Helping Individuals Get a Higher Education while Reducing Education Debt Act or the HIGHER ED Act
This bill makes various changes to student loan forgiveness and loan repayment programs.
First, the bill authorizes graduate and professional students to receive subsidized Stafford Loans. These students have been ineligible to receive subsidized Stafford Loans since July 1, 2012.
Next, the bill allows student loans to be discharged in bankruptcy proceedings.
The bill also establishes refinancing programs for student loans. It allows certain borrowers to refinance their federal student loans down to lower interest rates, and it creates the Federal Direct Refinanced Private Loan to allow certain borrowers to refinance their private student loans.
Additionally, the bill revises the Public Service Loan Forgiveness (PSLF) program, such as by (1) allowing certain part-time faculty to participate in the PSLF program, (2) directing the Department of Education (ED) to annually cancel 10% of the amount a borrower owes after satisfying 12 qualifying monthly payments, (3) revising the process for certification of employment, and (4) requiring ED to establish a dispute resolution process.
Further, the bill revises federal student loan repayment programs, including by (1) replacing existing student loan repayment plans with one income-based repayment plan and one standard 10-year repayment plan, and (2) allowing existing borrowers to lower their payments by switching to these new plans. It also establishes a process for ED to enroll a delinquent borrower in a new repayment plan.
The bill also requires ED to provide certain notifications to borrowers.
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6424 Introduced in House (IH)]
<DOC>
117th CONGRESS
2d Session
H. R. 6424
To amend the Higher Education Act of 1965 to improve loans, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 19, 2022
Mr. DeFazio introduced the following bill; which was referred to the
Committee on Education and Labor, and in addition to the Committee on
the Judiciary, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Higher Education Act of 1965 to improve loans, 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; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Helping
Individuals Get a Higher Education while Reducing Education Debt Act''
or the ``HIGHER ED Act''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--REINSTATEMENT OF AUTHORITY TO MAKE FEDERAL DIRECT STAFFORD
LOANS TO GRADUATE AND PROFESSIONAL STUDENTS; DISCHARGING STUDENT LOANS
IN BANKRUPTCY
Sec. 101. Reinstatement of authority to make Federal Direct Stafford
Loans to graduate and professional
students.
Sec. 102. Discharge student loans in bankruptcy.
TITLE II--REFINANCING PROGRAMS
Sec. 201. Program authority.
Sec. 202. Refinancing program.
Sec. 203. Income-based repayment.
TITLE III--LOAN FORGIVENESS
Sec. 301. Loan forgiveness for adjunct faculty.
Sec. 302. Amendments to the public service loan forgiveness program.
Sec. 303. Transition to improved public service loan forgiveness
program.
TITLE IV--INCOME-DRIVEN REPAYMENT PLANS
Sec. 401. Income-based repayment plan.
Sec. 402. Termination of certain repayment plan options.
Sec. 403. Notification and automatic enrollment procedures for
borrowers who are delinquent on loans.
Sec. 404. Automatic recertification for income-driven repayment plans.
TITLE I--REINSTATEMENT OF AUTHORITY TO MAKE FEDERAL DIRECT STAFFORD
LOANS TO GRADUATE AND PROFESSIONAL STUDENTS; DISCHARGING STUDENT LOANS
IN BANKRUPTCY
SEC. 101. REINSTATEMENT OF AUTHORITY TO MAKE FEDERAL DIRECT STAFFORD
LOANS TO GRADUATE AND PROFESSIONAL STUDENTS.
(a) Amendments.--Section 455(a)(3) of the Higher Education Act of
1965 (20 U.S.C. 1087e(a)(3)) is amended--
(1) in the paragraph heading, by inserting ``Temporary''
before ``Termination''; and
(2) in subparagraph (A), in the matter preceding clause
(i), by inserting ``, and ending on or before June 30, 2021''
after ``2012''.
(b) Inapplicability of Rulemaking Requirements.--Sections 482(c)
and 492 of the Higher Education Act of 1965 (20 U.S.C. 1089(c); 1098a)
shall not apply to the regulations under this section.
SEC. 102. DISCHARGE STUDENT LOANS IN BANKRUPTCY.
(a) Exception To Discharge.--Section 523(a) of title 11, United
States Code, is amended--
(1) by striking paragraph (8); and
(2) by redesignating paragraphs (9) through (14B) as
paragraphs (8) through (14A), respectively.
(b) Conforming Amendments.--Title 11, United States Code, is
amended--
(1) in section 704(c)(1)(C)(iv)(I) by striking ``(14A)''
and inserting ``(14)'';
(2) in section 1106(c)(1)(C)(iv)(I) by striking ``(14A)''
and inserting ``(14)'';
(3) in section 1202(c)(1)(C)(iv)(I) by striking ``(14A)''
and inserting ``(14)''; and
(4) in section 1328(a)(2) by striking ``(8), or (9)'' and
inserting ``or (8)''.
(c) Effective Date; Application of Amendments.--
(1) Effective date.--Except as provided in subsection (b),
this section and the amendments made by this section shall take
effect on the date of the enactment of this Act.
(2) Application of amendments.--The amendments made by this
section shall apply only with respect to cases commenced under
title 11 of the United States Code on or after the date of the
enactment of this Act.
TITLE II--REFINANCING PROGRAMS
SEC. 201. PROGRAM AUTHORITY.
Section 451(a) of the Higher Education Act of 1965 (20 U.S.C.
1087a(a)) is amended--
(1) by striking ``and (2)'' and inserting ``(2)''; and
(2) by inserting ``; and (3) to make loans under section
460A and section 460B'' after ``section 459A''.
SEC. 202. REFINANCING PROGRAM.
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 FFEL AND FEDERAL DIRECT LOANS.
``(a) In General.--Beginning not later than 180 days after the date
of enactment of the Helping Individuals Get a Higher Education while
Reducing Education Debt Act, the Secretary shall establish a program
under which the Secretary, upon the receipt of an application from a
qualified borrower, makes a loan under this part, in accordance with
the provisions of this section, in order to permit the borrower to
obtain the interest rate provided under subsection (c).
``(b) Refinancing Direct Loans.--
``(1) Federal direct loans.--Upon application of a
qualified borrower, the Secretary shall repay a Federal Direct
Stafford Loan, a Federal Direct Unsubsidized Stafford Loan, a
Federal Direct PLUS Loan, or a Federal Direct Consolidation
Loan of the qualified borrower, for which the first
disbursement was made, or the application for the consolidation
loan was received, before July 1, 2022, with the proceeds of a
refinanced Federal Direct Stafford Loan, a Federal Direct
Unsubsidized Stafford Loan, a Federal Direct PLUS Loan, or a
Federal Direct Consolidation Loan, respectively, issued to the
borrower in an amount equal to the sum of the unpaid principal,
accrued unpaid interest, and late charges of the original loan.
``(2) Refinancing ffel program loans as refinanced federal
direct loans.--Upon application of a qualified borrower for any
loan that was made, insured, or guaranteed under part B and for
which the first disbursement was made, or the application for
the consolidation loan was received, before July 1, 2010, the
Secretary shall make a loan under this part, in an amount equal
to the sum of the unpaid principal, accrued unpaid interest,
and late charges of the original loan to the borrower in
accordance with the following:
``(A) The Secretary shall pay the proceeds of such
loan to the eligible lender of the loan made, insured,
or guaranteed under part B, in order to discharge the
borrower from any remaining obligation to the lender
with respect to the original loan.
``(B) A loan made under this section that was
originally--
``(i) a loan originally made, insured, or
guaranteed under section 428 shall be a Federal
Direct Stafford Loan;
``(ii) a loan originally made, insured, or
guaranteed under section 428B shall be a
Federal Direct PLUS Loan;
``(iii) a loan originally made, insured, or
guaranteed under section 428H shall be a
Federal Direct Unsubsidized Stafford Loan; and
``(iv) a loan originally made, insured, or
guaranteed under section 428C shall be a
Federal Direct Consolidation Loan.
