Responsible Education Assistance through Loan Reforms Act
This bill makes various changes to the federal student loan system, including by (1) limiting the authority of the Department of Education to issue regulations, (2) establishing a new income-based repayment plan, (3) repealing the Public Service Loan Forgiveness program for new borrowers, and (4) allowing certain workforce development programs to be eligible for Pell Grants.
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8655 Introduced in House (IH)]
<DOC>
117th CONGRESS
2d Session
H. R. 8655
To streamline and improve the Federal student loan program to protect
borrowers and taxpayers, prohibit the Secretary of Education from
exercising regulatory overreach and abusing its authorities granted by
Congress, and extend Federal Pell Grant eligibility to certain short-
term workforce development programs.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
August 5, 2022
Ms. Foxx (for herself, Ms. Stefanik, and Mr. Banks) introduced the
following bill; which was referred to the Committee on Education and
Labor
_______________________________________________________________________
A BILL
To streamline and improve the Federal student loan program to protect
borrowers and taxpayers, prohibit the Secretary of Education from
exercising regulatory overreach and abusing its authorities granted by
Congress, and extend Federal Pell Grant eligibility to certain short-
term workforce development programs.
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 ``Responsible
Education Assistance through Loan Reforms Act'' or the ``Responsible
Education Assistance through Loan Reforms Act''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. References.
TITLE I--LIMITS ON SECRETARIAL AUTHORITY
Sec. 101. Limitation on authority of Secretary to propose or issue
regulations and executive actions.
TITLE II--LOAN REFORMS
Part A--Current Borrowers
Sec. 201. Income-contingent and income-based repayment plans.
Part B--Loan Rehabilitation and Loan Limits
Sec. 211. Loan rehabilitation.
Sec. 212. Loan limits.
Part C--Repayment Terms and Conditions for Loans Made on or After July
1, 2023
Sec. 221. Repayment terms for Federal Direct Consolidation Loans.
Sec. 222. Repayment incentives.
Sec. 223. Repayment plans.
Sec. 224. Public service loan forgiveness.
Sec. 225. Income-based repayment plan.
Sec. 226. Deferment on loans made on or after July 1, 2023.
Part D--Elimination of Interest Capitalization
Sec. 231. Elimination of interest capitalization.
TITLE III--WORKFORCE PELL GRANTS
Sec. 301. Data collection and dissemination related to Workforce Pell.
Sec. 302. Program eligibility for Workforce Pell grants.
Sec. 304. Workforce Pell Grants.
Sec. 305. Accrediting agency determination of eligibility requirements
for the Workforce Pell Grants program.
SEC. 2. REFERENCES.
Except as otherwise expressly provided, whenever in this Act an
amendment or repeal is expressed in terms of an amendment to, or repeal
of, a section or other provision, the reference shall be considered to
be made to a section or other provision of the Higher Education Act of
1965 (20 U.S.C. 1001 et seq.).
TITLE I--LIMITS ON SECRETARIAL AUTHORITY
SEC. 101. LIMITATION ON AUTHORITY OF SECRETARY TO PROPOSE OR ISSUE
REGULATIONS AND EXECUTIVE ACTIONS.
Part G of title IV (20 U.S.C. 1088 et seq.) is amended by inserting
after section 492 the following:
``SEC. 492A. LIMITATION ON AUTHORITY OF THE SECRETARY TO PROPOSE OR
ISSUE REGULATIONS AND EXECUTIVE ACTIONS.
``(a) Draft Regulations.--Beginning after the date of enactment of
this section, a draft regulation implementing this title (as described
in section 492(b)(1)) that is determined by the Secretary to be
economically significant shall be subject to the following requirements
(regardless of whether negotiated rulemaking occurs):
``(1) The Secretary shall determine whether the draft
regulation, if implemented, would result in an increase in a
subsidy cost resulting from a loan modification.
``(2) If the Secretary determines under paragraph (1) that
the draft regulation would result in an increase in a subsidy
cost resulting from a loan modification, then the Secretary may
take no further action with respect to such regulation.
``(b) Proposed or Final Regulations and Executive Actions.--
Beginning after the date of enactment of this section, the Secretary
may not issue a proposed rule, final regulation, or executive action
implementing this title if the Secretary determines that the rule,
regulation, or executive action--
``(1) is economically significant; and
``(2) would result in an increase in a subsidy cost
resulting from a loan modification.
``(c) Relationship to Other Requirements.--The analyses required
under subsections (a) and (b) shall be in addition to any other cost
analysis required under law for a regulation implementing this title,
including any cost analysis that may be required pursuant to Executive
Order 12866 (58 Fed. Reg. 51735; relating to regulatory planning and
review), Executive Order 13563 (76 Fed. Reg. 3821; relating to
improving regulation and regulatory review), or any related or
successor orders.
``(d) Definition.--In this section, the term `economically
significant', when used with respect to a draft, proposed, or final
regulation or executive action, means that the regulation or executive
action is likely, as determined by the Secretary--
``(1) to have an annual effect on the economy of
$100,000,000 or more; or
``(2) adversely to affect in a material way the economy, a
sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, or
tribal governments or communities.''.
TITLE II--LOAN REFORMS
PART A--CURRENT BORROWERS
SEC. 201. INCOME-CONTINGENT AND INCOME-BASED REPAYMENT PLANS.
(a) Income-Contingent Repayment.--
(1) Excessive interest cap.--Section 455(e) (20 U.S.C.
1087e(e)) is amended by adding at the end the following:
``(9) Excessive interest cap.--The Secretary shall cancel
any outstanding balance due on all loans made under this part
(other than an excepted PLUS Loan or an excepted Consolidation
Loan as such terms are defined in section 493C) to a borrower--
``(A) for whom an income contingent repayment plan
under this subsection is in effect, without regard to
the period of time for which such plan has been so in
effect for such borrower;
``(B) who, in the absence of this paragraph, would
not yet be eligible for loan cancellation under such
plan; and
``(C) who has repaid, pursuant to paragraph (7)--
``(i)(I) subject to subclause (II), an
amount on such loans that is equal to the total
amount of principal and interest that the
borrower would have repaid under a standard
repayment plan under section 455(d)(1)(A),
based on a 10-year repayment period, when the
borrower entered repayment on such loans; or
``(II) in the case of a Federal Direct
Consolidation Loan, an amount on such loan that
is equal to the total amount of principal and
interest that the borrower would have repaid
under the repayment schedule established for
such loan under section 428C(c)(2) on the date
on which such loan was made; and
``(ii) an amount equal to the amount of any
unpaid interest that has accrued, but was not
included in the calculation of the total amount
principal and interest that would have been
repaid under the standard repayment plan or
schedule described in clause (i)--
``(I) during any deferment period
described in clause (i) or (ii) of
section 455(f)(2)(A); and
``(II) during any forbearance
period while serving in a medical or
dental internship or residency program
as described in section
428(c)(3)(A)(i)(I); and''.
(2) Excessive interest cap for distressed borrowers.--
Section 455(e) (20 U.S.C. 1087e(e)) is further amended by
adding at the end the following:
``(10) Excessive interest cap for distressed borrowers.--
``(A) In general.--The Secretary shall cancel the
balance of interest due (in accordance with
subparagraph (B)) on any loan made under this part
(other than an excepted PLUS or excepted consolidation
loan (as defined in section 493C)) to a borrower--
``(i)(I) who has been in repayment for not
less than a 10-year period on such loan; or
``(II) in the case of a Federal Direct
Consolidation Loan, who has been in repayment
on such loan for not less than the repayment
period under the repayment schedule established
for such loan under section 428C(c)(2) on the
date on which such loan was made; and
``(ii) whose first monthly payment on such
loan pursuant to paragraph (7) that is not less
than the full amount due on such loan for such
month, after the date of enactment of the REAL
Reforms Act, is insufficient to cover the
interest that has accrued on such loan for such
month, and results in higher balance of
principal and interest on such loan.
