```

[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3752 Introduced in House (IH)]

<DOC>

114th CONGRESS
  1st Session
                                H. R. 3752

   To simplify and improve the Federal student loan program through 
    income-contingent repayment to provide stronger protections for 
    borrowers, encourage responsible borrowing, and save money for 
                               taxpayers.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            October 9, 2015

 Mr. Polis (for himself and Mr. Hanna) introduced the following bill; 
which was referred to the Committee on Education and the Workforce, and 
  in addition to the Committee on Ways and Means, 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 simplify and improve the Federal student loan program through 
    income-contingent repayment to provide stronger protections for 
    borrowers, encourage responsible borrowing, and save money for 
                               taxpayers.

    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 ``Earnings Contingent Education Loans 
Act of 2015'' or the ``ExCEL Act of 2015''.

SEC. 2. TERMINATION OF AUTHORITY TO MAKE FEDERAL DIRECT STAFFORD LOANS, 
              FEDERAL DIRECT UNSUBSIDIZED STAFFORD LOANS, AND FEDERAL 
              DIRECT PLUS LOANS TO STUDENTS UNDER THE WILLIAM D. FORD 
              FEDERAL DIRECT LOAN PROGRAM.

    Section 455(a) of the Higher Education Act of 1965 (20 U.S.C. 
1087e(a)) is amended by adding at the end the following:
            ``(4) Termination of authority to make federal direct 
        stafford loans, federal direct unsubsidized stafford loans, and 
        federal direct plus loans to students under this part.--
                    ``(A) In general.--Notwithstanding any provision of 
                this part or part B, for any period of instruction 
                beginning on or after July 1, 2016--
                            ``(i) a student shall not be eligible to 
                        receive a Federal Direct Stafford Loan under 
                        this part; and
                            ``(ii) a student shall not be eligible to 
                        receive a Federal Direct Unsubsidized Stafford 
                        Loan or Federal Direct PLUS Loan under this 
                        part, except as provided in subparagraph (B).
                    ``(B) Exceptions.--Subparagraph (A)(ii) shall not 
                be applicable with respect to the following:
                            ``(i) Existing student borrowers.--A 
                        student who, as of July 1, 2016, has an 
                        outstanding balance of principal or interest 
                        owing on any loan made, insured, or guaranteed 
                        under part B or this part may continue to be 
                        eligible to borrow a loan under this part, 
                        except for a Federal Direct Stafford Loan, in 
                        accordance with subparagraph (C) until June 30, 
                        2019.
                            ``(ii) Parent plus loans.--An excepted PLUS 
                        loan or excepted consolidation loan (as such 
                        terms are defined in section 493C(a)) under 
                        this part that is made to a parent on behalf of 
                        an undergraduate dependent student.
                            ``(iii) Federal direct consolidation 
                        loans.--A Federal Direct Consolidation Loan 
                        under this part.
                    ``(C) Maximum annual amounts of federal direct 
                unsubsidized stafford loans.--The maximum annual amount 
                of Federal Direct Unsubsidized Stafford Loans a student 
                described in subparagraph (B)(i) may borrow in an 
                academic year (as defined in section 481(a)(2)) or its 
                equivalent shall be the maximum annual amount for such 
                student determined under section 428H, plus an amount 
                equal to the amount of Federal Direct Stafford Loans 
                the student would have received in the absence of 
                subparagraph (A)(i).''.

SEC. 3. ESTABLISHMENT OF THE INCOME DEPENDENT EDUCATION ASSISTANCE LOAN 
              PROGRAM AND THE IDEA LOAN REPAYMENT PROGRAM.

    Title IV of the Higher Education Act of 1965 (20 U.S.C. 1070a et 
seq.) is amended by adding at the end the following new part:

         ``PART J--INCOME DEPENDENT EDUCATION ASSISTANCE LOANS

                        ``Subpart 1--IDEA Loans

``SEC. 499A. PROGRAM AUTHORITY AND AGREEMENTS.

    ``(a) Program Authority.--
            ``(1) In general.--There are hereby made available, in 
        accordance with the provisions of this part, such sums as may 
        be necessary to make loans to all eligible students in 
        attendance at participating institutions of higher education 
        selected by the Secretary, to enable such students to pursue 
        their courses of study at such institutions during the period 
        beginning July 1, 2016. Loans made under this part shall be 
        made by participating institutions, or consortia thereof, that 
        have agreements with the Secretary to originate loans, or by 
        alternative originators designated by the Secretary to make 
        loans for students in attendance at participating institutions.
            ``(2) Designation.--The program established under this 
        subpart shall be referred to as the `Income Dependent Education 
        Assistance Loan Program', or the `IDEA Loan Program'.
    ``(b) Funds for the Origination of IDEA Loans.--The Secretary shall 
provide funds for student loans under this part in the same manner as 
the Secretary provides funds for the origination of Federal Direct 
Student Loans under part D in accordance with section 452. The 
requirements, rights, and limitations under section 452 with respect to 
the Secretary and institutions for funds provided for loans under part 
D shall apply with respect to the Secretary and institutions for funds 
provided for loans under this part, except that funds under this part 
shall not be provided for parent loans.
    ``(c) Selection of Institutions for Participation and Origination, 
and Agreements With Institutions.--
            ``(1) Selection of institutions for participation and 
        origination.--The Secretary shall enter into agreements with 
        institutions of higher education to participate in the IDEA 
        Loan Program under this part and agreements with institutions 
        of higher education, or consortia thereof, to originate loans 
        in such program for academic years beginning on or after July 
        1, 2016. The provisions of section 453 shall apply with respect 
        to agreements under this section. The Secretary shall provide 
        alternative origination services for loans under this part, as 
        appropriate, in a manner consistent with the provisions of 
        sections 453 and 456 related to alternative origination 
        services for loans under part D.
            ``(2) Participation and origination agreements with 
        institutions.--An agreement with any institution of higher 
        education for participation in the IDEA Loan Program under this 
        part, and an agreement with any institution of higher 
        education, or consortia thereof, to originate loans in such 
        program, shall have the same terms as the terms required under 
        section 454 for agreements with an institution for 
        participation or origination, respectively, in the student loan 
        program under part D, except that agreements for participation 
        or origination under this part shall not apply to parent loans.
            ``(3) Withdrawal and termination procedures.--The Secretary 
        shall establish procedures by which institutions or consortia 
        may withdraw or be terminated from the program under this part.