``(C) The interest rate for each loan made by the
Secretary under this paragraph shall be the rate
provided under subsection (c).
``(c) Interest Rates.--
``(1) In general.--The interest rate for the refinanced
Federal Direct Stafford Loans, Federal Direct Unsubsidized
Stafford Loans, Federal Direct PLUS Loans, and Federal Direct
Consolidation Loans, shall be a rate equal to--
``(A) in any case where the original loan was a
loan under section 428 or 428H, a Federal Direct
Stafford loan, or a Federal Direct Unsubsidized
Stafford Loan, that was issued to an undergraduate
student, a rate equal to the rate for Federal Direct
Stafford Loans and Federal Direct Unsubsidized Stafford
Loans issued to undergraduate students for the 12-month
period beginning on July 1, 2016, and ending on June
30, 2017;
``(B) in any case where the original loan was a
loan under section 428 or 428H, a Federal Direct
Stafford Loan, or a Federal Direct Unsubsidized
Stafford Loan, that was issued to a graduate or
professional student, a rate equal to the rate for
Federal Direct Unsubsidized Stafford Loans issued to
graduate or professional students for the 12-month
period beginning on July 1, 2016, and ending on June
30, 2017;
``(C) in any case where the original loan was a
loan under section 428B or a Federal Direct PLUS Loan,
a rate equal to the rate for Federal Direct PLUS Loans
for the 12-month period beginning on July 1, 2016, and
ending on June 30, 2017; and
``(D) in any case where the original loan was a
loan under section 428C or a Federal Direct
Consolidation Loan, a rate calculated in accordance
with paragraph (2).
``(2) Interest rates for consolidation loans.--
``(A) Method of calculation.--In order to determine
the interest rate for any refinanced Federal Direct
Consolidation Loan under paragraph (1)(D), the
Secretary shall--
``(i) determine each of the component loans
that were originally consolidated in the loan
under section 428C or the Federal Direct
Consolidation Loan, and calculate the
proportion of the unpaid principal balance of
the loan under section 428C or the Federal
Direct Consolidation Loan that each component
loan represents;
``(ii) use the proportions determined in
accordance with clause (i) and the interest
rate applicable for each component loan, as
determined under subparagraph (B), to calculate
the weighted average of the interest rates on
the loans consolidated into the loan under
section 428C or the Federal Direct
Consolidation Loan; and
``(iii) apply the weighted average
calculated under clause (ii) as the interest
rate for the refinanced Federal Direct
Consolidation Loan.
``(B) Interest rates for component loans.--The
interest rates for the component loans of a loan made
under section 428C or a Federal Direct Consolidation
Loan shall be the following:
``(i) The interest rate for any loan under
section 428 or 428H, Federal Direct Stafford
Loan, or Federal Direct Unsubsidized Stafford
Loan issued to an undergraduate student shall
be a rate equal to the lesser of--
``(I) the rate for Federal Direct
Stafford Loans and Federal Direct
Unsubsidized Stafford Loans issued to
undergraduate students for the 12-month
period beginning on July 1, 2016, and
ending on June 30, 2017; or
``(II) the original interest rate
of the component loan.
``(ii) The interest rate for any loan under
section 428 or 428H, Federal Direct Stafford
Loan, or Federal Direct Unsubsidized Stafford
Loan issued to a graduate or professional
student shall be a rate equal to the lesser
of--
``(I) the rate for Federal Direct
Unsubsidized Stafford Loans issued to
graduate or professional students for
the 12-month period beginning on July
1, 2016, and ending on June 30, 2017;
or
``(II) the original interest rate
of the component loan.
``(iii) The interest rate for any loan
under section 428B or Federal Direct PLUS Loan
shall be a rate equal to the lesser of--
``(I) the rate for Federal Direct
PLUS Loans for the 12-month period
beginning on July 1, 2016, and ending
on June 30, 2017; or
``(II) the original interest rate
of the component loan.
``(iv) The interest rate for any component
loan that is a loan under section 428C or a
Federal Direct Consolidation Loan shall be the
weighted average of the interest rates that
would apply under this subparagraph for each
loan comprising the component consolidation
loan.
``(v) The interest rate for any eligible
loan that is a component of a loan made under
section 428C or a Federal Direct Consolidation
Loan and is not described in clauses (i)
through (iv) shall be the interest rate on the
original component loan.
``(3) Fixed rate.--The applicable rate of interest
determined under paragraph (1) for a refinanced loan under this
section shall be fixed for the period of the loan.
``(d) Terms and Conditions of Loans.--
``(1) In general.--A loan that is refinanced under this
section shall have the same terms and conditions as the
original loan, except as otherwise provided in this section.
``(2) No automatic extension of repayment period.--
Refinancing a loan under this section shall not result in the
extension of the duration of the repayment period of the loan,
and the borrower shall retain the same repayment term that was
in effect on the original loan. Nothing in this paragraph shall
be construed to prevent a borrower from electing a different
repayment plan at any time in accordance with section
455(d)(3).
``(e) Definition of Qualified Borrower.--
``(1) In general.--For purposes of this section, the term
`qualified borrower' means a borrower--
``(A) of a loan under this part or part B for which
the first disbursement was made, or the application for
a consolidation loan was received, before July 1, 2021;
and
``(B) who meets the eligibility requirements based
on income or debt-to-income ratio established by the
Secretary.
``(2) Income requirements.--Not later than 180 days after
the date of enactment of the Helping Individuals Get a Higher
Education while Reducing Education Debt Act, the Secretary
shall establish eligibility requirements based on income or
debt-to-income ratio that take into consideration providing
access to refinancing under this section for borrowers with the
greatest financial need.
``(f) Notification to Borrowers.--The Secretary, in coordination
with the Director of the Bureau of Consumer Financial Protection, shall
undertake a campaign to alert borrowers of loans that are eligible for
refinancing under this section that the borrowers are eligible to apply
for such refinancing. The campaign shall include the following
activities:
``(1) Developing consumer information materials about the
availability of Federal student loan refinancing.
``(2) Requiring servicers of loans under this part or part
B to provide such consumer information to borrowers in a manner
determined appropriate by the Secretary, in consultation with
the Director of the Bureau of Consumer Financial Protection.
``SEC. 460B. FEDERAL DIRECT REFINANCED PRIVATE LOAN PROGRAM.
``(a) Definitions.--In this section:
``(1) Eligible private education loan.--The term `eligible
private education loan' means a private education loan, as
defined in section 140(a) of the Truth in Lending Act (15
U.S.C. 1650(a)), that--
``(A) was disbursed to the borrower before July 1,
2022; and
``(B) was for the borrower's own postsecondary
educational expenses for an eligible program at an
institution of higher education participating in the
loan program under this part, as of the date that the
loan was disbursed.
``(2) Federal direct refinanced private loan.--The term
`Federal Direct Refinanced Private Loan' means a loan issued
under subsection (b)(1).
``(3) Private educational lender.--The term `private
educational lender' has the meaning given the term in section
140(a) of the Truth in Lending Act (15 U.S.C. 1650(a)).
``(4) Qualified borrower.--The term `qualified borrower'
means an individual who--
``(A) has an eligible private education loan;
``(B) has been current on payments on the eligible
private education loan for the 6 months prior to the
date of the qualified borrower's application for
refinancing under this section, and is in good standing
on the loan at the time of such application;
``(C) is not in default on the eligible private
education loan or on any loan made, insured, or
guaranteed under this part or part B or E; and
``(D) meets the eligibility requirements described
in subsection (b)(2).
