Simplifying Student Loans Act
This bill phases out existing repayment plans for federal student loans and replaces them with one fixed repayment plan and one income-based repayment plan.
Under current law, a borrower may choose among eight plans for student loan repayment, such as standard repayment, extended repayment, and income-contingent repayment.
The Department of Education must offer all borrowers a choice between the two new plans and allow borrowers of loans made prior to a date certain the option of continuing repayment under their original plan or electing to repay under one of the new plans.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4670 Introduced in House (IH)]
<DOC>
116th CONGRESS
1st Session
H. R. 4670
To amend the Higher Education Act of 1965 to establish an income-based
repayment for new loans on and after July 1, 2021, and for borrowers
who enter income-based repayment after June 30, 2021, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 11, 2019
Ms. Wild (for herself and Mrs. Hayes) introduced the following bill;
which was referred to the Committee on Education and Labor
_______________________________________________________________________
A BILL
To amend the Higher Education Act of 1965 to establish an income-based
repayment for new loans on and after July 1, 2021, and for borrowers
who enter income-based repayment after June 30, 2021, 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 ``Simplifying Student Loans Act''.
SEC. 2. TERMINATION OF CERTAIN REPAYMENT PLAN OPTIONS AND OPPORTUNITY
TO CHANGE REPAYMENT PLANS.
(a) Selection of Repayment Plans.--Section 428(b) of the Higher
Education Act of 1965 (20 U.S.C. 1078(b)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (D)--
(i) in clause (ii), by striking ``may
annually change the selection of a repayment
plan under this part,'' and inserting ``may at
any time after July 1, 2021, change the
selection of a repayment plan under this part
to one of the 2 repayment plans described in
paragraph (9)(C),''; and
(ii) in clause (iii), by striking ``be
subject to income contingent repayment in
accordance with subsection (m);'' and inserting
``be subject to income-based repayment in
accordance with section 493C(f);''; and
(B) in subparagraph (E)(i), by striking ``the
option of repaying the loan in accordance with a
standard, graduated, income-sensitive, or extended
repayment schedule (as described in paragraph (9))
established by the lender in accordance with
regulations of the Secretary; and'' and inserting ``the
option of repaying the loan in accordance with a
repayment plan described in paragraph (9)(C)
established by the lender in accordance with
regulations of the Secretary; and''; and
(2) in paragraph (9), by adding at the end the following:
``(C) Selection of repayment plans on and after
july 1, 2021; opportunity to change repayment plans.--
Notwithstanding any other provision of this paragraph,
or any other provision of law, and in accordance with
regulations, beginning on July 1, 2021, the lender
shall offer a borrower of a loan made, insured, or
guaranteed under this part the opportunity to change
repayment plans, and to enroll in one of the following
repayment plans:
``(i) A fixed repayment plan described in
section 493E.
``(ii) The income-based repayment plan
under section 493C(f).''.
SEC. 3. AMENDMENTS TO TERMS AND CONDITIONS OF LOANS AND REPAYMENT
PLANS.
(a) Rulemaking Regarding Termination of Certain Repayment Plans.--
Before July 1, 2021, the Secretary of Education shall carry out a plan
to end all eligibility for repayment plans other than a fixed repayment
plan described in section 493E of the Higher Education Act of 1965 (20
U.S.C. 1001 et seq.), as added by this Act, and an income-based
repayment plan described under section 493C(f) of the Higher Education
Act of 1965 (20 U.S.C. 1001 et seq.), as added by this Act, for loans
made under part B or D of title IV of the Higher Education Act of 1965
(20 U.S.C. 1070 et seq.), unless the borrower is enrolled in another
repayment plan before July 1, 2021, in accordance with the amendments
made by this Act.
(b) Repayment Plans.--Section 455(d) of the Higher Education Act of
1965 (20 U.S.C. 1087e(d)) is amended--
(1) by redesignating paragraphs (2) through (5) as
paragraphs (3) through (6), respectively;
(2) by inserting after paragraph (1), the following:
``(2) Design and selection on and after july 1, 2021.--
``(A) In general.--Notwithstanding paragraph (1),
for the borrower of a loan made on or after July 1,
2021, and for other borrowers subject to paragraph (7),
the Secretary shall offer a borrower of a loan made
under this part 2 plans for repayment of such loan,
including principal and interest on the loan. The
borrower shall be entitled to accelerate, without
penalty, repayment on the borrower's loans under this
part. The borrower may choose--
``(i) a fixed repayment plan described in
section 493E; or
``(ii) the income-based repayment plan
under section 493C(f).
``(B) Selection by the secretary.--If a borrower of
a loan made under this part on or after July 1, 2021,
does not select a repayment plan described in
subparagraph (A), the Secretary may provide the
borrower with a fixed repayment plan described in
section 493E.