``SEC. 499B. TERMS AND CONDITIONS OF IDEA LOANS.

    ``(a) Parallel Terms, Conditions, Benefits, and Amounts.--Unless 
otherwise specified in this part, Income Dependent Education Assistance 
Loans (hereinafter referred to as `IDEA Loans') made to borrowers under 
this part shall have the same terms, conditions, and benefits, and be 
available in the same amounts, as Federal Direct Unsubsidized Stafford 
Loans made to borrowers under part D, and first disbursed on the day 
before the date of enactment of the Earnings Contingent Education Loans 
Act of 2015.
    ``(b) Eligible Borrowers.--
            ``(1) In general.--In addition to the requirements of 
        section 484, to be eligible to receive a loan (other than an 
        IDEA Consolidation Loan) under this part, a borrower--
                    ``(A) shall be an individual who, on the date of 
                application for such loan, has no outstanding balance 
                of principal or interest owing on any loan made, 
                insured, or guaranteed under part B or D (other than an 
                excepted PLUS loan or an excepted consolidation loan 
                (as such terms are defined in section 493C(a))); or
                    ``(B) in the case of an individual with an 
                outstanding balance of principal or interest owing on 
                any loan described in subparagraph (A), shall 
                consolidate all such existing loans into an IDEA 
                Consolidation Loan under section 499C.
            ``(2) Only student borrowers eligible.--For purposes of 
        this part, the term `borrower' shall not include a parent 
        borrower.
    ``(c) Annual and Aggregate Limits.--
            ``(1) In general.--Subject to paragraph (2), the maximum 
        annual amount of IDEA Loans in any academic year (as defined in 
        section 481(a)(2)) or its equivalent, and the maximum aggregate 
        amount of IDEA Loans that a student may borrow, shall be the 
        maximum annual amounts and maximum aggregate amounts, 
        respectively, of Federal Direct Unsubsidized Stafford Loans 
        under part D that such student would have been eligible to 
        borrow in the absence of section 455(a)(4), as added by 
        Earnings Contingent Education Loans Act of 2015.
            ``(2) Graduate and professional students.--In the case of a 
        graduate or professional student who would have been eligible 
        to borrow a Federal Direct PLUS Loan under part D in the 
        absence of section 455(a)(4), as added by Earnings Contingent 
        Education Loans Act of 2015, the maximum annual amounts and 
        maximum aggregate amounts, respectively, of IDEA Loans that the 
        student may borrow as determined under paragraph (1) for any 
        academic year (as defined in section 481(a)(2)) or its 
        equivalent, may be increased to an amount equal to the maximum 
        annual amounts and maximum aggregate amounts, respectively, of 
        Federal Direct PLUS Loans that such student would have been 
        eligible to borrow in the absence of such section 455(a)(4).
    ``(d) Loan Fee.--The Secretary shall charge the borrower of a loan 
(other than an IDEA Consolidation Loan) made under this part an 
origination fee. Such fee shall be the sum of--
            ``(1) for the portion of the principal amount of the loan 
        that is equal to (or less than) the maximum annual amount a 
        student may borrow under subsection (c)(1), 1.0 percent of such 
        portion of the principal amount of the loan; plus
            ``(2) for the portion of the principal amount of the loan 
        that exceeds the maximum annual amount a student may borrow 
        under subsection (c)(1), as authorized by subsection (c)(2), 
        4.0 percent of such portion of the principal amount of the 
        loan.
    ``(e) Interest Rates.--
            ``(1) In general.--Except as provided in paragraph (2), for 
        IDEA Loans for which the first disbursement is made on or after 
        July 1, 2016, the applicable rate of interest shall, during any 
        12-month period beginning on July 1 and ending on June 30, be 
        determined on the preceding June 1 and be equal to--
                    ``(A) the bond equivalent rate of 10-year Treasury 
                bills auctioned at the final auction held prior to such 
                June 1; plus
                    ``(B) 3.0 percent.
            ``(2) Certain graduate and professional students.--
        Notwithstanding paragraph (1), with respect to graduate or 
        professional students who have increased maximum annual and 
        aggregate loan limits under subsection (c)(2), for IDEA Loans 
        for which the first disbursement is made on or after July 1, 
        2016, the applicable rate of interest shall be the weighted 
        average of--
                    ``(A) the rate determined under paragraph (1) for 
                the portion of the principal amount of the loan that is 
                equal to (or less than) the maximum annual amount a 
                student may borrow under subsection (c)(1); and
                    ``(B) the rate determined under paragraph (1), 
                except that `4.1 percent' shall be substituted for `3.0 
                percent' in such determination, for the portion of the 
                principal amount of the loan that exceeds the maximum 
                annual amount a student may borrow under subsection 
                (c)(1), as authorized by subsection (c)(2).
            ``(3) Consultation.--The Secretary shall determine the 
        applicable rate of interest under paragraph (1) after 
        consultation with the Secretary of the Treasury and shall 
        publish such rate in the Federal Register as soon as 
        practicable after the date of determination.
            ``(4) Application of interest rate during the life of the 
        loan.--
                    ``(A) Fixed rate until cap.--The applicable rate of 
                interest determined under paragraph (1) or (2) for an 
                IDEA Loan shall be fixed for the life of the loan, 
                except that interest shall cease to accrue when the 
                total amount of interest (both paid and unpaid) that 
                has accrued during the borrower's grace and repayment 
                periods equals 50 percent of the total amount of the 
                loan (equal to the sum of the unpaid principal, 
                interest, penalties, and fees due on the loan) as of 
                the first day of the borrower's grace period.
                    ``(B) In-school deferment period.--Interest shall 
                accrue and be capitalized or paid by the borrower (but 
                periodic installments of principal need not be paid) 
                during the in-school deferment period with respect to 
                an IDEA Loan. For the purposes of this part, the in-
                school deferment period with respect to an IDEA Loan is 
                the first period during which the borrower is pursuing 
                at least one-half the normal full-time academic 
                workload (as determined by the institution) in the 
                course of study for which the borrower received such 
                loan and ending on the first day of the first month 
                that begins after the borrower ceases to carry at least 
                one-half the normal full-time academic workload (as 
                determined by the institution) in the course of study.
                    ``(C) Grace and repayment periods.--Interest that 
                accrues during the borrower's grace period (for the 
                purposes of this title, defined as the period between 
                the borrower's in-school deferment period and the 
                borrower's repayment period) and during the borrower's 
                repayment period shall not be capitalized.