``(B) Amount of interest cancellation.--The
Secretary shall cancel the obligation to repay the
balance of interest due on such loan as of the time of
the payment described in subparagraph (A)(ii) on such
loan.''.
(b) Income-Based Repayment.--
(1) Excessive interest cap.--Section 493C(b)(7)(B) (20
U.S.C. 1098e(b)(7)(B)) is amended--
(A) by redesignating clauses (i) through (v) as
subclauses (I) through (V), respectively, and moving
the margins accordingly;
(B) by striking the following:
``(B) for a period''; and inserting the following:
``(B)(i) for a period'';
(C) by inserting ``or'' at the end of clause
(i)(V), as so redesignated; and
(D) by adding at the end the following:
``(ii) in the absence of this clause, would
not yet be eligible for loan cancellation or
repayment under this paragraph, and has repaid,
pursuant to clause (i)--
``(I)(aa) subject to item (bb), an
amount on such loans that is equal to
the total amount of principal and
interest that the borrower would have
repaid under a standard repayment plan
under section 428(b)(9)(A)(i) or
section 455(d)(1)(A), based on a 10-
year repayment period, when the
borrower entered repayment on such
loans; or
``(bb) in the case of a Federal
Direct Consolidation Loan or a loan
made under section 428C, an amount on
such loan that is equal to the total
amount of principal and interest that
the borrower would have repaid under
the repayment schedule established for
such loan under section 428C(c)(2) on
the date on which such loan was made;
and
``(II) an amount equal to the
amount of any unpaid interest that has
accrued, but was not included in the
calculation of the total amount
principal and interest that would have
been repaid under the standard
repayment plan or schedule described in
subclause (I)--
``(aa) during any deferment
period described in section
427(a)(2)(C)(i) or
428(b)(1)(M)(i), or clause (i)
or (ii) of section
455(f)(2)(A); and
``(bb) during any
forbearance period while
serving in a medical or dental
internship or residency program
as described in section
428(c)(3)(A)(i)(I);''.
(2) Clarification of repayment of part b loans.--Section
493C(b) (20 U.S.C. 1098e(b)) is further amended--
(A) by striking ``and'' at end of paragraph (8);
(B) by striking the period at the end of paragraph
(9); and
(C) by adding the end the following:
``(10) in repaying under clause (ii) of paragraph (7)(B)
the outstanding balance of principal and interest due on a loan
made under part B to a borrower who meets the requirements of
such clause (ii), or in repaying under subsection (g) the
balance of interest due on a loan made under part B to a
borrower who meets the requirements of such subsection (g), the
Secretary shall--
``(A) enter into an agreement with the holder of
such loan (or, if the holder acts as an eligible lender
trustee for the beneficial owner of the loan, the
beneficial owner of the loan) for the purpose of
assuming the repayment obligations of the borrower in
accordance with subparagraph (B), except that the
Secretary shall not assign to the United States the
right to such loan;
``(B)(i) in the case of a repayment under paragraph
(7)(B)(ii), assume the obligation of the borrower to
repay the holder of such loan (or, if the holder acts
as an eligible lender trustee for the beneficial owner
of the loan, the beneficial owner of the loan) the
total amount of principal and interest remaining to be
repaid on such loan (after taking into account the
amounts repaid by the borrower under paragraph
(7)(B)(ii) and the Secretary under subsection (g), if
applicable) according to the terms and conditions,
including the repayment schedule, that were in effect
with respect to such loan on the day before the
Secretary assumes such obligation; or
``(ii) in the case of a repayment under subsection
(g), assume the obligation of the borrower to repay the
holder of such loan (or, if the holder acts as an
eligible lender trustee for the beneficial owner of the
loan, the beneficial owner of the loan) the balance of
interest due on such loan as of the time of the payment
described in subsection (g)(1)(B) on such loan
according to the terms and conditions, including the
repayment schedule, that were in effect with respect to
such loan on the day before the Secretary assumes such
obligation; and
``(C) ensure that the holder of such loan (or, if
the holder acts as an eligible lender trustee for the
beneficial owner of the loan, the beneficial owner of
the loan) shall, upon entering into an agreement
described in subparagraph (A) with respect to a loan of
a borrower, reports to consumer reporting agencies
that--
``(i) in the case of a repayment under
paragraph (7)(B)(ii), the borrower's liability
on such loan has been discharged; and
``(ii) in the case of a repayment under
subsection (g), the borrower's liability has
been discharged with respect to the balance of
the interest due on such loan as of the time of
the payment described in subsection (g)(1)(B)
on such loan.''.
(3) Rules of construction.--Section 493C (20 U.S.C. 1098e)
is amended by adding at the end the following:
``(f) Rules of Construction.--Nothing in subsection (b)(10) shall
be construed to authorize the Secretary to--
``(1) revoke the rights to a special allowance under
section 438 of the holder (or, if the holder acts as an
eligible lender trustee for the beneficial owner of the loan,
the beneficial owner of the loan) of the loans being repaid by
the Secretary under subsection (b)(10);
``(2) prepay such loan ahead of repayment schedule with
respect to such loans described in subparagraph (B) of
subsection (b)(10); or
``(3) use any authority or take any actions beyond what is
authorized explicitly in subsection (b)(10).''.
(4) Excessive interest cap for distressed borrowers.--
Section 493C (20 U.S.C. 1098e) is further amended by adding at
the end the following:
``(g) Excessive Interest Cap for Distressed Borrowers.--
``(1) In general.--The Secretary shall repay or cancel the
balance of interest due (in accordance with paragraph (2)) on
any loan made under part B or D (other than an excepted PLUS or
excepted consolidation loan) to a borrower--
``(A)(i) who has been in repayment for not less
than a 10-year period on such loan; or
``(ii) in the case of a Federal Direct
Consolidation Loan or a consolidation loan under
section 428C, who has been in repayment on such loan
for not less than the repayment period under the
repayment schedule established for such loan under
section 428C(c)(2) on the date on which such loan was
made; and
``(B) whose first monthly payment on such loan
pursuant to subsection (b)(7) that is not less than the
full amount due on such loan for such month, after the
date of enactment of the REAL Reforms Act, is
insufficient to cover the interest that has accrued on
such loan for such month, and results in higher balance
of principal and interest on such loan.
``(2) Amount of interest repayment or cancellation.--The
Secretary shall repay or cancel the obligation to repay the
balance of interest due on such loan as of the time of the
payment described in paragraph (1)(B) on such loan.''.
PART B--LOAN REHABILITATION AND LOAN LIMITS
SEC. 211. LOAN REHABILITATION.
(a) In General.--Section 428F(a)(5) (20 U.S.C. 1078-6) is amended
by striking ``one time'' and inserting ``two times''.
(b) Application of Amendment.--The amendment made by this section
shall apply to any borrower of a loan made, insured, or guaranteed
under title IV of the Higher Education Act of 1965 before, on, or after
the date of enactment of this Act.
SEC. 212. LOAN LIMITS.
(a) Graduate and Professional Students.--
(1) Aggregate and annual limits.--Section 455(a) (20 U.S.C.
