enrollment described in subparagraph
(B)(ii)(II), an amount equal to--
``(I) the total outstanding
principal, accrued interest, and
related fees and costs (as determined
by the Secretary) owed by the borrower
on eligible private education loans;
minus
``(II) the aggregate amount of
loans under section 428B and Federal
Direct PLUS loans borrowed by the
borrower for such period of enrollment.
``(E) Interest rate.--Notwithstanding subsection
(b), a Federal Direct Consolidation loan made under
this paragraph shall bear interest at an annual rate on
the unpaid principal balance of the loan that is the
weighted average, rounded to the nearest higher one-
eighth of 1 percent, of--
``(i) for loans consolidated under this
paragraph that were made to a borrower for a
period described in subparagraph (B)(ii)(I),
the interest rate for a Federal Direct
Unsubsidized Stafford Loan for which the first
disbursement is made on the day before the date
of enactment of the College Debt Swap Act of
2011; and
``(ii) for loans consolidated under this
paragraph that were made to a borrower for a
period described in subparagraph (B)(ii)(II),
the interest rate for a Federal Direct PLUS
loan for which the first disbursement is made
on the day before the date of enactment of the
College Debt Swap Act of 2011.
``(F) Payment to the holder.--
``(i) Secretary.--For each eligible private
education loan that a borrower is consolidating
under this paragraph, the Secretary shall make
a payment to the holder of such loan in an
amount equal to the amount consolidated under
this paragraph with respect to such loan.
``(ii) Holder.--Upon receipt of a payment
described in clause (i), a holder shall
discharge the liability on the loan
consolidated under this paragraph in the amount
of such payment.
``(G) Outreach activities required.--
``(i) In general.--The Secretary shall
conduct outreach activities described in clause
(ii) to inform and educate students and their
families about the temporary private education
loan consolidation program under this
paragraph.
``(ii) Required components of outreach.--
The Secretary shall provide for the broad
dissemination of information on the program
under this paragraph by--
``(I) operating and maintaining an
Internet website through which
individuals may obtain information on
changes made to the program;
``(II) developing and disseminating
information to alumni of undergraduate,
graduate, and professional schools who
may be eligible for the program;
``(III) providing assistance to
institutions of higher education to
educate graduates on the availability
of the program; and
``(IV) ensuring that all outreach
efforts are developed using plain
language and are culturally- and
language-appropriate.
``(iii) Use of other entities.--In carrying
out this subparagraph, the Secretary may work
with other appropriate entities to facilitate
the dissemination of information under this
subparagraph and provide assistance as
described in this subparagraph.
``(H) Authorization and appropriation.--There are
authorized to be appropriated, and there are
appropriated, such sums as may be necessary to carry
out this paragraph. The amounts made available under
this subparagraph shall remain available until June 30,
2012.
``(I) Period of authority.--The authority to make
Federal Direct Consolidation loans under this paragraph
shall begin 30 days after the date of the enactment of
the College Debt Swap Act of 2011 and shall expire on
June 30, 2012.''.
SEC. 3. CONFORMING AMENDMENT.
Section 428C(a)(3)(B)(i)(V) of the Higher Education Act of 1965 (20
U.S.C. 1078-3(a)(3)(B)(i)(V)) is amended--
(1) by striking ``or'' at the end of item (bb);
(2) by striking the period at the end of item (cc) and
inserting ``; or''; and
(3) by adding at the end the following:
``(dd) for the purpose of
consolidating an eligible
private education loan under
section 455(g)(2), whether such
loan is consolidated only with
other eligible private
education loans or consolidated
with loans described in
paragraph (4).''.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Education and the Workforce.
Referred to the Subcommittee on Higher Education and Workforce Training.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line