    ``(f) Armed Forces Student Loan Interest Payment Program.--Using 
funds received by transfer to the Secretary under section 2174 of title 
10, United States Code, for the payment of interest on a loan made 
under this part to a member of the Armed Forces, the Secretary shall 
pay the interest on the loan as due for a period not in excess of 36 
consecutive months. The Secretary may not pay interest on such a loan 
out of any funds other than funds that have been so transferred.
    ``(g) No Accrual of Interest for Active Duty Servicemembers.--
            ``(1) In general.--Notwithstanding any other provision of 
        this part and in accordance with paragraphs (2) and (4), 
        interest shall not accrue for an eligible military borrower on 
        a loan made under this part for which the first disbursement is 
        made on or after July 1, 2016.
            ``(2) IDEA consolidation loans.--In the case of any IDEA 
        Consolidation Loan made under this part that is disbursed on or 
        after July 1, 2016, interest shall not accrue pursuant to this 
        subsection only on such portion of such loan as was used to 
        repay a loan made under part D for which the first disbursement 
        is made on or after October 1, 2008.
            ``(3) Eligible military borrower.--In this subsection, the 
        term `eligible military borrower' means an individual who--
                    ``(A)(i) is serving on active duty during a war or 
                other military operation or national emergency; or
                    ``(ii) is performing qualifying National Guard duty 
                during a war or other military operation or national 
                emergency; and
                    ``(B) is serving in an area of hostilities in which 
                service qualifies for special pay under section 310 of 
                title 37, United States Code.
            ``(4) Limitation.--An individual who qualifies as an 
        eligible military borrower under this subsection may receive 
        the benefit of this subsection for not more than 60 months.
    ``(h) Loan Cancellation and Discharge.--The Secretary shall 
discharge a borrower's liability on a loan made under this part in 
accordance with subsections (a) and (c) of section 437.
    ``(i) No Public Service Loan Forgiveness.--A loan made under this 
part shall not be eligible for the public service loan forgiveness 
program under section 455(m).

``SEC. 499C. IDEA CONSOLIDATION LOANS.

    ``(a) IDEA Consolidation Loans.--
            ``(1) In general.--Except as provided in this section, an 
        IDEA Consolidation Loan under this section shall have the same 
        terms, conditions, and benefits, as IDEA Loans under this part.
            ``(2) Borrower and loan eligibility.--To be eligible to 
        receive an IDEA Consolidation Loan under this section, a 
        borrower--
                    ``(A) shall--
                            ``(i) meet the criteria described in 
                        section 428C(a)(3)(A); and
                            ``(ii) in the case of a borrower described 
                        in section 499B(b)(1)(B), agree to consolidate 
                        into an IDEA Consolidation Loan all loans made 
                        to the borrower that are described in 
                        subparagraphs (A) and (C) of section 428C(a)(4) 
                        (other than an excepted PLUS loan or an 
                        excepted consolidation loan (as such terms are 
                        defined in section 493C(a)));
                    ``(B) may consolidate the loans described in 
                subparagraphs (B), (D), and (E) of section 428C(a)(4) 
                into such IDEA Consolidation Loan; and
                    ``(C) may not consolidate an IDEA Loan under 
                section 499B into such IDEA Consolidation Loan.
            ``(3) Requirements for the secretary.--In making IDEA 
        Consolidation Loans under this section, the Secretary--
                    ``(A) shall ensure that--
                            ``(i) each IDEA Consolidation Loan will be 
                        made, notwithstanding any other provision of 
                        this title limiting the annual or aggregate 
                        principal amount for all loans made to the 
                        borrower, in an amount which is equal to the 
                        sum of the unpaid principal, interest, 
                        penalties, and fees of all loans received by 
                        the borrower which are selected by the borrower 
                        for consolidation under this section; and
                            ``(ii) the proceeds of each IDEA 
                        Consolidation Loan will be paid by the 
                        Secretary to the holder or holders of the loans 
                        being consolidated to discharge the liability 
                        on such loans;
                    ``(B) shall not discriminate against any borrower 
                seeking such an IDEA Consolidation Loan--
                            ``(i) based on the number or type of loans 
                        the borrower seeks to consolidate;
                            ``(ii) based on the interest rate to be 
                        charged to the borrower with respect to the 
                        consolidation loan; or
                            ``(iii) based on the type or category of 
                        institution of higher education that the 
                        borrower attends or attended; and
                    ``(C) shall disclose to a prospective borrower, in 
                simple and understandable terms, at the time the 
                Secretary provides an application for an IDEA 
                Consolidation Loan--
                            ``(i) whether consolidation would result in 
                        a loss of loan benefits under part B or part D, 
                        including loan forgiveness, cancellation, and 
                        deferment;
                            ``(ii) with respect to Federal Perkins 
                        Loans under part E--
                                    ``(I) that if a borrower includes a 
                                Federal Perkins Loan under part E in 
                                the consolidation loan, the borrower 
                                will lose all interest-free periods 
                                that would have been available for the 
                                Federal Perkins Loan, including--
                                            ``(aa) the periods during 
                                        which no interest accrues on 
                                        such loan while the borrower is 
                                        enrolled in school at least 
                                        half-time;
                                            ``(bb) the grace period 
                                        under section 464(c)(1)(A); and
                                            ``(cc) the periods during 
                                        which the borrower's student 
                                        loan repayments are deferred 
                                        under section 464(c)(2);
                                    ``(II) that if a borrower includes 
                                a Federal Perkins Loan in the 
                                consolidation loan, the borrower will 
                                no longer be eligible for cancellation 
                                of part or all of the Federal Perkins 
                                Loan under section 465(a); and
                                    ``(III) the occupations listed in 
                                section 465 that qualify for Federal 
                                Perkins Loan cancellation under section 
                                465(a);
                            ``(iii) the options of the borrower to 
                        prepay the IDEA Consolidation Loan;
                            ``(iv) the consequences of default on the 
                        IDEA Consolidation Loan; and
                            ``(v) that by applying for an IDEA 
                        Consolidation Loan, the borrower is not 
                        obligated to agree to take the consolidation 
                        loan.
    ``(b) Interest Rate.--
            ``(1) In general.--Notwithstanding section 499B(e), an IDEA 
        Consolidation Loan for which the application is received on or 
        after July 1, 2016, shall bear interest at an annual rate on 
        the unpaid principal balance of the loan that is equal to the 
        weighted average of the interest rates on the loans 
        consolidated, rounded to the nearest higher one-eighth of one 
        percent. Interest that accrues on such an IDEA Consolidation 
        Loan shall not be capitalized.