1087e(a)) is amended--
(A) in paragraph (3)--
(i) in subparagraph (A)(ii), by inserting
before the period at the end the following: ``,
except that for any period of instruction
beginning on or after July 1, 2023, and subject
to subparagraph (D), such maximum annual amount
may not exceed $25,000''; and
(ii) by adding at the end the following:
``(C) Aggregate limits.--Subject to subparagraph
(D), for any period of instruction beginning on or
after July 1, 2023, the maximum aggregate amount of
loans under this part that a graduate or professional
student may borrow for enrollment in a program of
graduate or professional education shall be $100,000.
``(D) Exception for certain students.--The annual
and aggregate limits described in subparagraphs (A)(ii)
and (C) for any period of instruction beginning on or
after July 1, 2023, shall not apply to any student
enrolled in a program of study as of June 30, 2023, or
any loans made under this part to (or on behalf of)
such student, during the period required for the
completion of such program.''.
(2) Termination of authority to make federal direct plus
loans to graduate and professional students.--Section 455(a)
(20 U.S.C. 1087e(a)) is further amended by adding at the end
the following:
``(4) Termination of authority to make federal direct plus
loans to graduate and professional students.--
``(A) In general.--Notwithstanding any provision of
this part or part B, and except as otherwise provided
in subparagraph (B), for any period of instruction
beginning on or after July 1, 2023, a graduate or
professional student shall not be eligible to receive a
Federal Direct PLUS Loan under this part for enrollment
in a program of graduate or professional education.
``(B) Exception for certain students.--This
paragraph shall not apply to any student enrolled in a
program of study at an eligible institution as of June
30, 2023, or any loans made under this part to (or on
behalf of) such student, during the period required for
the completion of such program.''.
(b) Institutionally Determined Limits.--Section 455(a) (20 U.S.C.
1087e(a)) is further amended by adding at the end the following:
``(5) Institutionally determined limits.--
``(A) In general.--Notwithstanding any other
provision of this subsection, an eligible institution
(at the discretion of a financial aid administrator at
the institution) may prorate or limit the amount of a
loan any student (other than a student described in
subparagraph (D)) who is enrolled in a program of study
for a period of instruction beginning on or after July
1, 2023, at that institution, may borrow under this
part for an academic year--
``(i) if the institution can reasonably
demonstrate that student debt levels are or
would be excessive for such program, based on--
``(I) the most recently available
data from the Bureau of Labor
Statistics for the average starting
salary in the region in which the
institution is located for typical
occupations pursued by graduates of
such program; or
``(II) the most recently available
data from the College Scorecard (or
successor website) on--
``(aa) the median earnings
of students who complete such
program; and
``(bb) the median debt
owed, and the repayment rate,
on loans made under this part,
of such students;
``(ii) in a case in which the student is
enrolled on a less than full-time basis or the
student is enrolled for less than the period of
enrollment to which the annual loan limit
applies under this subsection, based on the
student's enrollment status;
``(iii) based on the credential level (such
as a degree, certificate, or other recognized
educational credential) that the student would
attain upon completion of such program; or
``(iv) based on the year of the program for
which the student is seeking such loan.
``(B) Application to all students.--Any proration
or limiting of loan amounts under subparagraph (A)
shall be applied in the same manner to all students
enrolled in the institution or program of study.
``(C) Increases for individual students.--Upon the
request of a student whose loan amount for an academic
year has been prorated or limited under subparagraph
(A), an eligible institution (at the discretion of the
financial aid administrator at the institution) may
increase such loan amount to an amount not exceeding
the annual loan amount applicable to such student under
this paragraph for such academic year if such student
demonstrates special circumstances or exceptional need.
``(D) Exception for certain students.--This
paragraph shall not apply to any student enrolled in a
program of study at an eligible institution as of June
30, 2023, or any loans made under this part to (or on
behalf of) such student, during the period required for
the completion of such program.''.
PART C--REPAYMENT TERMS AND CONDITIONS FOR LOANS MADE ON OR AFTER JULY
1, 2023
SEC. 221. REPAYMENT TERMS FOR FEDERAL DIRECT CONSOLIDATION LOANS.
Section 428C(c) (20 U.S.C. 1078-3(c)) is amended--
(1) in paragraph (2)(A), in the first sentence of
subparagraph (A), by inserting ``, including income-based
repayment schedules under section 460A, in the case of Federal
Direct Consolidation Loans made on or after July 1, 2023''
after ``income-based repayment schedules''; and
(2) in paragraph (3)--
(A) in subparagraph (A), by inserting ``or an
income-based repayment schedule under section 460A''
after ``section 493C''; and
(B) in subparagraph (C), by inserting ``or an
income-based repayment schedule under section 460A''
after ``section 493C''.
SEC. 222. REPAYMENT INCENTIVES.
(a) Amendment.--Section 455(b)(9)(C) (20 U.S.C. 1087e(b)(9)(C)) is
amended by inserting ``(which in the case of a loan for which the first
disbursement of principal is made on or after July 1, 2023, may not
exceed than 0.25 percentage points)'' after ``interest rate
reduction''.
(b) Application of Amendment.--The amendment made by this section
shall not apply to any borrower who is a student enrolled in a program
of study at an institution of higher education (as defined in section
102 of the Higher Education Act of 1965 (20 U.S.C. 1002)) as of June
30, 2023, or any loans made under part D of title IV of the Higher
Education Act of 1965 (20 U.S.C. 1087a et seq.) to (or on behalf of)
such student, during the period required for the completion of such
program.
SEC. 223. REPAYMENT PLANS.
Section 455(d) (20 U.S.C. 1087e(d)) is amended by adding at the end
the following:
``(6) Repayment plans for loans made on or after july 1,
2023.--
``(A) Design and selection.--Notwithstanding
paragraph (1) and except as provided in subparagraph
(E), the Secretary shall offer a borrower of a loan
made under this part on or after July 1, 2023, two
plans for repayment of such loan, including principal
and interest on the loan. The borrower shall be
entitled to accelerate, without penalty, repayment on
such loans. The borrower may choose--
``(i) a standard repayment plan with a
fixed monthly repayment amount paid over a
fixed period of time, not to exceed 10 years;
or
``(ii) an income-based repayment plan under
section 460A.
``(B) Selection by secretary.--If such borrower
does not select a repayment plan described in
subparagraph (A), the Secretary shall provide the
borrower with the repayment plan described in
subparagraph (A)(i).
``(C) Changes in selection.--
``(i) In general.--Subject to clause (ii),
a borrower may change the borrower's selection
of a repayment plan under subparagraph (A), or
the Secretary's selection of a plan for the
borrower under subparagraph (B), as the case
may be, under such terms and conditions as may
be established by the Secretary, except that
the Secretary may not establish any terms or
conditions with respect to whether a borrower
may change the borrower's repayment plan.
Nothing in this subsection shall prohibit the
Secretary from encouraging struggling borrowers
from enrolling in the income-based repayment
plan under section 460A.
``(ii) Same repayment plan required.--All
loans made under this part on or after July 1,
2023, to a borrower shall be repaid under the
same repayment plan under subparagraph (A),
except that the borrower may repay an excepted
PLUS loan or an excepted consolidation loan (as
such terms are defined in section 493C(a))
separately from other loans made under this
part to the borrower.
``(D) Repayment after default.--The Secretary may
require a borrower who has defaulted on a loan made
under this part on or after July 1, 2023, to--
``(i) pay all reasonable collection costs
associated with such loan; and
``(ii) repay the loan pursuant to the
income-based repayment plan under section 460A.