``(C) Changes in selections.--Beginning on July 1,
2021, a borrower of a loan made under this part may
change the borrower's selection of a repayment plan in
accordance with paragraph (7) and under such terms and
conditions as may be established by the Secretary.'';
(3) in paragraph (6)(B), as redesignated, by striking ``an
income contingent repayment plan.'' and inserting ``the income-
based repayment plan under section 493C(f).''; and
(4) by adding at the end the following:
``(7) Borrowers of loans made before july 1, 2021.--A
borrower who is in repayment on a loan made under part B or
part D before July 1, 2021--
``(A) may choose to retain the repayment plan that
the borrower was enrolled in on the day before such
date;
``(B) may elect to--
``(i) enter the income-based repayment plan
under section 493C(f); or
``(ii) enter a fixed repayment plan
described in section 493E;
``(C) after electing to leave a repayment plan
other than an income-based repayment plan described
under this subsection or a fixed repayment plan
described in section 493E, shall not be permitted to
re-elect a repayment plan that is not an income-based
repayment plan under this subsection or a fixed
repayment plan described in section 493E; and
``(D) shall retain, for purposes of repayment or
cancellation of any outstanding balance of principal
and interest due on a loan as described in section
493C(b)(7) any years of repayment under another income-
based or income contingent repayment plan under this
title.''.
(c) Maximum Repayment Period for Income-Contingent Repayment.--
Section 455(e) of the Higher Education Act of 1965 (20 U.S.C. 1087e(e))
is further amended--
(1) in paragraph (7)(B)--
(A) by striking ``or'' at the end of clause (iv);
(B) by striking the period at the end of clause (v)
and inserting a semicolon; and
(C) by adding at the end the following:
``(vi) makes payments under the income-
based repayment plan under section 493C(f); or
``(vii) makes payments under the fixed
repayment plan described in section 493E.
``(8) Additional qualifying repayment plans.--A borrower
repaying a loan pursuant to income-contingent repayment under
this subsection may elect at any time to terminate repayment
under such repayment plan and repay such loan under the income-
based repayment plan under section 493C(f) or the fixed
repayment plan described in section 493E.''.
SEC. 4. INCOME-BASED REPAYMENT PLAN.
(a) Options To Enter Into the New Fixed Repayment Plan and Income-
Based Repayment Plan.--Section 493C(b) of the Higher Education Act of
1965 (20 U.S.C. 1098e) is amended--
(1) in paragraph (7)(B)--
(A) by striking ``or'' at the end of clause (iv);
and
(B) by adding at the end the following:
``(vi) has made payments under the income-
based repayment plan under section 493C(f); or
``(vii) has made payments under the fixed
repayment plan described in section 493E;'';
(2) by amending paragraph (8) to read as follows:
``(8) a borrower who is repaying a loan made under part B
or D pursuant to income-based repayment may elect, at any time,
to terminate repayment pursuant to income-based repayment and
repay such loan under the income-based repayment plan under
section 493C(f) or the fixed repayment plan described in
section 493E;'';
(3) in paragraph (9), by striking the period at the end and
inserting ``; and''; and
(4) by adding at the end the following:
``(10) a borrower who is repaying a loan made, insured, or
guaranteed under part B or D pursuant to this section may repay
such loan in full at any time without penalty.''.
(b) Income-Based Repayment.--Section 493C of the Higher Education
Act of 1965 (20 U.S.C. 1098e) is amended by adding at the end the
following:
``(f) Income-Based Repayment for New Loans on and After July 1,
2021, and for Borrowers Who Enter Income-Based Repayment After June 30,
2021.--
``(1) In general.--The income-based repayment plan under
this subsection shall be carried out in accordance with this
section, except as otherwise specified in this subsection--
``(A) with respect to any loan made under part D on
or after July 1, 2021, if such borrower elects such
income-based repayment plan for the loan; and
``(B) with respect to any loan made, insured, or
guaranteed under part B or D on or before June 30,
2021, if such borrower elects to repay the loan under
such income-based repayment plan on or after July 1,
2021.
``(2) Special terms.--Notwithstanding any other provision
of this section, with respect to a loan described under
paragraph (1), the following terms shall apply to the income-
based repayment plan under this subsection:
``(A)(i) Notwithstanding subsection (a)(3)(B), the
repayment amount under this subsection shall be an
amount equal to 10 percent of the result obtained by
calculating, on at least an annual basis, the amount by
which the adjusted gross income of the borrower
(subject to clause (ii)) exceeds the applicable
percentage of the poverty line in accordance with
clause (iii).
``(ii)(I) Subject to subclause (II), in the case of
a married borrower (regardless of tax filing status),
clause (i) shall be applied by substituting `the
adjusted gross income of the borrower and the
borrower's spouse' for `the adjusted gross income of
the borrower'.
``(II) Subclause (I) shall not be applicable to any
borrower who is married and who certifies to the
Secretary through a form approved by the Secretary that
the borrower is--
``(aa) separated from the spouse of the
borrower; or
``(bb) unable to reasonably access the
income information the spouse of such borrower.