            ``(2) Application of interest rate during the life of the 
        loan.--The applicable rate of interest determined under 
        paragraph (1) shall be fixed for the life of the IDEA 
        Consolidation Loan, except that interest shall cease to accrue 
        when the total amount of interest (both paid and unpaid) that 
        has accrued on such Loan equals 50 percent of the total amount 
        of the loans consolidated (as calculated on the date such 
        Consolidation Loan is made, and equal to the sum of the unpaid 
        principal, interest, penalties, and fees of all loans received 
        by the borrower which are selected by the borrower for 
        consolidation under this section).

                ``Subpart 2--IDEA Loan Repayment Program

     ``CHAPTER 1--ESTABLISHMENT OF THE IDEA LOAN REPAYMENT PROGRAM

``SEC. 499D. DUTIES OF THE SECRETARY OF THE TREASURY.

    ``(a) In General.--As part of the IDEA Loan Repayment Program 
established under this subpart, the Secretary of the Treasury shall, 
with respect to each individual for whom a loan made under this part is 
in repayment status during a taxable year, transmit to the Secretary of 
Education--
            ``(1) in the case of such an individual who files an income 
        tax return for such taxable year, such tax information as is 
        necessary to determine the individual's income-based repayment 
        obligation under section 499E; and
            ``(2) in the case of any such individual who does not file 
        a return for such taxable year, any available tax information 
        of the individual as may be necessary to determine such 
        obligation and whether such individual is in default under the 
        terms of such loan for not so filing.
    ``(b) Additional Program Requirements.--The Secretary of the 
Treasury shall establish such other policies, procedures, and guidance 
as may be necessary to carry out the purposes of this subpart, 
including measures to prevent underreporting and evasion of repayment 
or filing.

``SEC. 499E. DUTIES OF THE SECRETARY OF EDUCATION.

    ``(a) In General.--The Secretary shall carry out, as part of the 
IDEA Loan Repayment Program established under this subpart, the 
following activities:
            ``(1) Calculation of annual repayment amounts.--The 
        Secretary shall calculate the annual repayment amount under 
        this subpart for borrowers with 1 or more loans made under this 
        part in repayment status, including the income-based repayment 
        obligations of such borrowers in accordance with section 
        499F(i).
            ``(2) Communication with the secretary of the treasury.--
        The Secretary shall transmit to the Secretary of the Treasury 
        such information as is necessary for the Secretary of the 
        Treasury to carry out section 499F(i).
            ``(3) Annual statements.--Upon calculating the annual 
        repayment amounts under paragraph (1) for a taxable year, the 
        Secretary shall provide a statement, on an annual basis, to 
        each borrower with a loan made under this part, which lists the 
        following:
                    ``(A) Total payments made on the borrower's annual 
                repayment amount for such taxable year.
                    ``(B) The borrower's annual repayment amount for 
                such taxable year.
                    ``(C) In the case of a borrower who, according to 
                section 499F(f), has underpaid such annual repayment 
                amount, the amount of such underpayment and the process 
                for paying such underpayment under section 499F(f)(2).
                    ``(D) In the case of a borrower with an overpayment 
                on such annual repayment amount, the amount of such 
                overpayment and the process for requesting a refund of 
                such amount under section 499F(g), if applicable.
                    ``(E) The outstanding balances on all the loans 
                made to the borrower under this part.
                    ``(F) A description of how the borrower's annual 
                repayment amount was calculated under paragraph (1) or 
                (2) of section 499F(b).
            ``(4) Direct payment.--The Secretary shall enable a 
        borrower to make direct payments on the borrower's annual 
        repayment amount for the taxable year to the Secretary 
        throughout the year.
            ``(5) Payments on a borrower's behalf.--The Secretary 
        shall--
                    ``(A) provide a mechanism for other individuals or 
                entities to make payments on the annual repayment 
                amount of a borrower for a taxable year; and
                    ``(B) notify the borrower that any payments made 
                under subparagraph (A) for the taxable year that exceed 
                the annual repayment amount for the year shall not be 
                refunded to the borrower.
            ``(6) Calculating interest accrued.--The Secretary shall 
        calculate the interest accrued for the taxable year as if the 
        borrower's payments under wage withholding under paragraph (10) 
        for the taxable year were made in 12 equal increments 
        throughout the year.
            ``(7) Appeals process.--The Secretary shall make available 
        a process through which a borrower can appeal the calculation 
        of the borrower's annual repayment amount, including a 
        worksheet that enables a borrower to calculate the borrower's 
        annual repayment amount.
            ``(8) Default for failure to file a return.--In a case in 
        which the Secretary receives information from the Secretary of 
        the Treasury under section 499D that a borrower with a loan 
        made under this part in repayment status has failed to file a 
        return under section 6012(a)(1) of the Internal Revenue Code of 
        1986 and such borrower was required to file such a return, the 
        Secretary shall--
                    ``(A) notify the borrower of the borrower's failure 
                to file such a return; and
                    ``(B) if the borrower fails to file such a return 
                within 90 days of receipt of the notice described in 
                subparagraph (A), consider the borrower's loans made 
                under this part in repayment status to be in default.
            ``(9) Withholding opt-out.--The Secretary shall establish a 
        process through which a borrower can indicate that the borrower 
        would like to opt-out of the withholding process under 
        subsection (b) and, in lieu of such process, make payments on a 
        monthly basis, as described in subsection (c).
            ``(10) Employer withholding.--The Secretary shall establish 
        a process that meets the requirements of subsection (b) under 
        which employers making payment of wages deduct and withhold 
        upon such wages amounts determined in accordance with 
        subsection (b)(3) with respect to an employee--
                    ``(A) who has a loan made under this part that is 
                in repayment status;
                    ``(B) who has not opted out of the withholding 
                process under this paragraph; and
                    ``(C) who is not in a forbearance period under 
                section 499F(a)(2)(C).
            ``(11) Monthly payments process.--The Secretary shall 
        establish a monthly payments process described in subsection 
        (c).
    ``(b) Requirements for Employer Withholding.--
            ``(1) Withholding orders.--In carrying out the employer 
        withholding process under subsection (a)(10), the Secretary 
        shall carry out the following:
                    ``(A) New employment.--Upon determining, using the 
                information provided under section 453(j)(12) of the 
                Social Security Act (42 U.S.C. 653(j)(12)), that a 
                borrower who meets the requirements of subparagraphs 
                (A) through (C) of subsection (a)(10) obtains new 
                employment, issue a withholding order to the borrower's 
                employer directing the employer to withhold and 
                transmit the amounts described in paragraph (3) to the 
                Secretary.