``(b) Program Authorized.--
``(1) In general.--The Secretary, in consultation with the
Secretary of the Treasury, shall carry out a program under
which the Secretary, upon application by a qualified borrower
who has an eligible private education loan, shall issue such
borrower a loan under this part in accordance with the
following:
``(A) The loan issued under this program shall be
in an amount equal to the sum of the unpaid principal,
accrued unpaid interest, and late charges of the
private education loan.
``(B) The Secretary shall pay the proceeds of the
loan issued under this program to the private
educational lender of the private education loan, in
order to discharge the qualified borrower from any
remaining obligation to the lender with respect to the
original loan.
``(C) The Secretary shall require that the
qualified borrower undergo loan counseling that
provides all of the information and counseling required
under clauses (i) through (viii) of section
485(b)(1)(A) before the loan is refinanced in
accordance with this section, and before the proceeds
of such loan are paid to the private educational
lender.
``(D) The Secretary shall issue the loan as a
Federal Direct Refinanced Private Loan, which shall
have the same terms, conditions, and benefits as a
Federal Direct Unsubsidized Stafford Loan, except as
otherwise provided in this section.
``(2) Borrower eligibility.--Not later than 180 days after
the date of enactment of the Helping Individuals Get a Higher
Education while Reducing Education Debt Act, the Secretary, in
consultation with the Secretary of the Treasury and the
Director of the Bureau of Consumer Financial Protection, shall
establish eligibility requirements--
``(A) based on income or debt-to-income ratio that
take into consideration providing access to refinancing
under this section for borrowers with the greatest
financial need;
``(B) to ensure eligibility only for borrowers in
good standing;
``(C) to minimize inequities between Federal Direct
Refinanced Private Loans and other Federal student
loans;
``(D) to preclude windfall profits for private
educational lenders; and
``(E) to ensure full access to the program
authorized in this subsection for borrowers with
private loans who otherwise meet the criteria
established in accordance with subparagraphs (A) and
(B).
``(c) Interest Rate.--
``(1) In general.--The interest rate for a Federal Direct
Refinanced Private Loan is--
``(A) in the case of a Federal Direct Refinanced
Private Loan for a private education loan originally
issued for undergraduate postsecondary educational
expenses, a rate equal to the rate for Federal Direct
Stafford Loans and Federal Direct Unsubsidized Stafford
Loans issued to undergraduate students for the 12-month
period beginning on July 1, 2016, and ending on June
30, 2017; and
``(B) in the case of a Federal Direct Refinanced
Private Loan for a private education loan originally
issued for graduate or professional degree
postsecondary educational expenses, a rate equal to the
rate for Federal Direct Unsubsidized Stafford Loans
issued to graduate or professional students for the 12-
month period beginning on July 1, 2016, and ending on
June 30, 2017.
``(2) Combined undergraduate and graduate study loans.--If
a Federal Direct Refinanced Private Loan is for a private
education loan originally issued for both undergraduate and
graduate or professional postsecondary educational expenses,
the interest rate shall be a rate equal to the rate for Federal
Direct PLUS Loans for the 12-month period beginning on July 1,
2016, and ending on June 30, 2017.
``(3) Fixed rate.--The applicable rate of interest
determined under this subsection for a Federal Direct
Refinanced Private Loan shall be fixed for the period of the
loan.
``(d) No Inclusion in Aggregate Limits.--The amount of a Federal
Direct Refinanced Private Loan, or a Federal Direct Consolidated Loan
to the extent such loan was used to repay a Federal Direct Refinanced
Private Loan, shall not be included in calculating a borrower's annual
or aggregate loan limits under section 428 or 428H.
``(e) No Eligibility for Service-Related Repayment.--
Notwithstanding sections 428K(a)(2)(A), 428L(b)(2), 455(m)(3)(A), and
460(b), a Federal Direct Refinanced Private Loan, or any Federal Direct
Consolidation Loan to the extent such loan was used to repay a Federal
Direct Refinanced Private Loan, shall not be eligible for any loan
repayment or loan forgiveness program under section 428K, 428L, or 460
or for the repayment plan for public service employees under section
455(m).
``(f) Private Educational Lender Reporting Requirement.--
``(1) Reporting required.--Not later than 180 days after
the date of enactment of the Helping Individuals Get a Higher
Education while Reducing Education Debt Act, the Secretary, in
consultation with the Secretary of the Treasury and the
Director of the Bureau of Consumer Financial Protection, shall
establish a requirement that private educational lenders report
the data described in paragraph (2) to the Secretary, to
Congress, to the Secretary of the Treasury, and to the Director
of the Bureau of Consumer Financial Protection, in order to
allow for an assessment of the private education loan market.
``(2) Contents of reporting.--The data that private
educational lenders shall report in accordance with paragraph
(1) shall include each of the following about private education
loans (as defined in section 140(a) of the Truth in Lending Act
(15 U.S.C. 1650(a))):
``(A) The total amount of private education loan
debt the lender holds.
``(B) The total number of private education loan
borrowers the lender serves.
``(C) The average interest rate on the outstanding
private education loan debt held by the lender.
``(D) The proportion of private education loan
borrowers who are in default on a loan held by the
lender.
``(E) The proportion of the outstanding private
education loan volume held by the lender that is in
default.
``(F) The proportions of outstanding private
education loan borrowers who are 30, 60, and 90 days
delinquent.
``(G) The proportions of outstanding private
education loan volume that is 30, 60, and 90 days
delinquent.
``(g) Notification to Borrowers.--The Secretary, in coordination
with the Secretary of the Treasury and the Director of the Bureau of
Consumer Financial Protection, shall undertake a campaign to alert
borrowers about the availability of private student loan refinancing
under this section.''.
SEC. 203. 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) Special Rule for Refinanced Loans.--
``(1) Refinanced federal direct and ffel loans.--In
calculating the period of time during which a borrower of a
loan that is refinanced under section 460A has made monthly
payments for purposes of subsection (b)(7), the Secretary shall
deem the period to include all monthly payments made for the
original loan, and all monthly payments made for the refinanced
loan, that otherwise meet the requirements of this section.
``(2) Federal direct refinanced private loans.--In
calculating the period of time during which a borrower of a
Federal Direct Refinanced Private Loan under section 460B has
made monthly payments for purposes of subsection (b)(7), the
Secretary shall include only payments--
``(A) that are made after the date of the issuance
of the Federal Direct Refinanced Private Loan; and
``(B) that otherwise meet the requirements of this
section.''.
TITLE III--LOAN FORGIVENESS
SEC. 301. LOAN FORGIVENESS FOR ADJUNCT FACULTY.
Section 455(m)(3)(B)(ii) of the Higher Education Act of 1965 (20
U.S.C. 1087e(m)(3)(B)(ii)) is amended--
(1) by striking ``teaching as'' and inserting the
following: ``teaching--
``(I) as'';
(2) by striking ``, foreign language faculty, and part-time
faculty at community colleges), as determined by the
Secretary.'' and inserting ``and foreign language faculty), as
determined by the Secretary; or''; and
(3) by adding at the end the following:
``(II) as a part-time faculty
member or instructor who--
``(aa) teaches not less
than 1 course at an institution
of higher education (as defined
in section 101(a)), a
postsecondary vocational
institution (as defined in
section 102(c)), or a Tribal
College or University (as
defined in section 316(b)); and
``(bb) is not employed on a
full-time basis by any other
employer.''.
SEC. 302. AMENDMENTS TO THE PUBLIC SERVICE LOAN FORGIVENESS PROGRAM.