``(E) Exception for certain borrowers.--This
paragraph shall not apply to any borrower who is
student who is enrolled in a program of study at an
institution of higher education as of June 30, 2023, or
any loans made to (or on behalf of) such borrower,
during the period required for the completion of such
program.
``(F) Rule of construction.--Nothing in this
paragraph shall be construed to authorize, with respect
to a borrower of loans made under this part on or after
July 1, 2023--
``(i) eligibility for a repayment plan that
is not described in clause (i) or (ii) of
subparagraph (A); or
``(ii) the Secretary to--
``(I) carry out a repayment plan
that is not described in such clause
(i) or (ii); or
``(II) modify a repayment plan that
is described in such clause (i) or
(ii).''.
SEC. 224. PUBLIC SERVICE LOAN FORGIVENESS.
(a) Amendment.--Section 455(m)(3)(A) (20 U.S.C. 1087e(m)(3)(A)) is
amended by inserting before the period at the end the following: ``that
was made before July 1, 2023''.
(b) Application of Amendment.--The amendment made by this section
shall not apply to any borrower who is a student enrolled in a program
of study at an institution of higher education (as defined in section
102 of the Higher Education Act of 1965 (20 U.S.C. 1002)) as of June
30, 2023, or any loans made under part D of title IV of the Higher
Education Act of 1965 (20 U.S.C. 1087a et seq.) to (or on behalf of)
such student, during the period required for the completion of such
program.
SEC. 225. INCOME-BASED REPAYMENT PLAN.
(a) Establishment of New IBR.--Part D of title IV (20 U.S.C. 1087e
et seq.) is further amended by adding at the end the following:
``SEC. 460A. INCOME-BASED REPAYMENT PROGRAM.
``(a) In General.--Notwithstanding any other provision of this Act,
the Secretary shall carry out a program under which--
``(1) a borrower (other than a borrower described in
section 455(d)(6)(E)) of a loan made under this part on or
after July 1, 2023, may elect to have the borrower's aggregate
monthly payment for all such loans (other than an excepted PLUS
Loan or excepted Consolidation Loan) made to the borrower--
``(A) not to exceed the result obtained by dividing
by 12, 15 percent of the result obtained by
calculating, on at least an annual basis, the amount by
which--
``(i) the adjusted gross income of the
borrower or, if the borrower is married and
files a Federal income tax return jointly with
or separately from the borrower's spouse, the
adjusted gross income of the borrower and the
borrower's spouse; exceeds
``(ii) 150 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)); and
``(B) not to be less than $25;
``(2) the Secretary shall apply the borrower's monthly
payment under this section first toward interest due on such a
loan, next toward any fees due on the loan, and then toward the
principal of the loan;
``(3) any principal due and not paid under paragraph (2)
shall be deferred;
``(4) the amount of time the borrower makes monthly
payments under paragraph (1) may exceed 10 years;
``(5) the Secretary shall cancel any outstanding balance
due on all loans made on or after July 1, 2023, under this part
(other than an excepted PLUS Loan or an excepted Consolidation
Loan) to the borrower--
``(A) who, at any time, elected to participate in
income-based repayment under paragraph (1);
``(B) whose final monthly payment for such loans
prior to the loan cancellation under this paragraph was
made under such income-based repayment; and
``(C) who has repaid, pursuant to income-based
repayment under paragraph (1), a standard repayment
plan under section 455(d)(6)(A)(i), or a combination,
or in the case of consolidation loans, a repayment
schedule described in clause (i)(II)--
``(i)(I) except as otherwise provided in
subclause (II), an amount on such loans that is
equal to the total amount of principal and
interest that the borrower would have repaid
under a standard repayment plan under section
455(d)(6)(A)(i), based on a 10-year repayment
period, when the borrower entered repayment on
such loans; or
``(II) in the case of a Federal Direct
Consolidation Loan, an amount on such loan that
is equal to the total amount of principal and
interest that the borrower would have repaid
under the repayment schedule established for
such loan under section 428C(c)(2) on the date
on which such loan was made; and
``(ii) an amount equal to the amount of any
unpaid interest that has accrued, but was not
included in the calculation of the total amount
principal and interest that would have been
repaid under the standard repayment plan or
schedule described in clause (i), during any
period of deferment under subparagraph (A),
(B), or (F) of section 460B(b)(1); and
``(6) a borrower who is repaying a loan made under this
part pursuant to income-based repayment under paragraph (1) may
elect, at any time, to terminate repayment pursuant to such
income-based repayment and repay such loan under the standard
repayment plan.
``(b) Eligibility Determinations.--The Secretary shall establish
and implement with respect to any borrower who chooses to repay a loan
made under this part pursuant to income-based repayment under this
section procedures to--
``(1) use return information disclosed under section
6103(l)(13) of the Internal Revenue Code of 1986, pursuant to
approval provided under section 494, to determine the repayment
obligation of the borrower without further action by the
borrower;
``(2) allow the borrower (or the spouse of the borrower),
at any time, to opt out of disclosure under such section
6103(l)(13) and instead provide such information as the
Secretary may require to determine the repayment obligation of
the borrower (or withdraw from the repayment plan under this
subsection); and
``(3) provide the borrower with an opportunity to update
the return information so disclosed before the determination of
the repayment obligation of the borrower.
``(c) Notification to Borrowers.--The Secretary shall establish
procedures under which a borrower of a loan made under this part who
chooses to repay such loan pursuant to income-based repayment under
this section is notified of the terms and conditions of such plan,
including notification that if a borrower considers that special
circumstances, such as a loss of employment by the borrower or the
borrower's spouse, warrant an adjustment in the borrower's loan
repayment as determined using the borrower's Federal tax return
information, or the alternative documentation described in subsection
(b)(2), the borrower may contact the Secretary, who shall determine
whether such adjustment is appropriate, in accordance with criteria
established by the Secretary.
``(d) Reduced Payment Periods.--
``(1) In general.--The Secretary shall authorize borrowers
meeting the criteria under paragraph (2) to make monthly
payments of $5 for a period not in excess of 3 years, except
that--
``(A) for purposes of paragraph (2)(A), the
Secretary may authorize reduced payments in 6-month
increments, beginning on the date the borrower provides
to the Secretary the evidence described in paragraph
(2)(A)(i); and
``(B) for purposes of paragraph (2)(B), the
Secretary may authorize reduced payments in 3-month
increments, beginning on the date the borrower provides
to the Secretary the evidence described in paragraph
(2)(B)(i).
``(2) Eligibility determinations.--The Secretary shall
authorize borrowers to make reduced payments under this
subsection in the following circumstances:
``(A) In a case of borrower who is seeking and
unable to find full-time employment, as demonstrated by
providing to the Secretary--
``(i) evidence of the borrower's
eligibility for unemployment benefits to the
Secretary; or
``(ii) the borrower recertifies the reason
for the $5 monthly payment under this
subparagraph.
``(B) The Secretary determines that, due to high
medical expenses, the $25 monthly payment the borrower
would otherwise make would be an extreme economic
hardship to the borrower, if--
``(i) the borrower documents the reason why
the $25 minimum payment is an extreme economic
hardship; and
``(ii) the borrower recertifies the reason
for the $5 minimum payment on a three-month
basis.
``(3) Definition.--For purpose of this subsection, the term
`full-time employment' means employment that will provide not
less than 30 hours of work a week and is expected to continue
for a period of not less than 3 months.
``(e) Definitions.--In this section:
``(1) Adjusted gross income.--The term `adjusted gross
income' has the meaning given the term in section 62 of the
Internal Revenue Code of 1986.
