Responsible Student Loan Solutions Act - Amends title IV (Student Assistance) of the Higher Education Act of 1965 to limit the unpaid amount of Direct Stafford loans that students may amass before completing their undergraduate education. Varies that limit on the basis of whether a student is a dependent student, independent student, or dependent student whose parents are unable to borrow a Direct PLUS loan.
Limits the amount of Direct Stafford loans that students may borrow in any academic year before the completion of their undergraduate studies. Varies that limit on the basis of whether a student: (1) is a dependent student, independent student, or dependent student whose parents are unable to borrow a Direct PLUS loan; and (2) has or has not successfully completed the first year or first and second years of their undergraduate studies.
Sets the annual interest rate on Direct loans at the bond equivalent rate on 91-day Treasury bills plus a percentage that: (1) represents the total cost of administering the Direct Loan program and borrower benefits, and (2) results in the program being revenue neutral for the applicable 12-month period. Allows the Secretary of Education to use different percentages under that formula for the Direct Stafford Loan, Unsubsidized Stafford Loan, PLUS Loan, and Consolidation Loan programs.
Caps the annual interest rate for Direct Stafford loans at 6.8%, and for Direct Unsubsidized Stafford loans and Direct PLUS and Consolidation loans at 8.25%
Directs the Secretary to charge the borrower of a Direct PLUS loan an origination fee of up to 3% of the loan principal.
Limits the applicability of the preceding provisions to loans first disbursed on or after July 1, 2013.
Authorizes the Secretary to refinance federal PLUS and Stafford loans to permit borrowers to obtain an interest rate determined pursuant to this Act's provisions.
Allows the Secretary to charge borrowers an administrative fee for refinancing such loans that does not exceed 0.5% of the loan principal.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1946 Introduced in House (IH)]
113th CONGRESS
1st Session
H. R. 1946
To amend the Federal Direct Loan Program under the Higher Education Act
of 1965 to provide for student loan affordability, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 9, 2013
Mr. Tierney (for himself, Mr. Courtney, and Mr. George Miller of
California) introduced the following bill; which was referred to the
Committee on Education and the Workforce
_______________________________________________________________________
A BILL
To amend the Federal Direct Loan Program under the Higher Education Act
of 1965 to provide for student loan affordability, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Responsible Student Loan Solutions
Act''.
SEC. 2. STUDENT LOAN AFFORDABILITY.
(a) Terms and Conditions of Federal Direct Loans.--Section 455 of
the Higher Education Act of 1965 (20 U.S.C. 1087e) is amended--
(1) in subsection (a), by adding at the end the following:
``(4) Federal direct stafford loan limits for new loans on
or after july 1, 2013.--
``(A) Aggregate loan limits.--Notwithstanding any
other provision of this Act, with respect to Federal
Direct Stafford Loans for which the first disbursement
is made on or after July 1, 2013, the aggregate unpaid
principal amount for all such loans made on or after
such date (and including Federal Direct Stafford Loans
first disbursed before such date) to any student shall
not at any time exceed--
``(i) $31,000, in the case of any dependent
student (except an undergraduate dependent
student whose parents are unable to borrow
under the Federal Direct PLUS Loan Program) who
has not successfully completed a program of
undergraduate education; or
``(ii) $57,500, in the case of any
independent student, or an undergraduate
dependent student whose parents are unable to
borrow under the Federal Direct PLUS Loan
Program, who has not successfully completed a
program of undergraduate education.
``(B) Annual loan limits.--Notwithstanding any
other provision of this Act, with respect to Federal
Direct Stafford Loans for which the first disbursement
is made on or after July 1, 2013, the maximum annual
amount for all such loans made on or after such date a
student who has not successfully completed a program of
undergraduate education may borrow in any academic year
shall not at any time exceed--
``(i) in the case of a dependent student
(except an undergraduate dependent student
whose parents are unable to borrow under the
Federal Direct PLUS Loan Program)--
``(I) who has not successfully
completed the first year of a program
of undergraduate education, $5,500;
``(II) who has successfully
completed such first year but has not
successfully completed the remainder of
a program of undergraduate education,
$6,500; and
``(III) who has successfully
completed the first and second years of
a program of undergraduate education
but has not successfully completed the
remainder of such program, $7,500; and
``(ii) in the case of an independent
student, or an undergraduate dependent student
whose parents are unable to borrow under the
Federal Direct PLUS Loan Program--
``(I) who has not successfully
completed the first year of a program
of undergraduate education, $9,500;
``(II) who has successfully
completed such first year but has not
successfully completed the remainder of
a program of undergraduate education,
$10,500; and
``(III) who has successfully
completed the first and second years of
a program of undergraduate education
but has not successfully completed the
remainder of such program, $12,500.'';
(2) in subsection (b)--
(A) in paragraph (7)--
(i) in the paragraph heading, by inserting
``, and before july 1, 2013'' after ``2006'';
(ii) in subparagraph (A), by inserting
``and before July 1, 2013,'' after ``2006,'';
(iii) in subparagraph (B), by inserting
``and before July 1, 2013,'' after ``2006,'';
and
(iv) in subparagraph (C), by inserting
``and before July 1, 2013,'' after ``2006,'';
(B) by redesignating paragraphs (8) and (9) as
paragraphs (9) and (10), respectively; and
(C) by inserting after paragraph (7) the following:
``(8) Interest rates for new loans on or after july 1,
2013.--
``(A) Rates for fdsl and fdusl.--Notwithstanding
the preceding paragraphs of this subsection, for--
``(i) Federal Direct Stafford Loans for
which the first disbursement is made on or
after July 1, 2013, the applicable rate of
interest shall, during any 12-month period
beginning on July 1 and ending on June 30, be
determined on the preceding June 1 and be equal
to--
``(I) the bond equivalent rate of
91-day Treasury bills auctioned at the
final auction held prior to such June
1; plus
``(II) a percentage determined
under subparagraph (D),
except that such rate shall not exceed 6.8
percent; and
``(ii) Federal Direct Unsubsidized Stafford
Loans for which the first disbursement is made
on or after July 1, 2013, the applicable rate
of interest shall, during any 12-month period
beginning on July 1 and ending on June 30, be
determined on the preceding June 1 and be equal
to--
``(I) the bond equivalent rate of
91-day Treasury bills auctioned at the
final auction held prior to such June
1; plus
``(II) a percentage determined
under subparagraph (D),
except that such rate shall not exceed 8.25
percent.
