Emergency Student Loan Consolidation Act of 1997

SECTION 1. SHORT TITLE; REFERENCE.

    (a) Short Title.--This Act may be cited as the ``Emergency Student 
Loan Consolidation Act of 1997''.
    (b) 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.).

SEC. 2. LOAN CONSOLIDATION PROVISIONS.

    (a) Definition of Loans Eligible for Consolidation.--Section 
428C(a)(4) (20 U.S.C. 1078-3(a)(4)) is amended--
            (1) by redesignating subparagraphs (C) and (D) as 
        subparagraphs (D) and (E), respectively; and
            (2) by inserting after subparagraph (B) the following new 
        subparagraph:
                    ``(C) made under part D of this title, except that 
                loans made under such part shall be eligible student 
                loans only for consolidation loans for which the 
                application is received by an eligible lender during 
                the period beginning on the date of enactment of the 
                Emergency Student Loan Consolidation Act of 1997 and 
                ending on October 1, 1998;''.
    (b) Terms of Consolidation Loans.--Section 428C(b)(4)(C)(ii) is 
amended--
            (1) in subclause (I), by inserting after ``consolidation 
        loan'' the following: ``for which the application is received 
        by an eligible lender before the date of enactment of the 
        Emergency Student Loan Consolidation Act of 1997, or on or 
        after October 1, 1998,'' ;
            (2) by striking ``or'' at the end of subclause (I);
            (3) by inserting ``or (II)'' before the semicolon at the 
        end of subclause (II);
            (4) by redesignating subclause (II) as subclause (III); and
            (5) by inserting after subclause (I) the following new 
        subclause:
                            ``(II) by the Secretary, in the case of a 
                        consolidation loan for which the application is 
                        received by an eligible lender on or after the 
                        date of enactment of the Emergency Student Loan 
                        Consolidation Act of 1997 and before October 1, 
                        1998, except that the Secretary shall pay such 
                        interest only on that portion of the loan that 
                        repays Federal Stafford Loans for which the 
                        student borrower received an interest subsidy 
                        under section 428 or Federal Direct Stafford 
                        Loans for which the borrower received an 
                        interest subsidy under section 455; or''.
    (c) Nondiscrimination in Loan Consolidation.--Section 428C(b) is 
amended by adding at the end the following new paragraph:
            ``(6) Nondiscrimination in loan consolidation.--An eligible 
        lender that makes consolidation loans under this section shall 
        not discriminate against any borrower seeking such a loan--
                    ``(A) based on the number or type of eligible 
                student loans the borrower seeks to consolidate;
                    ``(B) based on the type or category of institution 
                of higher education that the borrower attended;
                    ``(C) based on the interest rate that is authorized 
                to be collected with respect to the consolidation loan; 
                or
                    ``(D) with respect to the types of repayment 
                schedules offered to such borrower.''.
    (d) Interest Rate.--Section 428C(c)(1) is amended--
            (1) in the first sentence of subparagraph (A), by striking 
        ``(B) or (C)'' and inserting ``(B), (C), or (D)''; and
            (2) by adding at the end the following new subparagraph:
            ``(D) A consolidation loan for which the application is 
        received by an eligible lender on or after the date of 
        enactment of the Emergency Student Loan Consolidation Act of 
        1997 and before October 1, 1998, shall bear interest at an 
        annual rate on the unpaid principal balance of the loan that is 
        equal to the rate specified in section 427A(f), except that the 
        eligible lender may continue to calculate interest on such a 
        loan at the rate previously in effect and defer, until not 
        later than April 1, 1998, the recalculation of the interest on 
        such a loan at the rate required by this subparagraph if the 
        recalculation is applied retroactively to the date on which the 
        loan is made.''.
    (e) Amendments Effective for Pending Applicants.--The consolidation 
loans authorized by the amendments made by this section shall be 
available notwithstanding any pending application by a student for a 
consolidation loan under part D of title IV of the Higher Education Act 
of 1965, upon withdrawal of such application by the student at any time 
prior to receipt of such a consolidation loan.