(a) Public Service Loan Forgiveness.--
(1) In general.--Section 455(m) of the Higher Education Act
of 1965 (20 U.S.C. 1087e(m)) is amended to read as follows:
``(m) Loan Forgiveness for Federal Student Loan Borrowers Employed
in Public Service.--
``(1) Definitions.--In this subsection:
``(A) Certification of employment.--The term
`certification of employment' means a certification of
employment under paragraph (4).
``(B) Full-time.--The term `full-time', when used
with respect to employment, means employment--
``(i) with a qualifying employer for not
less than 30 hours per week; or
``(ii) with 2 or more qualifying employers
for a total of not less than 30 hours per week.
``(C) Qualifying employer.--The term `qualifying
employer' means--
``(i) a Federal, State, local, or Tribal
government organization or instrumentality,
including any organization established in law
as a body politic;
``(ii) an organization that is described in
section 501(c)(3) of the Internal Revenue Code
of 1986, and exempt from taxation under section
501(a) of such Code;
``(iii) an organization--
``(I) not described in clause (ii)
that is a not-for-profit organization
under other Federal or State law;
``(II) that is not a labor
organization or partisan political
organization; and
``(III) whose purpose is to
directly provide any of the following
services, as defined in regulations
promulgated by the Secretary:
``(aa) Emergency management
and disaster response.
``(bb) Military service.
``(cc) Public safety
services, including fire
prevention and suppression,
rescue services, hazardous
materials response, ambulance
services, and emergency medical
services.
``(dd) Law enforcement.
``(ee) Public health,
including service through
organizations that employ
nurses, nurse practitioners,
nurses in a clinical setting,
or professionals engaged in
health care practitioner
occupations and health care
support occupations, as such
terms are defined by the Bureau
of Labor Statistics, or
organizations at which
individuals engaged in such
occupations provide service,
but who are prohibited from
being employed directly by such
an organization or other health
care facility by State law.
``(ff) Public education,
including the provision of
educational enrichment or
support directly to students or
their families, employment with
a Tribal College or University
(as defined in section 316(b)),
and employment as an adjunct
faculty member or instructor
for an educational institution.
``(gg) Public interest law
services, including prosecution
or public defense or legal
advocacy on behalf of low-
income communities at a not-
for-profit organization.
``(hh) Early childhood
education, including licensed
or regulated childcare, Head
Start programs, and State
funded prekindergarten.
``(ii) Public service for
individuals with disabilities.
``(jj) Public service for
the elderly.
``(kk) Public and school-
based library sciences.
``(ll) School-based
services, including the
provision of noneducational
enrichment or support directly
to students or their families.
``(mm) Social work,
including child or family
services.
``(nn) Veteran or military
services organization; or
``(iv) a farm or ranch that, with respect
to a fiscal year, has earnings of gross revenue
during such year from the sale of agricultural
products equal to or greater than--
``(I) in the case of 2022, $35,000;
or
``(II) in the case of any
succeeding year, the amount applicable
under this subparagraph for the
previous year, increased by the
estimated percentage change in the
Consumer Price Index for the most
recent year preceding such year.
``(D) Qualifying monthly payment obligation.--The
term `qualifying monthly payment obligation' means a
monthly payment obligation due on a loan under the
repayment plan of the borrower--
``(i) that was satisfied by the borrower
through a payment made after October 1, 2007;
and
``(ii) attributable to a period during
which the borrower was employed full-time by a
qualifying employer.
``(E) Loan made under this part.--The term `loan
made under this part' includes a Federal Direct
Stafford Loan, Federal Direct PLUS Loan, Federal Direct
Unsubsidized Stafford Loan, or Federal Direct
Consolidation Loan refinanced under section 460A.
``(2) Cancellation authorized.--
``(A) In general.--Beginning on July 1, 2022, the
Secretary shall, on an annual basis, cancel an amount
of interest and principal due, in accordance with
subparagraph (B), on any loan made under this part that
is not in default for a borrower who--
``(i) has satisfied 12 qualifying monthly
payment obligations on such loan; and
``(ii) submits a certification of
employment that meets the requirements of
paragraph (3) for the period in which the
borrower makes each of the 12 payment
obligations described in subparagraph (A).
``(B) Cancellation amount.--The Secretary shall
cancel--
``(i) after the conclusion of each of the
first 9, 12-month periods described in
subparagraph (A), an amount equal to 10 percent
of the balance of interest and principal due,
on the loans made to the borrower under this
part, as of the date on which the borrower
satisfies the first qualifying monthly payment
obligation under this subsection on such loans;
and
``(ii) after the conclusion of the tenth,
12-month period described in subparagraph (A),
the obligation to repay any remaining balance
of principal and interest due as of the time of
such cancellation, on the loans made to the
borrower under this part.
``(3) Certification of employment requirements.--
``(A) In general.--In order to receive loan
cancellation under this subsection, a borrower of a
loan made under this part shall submit to the Secretary
a certification of employment.
``(B) Content of certification.--The Secretary
shall--
``(i) develop, and make easily accessible,
the certification of employment; and
``(ii) ensure that the method of
certification--
``(I) allows for the employer to
indicate and certify the dates of the
borrower's employment; and
``(II) provides electronic
signature options for the employer and
for the borrower.
``(C) Borrower access.--The Secretary shall ensure
that a borrower may submit a certification of
employment to the Secretary electronically through any
information system through which the Secretary permits
borrowers to take self-service actions with respect to
their loans.
``(D) Exception for self-certification.--The
Secretary shall provide a self-certification option for
the certification of employment for borrowers who have
extenuating circumstances preventing the borrowers from
obtaining the qualifying employer signature and
certification required under subparagraph (B)(ii), as
determined by the Secretary pursuant to rulemaking and
including situations where an employer is no longer in
existence or refuses to cooperate.
``(E) Periodic review of certification of
employment.--For each borrower of a loan made under
this part who has submitted a certification of
employment, the Secretary shall--
``(i) by not later than 30 days after
receipt of the certification of employment--
``(I) review the certification of
employment and determine the number of
qualifying monthly payment obligations
satisfied on the loan during the period
of employment covered by the
certification of employment; and
``(II) inform the borrower of the
number of qualifying monthly payment
obligations satisfied; and
``(ii) periodically, but not less than
twice annually, notify the borrower, using the
most recent calculation of qualifying monthly
payment obligations, of--
``(I) the number of qualifying
monthly payment obligations satisfied,
as of the date of the notice;
``(II) any steps the borrower can
take to convert non-qualifying monthly
payment obligations into qualifying
monthly payment obligations, including
the options to provide payments to
satisfy monthly payment obligations for
past public service under paragraph
(4)(C); and
``(III) the dispute resolution
process for the Secretary's
determination of qualifying monthly
payment obligations, as described in
paragraph (7).
``(4) Qualifying monthly payment obligations.--
``(A) In general.--For purposes of this subsection,
the number of qualifying monthly payment obligations
satisfied on a loan is the number of monthly payments,
during the period of employment and based on the
repayment plan selected by the borrower for such
period, that would be satisfied based on applying the
total amount of payments made by the borrower on the
loan at any time during such period.
``(B) Adjustment of payment obligation status.--
``(i) Hold harmless against retroactive
determinations.--If the Secretary has
classified a payment obligation satisfied by a
borrower of a loan made under this part as a
qualifying monthly payment obligation and later
determines that the payment obligation does not
qualify, the Secretary shall deem the payment
obligation to be a qualifying monthly payment
obligation to be counted for purposes of
paragraph (2).
``(ii) Explanation of non-qualifying
payment obligation determinations.--If the
Secretary determines that payments made by a
borrower of a loan made under this part for a
period of full-time employment with a
qualifying employer cannot be applied toward
the total number of qualifying monthly payment
obligations for purposes of paragraph (2), the
Secretary shall provide a borrower with an
explanation and allow the borrower to correct
the reason for such determination, to the
extent possible. Such borrower remediation
shall include, at a minimum, providing a
borrower with the opportunity to reimburse the
Secretary for any underpayment.