                    ``(B) Other purposes.--Upon notification by a 
                borrower that the borrower no longer wishes to opt out 
                of the withholding process under subsection (a)(10) or 
                that a borrower who has been in forbearance under 
                section 499F(a)(2)(C), voluntarily ends or no longer 
                qualifies for such forbearance, or upon determining 
                that a borrower has entered repayment status on 1 or 
                more loans made under this part (and the borrower had 
                no loans made under this part already in repayment 
                status), using the information provided under section 
                453(j)(12) of the Social Security Act (42 U.S.C. 
                653(j)(12)), issue a withholding order to all of the 
                borrower's employers directing such employers to 
                withhold and transmit the amounts described in 
                paragraph (3) to the Secretary.
                    ``(C) Stop withholding order.--Upon determining 
                that a borrower is eligible for a forbearance under 
                section 499F(a)(2)(C), that the borrower has opted out 
                of the withholding process under subsection (a)(10), or 
                that a borrower has repaid the borrower's loans made 
                under this part, using the information provided under 
                paragraph 12 of section 453(j)(12) of the Social 
                Security Act (42 U.S.C. 653(j)(12)), issue a 
                withholding order to the borrower's employers directing 
                such employers to cease withholding under this 
                paragraph.
                    ``(D) Transfer of payments.--Outline clearly the 
                process through which employers shall transfer money 
                withheld under this subsection to the Secretary.
                    ``(E) Electronic transmission.--
                            ``(i) In general.--Make available 
                        electronic means of transmitting and processing 
                        both withholding orders and payments from 
                        employers, including a means to correct under- 
                        and overpayments to the extent feasible, with 
                        the goal of streamlining the processing of such 
                        orders and payments and minimizing impacts on 
                        employers.
                            ``(ii) No requirement to use electronic 
                        transmission.--Nothing in this part shall be 
                        construed to require an employer, in carrying 
                        out a withholding order under this section, to 
                        use the electronic process described in clause 
                        (i).
            ``(2) Employer remittance.--
                    ``(A) In general.--In the case where an employer 
                has received a withholding order under subparagraph (A) 
                or (B) of paragraph (1) or the employee has indicated 
                under paragraph (4)(A) that the employee has a loan 
                that meets the requirements of subparagraphs (A) 
                through (C) of subsection (a)(10), and the employer has 
                not subsequently received an order to stop withholding 
                under paragraph (1)(C) for such employee, the employer 
                shall withhold and transmit the amounts described in 
                paragraph (3) to the Secretary as directed under 
                paragraph (1)(D) and shall be liable for, and the 
                Secretary, as appropriate, may sue the employer in a 
                State or Federal court of competent jurisdiction to 
                recover any amount that such employer fails to withhold 
                from wages with respect to an employee after being 
                directed to do so for such employee, plus attorneys' 
                fees, costs, and, in the court's discretion, punitive 
                damages. Such employer shall not be required to vary 
                the normal pay and disbursement cycles in order to 
                comply with this subparagraph.
                    ``(B) Timing.--An employer transmitting to the 
                Secretary withholding payments under this subsection 
                shall transmit such payments on a periodic basis, as 
                determined by the employer but not less frequently than 
                quarterly.
            ``(3) Withholding amount.--The amount withheld by an 
        employer for each pay period with respect to any employee for 
        whom the employer is withholding under this subsection shall be 
        an amount equal to the sum of--
                    ``(A) the amount that results from the employer 
                withholding--
                            ``(i) 15 percent of the employee's wages 
                        for such pay period that will count towards the 
                        employee's annual repayment amount under 
                        section 499F(b) that is in excess of the 
                        employee's exemption amount for such pay period 
                        (as determined by dividing the employee's 
                        exemption amount under section 499F(i)(3) by 
                        the number of pay periods for the taxable 
                        year); or
                            ``(ii) in a case in which an employee 
                        requests that such exemption amount not be 
                        taken into account, 15 percent of the 
                        employee's wages for such pay period that will 
                        count towards the employee's annual repayment 
                        amount under section 499F(b); and
                    ``(B) any additional amounts the employee wishes to 
                have withheld in accordance with paragraph (4)(C).
            ``(4) Withholding preferences.--The Secretary shall provide 
        forms and procedures to allow an employee to indicate to the 
        employee's employer--
                    ``(A) that the employee has a loan that meets the 
                requirements of subparagraphs (A) through (C) of 
                subsection (a)(10) and therefore the employer shall 
                withhold payments under this subsection;
                    ``(B) that the employer shall not take into account 
                the exemption amount to which the employee is eligible 
                under this part in determining the employee's 
                withholding amount because the exemption amount has 
                already been taken into account with respect to such 
                employee; and
                    ``(C) an election by the employee to have amounts 
                withheld in addition to the employee's withholding 
                amount as calculated under paragraph (3).
            ``(5) Employee protection.--An employer may not discharge 
        from employment, refuse to employ, or take disciplinary action 
        against an individual subject to wage withholding in accordance 
        with this section by reason of the fact that the individual's 
        wages have been subject to withholding under this section, nor 
        may an employer require that an individual opt-out under 
        subsection (a)(9) and such individual may sue in a State or 
        Federal court of competent jurisdiction any employer who takes 
        such action. The court shall award attorneys' fees to a 
        prevailing employee and, in its discretion, may order 
        reinstatement of the individual, award punitive damages and 
        back pay to the employee, or order such other remedy as may be 
        reasonably necessary.
            ``(6) Garnishment.--For purposes of title III of the 
        Consumer Credit Protection Act (15 U.S.C. 1671 et seq.), 
        amounts withheld under this subsection shall--
                    ``(A) not be considered a garnishment; and
                    ``(B) be considered to be amounts required by law 
                to be withheld.
    ``(c) Monthly Payments Process.--
            ``(1) In general.--The Secretary shall establish a process 
        under which a borrower may make monthly payments towards the 
        borrower's annual repayment amount, at any time in the taxable 
        year, because the borrower--
                    ``(A) has opted-out of withholding under subsection 
                (a)(10); or
                    ``(B) expects to have income that is not subject to 
                the withholding process described in subsection (b).