``(2) Excepted consolidation loan.--The term `excepted
Consolidation Loan' means a Federal Direct Consolidation Loan,
if the proceeds of such loan were used to the discharge the
liability on--
``(A) an excepted PLUS loan; or
``(B) a Federal Direct Consolidation loan, if the
proceeds of such loan were used to discharge the
liability on an excepted PLUS loan.
``(3) Excepted plus loan.--The term `excepted PLUS Loan'
has the meaning given the term in section 493C.''.
(b) Procedure and Requirements for Requesting Tax Return
Information From the IRS.--Section 494(a) (20 U.S.C. 1098h(a)) is
amended by adding at the end the following:
``(4) Income-based repayment for loans made on or after
july 1, 2023.--
``(A) New applicants.--In the case of any written
or electronic application by an individual for an
income-based repayment plan under section 460A for a
loan made under part D on after July 1, 2023, the
Secretary, with respect to such individual and any
spouse of such individual, shall--
``(i) provide to such individuals the
notification described in paragraph (1)(A)(i);
and
``(ii) require, as a condition of
eligibility for such repayment plan, that such
individuals--
``(I) affirmatively approve the
disclosures described in subclauses (I)
and (II) of paragraph (1)(A)(i), to the
extent applicable, and agree that such
approval shall serve as an ongoing
approval of such disclosures until the
date on which the individual elects to
opt out of such disclosures under
section 465(b)(2); or
``(II) provide such information as
the Secretary may require to confirm
the eligibility of such individual for
such repayment plan.
``(B) Recertifications.--With respect to the first
written or electronic recertification (after the date
of the enactment of the REAL Reforms Act) of an
individual's income or family size for purposes of an
income-based repayment plan under section 460A (entered
into before the date of the enactment of the REAL
Reforms Act) for a loan under part D, the Secretary,
with respect to such individual and any spouse of such
individual, shall meet the requirements of clauses (i)
and (ii) of subparagraph (A) with respect to such
recertification.''.
SEC. 226. DEFERMENT ON LOANS MADE ON OR AFTER JULY 1, 2023.
(a) In General.--Part D of title IV (20 U.S.C. 1087e et seq.) is
further amended by adding at the end the following:
``SEC. 460B. DEFERMENT ON LOANS MADE ON OR AFTER JULY 1, 2023.
``(a) Effect on Principal and Interest.--
``(1) In general.--A borrower (other than a borrower
described in section 455(d)(6)(E)) of a loan made under this
part on or after July 1, 2023--
``(A) who meets the requirements described in
subsection (b) shall be eligible for a deferment on
such loan during which installments of principal need
not be paid and, as specified in paragraph (2),
interest shall not accrue, or shall accrue and be paid
by the borrower; and
``(B) may not be eligible for a deferment or
forbearance under section 455(f) or any other provision
of this Act (other than forbearance under section
455(l), forbearance under section 685.205(a) of title
34, Code of Federal Regulations (or successor
regulations), or deferment under section 493D).
``(2) Effect on interest.--
``(A) No accrual of interest on subsidized loans.--
With respect to a deferment period described in
subparagraphs (A) through (D) of subsection (b)(1),
interest--
``(i) shall not accrue, in the case of a--
``(I) Federal Direct Stafford Loan;
or
``(II) a Federal Direct
Consolidation Loan that consolidated
only Federal Direct Stafford Loans, or
a combination of such loans and Federal
Stafford Loans for which the student
borrower received an interest subsidy
under section 428; or
``(ii) shall accrue or be paid by the
borrower, in the case of a Federal Direct PLUS
Loan, a Federal Direct Unsubsidized Stafford
Loan, or a Federal Direct Consolidation Loan
not described in clause (i)(II).
``(B) Interest accrual on all loans.--With respect
to a deferment period described in subparagraph (E) or
(F) of subsection (b)(1), or paragraph (2), (3)(A), or
(4), interest shall accrue or be paid by the borrower,
in the case of any loan made under this part.
``(C) No accrual of interest on any loan.--With
respect to a deferment period described in paragraph
(3)(B) or paragraph (5), interest shall not accrue, in
the case of any loan made under this part.
``(b) Eligibility.--Any borrower described in subsection (a) shall
be eligible for a deferment on a loan made under this part on or after
July 1, 2023--
``(1) during any period during which the borrower--
``(A) is carrying at least one-half the normal
full-time work load for the course of study that the
borrower is pursuing, as determined by the eligible
institution the borrower is attending;
``(B) is pursuing a course of study pursuant to--
``(i) an eligible graduate fellowship
program in accordance with subsection (g); or
``(ii) an eligible rehabilitation training
program for individuals with disabilities in
accordance with subsection (i);
``(C) is serving on active duty during a war or
other military operation or national emergency, and for
the 180-day period following the demobilization date
for such service;
``(D) is performing qualifying National Guard duty
during a war or other military operation or national
emergency, and for the 180-day period following the
demobilization date for such service;
``(E) is a member of the National Guard who is not
eligible for a post-active duty deferment under section
493D and is engaged in active State duty for a period
of more than 30 consecutive days beginning--
``(i) the day after 6 months after the date
the student ceases to carry at least one-half
the normal full-time academic workload (as
determined by the institution); or
``(ii) the day after the borrower ceases
enrollment on at least a half-time basis, for a
loan in repayment; or
``(F) is serving in a medical or dental internship
or residency program, the successful completion of
which is required to begin professional practice or
service, or is serving in a medical or dental
internship or residency program leading to a degree or
certificate awarded by an institution of higher
education, a hospital, or a health care facility that
offers postgraduate training;
``(2) during a period sufficient to enable the borrower to
resume honoring the agreement to repay the outstanding balance
of principal and interest on the loan after default, if--
``(A) the borrower signs a new agreement to repay
such outstanding balance;
``(B) the deferment period is limited to 120 days;
and
``(C) such deferment is not granted for consecutive
periods;
``(3) during a period of administrative deferment--
``(A) described in paragraphs (1) through (4) of
subsection (j); or
``(B) described in subsection (j)(5);
``(4) in the case of a borrower of an excepted PLUS Loan or
an excepted Consolidation Loan, during a period described in
subsection (k); or
``(5) during a period in which such borrower is receiving
treatment for cancer (in this paragraph referred to as the
`treatment period'), and the 6-month period after such
treatment period (in this paragraph referred to as the `post-
treatment period'), except that, notwithstanding subsection
(a), interest shall not accrue during any such treatment period
or post-treatment period.
``(c) Length of Deferment.--A deferment granted by the Secretary--
``(1) under subparagraph (F) of subsection (b)(1) shall be
renewable at 12 month intervals; and
``(2) under subparagraph (F) of subsection (b)(1) shall
equal the length of time remaining in the borrower's medical or
dental internship or residency program.
``(d) Request and Documentation.--The Secretary shall determine the
eligibility of a borrower for a deferment under paragraph (1), (2), or
(4) of subsection (b), based on--
``(1) the receipt of a request for a deferment from the
borrower, and documentation of the borrower's eligibility for
the deferment;
``(2) receipt of a completed loan application that
documents the borrower's eligibility for a deferment;
``(3) receipt of a student status information documenting
that the borrower is enrolled on at least a half-time basis; or
``(4) the Secretary's confirmation of the borrower's half-
time enrollment status, if the confirmation is requested by the
institution of higher education.