``(C) Satisfying previously non-qualifying monthly
payment obligations.--
``(i) In general.--A borrower of a loan
made under this part who has a period during
which the borrower was employed full-time with
a qualifying employer but did not satisfy one
or more qualifying monthly payment obligations
during such period, such as a borrower who was
in deferment or forbearance, may satisfy one or
more monthly payment obligations of that period
at a later date by paying the additional amount
needed to satisfy the qualifying monthly
payment obligation, in accordance with a
process established by the Secretary.
``(ii) Determination process.--The amount
of past monthly payment obligations satisfied
by a payment under this subparagraph for a
period of employment shall be determined using
the amount of the borrower's monthly payment,
based on any repayment plan, as selected by the
borrower, that could have been selected by the
borrower during such period. The Secretary may
require a borrower wishing to satisfy past
monthly payment obligations under this
subparagraph to submit any additional
information necessary to calculate the amount
of the past payments.
``(iii) Limit.--A borrower may not satisfy
more than 36 past monthly payment obligations
under this subparagraph.
``(D) Overpayment.--In a case in which the dispute
resolution process under paragraph (8) delays the date
on which a borrower would have received full loan
forgiveness under paragraph (3)(B), the Secretary shall
refund the borrower the amount of any qualifying
monthly payment obligation the borrower makes in excess
of 120 qualifying payment obligations during such
process.
``(5) Special rules relating to federal direct
consolidation loans.--
``(A) Review of any new consolidation loan
application.--
``(i) Public service loan forgiveness
option on consolidation application.--Beginning
on July 1, 2022, the Secretary shall include,
in any application for a Federal Direct
Consolidation Loan, the option for the borrower
to indicate that the borrower is consolidating
for the purpose of using the public service
loan forgiveness program under this subsection.
``(ii) Review.--Beginning on July 1, 2022,
the Secretary shall, after issuing any Federal
Direct Consolidation Loan to a borrower who
indicated an interest in the public service
loan forgiveness program on the loan
application--
``(I) request that the borrower
submit a certification of employment;
and
``(II) after receiving a complete
certification of employment, review the
borrower's past payments on all
component loans comprising the Federal
Direct Consolidation Loan and inform
the borrower--
``(aa) of the number of
monthly payment obligations
satisfied by the borrower
before the date of
consolidation that are
qualifying monthly payment
obligations, in accordance with
subparagraph (B); or
``(bb) if no payment
obligations are satisfied, that
the borrower will not receive
any credit towards public
service loan forgiveness under
this subsection for the Federal
Direct Consolidation Loan.
``(B) Qualifying payment obligations on all
component loans and loan types through consolidation.--
In the case of a borrower of one or more loans eligible
for consolidation, including loans made under part B,
who applies for, and receives, a Federal Direct
Consolidation Loan, the Secretary shall request the
borrower submit a certification of employment for any
qualifying employment and, after receiving the
certification of employment, shall--
``(i) review the borrower's payment history
on each of the component loans comprising the
Federal Direct Consolidation Loan, including
each loan made under part B; and
``(ii) for each component loan--
``(I) calculate the weighted factor
of the component loan, which shall be
the factor that represents the ratio
between the amount of the component
loan and the amount of the Federal
Direct Consolidation Loan, as
determined by the Secretary;
``(II) determine the number of
equivalent monthly payment obligations
toward the Federal Direct Consolidation
Loan satisfied on the component loan by
multiplying the weighted factor for the
component loan by the number of
qualifying monthly payment obligations
that the borrower satisfied on the
component loan; and
``(III) after rounding the number
determined under subclause (II) to the
nearest whole number, deem that number
of equivalent monthly payment
obligations to be qualifying monthly
payment obligations on the Federal
Direct Consolidation Loan.
``(C) Applicability of borrower protections and
rights.--A borrower of one or more loans eligible for
consolidation, including loans made under part B, who
applies for and receives a Federal Direct Consolidation
Loan shall receive all the protections and rights
provided under subparagraphs (B) and (C) of paragraph
(4) for the loan, and for any component loan, in the
same manner as provided to any other borrower of a loan
made under this part.
``(D) Treatment of certain consolidation loan
payments.--In a case in which a borrower makes a
qualifying monthly payment obligation for purposes of
paragraph (2) on a Federal Direct Consolidation Loan
that was used to repay a Federal Direct Stafford Loan,
Federal Direct PLUS Loan, Federal Direct Unsubsidized
Stafford Loan, or Federal Direct Consolidation Loan
refinanced under section 460A for which at least one
qualifying monthly payment obligation for such purposes
has been made prior to the consolidation, the
qualifying monthly payment obligation on such Federal
Direct Consolidation Loan shall be treated as a
qualifying monthly payment obligation for purposes of
paragraph (2) on such Federal Direct Stafford Loan,
Federal Direct PLUS Loan, Federal Direct Unsubsidized
Stafford Loan, or Federal Direct Consolidation Loan.
``(6) Notice of qualifying payment obligations.--
``(A) Initial notice.--Upon receiving any verbal or
written contact by a borrower on or after July 1, 2022,
expressing interest in the public service loan
forgiveness program under this subsection, the
Secretary, or an eligible lender or guaranty agency
under part B, shall provide the borrower, by not later
than 30 days after the contract, with a notice that--
``(i) explains the requirements of the
program, including whether the borrower needs
to consolidate some or all of the borrower's
loans to receive forgiveness under this
subsection;
``(ii) includes a copy of, or a link to,
information about the certification of
employment process described in paragraph (3);
``(iii) includes an estimate of the
qualifying monthly payment obligations that
would be satisfied by the borrower based on the
borrower's payment history, as of the date of
notice, if the borrower was a full-time
employee of a qualifying employer and met the
requirements of paragraph (2); and
``(iv) includes an estimate of the number
of remaining qualifying monthly payment
obligations to be satisfied in order for the
borrower to receive partial loan forgiveness
under paragraph (2)(A).
``(B) Subsequent notices.--After providing an
initial notice under subparagraph (A), the Secretary,
or an eligible lender or guaranty agency under part B,
shall annually provide the borrower with a notice
containing the information described in such
subparagraph for each subsequent year that the borrower
has an outstanding loan, unless the borrower receives
notices under paragraph (3)(E)(ii) or requests that the
notices be discontinued.
``(7) Dispute resolution process.--By not later than July
1, 2022, the Secretary shall establish a process on an online
portal for borrowers to dispute the calculation of qualifying
monthly payment obligations, or the determination of full or
partial loan forgiveness under paragraph (2), following the
submission of a certification of employment or application for
forgiveness or any successor certification or application.
``(8) Special rules for section 460a loans.--
``(A) Refinanced federal direct loans.--
Notwithstanding paragraph (2), in determining the
number of monthly payments that meet the requirements
of such paragraph for an eligible Federal Direct Loan
refinanced under section 460A that was originally a
loan under this part, the Secretary shall include all
monthly payments made on the original loan that meet
the requirements of such paragraph.
``(B) Refinanced ffel loans.--In the case of an
eligible Federal Direct Loan refinanced under section
460A that was originally a loan under part B, only
monthly payments made after the date on which the loan
was refinanced may be included for purposes of
paragraph (2).
``(9) Ineligibility.--
``(A) No double benefits.--No borrower may, for the
same service, receive a reduction of loan obligations
under both this subsection and section 428J, 428K,
428L, or 460.
``(B) Federal elected service excluded.--No
borrower may receive loan forgiveness under this
subsection for service as a Member of Congress or
President or Vice President of the United States.''.