            ``(2) Information required.--The procedure for initiating 
        the monthly payments process under paragraph (1) shall include 
        the following:
                    ``(A) Income estimate.--A requirement for a 
                borrower to provide an estimate of the borrower's 
                income for the taxable year that will count towards the 
                borrower's income-based repayment obligation, 
                excluding, in the case of a borrower subject to the 
                withholding process, any income subject to the 
                withholding process.
                    ``(B) Amortization schedule.--In the case of a 
                borrower who has opted out of the withholding process, 
                the ability for the borrower to indicate that the 
                borrower would like the borrower's monthly payments set 
                such that the borrower's outstanding loans made under 
                this part would be repaid within a specified number of 
                years.
            ``(3) Monthly payments amounts.--The Secretary shall set 
        the borrower's monthly payment amount to the greater of--
                    ``(A) the difference between the borrower's annual 
                repayment amount that would result given the income 
                estimate provided by the borrower under paragraph 
                (2)(A) and the payments the borrower has already made 
                in the year towards such amount (excluding, for 
                borrowers who have not opted-out of withholding, 
                payments through the withholding process), divided by 
                the remaining months in the taxable year; or
                    ``(B) for a borrower who indicates a time frame 
                under paragraph (2)(B), the monthly payment amount that 
                would result in the borrower's currently outstanding 
                loans made under this part being repaid within the 
                number of years specified by the borrower.
            ``(4) Automatic continuation.--The monthly payments process 
        shall continue until--
                    ``(A) the borrower elects to stop such payments; or
                    ``(B) the borrower's loans made under this part are 
                repaid.
            ``(5) Updating payment amounts.--
                    ``(A) Secretary.--The Secretary shall automatically 
                recalculate a borrower's monthly payment amount at the 
                beginning of a new taxable year using the most recent 
                income estimate provided under paragraph (2)(A) by the 
                borrower.
                    ``(B) Borrower.--The borrower may update the 
                borrower's income estimate under paragraph (2)(A) at 
                any time.

 ``CHAPTER 2--BORROWER REPAYMENT OF IDEA LOANS AND IDEA CONSOLIDATION 
                                 LOANS

``SEC. 499F. BORROWER REPAYMENT.

    ``(a) Repayment Period.--The repayment period of a loan made under 
this part shall--
            ``(1) begin on the first day of the first taxable year that 
        begins after the borrower's in-school deferment period, or in 
        the case of an IDEA Consolidation Loan, on the first day of the 
        first taxable year that begins after such Consolidation Loan is 
        disbursed; and
            ``(2) continue until the loan is paid in full, except that 
        the Secretary may grant a borrower forbearance of the 
        borrower's annual repayment amount--
                    ``(A) for a period not to exceed 60 days, due to 
                administrative or technical reasons;
                    ``(B) for a period not to exceed 3 months, due to 
                unusual circumstances that disrupt the borrower's 
                ability to make timely payments on the loan; or
                    ``(C) renewable at 12-month intervals for a period 
                not to exceed 3 years, due to documented extreme 
                economic hardship on the part of a borrower.
    ``(b) Annual Repayment Amount.--The annual repayment amount under 
this part for a taxable year for a borrower with 1 or more loans made 
under this part in repayment status shall be equal to the lesser of--
            ``(1) the income-based repayment obligation for such 
        borrower for such year, as calculated under section 499E(a)(1); 
        or
            ``(2) an amount equal to the sum of the outstanding 
        balances (equal to the sum of the unpaid principal, interest, 
        penalties, and fees) that the borrower owes on such loans.
    ``(c) Methods of Repayment.--A borrower who expects to have an 
annual repayment amount for the taxable year that is greater than the 
amount specified in subsection (f)(1)(D) shall make payments through 
the following methods:
            ``(1) With respect to any wages earned by the borrower that 
        are subject to Federal income tax withholding, the withholding 
        process described in section 499E(a)(10).
            ``(2) The monthly payments process described in section 
        499E(c), to meet the portion of the borrower's obligation that 
        is not paid through withholding, or, in the case of a borrower 
        who opts out of the withholding process, to meet the borrower's 
        entire obligation.
            ``(3) The direct payments process under section 499E(a)(4).
            ``(4) The process described in section 499E(a)(5) that 
        allows other individuals or entities to make payments on the 
        borrower's annual repayment amount for the year.
    ``(d) Order of Crediting.--Payments on loans made under this part 
shall be applied, without regard to the method of such payments, first 
toward penalties due on the loans, next toward any fees due on the 
loans, then toward any interest due on the loans, and finally toward 
the principal due on the loan with the highest applicable rate of 
interest among such loans.
    ``(e) Prepayment Authorized.--A borrower shall have the right to 
prepay all or part of such loan, at any time and without penalty. Any 
such prepayment amount will be applied to loans made under this part in 
the same order as described in subsection (d).
    ``(f) Underpayments.--
            ``(1) Penalties for underpayments.--
                    ``(A) In general.--Subject to subparagraph (C), if, 
                as of the last day of a taxable year, a borrower has 
                not paid at least 90 percent of the borrower's annual 
                repayment amount for such year, the borrower shall be 
                charged a penalty in an amount equal to 15 percent of 
                the difference between--
                            ``(i) an amount equal to 90 percent of the 
                        borrower's annual repayment amount for such 
                        year; and
                            ``(ii) the amount paid on such annual 
                        repayment amount as of such day.
                    ``(B) Increase of annual repayment amount.--A 
                borrower's annual repayment amount calculated under 
                subsection (b) for such year shall be increased by the 
                amount of such penalty, but such penalty shall not be 
                treated as a principal or interest amount for a loan 
                made under this part.
                    ``(C) Exception for meeting the obligation for the 
                previous year.--A borrower who has paid 100 percent of 
                the borrower's annual repayment amount for the taxable 
                year preceding the taxable year described in 
                subparagraph (A) shall not be subject to the penalty 
                under this paragraph for the taxable year described in 
                subparagraph (A).
                    ``(D) De minimis exception.--A borrower whose 
                annual repayment amount is less than $300 shall not be 
                subject to the penalty under this paragraph for the 
                taxable year described in subparagraph (A).