SEC. 3. ADMINISTRATIVE EXPENSE REDUCTIONS.

    Section 458(a)(1) (20 U.S.C. 1087h(a)(1)) is amended by striking 
``$532,000,000'' and inserting ``$507,000,000''.

SEC. 4. TREATMENT OF TAX BENEFITS.

    (a) Family Contribution for Dependent Students.--
            (1) Parents' available income.--Section 475(c)(1) is 
        amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (D);
                    (B) by striking the period at the end of 
                subparagraph (E) and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(F) the amount of any tax credit taken by the 
                parents under section 25A of the Internal Revenue Code 
                of 1986.''.
            (2) Student contribution from available income.--Section 
        475(g)(2) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (C);
                    (B) by striking the period at the end of 
                subparagraph (D) and inserting ``; and''; and
                    (C) by inserting after subparagraph (D) the 
                following new subparagraph:
                    ``(E) the amount of any tax credit taken by the 
                student under section 25A of the Internal Revenue Code 
                of 1986.''.
    (b) Family Contribution for Independent Students Without Dependents 
Other Than a Spouse.--Section 476(b)(1)(A) (20 U.S.C. 1087pp(b)(1)(A)) 
is amended--
            (1) by striking ``and'' at the end of clause (iv); and
            (2) by inserting after clause (v) the following new clause:
                            ``(vi) the amount of any tax credit taken 
                        under section 25A of the Internal Revenue Code 
                        of 1986; and''.
    (c) Family Contribution for Independent Students With Dependents 
Other Than a Spouse.--Section 477(b)(1) (20 U.S.C. 1087qq(b)(1)) is 
amended--
            (1) by striking ``and'' at the end of subparagraph (D);
            (2) by striking the period at the end of subparagraph (E) 
        and inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(F) the amount of any tax credit taken under 
                section 25A of the Internal Revenue Code of 1986.''.
    (d) Total Income.--Section 480(a)(2) (20 U.S.C. 1087vv(a)(2)) is 
amended--
            (1) by striking ``individual, and'' and inserting 
        ``individual,''; and
            (2) by inserting ``and no portion of any tax credit taken 
        under section 25A of the Internal Revenue Code of 1986,'' 
        before ``shall be included''.
    (e) Other Financial Assistance.--Section 480(j) is amended by 
adding at the end the following new paragraph:
    ``(4) Notwithstanding paragraph (1), a tax credit taken under 
section 25A of the Internal Revenue Code of 1986 shall not be treated 
as estimated financial assistance for purposes of section 471(3).''.

            Passed the House of Representatives October 21, 1997.

            Attest:

                                                ROBIN H. CARLE,

                                                                 Clerk.

Summary: Emergency Student Loan Consolidation Act of 1997 - Amends the Higher Education Act of 1965 (HEA) to allow until October 1, 1998, the consolidation, under the Federal Family Education Loan Program (FFELP), of all of a student's loans under both the FFELP and the Direct Loan Program. Requires an application for such a consolidation loan to be received by an eligible lender between the date of enactment of this Act and October 1, 1998. Prohibits an eligible lender from discriminating against any borrower seeking such a consolidation loan: (1) based on the number or type of eligible student loans the borrower seeks to consolidate. (2) based on the type or category of institution of higher education that the borrower attended. (3) based on the interest rate authorized to be collected with respect to the consolidation loan. Or (4) with respect to the types of repayment schedules offered to such borrower. Sets forth required interest rates for such consolidation loans. Makes such consolidation loans available notwithstanding any pending application by a student for a direct consolidation loan, upon the student's withdrawal of such application. Reduces the amount of certain funds available for administrative expenses under HEA student assistance provisions. Revises HEA need analysis requirements to exclude from the calculation of available family income, and so reduce the family contribution for dependent or independent students by, the amount of the Hope Tax Credit taken by the student, the student's parents, or the student's spouse .