(2) FFEL program amendments.--Part B of the Higher
Education Act of 1965 (20 U.S.C. 1071 et seq.) is amended--
(A) in section 428 (20 U.S.C. 1078), by adding at
the end the following:
``(p) Repayment History Information and Public Service Loan
Forgiveness Information.--A guaranty agency shall--
``(1) provide, in a timely manner, any necessary borrower
repayment history information that the Secretary requests in
order to determine the borrower's eligibility for the public
service loan forgiveness program under section 455(m), or the
number of qualifying monthly payment obligations satisfied for
purposes of the program, including such information from all
servicers involved in servicing the borrower's loan; and
``(2) carry out the requirements of section 455(m)(7) upon
receiving any verbal or written contact by a borrower on or
after July 1, 2022, expressing interest in the public service
loan forgiveness program under section 455(m).''; and
(B) in section 433 (20 U.S.C. 1083)--
(i) by redesignating subsection (f) as
subsection (g); and
(ii) by inserting after subsection (e) the
following:
``(f) Repayment History Information.--An eligible lender shall--
``(1) provide, in a timely manner, any necessary borrower
repayment history information that the Secretary requests in
order to determine the borrower's eligibility for the public
service loan forgiveness program under section 455(m), or the
number of qualifying monthly payment obligations satisfied for
purposes of the public service loan forgiveness program under
section 455(m), including such information from all servicers
involved in servicing the borrower's loan; and
``(2) carry out the requirements of section 455(m)(7) upon
receiving any verbal or written contact by a borrower on or
after July 1, 2022, expressing interest in the public service
loan forgiveness program under section 455(m).''.
(b) Notification to Direct Loan Borrowers Regarding All Options for
Loan Forgiveness.--Section 455 of the Higher Education Act of 1965 (20
U.S.C. 1087e) is amended by adding at the end the following:
``(r) Annual Notice Regarding Loan Forgiveness Options.--
``(1) In general.--The Secretary shall annually provide a
written or electronic disclosure to each borrower of a loan
under this part--
``(A) notifying the borrower--
``(i) of any loan forgiveness option
available under this title that might apply to
a loan under this part held by the borrower,
including the public service loan forgiveness
program under subsection (m); and
``(ii) in the case of a borrower who is a
full-time employee of a Federal agency and has
not expressed interest in or submitted a
certification of employment for the public
service loan forgiveness program--
``(I) that the borrower is employed
by a qualifying employer;
``(II) the number of payment
obligations satisfied by the borrower
that the Secretary has determined could
be qualifying monthly payment
obligations on eligible Federal Direct
Loan for purposes of the public service
loan forgiveness program; and
``(III) the steps necessary for the
borrower to submit a certification of
employment and to obtain forgiveness
under subsection (m)(2);
``(B) informing the borrower that the loan
forgiveness options described in subparagraph (A) are
provided free of charge; and
``(C) including, for each loan forgiveness option,
information regarding how the borrower should proceed,
including contact information, if the borrower wishes
to pursue such loan forgiveness option.
``(2) Exclusions.--Notwithstanding paragraph (1), the
Secretary shall not provide a notification under this
subsection to a borrower of a loan under this part if--
``(A) the borrower is also receiving a notification
under subsection (m)(7); or
``(B) the borrower has requested that the Secretary
no longer provide the notifications under this
subsection.''.
(c) Effective Date.--The amendments made by this section shall take
effect on July 1, 2022.
SEC. 303. TRANSITION TO IMPROVED PUBLIC SERVICE LOAN FORGIVENESS
PROGRAM.
(a) Review of Borrowers Currently Participating in Public Service
Loan Forgiveness.--
(1) Calculating the number of qualifying payment
obligations for current public service loan forgiveness program
participants.--By not later than July 1, 2022, the Secretary
shall, for each borrower that has submitted a certification of
employment under the public service loan forgiveness program
under section 455(m) of the Higher Education Act of 1965 (20
U.S.C. 1087e) before July 1, 2022--
(A) calculate the number of qualifying payment
obligations under such section satisfied by the
borrower, using the criteria of such section as in
effect on July 1, 2022; and
(B) inform the borrower of the changes in the
public service loan forgiveness program and the number
of qualifying payment obligations that the borrower
will have satisfied for purposes of the program,
beginning on July 1, 2022.
(2) Retroactive partial loan forgiveness.--By not later
than July 1, 2022, the Secretary shall take such steps as are
necessary to provide partial loan forgiveness under section
455(m)(3)(A)(i) of the Higher Education Act of 1965 (20 U.S.C.
1087e(m)(3)(A)(i)), as in effect on such date, to borrowers
with outstanding balance of principal and interest on a loan
made under this part who met the criteria for partial loan
forgiveness under such section, as in effect on July 1, 2022,
before such date but on or after October 1, 2007.
(3) Applicability of other provisions.--In carrying out
paragraphs (1) and (2), and in any other case where the
Secretary is applying the loan forgiveness provisions of
section 455(m) of the Higher Education Act of 1965 (20 U.S.C.
1087e(m)), as in effect on July 1, 2022, to a borrower for whom
one or more payment obligations were satisfied before July 1,
2022, the Secretary shall determine the number of payment
obligations satisfied by applying all of the provisions of such
section as in effect on July 1, 2022, including the calculation
of payment obligations under section 455(m)(5) of such Act and
the inclusion of payment obligations satisfied through the
component loans of a Federal Direct Consolidation Loan under
section 455(m)(6), without regard as to the date on which the
payment obligation was satisfied.
(b) Special PSLF Program Funds.--
(1) Definition of special pslf program funds.--In this
section, the term ``special PSLF program funds'' means the
amounts appropriated for public service loan forgiveness under
section 315 of division H of the Consolidated Appropriations
Act, 2018 (Public Law 115-141; March 23, 2018) or under section
313 of division B of the Department of Defense and Labor,
Health and Human Services, and Education Appropriations Act,
2019 and Continuing Appropriations Act, 2019 (Public Law 115-
245; September 28, 2018).
(2) Rescission.--Upon the effective date described in
section 2(c), all special PSLF program funds that remain
unexpended on such date shall be rescinded.
(3) Transition.--The Secretary of Education shall establish
a process through which the Secretary shall--
(A) review the applications of borrowers who
applied for the loan forgiveness program carried out
with special PSLF program funds but had not received
loan forgiveness through such program before July 1,
2022; and
(B) assist such borrowers in pursuing loan
forgiveness under section 455(m) of the Higher
Education Act of 1965 (20 U.S.C. 1087e(m)), as in
effect on July 1, 2022.
TITLE IV--INCOME-DRIVEN REPAYMENT PLANS
SEC. 401. INCOME-BASED REPAYMENT PLAN.
Section 493C of the Higher Education Act of 1965 (20 U.S.C. 1098e)
is amended--
(1) in subsection (b)--
(A) in paragraph (8), by striking ``and'' after the
semicolon;
(B) in paragraph (9), by striking the period at the
end and inserting ``; and''; and
(C) by adding at the end the following:
``(10) a borrower who is repaying a loan made under part B
or D pursuant to this section may repay such loan in full at
any time without penalty.''; and
(2) by adding at the end the following:
``(f) Income-Based Repayment for New Loans on and After July 1,
2022, and for Borrowers Who Enter IBR After July 1, 2022.--
``(1) In general.--The income-based repayment plan shall be
carried out in accordance with this section, except as
otherwise specified in this subsection (including through the
special terms described in paragraph (2))--
``(A) with respect to any loan issued on or after
July 1, 2022, if such borrower elects the income-based
repayment plan for that loan; and
``(B) with respect to any borrower who is repaying
a loan made, insured, or guaranteed under part B or D,
if such borrower elects to repay the loan under the
income-based repayment plan on or after July 1, 2022.