            ``(2) Reconciling underpayments.--
                    ``(A) In general.--If, as of the last day of a 
                taxable year, the sum of the payments made on a 
                borrower's annual repayment amount for such year is 
                less than the total amount of the borrower's annual 
                repayment amount for such year, the borrower--
                            ``(i) in the case of the first year that 
                        the borrower has a difference between such 
                        amounts--
                                    ``(I) may request, in such manner 
                                as the Secretary shall require, that 
                                the Secretary reduce the borrower's 
                                annual repayment amount for such year 
                                to the sum of--
                                            ``(aa) the payments made, 
                                        as of such day, on the 
                                        borrower's annual repayment 
                                        amount for such year; and
                                            ``(bb) any penalties 
                                        calculated under paragraph (1) 
                                        resulting from such 
                                        underpayment; and
                                    ``(II) if the borrower qualifies 
                                for the reduction requested under 
                                subclause (I), shall pay the sum 
                                calculated under such subclause at such 
                                time and in such manner as required by 
                                the Secretary;
                            ``(ii) if the borrower does not qualify for 
                        a reduction under clause (i) or does not 
                        request such a reduction, shall pay to the 
                        Secretary an amount equal to the difference 
                        between such amounts within the 30-day period 
                        beginning on the date of receipt by the 
                        borrower of the borrower's annual statement 
                        described in section 499E(a)(3) for such year; 
                        or
                            ``(iii) if the borrower fails to pay the 
                        amount owed by the borrower as calculated under 
                        clause (ii) within the 30-day period, shall be 
                        charged a penalty equal to 2 percent of such 
                        amount for each month (prorated based on the 
                        percentage of a month such penalty is charged) 
                        that such amount is owed or until the borrower 
                        defaults on the loan for which such amount is 
                        owed, whichever occurs first.
                    ``(B) Default.--A loan for which an amount is owed 
                under subparagraph (A) and that is not paid within 270 
                days after the date of receipt by the borrower of the 
                borrower's annual statement described in section 
                499E(a)(3) shall be considered to be in default.
    ``(g) Overpayments.--If, as of the last day of a taxable year, the 
sum of the payments made on a borrower's annual repayment amount for 
such year is greater than the total amount of the borrower's annual 
repayment amount for such year, the Secretary shall--
            ``(1) refund the overpayment amount, if the borrower 
        notifies the Secretary, within the 90-day period beginning on 
        the date of receipt of the borrower's annual statement 
        described in section 499E(a)(3) for such year and in a manner 
        prescribed by the Secretary, that the borrower desires to have 
        the overpayment amount refunded; or
            ``(2) if a borrower fails to notify the Secretary of the 
        borrower's desire for a refund of such amount within such 90-
        day period, apply such amount as a prepayment to the borrower's 
        loans made under this part in the same manner as a prepayment 
        authorized under subsection (e).
    ``(h) Employer Failure To Withhold Payments.--In the case of a 
borrower whose employer fails to withhold amounts under section 499E(b) 
upon any wages earned by the borrower that are subject to Federal 
income tax withholding and with respect to which the borrower made an 
election to have amounts withheld under such section, the Secretary 
shall--
            ``(1) reduce the borrower's annual repayment to an amount 
        equal to the borrower's annual repayment amount had wages from 
        such employer been excluded when calculating the borrower's 
        annual repayment amount; and
            ``(2) reduce any penalties for underpayments calculated 
        under subsection (f)(1) and refund any overpayments on such 
        annual repayment amount, accordingly.
    ``(i) Determination of Income-Based Repayment Obligation.--
            ``(1) In general.--The income-based repayment obligation 
        with respect to an individual for any taxable year is an amount 
        equal to 15 percent of the excess of--
                    ``(A) the sum of--
                            ``(i) the wages, salaries, tips, and other 
                        employee compensation of the individual, but 
                        only if such amounts are includible in gross 
                        income for the taxable year (determined without 
                        regard to sections 911, 931, and 933 of the 
                        Internal Revenue Code of 1986) and are readily 
                        attributable to the individual, plus
                            ``(ii) any other amount included in total 
                        income of the taxpayer for the taxable year but 
                        not described in clause (i), except that such 
                        amount shall be divided by 2 in the case of an 
                        individual who is married and filing a joint 
                        tax return, over
                    ``(B) the sum of--
                            ``(i) the exemption amount with respect to 
                        such individual, plus
                            ``(ii) the lesser of the amount determined 
                        with respect to the taxpayer under subparagraph 
                        (A)(ii).
            ``(2) Exclusion of certain amounts paid on behalf of 
        individual.--Any amount paid on the borrower's behalf under 
        section 499E(a)(5) shall not be taken into account in 
        determining such borrower's income-based repayment obligation.
            ``(3) Exemption amount.--For purposes of this subpart, the 
        exemption amount with respect to an individual shall be 150 
        percent of the poverty line for the individual's household size 
        (as determined under section 673(2) of the Community Services 
        Block Grant Act (42 U.S.C. 9902(2))) for the calendar year in 
        which the taxable year ends.
            ``(4) Individuals not filing a return.--The income-based 
        repayment obligation with respect to an individual not required 
        to file a return under section 6012(a)(1) of the Internal 
        Revenue Code of 1986 shall be treated as zero.''.

SEC. 4. CONFORMING CHANGES TO THE HIGHER EDUCATION ACT OF 1965.

    (a) Loan Forgiveness and Cancellation for Teachers.--
            (1) Loan forgiveness for teachers.--Section 428J of the 
        Higher Education Act of 1965 (20 U.S.C. 1078-10) is amended--
                    (A) in subsection (b), by inserting ``or for an 
                IDEA loan made under part J,'' after ``or 428H,''; and
                    (B) in subsection (c)--
                            (i) in paragraph (1), by inserting ``or an 
                        IDEA loan made under part J'' after ``or 
                        428H''; and
                            (ii) in paragraph (2)--
                                    (I) by striking ``A loan'' and 
                                inserting the following:
                    ``(A) Loans made under section 428c.--A loan''; and
                                    (II) by adding at the end the 
                                following new subparagraph:
                    ``(B) IDEA consolidation loan.--A loan amount for 
                an IDEA Consolidation Loan may be a qualified loan 
                amount for purposes of this subsection only to the 
                extent that such loan amount was used to repay a 
                Federal Direct Stafford Loan, a Federal Direct 
                Consolidation Loan, a Federal Direct Unsubsidized 
                Stafford Loan, or a loan made under section 428, 428C, 
                or 428H.''.