``(B) Rates for plus loans.--Notwithstanding the
preceding paragraphs of this subsection, for Federal
Direct PLUS Loans for which the first disbursement is
made on or after July 1, 2013, the applicable rate of
interest shall, during any 12-month period beginning on
July 1 and ending on June 30, be determined on the
preceding June 1 and be equal to--
``(i) the bond equivalent rate of 91-day
Treasury bills auctioned at the final auction
held prior to such June 1; plus
``(ii) a percentage determined under
subparagraph (D),
except that such rate shall not exceed 8.25 percent.
``(C) Consolidation loans.--Notwithstanding the
preceding paragraphs of this subsection, for Federal
Direct Consolidation Loans for which the first
disbursement is made on or after July 1, 2013, the
applicable rate of interest shall, during any 12-month
period beginning on July 1 and ending on June 30, be
determined on the preceding June 1 and be equal to--
``(i) the bond equivalent rate of 91-day
Treasury bills auctioned at the final auction
held prior to such June 1; plus
``(ii) a percentage determined under
subparagraph (D),
except that such rate shall not exceed 8.25 percent.
``(D) Percentage determination.--Except as provided
in the flush text under clauses (i) and (ii) of
subparagraph (A), subparagraph (B), and subparagraph
(C), during each 12-month period beginning on July 1
and ending on June 30, beginning on July 1, 2013, the
Secretary shall determine a percentage for application
under clauses (i)(II) and (ii)(II) of subparagraph (A),
subparagraph (B)(ii), and subparagraph (C)(ii). In
carrying out this subparagraph, the Secretary may
determine different percentages for application under
each such clause or subparagraph, as long as such
percentages in the aggregate--
``(i) represent the total cost of
administering the Federal Direct Loan program
and borrower benefits; and
``(ii) result in such program being revenue
neutral for such 12-month period.''; and
(3) in subsection (c), by adding at the end the following:
``(3) Reduction of fee for federal direct plus loans.--
Notwithstanding paragraph (1), for any Federal Direct PLUS Loan
for which the first disbursement is made on or after July 1,
2013, the Secretary shall charge the borrower of the Loan an
origination fee of not more than 3 percent of the principal
amount of the loan.''.
(b) Refinancing.--Part D of title IV of the Higher Education Act of
1965 (20 U.S.C. 1087a et seq.) is amended by adding at the end the
following:
``SEC. 460A. REFINANCING.
``(a) Refinancing for PLUS Loans.--
``(1) Reissuing federal direct plus loans.--The Secretary
may reissue a Federal Direct PLUS Loan for which the first
disbursement was made before July 1, 2013, that is not in
default in order to permit the borrower to obtain the interest
rate provided under section 455(b)(8)(B).
``(2) Purchasing federal plus loans.--The Secretary may
purchase a Federal PLUS Loan that is not in default and reissue
such loan in order to permit the borrower to obtain the
interest rate provided under section 455(b)(8)(B).
``(3) Administrative fee.--The Secretary may charge a
borrower an amount not to exceed 0.5 percent of the principal
amount of the loan to be reissued or purchased to cover the
administrative cost of reissuing or purchasing such loan, which
amount shall be paid to the Secretary.
``(b) Refinancing for Stafford Loans.--
``(1) Reissuing federal direct stafford loans.--The
Secretary may reissue a Federal Direct Stafford Loan or a
Federal Direct Unsubsidized Stafford Loan for which the first
disbursement was made before July 1, 2013, that is not in
default in order to permit the borrower to obtain the interest
rate provided under section 455(b)(8)(A).
``(2) Purchasing federal stafford loans.--The Secretary may
purchase a Federal Stafford Loan or a Federal Unsubsidized
Stafford Loan that is not in default and reissue such loan in
order to permit the borrower to obtain the interest rate
provided under section 455(b)(8)(A).
``(3) Administrative fee.--The Secretary may charge a
borrower an amount not to exceed 0.5 percent of the principal
amount of the loan to be reissued or purchased to cover the
administrative cost of reissuing or purchasing such loan, which
amount shall be paid to the Secretary.''.
<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.
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