``(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:
``(A)(i) Notwithstanding subsection (a)(3)(B), the
repayment amount under this subsection shall be an
amount equal to 5 percent of the result obtained by
calculating, on at least an annual basis, the amount by
which--
``(I) the borrower's, and the borrower's
spouse (if applicable), adjusted gross income;
exceeds
``(II) the applicable percentage of the
poverty line in accordance with clause (ii)
that is 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)).
``(ii) For purposes of clause (i), the term
`applicable percentage' means 150 percent reduced by 1
percentage point for each $1,000 by which the
borrower's adjusted gross income exceeds $100,000.
``(B) A borrower may elect--
``(i) during any period during which the
borrower's (and the borrower's spouse, if
applicable) adjusted gross income is equal to
or less than 250 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)), to have the borrower's aggregate
monthly payment for all such loans equal to $0;
and
``(ii) during any period during which the
borrower's (and the borrower's spouse, if
applicable) adjusted gross income exceeds 250
percent of such poverty line, to have the
borrower's aggregate monthly payment for all
such loans not exceed, the lesser of--
``(I) the result described in
subparagraph (A) divided by 12; or
``(II) the monthly amount
calculated under section 455(d)(1)(A),
based on a 10-year repayment period,
when the borrower first made the
election described in this subsection.
``(C) With respect to any loan for which payments
may be made under subparagraph (B), be paid, or be
treated as if no interest has accrued, by the
Secretary--
``(i) for any period described in
subparagraph (B)(i); and
``(ii) for the 6-month period after the
date the borrower ceases to carry at least one-
half the normal full-time academic workload at
an institution of higher education, as
determined by the institution, and during which
the borrower is not earning any income.
``(D) Subsection (b)(7)(B) shall be applied by
substituting `20 years' for `25 years'.
``(E) A borrower of such a loan shall not be
required to have a partial financial hardship and may
elect, and remain enrolled in, the income-based
repayment plan under this subsection regardless of
income level.
``(F) Subparagraph (A) of subsection (b)(6) shall
not apply and a borrower's monthly payment shall be
determined in accordance with subparagraph (A) divided
by 12, which may exceed the monthly repayment amount
under a standard 10-year repayment plan.
``(G) Subparagraph (B) of subsection (b)(3) shall
not apply.
``(3) Additional special terms for certain borrowers.--A
borrower described in paragraph (1)(B)--
``(A) may choose to retain the repayment plan in
which the borrower is enrolled on June 30, 2022;
``(B) may elect to--
``(i) leave the repayment plan described in
subparagraph (A) and enter the income-based
repayment plan under this subsection;
``(ii) leave the repayment plan described
in subparagraph (A) and enter a standard 10-
year repayment plan under section 455(d)(A)(A);
or
``(iii) not more than once per calendar
year, switch between the repayment plans
described in clauses (i) and (ii);
``(C) after electing to leave a repayment plan
other than an income-based repayment plan described
under this subsection or a standard 10-year repayment
plan under section 455(d)(A)(A), shall not be permitted
to re-elect a repayment plan that is not an income-
based repayment plan under this subsection or such
standard 10-year repayment plan; 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 subsection
(b)(7)) any years of repayment under another income-
based or income-contingent repayment plan under this
title.
``(4) Cap on interest accrual.--Notwithstanding any other
provision of this Act, the total amount of interest that
accrues during a borrower's grace period and the time that a
borrower is in repayment under this subsection shall not exceed
50 percent of the original principal amount of the loan.''.
SEC. 402. TERMINATION OF CERTAIN REPAYMENT PLAN OPTIONS.
(a) Effective Date; Rulemaking Regarding Termination of Certain
Repayment Plans.--
(1) Effective date.--The amendments made by this section
shall take effect on July 1, 2022.
(2) Regulations.--Before the effective date described in
paragraph (1), the Secretary of Education shall carry out a
plan to end all eligibility for repayment plans other than a
standard repayment plan under section 428(b)(9)(A)(i) or
455(d)(1)(A) with a repayment period of 10 years and an income-
based repayment plan described under section 493C(f) for loans
made under part B or D of title IV of the Higher Education Act
of 1965, unless the borrower is enrolled in another repayment
plan before such effective date, in accordance with the
amendments made by this Act.
(b) Changes to Current Law.--
(1) Section 428(b) of the Higher Education Act of 1965 (20
U.S.C. 1078(b)) is amended--
(A) in paragraph (1)--
(i) 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, 2022, and not more frequently than
once per calendar year thereafter,
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
(ii) 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
(B) in paragraph (9), by adding at the end the
following:
``(C) Selection of repayment plans on and after
july 1, 2022.--
``(i) 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, 2022, the lender shall offer a
borrower of a loan made, insured, or guaranteed
under this part the opportunity to change
repayment plans not more than once per calendar
year, and to enroll in one of the following
repayment plans:
``(I) A standard repayment plan
under section 428(b)(9)(A)(i) with a
repayment period of 10 years.
``(II) The income-based repayment
plan under section 493C(f).''.
(2) Section 455(d) is amended--
(A) by redesignating paragraphs (2) through (5) as
paragraphs (3) through (6), respectively;
(B) by inserting after paragraph (1), the
following:
``(2) Design and selection on and after july 1, 2022.--
``(A) In general.--Notwithstanding paragraph (1),
for the borrower of a loan made on or after July 1,
2022, 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 standard repayment plan under
section 455(d)(1)(A) with a repayment period of
10 years; 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, 2022,
does not select a repayment plan described in
subparagraph (A), the Secretary may provide the
borrower with a standard repayment plan under section
455(d)(1)(A) with a repayment period of 10 years.
``(C) Changes in selections.--Beginning on July 1,
2022, 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.
``(D) Borrower in default.--Beginning on July 1,
2022, the Secretary may require any borrower who has
defaulted on a loan made under this part to--
``(i) pay all reasonable collection costs
associated with such loan; and
``(ii) repay the loan pursuant to an
income-based repayment plan under section
493C(f).''; and
(C) by adding at the end the following:
``(7) Borrowers of loans made before july 1, 2022.--A
borrower who is in repayment on a loan made under part B or
part D before July 1, 2022--
``(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);
``(ii) enter a standard repayment plan
under section 455(d)(1)(A) with a repayment
period of 10 years; or
``(iii) switch between the repayment plans
described in clauses (i) and (ii) not more than
once during a calendar year;
``(C) after electing to leave a repayment plan
other than an income-based repayment plan described in
this subsection or a standard repayment plan under
section 455(d)(1)(A), shall not be permitted to re-
elect a repayment plan that is not an income-based
repayment plan described in this subsection or a
standard repayment plan under section 455(d)(1)(A); 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.''.
SEC. 403. NOTIFICATION AND AUTOMATIC ENROLLMENT PROCEDURES FOR
BORROWERS WHO ARE DELINQUENT ON LOANS.
(a) Income-Contingent Repayment.--Section 455(d) of the Higher
Education Act of 1965 (20 U.S.C. 1087e(d)) is further amended by adding
at the end the following:
``(8) Notification and automatic enrollment procedures for
borrowers who are delinquent on loans.--
``(A) Authority to obtain income information.--
``(i) In general.--In the case of any
borrower who is at least 60 days delinquent on
a covered loan, the Secretary may obtain such
information as is reasonably necessary
regarding the income and family size of the
borrower (and the borrower's spouse, if
applicable).
``(ii) Availability of returns and return
information.--Returns and return information
(as defined in section 6103 of the Internal
Revenue Code of 1986) may be obtained under
this subparagraph only to the extent authorized
by section 6103(l)(13) of such Code.