``(iii) For purposes of clause (i), the term
`applicable percentage' means 200 percent of the
poverty line applicable to the borrower's family size
(as determined under section 673(2) of the Community
Services Block Grant Act (42 U.S.C. 9902(2))) reduced
by 5 percentage points for each $1,000 by which the
borrower's adjusted gross income exceeds--
``(I) in the case of a single borrower,
$80,000; and
``(II) in the case of a married borrower
(regardless of tax filing status), $160,000.
``(B) Subsection (b)(7)(B) shall apply by
substituting `20 years' for `25 years'.
``(C) A borrower of such a loan may elect, and
remain enrolled in, the income-based repayment plan
under this subsection regardless of--
``(i) whether such borrower has a partial
financial hardship; and
``(ii) the income level of the borrower.
``(D) Notwithstanding subparagraph (A) of
subsection (b)(6), a borrower's monthly payment--
``(i) shall be equal to the repayment
amount determined under subparagraph (A)
divided by 12; and
``(ii) may exceed the monthly repayment
amount under a standard 10-year repayment plan
or a fixed repayment plan described in section
493E.
``(E) Subparagraph (B) of subsection (b)(3) shall
not apply.
``(F) Subsection (d) shall not apply.
``(G) In the case of a consolidation loan made
under part B or D on or after the date of enactment of
the `Simplifying Student Loans Act' that is being
repaid under this subsection, any monthly payment made
pursuant to any repayment plan listed in subsection
(b)(7)(B) on a loan for which the liability has been
discharged by the proceeds of such consolidation loan
shall be treated as a monthly payment under this
subsection on the portion of such consolidation loan
that is attributable to such discharged loan, except
that in the case of a subsequent consolidation loan,
any monthly payment on a loan for which the liability
has been discharged by the first consolidation loan
shall not be applicable for the purposes of this
subparagraph.
``(3) Additional special terms for certain borrowers.--A
borrower described in paragraph (1)(B)--
``(A) may--
``(i) choose to continue repayment pursuant
to the repayment plan in which the borrower is
enrolled on June 30, 2021; or
``(ii) make a one-time election to--
``(I) terminate repayment pursuant
to the repayment plan described in
clause (i) and enter the income-based
repayment plan under this subsection;
or
``(II) terminate repayment pursuant
to the repayment plan described in
clause (i) and enter a fixed repayment
plan described in section 493E; and
``(B) who makes an election under subparagraph
(A)(ii), shall not repay a loan described in paragraph
(1)(B) under a repayment plan that is not an income-
based repayment plan under this subsection or a fixed
repayment plan described in section 493E.''.
SEC. 5. FIXED REPAYMENT PLAN.
Part G of title IV of the Higher Education Act of 1965 (20 U.S.C.
1088 et seq.) is further amended by adding at the end the following:
``SEC. 493E. FIXED REPAYMENT PLAN.
``(a) In General.--A borrower of a loan made under this part on or
after July 1, 2021, and a borrower who is in repayment on a loan made,
insured, or guaranteed under part B or part D before July 1, 2021, may
elect to repay such loan under the fixed repayment plan described in
this section.
``(b) Fixed Repayment Plan.--Under the fixed repayment plan, a
borrower whose total outstanding amount of principal and interest on
such a loan (as of the day before entering repayment on such loan)--
``(1) is equal to or less than $20,000, shall repay such
loan with a fixed monthly repayment amount paid over a period
of 10 years;
``(2) is more than $20,000 and less than $30,000, shall
repay such loan with a fixed monthly repayment amount paid over
a period of--
``(A) 15 years; or
``(B) the period described in paragraph (1), if the
borrower elects such period;
``(3) is equal to or greater than $30,000, and less than
$40,000, shall repay such loan with a fixed monthly repayment
amount paid over a period of--
``(A) 20 years; or
``(B) the period described in paragraph (1) or (2),
if the borrower elects such period; and
``(4) is equal to or greater than $40,000, shall repay such
loan with a fixed monthly repayment amount paid over a period
of--
``(A) 25 years; or
``(B) the period described in any of paragraphs (1)
through (3), if the borrower elects such period.
``(c) Treatment of Certain Consolidation Loans.--In the case of a
consolidation loan made under part B or D on or after the date of
enactment of the `Simplifying Student Loans Act' that is being repaid
under this section, any monthly payment made pursuant to any repayment
plan listed in section 493C(b)(7)(B) on a loan for which the liability
has been discharged by the proceeds of such consolidation loan shall be
treated as a monthly payment under this section on the portion of such
consolidation loan that is attributable to such discharged loan, except
that in the case of a subsequent consolidation loan, any monthly
payment on a loan for which the liability has been discharged by the
first consolidation loan shall not be applicable for the purposes of
this subsection.''.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Education and Labor.
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