``(e) Notification.--The Secretary shall--
``(1) notify a borrower of a loan made under this part--
``(A) the granting of a deferment under this
subsection on such loan; and
``(B) the option of the borrower to continue making
payments on the outstanding balance of principal and
interest on such loan in accordance with subsection
(f);
``(2) at the time the Secretary grants a deferment to a
borrower of a loan made under this part, and not less
frequently than once every 180 days during the period of such
deferment, provide information to the borrower to assist the
borrower in understanding--
``(A) the effect of granting a deferment on the
total amount to be paid under the income-based
repayment plan under 460A;
``(B) interest shall not accrue, or shall accrue or
be paid by the borrower, as specified in subsection
(a)(2);
``(C) the amount of unpaid principal and the amount
of interest that has accrued since the last statement
of such amounts provided to the borrower; and
``(D) the borrower's option to discontinue the
deferment at any time.
``(f) Payments by Borrowers Authorized.--A borrower may make
payments on the outstanding balance of principal and interest on a loan
made under this part during any period of deferment granted under this
subsection.
``(g) Graduate Fellowship Deferment.--
``(1) In general.--A borrower of a loan under this part is
eligible for a deferment under subsection (b)(1)(B)(i) during
any period for which an authorized official of the borrower's
graduate fellowship program certifies that the borrower meets
the requirements of paragraph (2) and is pursuing a course of
study pursuant to an eligible graduate fellowship program.
``(2) Borrower requirements.--A borrower meets the
requirements of this subparagraph if the borrower--
``(A) holds at least a baccalaureate degree
conferred by an institution of higher education;
``(B) has been accepted or recommended by an
institution of higher education for acceptance on a
full-time basis into an eligible graduate fellowship
program; and
``(C) is not serving in a medical internship or
residency program, except for a residency program in
dentistry.
``(h) Treatment of Study Outside the United States.--
``(1) In general.--The Secretary shall treat, in the same
manner as required under section 428(b)(4), any course of study
at a foreign university that is accepted for the completion of
a recognized international fellowship program by the
administrator of such a program as an eligible graduate
fellowship program.
``(2) Requests for deferment.--Requests for deferment of
repayment of loans under this subsection by students engaged in
graduate or postgraduate fellowship-supported study (such as
pursuant to a Fulbright grant) outside the United States shall
be approved until completion of the period of the fellowship,
in the same manner as required under section 428(b)(4).
``(i) Rehabilitation Training Program Deferment.--A borrower of a
loan under this part is eligible for a deferment under subsection
(b)(1)(B)(ii) during any period for which an authorized official of the
borrower's rehabilitation training program certifies that the borrower
is pursuing an eligible rehabilitation training program for individuals
with disabilities.
``(j) Administrative Deferments.--The Secretary may grant a
deferment to a borrower without requiring a request and documentation
from the borrower under subsection (d) for--
``(1) a period during which the borrower was delinquent at
the time a deferment is granted, including a period for which
scheduled payments of principal and interest were overdue at
the time such deferment is granted;
``(2) a period during which the borrower was granted a
deferment under this subsection but for which the Secretary
determines the borrower should not have qualified;
``(3) a period necessary for the Secretary to determine the
borrower's eligibility for the cancellation of the obligation
of the borrower to repay the loan under section 437;
``(4) a period during which the Secretary has authorized
deferment due to a national military mobilization or other
local or national emergency; or
``(5) a period not to exceed 60 days, during which interest
shall accrue but not be capitalized, if the Secretary
reasonably determines that a suspension of collection activity
is warranted to enable the Secretary to process supporting
documentation relating to a borrower's request--
``(A) for a deferment under this subsection;
``(B) for a change in repayment plan under section
455(d)(6); or
``(C) to consolidate loans under this part.
``(k) Deferments for Excepted PLUS Loans or Excepted Consolidation
Loans.--
``(1) In general.--A qualified borrower shall be eligible
for deferments under paragraphs (3) through (5).
``(2) Qualified borrower defined.--In this subsection, the
term `qualified borrower' means a borrower of an excepted PLUS
Loan or an excepted consolidation loan.
``(3) Economic hardship deferment.--
``(A) In general.--A qualified borrower shall be
eligible for a deferment during periods, not to exceed
3 years in total, during which the qualified borrower
experiences an economic hardship described in
subparagraph (B).
``(B) Economic hardship.--An economic hardship
described in this clause is a period during which the
qualified borrower--
``(i) is receiving payment under a means-
tested benefit program;
``(ii) is employed full-time and the
monthly gross income of the qualified borrower
does not exceed the greater of--
``(I) the minimum wage rate
described in section 6 of the Fair
Labor Standards Act of 1938 (29 U.S.C.
206); or
``(II) an amount equal to 150
percent of the poverty line; or
``(iii) demonstrates that the sum of the
qualified borrower's monthly payments on the
qualified borrower's excepted PLUS Loan or an
excepted consolidation loan is not less than 20
percent of the qualified borrower's monthly
gross income.
``(C) Eligibility.--To be eligible to receive a
deferment under this subparagraph, a qualified borrower
shall submit to the Secretary--
``(i) for the first period of deferment
under this subparagraph, evidence showing the
monthly gross income of the qualified borrower;
and
``(ii) for a subsequent period of deferment
that begins less than one year after the end of
a period of deferment granted under this
subparagraph--
``(I) evidence showing the monthly
gross income of the qualified borrower;
or
``(II) the qualified borrower's
most recently filed Federal income tax
return, if such a return was filed in
either of the two tax years preceding
the year in which the qualified
borrower requests the subsequent period
of deferment.
``(4) Unemployment deferment.--
``(A) In general.--A qualified borrower shall be
eligible for a deferment for periods during which the
qualified borrower is seeking, and is unable to find,
full-time employment.
``(B) Eligibility.--To be eligible to receive an
deferment under this subparagraph, a qualified borrower
shall submit to the Secretary--
``(i) evidence of the qualified borrower's
eligibility for unemployment benefits; or
``(ii) for requests submitted after the
initial request, written confirmation, or an
equivalent as approved by the Secretary, that
the qualified borrower has made at least six
diligent attempts during the preceding six-
month period to secure full-time employment.
``(C) Terms of deferment.--The following terms
shall apply to a deferment under this subparagraph:
``(i) Initial period.--The first deferment
granted to a qualified borrower under this
subparagraph may be for a period of
unemployment beginning not more than 6 months
before the date on which the Secretary receives
the qualified borrower's request for deferment
and may be granted for a period of up to 6
months after that date.
``(ii) Renewals.--Deferments under this
subparagraph shall be renewable at 6-month
intervals beginning after the expiration of the
first period of deferment under clause (i). To
be eligible to renew a deferment under this
subparagraph, a qualified borrower shall submit
to the Secretary the information described in
subparagraph (B)(i).
``(iii) Aggregate limit.--The period of all
deferments granted to a borrower under this
subparagraph may not exceed 3 years in
aggregate.
``(5) Health deferment.--
``(A) In general.--A qualified borrower shall be
eligible for a deferment during periods in which the
qualified borrower is unable to make scheduled loan
payments due to high medical expenses, as determined by
the Secretary.
``(B) Eligibility.--To be eligible to receive a
deferment under this subparagraph, a qualified borrower
shall--
``(i) submit to the Secretary documentation
demonstrating that making scheduled loan
payments would be an extreme economic hardship
to the borrower due to high medical expenses,
as determined by the Secretary; and
``(ii) resubmit such documentation to the
Secretary not less frequently than once every 3
months.
