Parent PLUS Loan Fairness and Responsibility Act
This bill allows parent borrowers to transfer their parent PLUS loans to their child under certain circumstances. Among other requirements for a transfer, the child must demonstrate the ability to repay the loan, as determined by the Department of Education. Additionally, the bill makes these transferred loans eligible for income-driven repayment plans.
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7982 Introduced in House (IH)]
<DOC>
117th CONGRESS
2d Session
H. R. 7982
To amend the Higher Education Act of 1965 to allow certain Federal
student loans to be transferred from a parent to a child, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 8, 2022
Mr. Foster 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 allow certain Federal
student loans to be transferred from a parent to a child, 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 ``Parent PLUS Loan Fairness and
Responsibility Act''.
SEC. 2. TRANSFER OF FEDERAL STUDENT LOANS FROM PARENT TO CHILD.
Part G of title IV of the Higher Education Act of 1965 (20 U.S.C.
1088 et seq.) is amended by inserting after section 493D the following:
``SEC. 493E. TRANSFER OF FEDERAL STUDENT LOANS FROM PARENT TO CHILD.
``(a) In General.--A covered parent loan may be transferred from
the original borrower of the loan to a child of such borrower in
accordance with this section.
``(b) Transfer Requirements.--A covered parent loan may be
transferred to a child under subsection (a) only if--
``(1) the loan is in good standing, as determined by the
Secretary;
``(2) the loan was used to pay the educational expenses of
the child to whom the loan is to be transferred;
``(3) the child to whom the loan is to be transferred--
``(A) has attained the age of 18 years; and
``(B) demonstrates the ability to repay the loan,
as determined by the Secretary in accordance with
subsection (c);
``(4) the child, the parent, and the lender agree, in
writing, to the transfer of the loan;
``(5) the agreement described in paragraph (4) notifies the
child to whom the loan is transferred of the effect of the
transfer on the eligibility of the loan for forgiveness under
section 455(m); and
``(6) a period of 180 days has elapsed during which the
child was not pursuing--
``(A) at least a half-time course of study as
determined by an institution of higher education; or
``(B) a course of study pursuant to a graduate
fellowship program approved by the Secretary, or
pursuant to a rehabilitation training program for
disabled individuals approved by the Secretary.
``(c) Determination of Ability To Repay Loan.--In determining the
ability of a child to repay a covered parent loan under subsection
(b)(3)(B), the Secretary shall consider the following:
``(1) The child's employment status, income level, and
credit history.
``(2) The total dollar amount of the loans proposed to be
transferred to the child.
``(3) The debt-to-income ratio of the child before such
transfer.
``(4) The projected debt-to-income ratio of the child after
such transfer.
``(5) Any other factors the Secretary determines to be
relevant to the ability of the child to repay the loan.
``(d) Treatment of Transferred Loan.--A covered parent loan
transferred to a child under subsection (a) shall have the same terms,
conditions, and benefits applicable to the loan before the date of such
transfer except that--
``(1) the child to whom the loan is transferred shall be
treated as the original borrower of the loan; and
``(2) the parent who transferred the loan to the child
shall not be responsible for paying--
``(A) the outstanding balance of principal or
interest on the loan; or
``(B) any other costs associated with the loan,
including fees.
``(e) Effect on Loan Limits.--Notwithstanding any other provision
of this Act, a covered parent loan transferred to a child under
subsection (a) shall not be counted toward the child's annual or
aggregate maximum loan limits under this title.
``(f) Covered Parent Loan Defined.--In this section, the term
`covered parent loan' means--
``(1) a loan made to a parent on behalf of a dependent
student under section 428B;
``(2) a Federal Direct PLUS Loan made to the parent of a
dependent student; or
``(3) a loan made under section 428C or 455(g), to the
extent that such loan was used to repay--
``(A) a loan made to the parent of a dependent
student under section 428B; or
``(B) a Federal Direct PLUS Loan made to the parent
of a dependent student.''.
SEC. 3. TREATMENT OF COVERED PARENTS LOANS UNDER INCOME-DRIVEN
REPAYMENT PLANS.
(a) Repayment Plans.--Section 455(d)(1) of the Higher Education Act
of 1965 (20 U.S.C. 1087e(d)(1)) is amended--
(1) in subparagraph (D), by inserting before the semicolon
at the end the following: ``, and the plan described in this
subparagraph shall be available to the transferee of a covered
parent loan that is transferred under section 493E''; and
(2) in subparagraph (E), by inserting before the period the
following: ``, and the plan described in this subparagraph
shall be available to the transferee of a covered parent loan
that is transferred under section 493E''.
(b) Income-Based Repayment.--Section 493C(a) of the Higher
Education Act of 1965 (20 U.S.C. 1098e(a)) is amended--
(1) in paragraph (1), by inserting before the period at the
end the following: ``, except that such term does not include a
covered parent loan that is transferred under section 493E'';
and
(2) in paragraph (2), by inserting before the period at the
end the following: ``, except that such term does not include a
covered parent loan that is transferred under section 493E''.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Education and Labor.
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