``(B) Borrower notification.--With respect to each
borrower of a covered loan who is at least 60 days
delinquent on such loan and who has not been subject to
the procedures under this paragraph for such loan in
the preceding 120 days, the Secretary shall, as soon as
practicable after such 60-day delinquency, provide to
the borrower the following:
``(i) Notification that the borrower is at
least 60 days delinquent on at least 1 covered
loan, and a description of all delinquent
covered loans, nondelinquent covered loans, and
noncovered loans of the borrower.
``(ii) A brief description of the repayment
plans for which the borrower is eligible and
the covered loans and noncovered loans of the
borrower that may be eligible for such plans,
based on information available to the
Secretary.
``(iii) Clear and simple instructions on
how to select the repayment plans.
``(iv) The amount of monthly payments for
the covered and noncovered loans under the
repayment plans for which the borrower is
eligible, based on information available to the
Secretary, including, if the income information
of the borrower is available to the Secretary
under subparagraph (A)--
``(I) the amount of the monthly
payment under each income-driven
repayment plan for which the borrower
is eligible for the borrower's covered
and noncovered loans, based on such
income information; and
``(II) the income, family size, tax
filing status, and tax year information
on which each monthly payment is based.
``(v) An explanation that in the case of a
borrower for whom adjusted gross income is
unavailable--
``(I) if the borrower selects to
repay the covered loans of such
borrower pursuant to an income-driven
repayment plan that defines
discretionary income in such a manner
that an individual not required under
section 6012(a)(1) of the Internal
Revenue Code of 1986 to file a return
with respect to income taxes imposed by
subtitle A of such Code may have a
calculated monthly payment greater than
$0, the borrower will be required to
provide the Secretary with other
documentation of income satisfactory to
the Secretary, which documentation the
Secretary may use to determine an
appropriate repayment schedule; and
``(II) if the borrower selects to
repay such loans pursuant to an income-
driven repayment plan that is not
described in subclause (I), the
borrower will not be required to
provide the Secretary with such other
documentation of income, and the
borrower will have a calculated monthly
payment of $0.
``(vi) An explanation that the Secretary
shall take the actions under subparagraph (C)
with respect to such borrower, if--
``(I) the borrower is 120 days
delinquent on one or more covered loans
and has not selected a new repayment
plan for the covered loans of the
borrower; and
``(II) in the case of such a
borrower whose repayment plan for the
covered loans of the borrower is not an
income-driven repayment plan, the
monthly payments under such repayment
plan are higher than such monthly
payments would be under an income-
driven repayment plan for such loans.
``(vii) Instructions on updating the
information of the borrower obtained under
subparagraph (A).
``(C) Secretary's initial selection of plan.--With
respect to each borrower described in subparagraph (B)
who has a repayment plan for the covered loans of the
borrower that meets the requirements of clause (vi)(II)
of subparagraph (B) and has not selected a new
repayment plan for such loans in accordance with the
notice received under such subparagraph, and who is at
least 120 days delinquent on such a loan, the Secretary
shall, as soon as practicable--
``(i) in a case in which any of the
borrower's covered loans are eligible for an
income-driven repayment plan--
``(I)(aa) provide the borrower with
the income-driven repayment plan that
requires the lowest monthly payment
amount for each covered loan of the
borrower, compared to any other such
plan for which the borrower is
eligible; or
``(bb) if more than one income-
driven repayment plan would offer the
borrower the same lowest monthly
payment amount, provide the borrower
with the income-driven repayment plan
that has the most favorable terms for
the borrower;
``(II) if the plan selected under
subclause (I) is not the income-driven
repayment plan that would have the
lowest monthly payment amount if the
borrower were eligible for such plan
for the borrower's covered loans and
noncovered loans, notify the borrower
of the actions, if any, the borrower
may take to become eligible for such
income-driven repayment plan; and
``(III) authorize the borrower to
change the Secretary's selection of a
plan under this clause to any plan
described in paragraph (1) for which
the borrower is eligible; and
``(ii) in a case in which none of the
borrower's covered loans are eligible for an
income-driven repayment plan, notify the
borrower of the actions, if any, the borrower
may take for such loans to become eligible for
such a plan.
``(D) Secretary's additional selection of plan.--
``(i) In general.--With respect to each
borrower of a covered loan who selects a new
repayment plan in accordance with the notice
received under subparagraph (B) and who
continues to be delinquent on such loan for a
period described in clause (ii), the Secretary
shall, as soon as practicable after such
period, carry out the procedures described in
clauses (i) and (ii) of subparagraph (C) for
the covered loans of the borrower, if such
procedures would result in lower monthly
repayment amounts on such loan.
``(ii) Description of period.--The duration
of the period described in clause (i) shall be
the amount of time that the Secretary
determines is sufficient to indicate that the
borrower may benefit from repaying such loan
under a new repayment plan, but in no case
shall such period be less than 60 days.
``(E) Opt-out.--A borrower of a covered loan shall
have the right to opt-out of the procedures under this
paragraph.
``(9) Definitions.--In this subsection:
``(A) Covered loan.--The term `covered loan'
means--
``(i) a loan made under this part;
``(ii) a loan purchased under section 459A;
or
``(iii) a loan that has been assigned to
the Secretary under section 428(c)(8) or part
E.
``(B) Income-driven repayment plan.--The term
`income-driven repayment plan' means--
``(i) in the case of a covered loan made
under this part, purchased under section 459A,
or assigned to the Secretary before July 1,
2022, a plan described in subparagraph (D) or
(E) of paragraph (1); and
``(ii) in the case of a covered loan made
under this part, purchased under section 459A,
or assigned to the Secretary before July 1,
2022, the income-based repayment plan under
section 493C(f).
``(C) Noncovered loan.--The term `noncovered loan'
means a loan made, insured, or guaranteed under this
title that is not a covered loan.''.
(b) Changing Plans.--Section 493C(b)(8) of the Higher Education Act
of 1965 (20 U.S.C. 1098e(b)(8)) is amended to read as follows:
``(8) a borrower who is repaying a loan made, insured, or
guaranteed 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 any repayment
plan for which the loan is eligible in accordance with the
requirements of part B or part D, respectively; and''.
(c) Effective Date; Application.--
(1) Automatic enrollment.--The amendments made by
subsection (a) shall--
(A) take effect as soon as the Secretary of
Education determines practicable, but not later than 2
years after the date of enactment of this Act; and
(B) apply to all borrowers of covered loans (as
defined in section 455(d)(9) of the Higher Education
Act of 1965, as added by subsection (a)).
(2) Changing plans.--The amendment made by subsection (b)
shall take effect on the date of enactment of this Act.
SEC. 404. AUTOMATIC RECERTIFICATION FOR INCOME-DRIVEN REPAYMENT PLANS.
Section 455(e)(8)(A) of the Higher Education Act of 1965 (20 U.S.C.
1087e(e)(8)(A)) is amended--
(1) by striking ``and'' after clause (ii);
(2) in clause (iii), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following:
``(iv) in the case of a borrower for whom
adjusted gross income is unavailable--
``(I) if the borrower has selected
to repay the covered loans of such
borrower pursuant to an income-
contingent repayment plan that defines
discretionary income in such a manner
that an individual not required under
section 6012(a)(1) of the Internal
Revenue Code of 1986 to file a return
with respect to income taxes imposed by
subtitle A of such Code may have a
calculated monthly payment greater than
$0, the borrower will be required to
provide the Secretary with other
documentation of income satisfactory to
the Secretary, which documentation the
Secretary may use to determine an
appropriate repayment schedule; or
``(II) if the borrower has selected
to repay such loans pursuant to an
income-contingent repayment that is not
described in subclause (I), the
borrower will not be required to
provide the Secretary with such other
documentation of income, and the
borrower will have a calculated monthly
payment of $0.''.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Education and Labor, and in addition to the Committee on the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Education and Labor, and in addition to the Committee on the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Antitrust, Commercial, and Administrative Law.
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