``(l) Prohibitions.--
``(1) Prohibition on fees.--No administrative fee or other
fee may be charged to the borrower in connection with the
granting of a deferment under this subsection.
``(2) Prohibition on adverse credit reporting.--No adverse
information relating to a borrower may be reported to a
consumer reporting agency solely because of the granting of a
deferment under this subsection.
``(3) Limitation on authority.--The Secretary shall not,
through regulation or otherwise, authorize additional deferment
options or periods of deferment other than the deferment
options and periods of deferment authorized under this
subsection.
``(m) Definitions.--In this section:
``(1) Eligible graduate fellowship program.--The term
`eligible graduate fellowship program', when used with respect
to a course of study pursued by the borrower of a loan under
this part, means a fellowship program that--
``(A) provides sufficient financial support to
graduate fellows to allow for full-time study for at
least six months;
``(B) requires a written statement from each
applicant explaining the applicant's objectives before
the award of that financial support;
``(C) requires a graduate fellow to submit periodic
reports, projects, or evidence of the fellow's
progress; and
``(D) in the case of a course of study at an
institution of higher education outside the United
States described in section 102, accepts the course of
study for completion of the fellowship program.
``(2) Eligible rehabilitation training program for
individuals with disabilities.--The term `eligible
rehabilitation training program for individuals with
disabilities', when used with respect a course of study pursued
by the borrower of a loan under this part, means a program
that--
``(A) is necessary to assist an individual with a
disability in preparing for, securing, retaining, or
regaining employment;
``(B) is licensed, approved, certified, or
otherwise recognized as providing rehabilitation
training to disabled individuals by--
``(i) a State agency with responsibility
for vocational rehabilitation programs, drug
abuse treatment programs, mental health
services programs, or alcohol abuse treatment
programs; or
``(ii) the Secretary of Veterans Affairs;
and
``(C) provides or will provide the borrower with
rehabilitation services under a written plan that--
``(i) is individualized to meet the
borrower's needs;
``(ii) specifies the date on which the
services to the borrower are expected to end;
and
``(iii) requires a commitment of time and
effort from the borrower that prevents the
borrower from being employed at least 30 hours
per week, either because of the number of hours
that must be devoted to rehabilitation or
because of the nature of the rehabilitation.
``(3) Excepted plus loan; excepted consolidation loan.--The
terms `excepted PLUS loan' and `excepted consolidation loan'
have the meanings given such terms in section 460A.
``(4) Family size.--The term `family size' means the number
that is determined by counting--
``(A) the borrower;
``(B) the borrower's spouse;
``(C) the borrower's children, including unborn
children who are expected to be born during the period
covered by the deferment, if the children receive more
than half their support from the borrower; and
``(D) another individual if, at the time the
borrower requests a deferment under this section, the
individual--
``(i) lives with the borrower;
``(ii) receives more than half of the
individual's support (which may include money,
gifts, loans, housing, food, clothes, car,
medical and dental care, and payment of college
costs) from the borrower; and
``(iii) is expected to receive such support
from the borrower during the relevant period of
deferment.
``(5) Full-time.--The term `full-time', when used with
respect to employment, means employment for not less than 30
hours per week that is expected to continue for not less than
three months.
``(6) Means-tested benefit program.--The term `means-tested
benefit program' means--
``(A) a State public assistance program under which
eligibility for the program's benefits, or the amount
of such benefits, are determined on the basis of income
or resources of the individual or family seeking the
benefit; or
``(B) a mandatory spending program of the Federal
Government, other than a program under this title,
under which eligibility for the program's benefits, or
the amount of such benefits, are determined on the
basis of income or resources of the individual or
family seeking the benefit, and may include such
programs as--
``(i) the supplemental security income
program under title XVI of the Social Security
Act (42 U.S.C. 1381 et seq.);
``(ii) the supplemental nutrition
assistance program under the Food and Nutrition
Act of 2008 (7 U.S.C. 2011 et seq.);
``(iii) the program of block grants for
States for temporary assistance for needy
families established under part A of title IV
of the Social Security Act (42 U.S.C. 601 et
seq.);
``(iv) the special supplemental nutrition
program for women, infants, and children
established by section 17 of the Child
Nutrition Act of 1966 (42 U.S.C. 1786); and
``(v) other programs identified by the
Secretary.
``(7) Monthly gross income.--The term `monthly gross
income', when used with respect to a borrower, means--
``(A) the gross amount of income received by the
borrower from employment and other sources for the most
recent month; or
``(B) one-twelfth of the borrower's adjusted gross
income, as recorded on the borrower's most recently
filed Federal income tax return.
``(8) Rule of construction.--Nothing in this section shall
be construed to impact a borrower's eligibility to receive the
benefit of section 455(o).''.
(b) Conforming Amendment.--Section 493D(a) (20 U.S.C. 1098f(a)) is
amended by inserting ``, or section 460B'' after ``464(c)(2)(A)(iii)''.
PART D--ELIMINATION OF INTEREST CAPITALIZATION
SEC. 231. ELIMINATION OF INTEREST CAPITALIZATION.
(a) Federal PLUS Loans.--Section 428B(d)(2) (20 U.S.C. 1078-
2(d)(2)) is amended to read as follows:
``(2) No capitalization of interest.--Interest on loans
made under this section for which payments of principal are
deferred pursuant to paragraph (1) shall be paid monthly or
quarterly, if agreed upon by the borrower and the lender.''.
(b) Federal Consolidation Loans Deferrals.--Section
428C(b)(4)(C)(ii)(III) (20 U.S.C. 1078-3(b)(4)(C)(III)) is amended by
striking ``or capitalized,''.
(c) Loan Limits for Unsubsidized Stafford Loans.--Section
428H(d)(5) (20 U.S.C. 1078-8(d)(5)) is amended by inserting ``before
the date of enactment of the REAL Reforms Act'' after ``Interest
capitalized''.
(d) Unsubsidized Stafford Loans for Middle Income Borrowers.--
Section 428H(e)(2) (20 U.S.C. 1078-8(e)(2)) is amended--
(1) in subparagraph (A), in the matter before clause (i),
by striking ``, if agreed upon by the borrower and the lender''
and all that follows through clause (ii)(IV) and inserting ``be
paid monthly or quarterly, if agreed upon by the borrower and
the lender.'';
(2) by striking subparagraph (B); and
(3) by redesignating subparagraph (C) as subparagraph (B).
(e) Income Contingent Repayment.--Section 455(e)(5) (20 U.S.C.
1087e(e)(5)) is amended by striking the last sentence and inserting
``No interest may be capitalized on such loan on or after the date of
the enactment of the REAL Reforms Act, and the Secretary shall
promulgate regulations with respect to the treatment of accrued
interest that is not capitalized''.
(f) Effect of Deferment on Principal and Interest.--Section
455(f)(1)(B) (20 U.S.C. 1087e(f)(1)(B)) is amended by striking
``capitalized or''.
(g) Income-Based Repayment Program.--Section 493C(b)(3)(B) (20
U.S.C. 1098e(b)(3)(B)) is amended by inserting ``shall accrue but not''
before ``be capitalized''.
TITLE III--WORKFORCE PELL GRANTS
SEC. 301. DATA COLLECTION AND DISSEMINATION RELATED TO WORKFORCE PELL.
Section 131 (20 U.S.C. 1015) is amended by adding at the end the
following:
``(i) Data Collection and Dissemination Related to Workforce
Pell.--
``(1) Appeal of earnings information.--The Secretary may
establish an appeals process to permit eligible programs for
purposes of the Workforce Pell Grants program under section
401(k) to submit alternate earnings data to comply with section
481(b)(3)(F), provided that such data are statistically
rigorous, accurate, comparable, and representative of students
who receive a Workforce Pell Grant and complete the eligible
program.
``(2) Dissemination of information.--The Secretary shall
collect, verify, and make publicly available the information
required under subparagraph (E) of subsection (b)(3) of section
481 on the College Scorecard or any similar successor website.
``(3) Exceptions.--Notwithstanding any other provision of
this subsection, if disclosure of any data under paragraph (2)
is prohibited under State or Federal privacy laws or
regulations, the Secretary shall take such steps as the
Secretary determines necessary to make publicly available such
data in accordance with such laws and regulations.''.
SEC. 302. PROGRAM ELIGIBILITY FOR WORKFORCE PELL GRANTS.
Section 481(b) (20 U.S.C. 1088(b)) is amended--
(1) by redesignating paragraphs (3) and (4) as paragraphs
(4) and (5), respectively; and
(2) by inserting after paragraph (2) the following:
``(3) A program is an eligible program for purposes of the
Workforce Pell Grants program under section 401(k) only if--
``(A) it is at least 150 clock hours of
instruction, but not more than 600 clock hours of
instruction, or an equivalent number of credit hours,
offered during a minimum of 8 weeks, but not more than
15 weeks;
``(B) it is determined by an accrediting agency or
association recognized by the Secretary pursuant to
section 496(a) to--
``(i) provide an education aligned with the
requirements of in-demand industry sectors or
occupations, as defined in section 3 of the
Workforce Innovation and Opportunity Act;
``(ii) meet the hiring requirements of
potential employers in the sectors or
occupations described in clause (i);
``(iii) have been offered by an institution
for not less than 1 year prior to a
determination by such agency or association
under this subparagraph;
``(iv) have a completion rate (based on the
methodology of such agency or association) of
at least 70 percent; and
``(v) have a job placement rate (based on
the methodology of such agency or association)
of at least 70 percent; and
``(C) the increase in median earnings of students
who receive Federal financial aid under this title and
who complete the program is an amount that is equal to
or greater than the published tuition and fees of such
program, as determined by calculating the difference
between--
``(i) the median earnings of such students
at the time of initial enrollment in the
program; and
``(ii) the median earnings of such students
two years after completing such program.''.
SEC. 303. WORKFORCE PELL GRANTS.
(a) Award Year 2023-2024.--Section 401 (20 U.S.C. 1070a) is amended
by adding at the end the following:
``(k) Workforce Pell Grants Program.--
``(1) In general.--For the award year beginning on July 1,
2023, the Secretary shall award grants (referred to as a
`Workforce Pell Grants') to eligible students under paragraph
(2) in accordance with this subsection.
``(2) Eligible students.--For award year 2023-2024, to be
eligible to receive a Workforce Pell Grant under this
subsection for any period of enrollment, a student shall meet
the eligibility requirements for a Federal Pell Grant under
this section, except that the student--
``(A) shall be enrolled, or accepted for
enrollment, in an eligible program described in section
481(b)(3); and
``(B) may not have received a postbaccalaureate
degree.
``(3) Terms and conditions of awards.--The Secretary shall
award Workforce Pell Grants under this subsection in the same
manner and with the same terms and conditions as the Secretary
awards Federal Pell Grants under subsection (b), except that a
student who is eligible for a grant equal to less than the
amount of the minimum Federal Pell Grant because the eligible
workforce development program in which the student is enrolled
or accepted for enrollment is less than an academic year (in
hours of instruction or weeks of duration) may still be
eligible for a Workforce Pell Grant.
``(4) Prevention of double benefits.--No eligible student
described in paragraph (2) may, for the same period of
enrollment, receive both a grant under this subsection and a
Federal Pell Grant under subsection (b).''.
(b) Subsequent Award Years.--
(1) In general.--Section 401 (20 U.S.C. 1070a), as amended
by section 703 of the FAFSA Simplification Act (title VII of
division FF of Public Law 116-260), is amended by adding at the
end the following:
``(k) Workforce Pell Grants Program.--
``(1) In general.--For the award year beginning on July 1,
2024, and each subsequent award year, the Secretary shall award
grants (referred to as a `Workforce Pell Grants') to eligible
students under paragraph (2) in accordance with this
subsection.
``(2) Eligible students.--For award year 2024-2025 and each
succeeding award year, to be eligible to receive a Workforce
Pell Grant under this subsection for any period of enrollment,
a student shall meet the eligibility requirements for a Federal
Pell Grant under this section, except that the student--
``(A) shall be enrolled, or accepted for
enrollment, in an eligible program described in section
481(b)(3); and
``(B) may not have received a postbaccalaureate
degree.
``(3) Terms and conditions of awards.--The Secretary shall
award Workforce Pell Grants under this subsection in the same
manner and with the same terms and conditions as the Secretary
awards Federal Pell Grants under subsection (b), except that a
student who is eligible for a grant equal to less than the
amount of the minimum Federal Pell Grant because the eligible
workforce development program in which the student is enrolled
or accepted for enrollment is less than an academic year (in
hours of instruction or weeks of duration) may still be
eligible for a Workforce Pell Grant.
``(4) Prevention of double benefits.--No eligible student
described in paragraph (2) may, for the same period of
enrollment, receive both a grant under this subsection and a
Federal Pell Grant under subsection (b).''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect as if included in section 703 of the FAFSA
Simplification Act (title VII of division FF of Public Law 116-
260; 134 Stat. 3191) and in accordance with section 701(b) of
such Act.
SEC. 304. ACCREDITING AGENCY DETERMINATION OF ELIGIBILITY REQUIREMENTS
FOR THE WORKFORCE PELL GRANTS PROGRAM.
(a) In General.--Section 496(a)(4) (20 U.S.C. 1099b(a)(4)) is
amended--
(1) in subparagraph (A), by striking ``and'' at the end;
(2) in subparagraph (B)(ii), by inserting ``and'' at the
end; and
(3) by adding at the end the following:
``(C) if such agency or association has or seeks to include
within its scope of recognition the evaluation of the quality
of institutions offering an eligible program for purposes of
the Workforce Pell Grants program (in accordance with section
481(b)(3)), such agency or association shall, in addition to
meeting the other requirements of this subpart, demonstrate to
the Secretary that, with respect to such eligible programs--
``(i) the agency's or association's standards
include a process for determining if the institution
has the capability to effectively offer such an
eligible program; and
``(ii) the agency or association requires a
demonstration that the program--
``(I) satisfies the requirements of
subparagraph (B) of section 481(b)(3); and
``(II) provides academic content, an amount
of instructional time, and competencies to
satisfy any applicable educational requirement
so that a student who completes the program and
seeks employment is qualified to practice or
find employment in the sectors or occupations
that the program prepares students to enter.''.
(b) Additional NACIQI Review Meetings.--For the purpose of
preparing for the implementation of the Workforce Pell Grant program
under section 401(k) of the Higher Education Act of 1965 (as added by
section 304), in addition to the meetings required under section
114(d)(1) of the Higher Education Act of 1965 (20 U.S.C. 1011c(d)(1)),
the National Advisory Committee on Institutional Quality and Integrity
(as established by such section 114) shall, through 2025, hold meetings
to evaluate the additions to the scope of recognition of accrediting
agencies and associations with respect to an eligible program for
purposes of the Workforce Pell Grants program (in accordance with
section 481(b)(3) of the Higher Education Act of 1965, as added by
section 302).
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Education and Labor.
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