            (2) Loan cancellation for teachers.--Section 460 of such 
        Act (20 U.S.C. 1087j) is amended--
                    (A) in subsection (b), by inserting ``or for an 
                IDEA loan made under part J'' after ``under this 
                part''; and
                    (B) in subsection (c)--
                            (i) in paragraph (1), by striking ``or a 
                        Federal Direct Unsubsidized Stafford Loan'' and 
                        inserting ``, a Federal Direct Unsubsidized 
                        Stafford Loan, or an IDEA loan made under part 
                        J''; and
                            (ii) in paragraph (2)--
                                    (I) by striking ``A loan'' and 
                                inserting the following:
                    ``(A) Federal direct consolidation loan.--A loan''; 
                and
                                    (II) by adding at the end the 
                                following new subparagraph:
                    ``(B) IDEA consolidation loan.--A loan amount for 
                an IDEA Consolidation Loan may be a qualified loan 
                amount for purposes of this subsection only to the 
                extent that such loan amount was used to repay a 
                Federal Direct Stafford Loan, a Federal Direct 
                Consolidation Loan, a Federal Direct Unsubsidized 
                Stafford Loan, or a loan made under section 428, 428C, 
                or 428H.''.
    (b) Loan Forgiveness for Service in Areas of National Need.--
Section 428K(a)(2) of such Act (20 U.S.C. 1078-11(a)(2)) is amended--
            (1) by striking ``and'' at the end of subparagraph (A);
            (2) by striking the period at the end of subparagraph (B) 
        and inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(C) to cancel the qualified loan amount for a 
                loan made under part J of this title.''.
    (c) Loan Repayment for Civil Legal Assistance Attorneys.--Section 
428L(b)(2)(A) of such Act (20 U.S.C. 1078-12(b)(2)(A)) is amended--
            (1) in clause (i), by striking ``or part E'' and inserting 
        ``, part E, or part J''; and
            (2) in clause (ii)--
                    (A) in the matter preceding subclause (I), by 
                striking ``or 455(g)'' and inserting ``, 455(g), or 
                499C'';
                    (B) by striking ``or'' at the end of subclause 
                (II);
                    (C) by redesignating subclause (III) as subclause 
                (IV); and
                    (D) by inserting after subclause (II) the 
                following:
                                    ``(III) a Federal Direct 
                                Consolidation Loan or a loan made under 
                                section 428C, in the case of a loan 
                                made under section 499C; or''.
    (d) Master Promissory Note.--Section 432(m)(1)(D) of such Act (20 
U.S.C. 1082(m)(1)(D)) is amended--
            (1) by striking ``this part and part D'' each place it 
        appears and by inserting ``this part, part D, and part J''; and
            (2) by striking ``this part or part D'' each place it 
        appears and by inserting ``this part, part D, or part J''.
    (e) Contracts.--Section 456 of such Act (20 U.S.C. 1087f) is 
amended--
            (1) in subsection (a)--
                    (A) in paragraph (2), by striking ``this part'' 
                each place it appears and inserting ``this part or part 
                J''; and
                    (B) in paragraph (4), by inserting ``or part J'' 
                after ``this part''; and
            (2) in subsection (b)--
                    (A) in paragraph (1), by inserting ``or the program 
                under part J'' after ``(or their parents)'';
                    (B) in paragraph (2), by inserting ``or part J'' 
                after ``this part'';
                    (C) in paragraph (3), by inserting ``or part J'' 
                after ``this part''; and
                    (D) in paragraph (4), by inserting ``or the IDEA 
                Loan Program'' after ``loan program''.
    (f) Funds for Administrative Expenses.--Section 458(a)(3) of such 
Act (20 U.S.C. 1087h(a)(3)) is amended--
            (1) by striking ``this part and part B'' and inserting 
        ``this part, part B, and part J''; and
            (2) by inserting before the period at the end the 
        following: ``and part J''.
    (g) Student Eligibility.--Section 484 of such Act (20 U.S.C. 1091) 
is amended--
            (1) in subsection (b)--
                    (A) in paragraph (3), by striking ``or D'' and 
                inserting ``, D, or E''; and
                    (B) in paragraph (4)(B), by striking ``or E'' and 
                inserting ``E, or J'';
            (2) in subsection (d), by striking ``and E'' and inserting 
        ``E, and J'';
            (3) in subsection (f), by striking ``or part E'' each place 
        it appears and inserting ``part E, or part J''; and
            (4) in subsection (m), by striking ``and E'' and inserting 
        ``E, and J''.
    (h) Institutional and Financial Assistance Information for 
Students.--Section 485 of such Act (20 U.S.C. 1092) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1)(M), by striking ``and E'' and 
                inserting ``E, and J''; and
                    (B) in paragraph (7)(A)(i), by striking ``Loan)'' 
                each place it appears and inserting ``Loan) or part 
                J'';
            (2) in subsection (b)--
                    (A) in paragraph (1)(A)--
                            (i) in the matter preceding clause (i), by 
                        inserting ``or made under part J'' after ``part 
                        E''; and
                            (ii) in clause (vii)--
                                    (I) by inserting ``or an IDEA 
                                Consolidation Loan'' after ``Federal 
                                Direct Consolidation Loan''; and
                                    (II) by striking ``and E'' and 
                                inserting ``E, and J''; and
                    (B) in paragraph (2)(A), by striking ``or E'' and 
                inserting ``E, or J''; and
            (3) in subsection (l)(1)--
                    (A) in subparagraph (A), in the matter preceding 
                clause (i), by inserting ``or made under part J'' after 
                ``student)''; and
                    (B) in subparagraph (B), by striking ``or D'' and 
                inserting ``, D, or J''.

SEC. 5. NATIONAL DIRECTORY OF NEW HIRES.

    Section 453(j) of the Social Security Act (42 U.S.C. 653(j)) is 
amended by adding at the end the following:
            ``(12) Information comparisons and disclosure to assist 
        with collection of idea student loans.--
                    ``(A) Furnishing of information by the secretary of 
                education.--The Secretary of Education shall furnish to 
                the Secretary, on such periodic basis as determined by 
                the Secretary of Education in consultation with the 
                Secretary, information in the custody of the Secretary 
                of Education for comparison with information in the 
                National Directory of New Hires, in order to obtain 
                information in such Directory with respect to persons 
                who have a loan made under part J of title IV of the 
                Higher Education Act of 1965 in repayment status.
                    ``(B) Requirement to seek minimum information.--The 
                Secretary of Education shall seek information pursuant 
                to this section only to the extent necessary to improve 
                collection of the debts owed on the loans described in 
                subparagraph (A).
                    ``(C) Duties of the secretary.--
                            ``(i) Information disclosure.--The 
                        Secretary, in cooperation with the Secretary of 
                        Education, shall compare information in the 
                        National Directory of New Hires with 
                        information provided by the Secretary of 
                        Education with respect to persons described in 
                        subparagraph (A) and shall disclose information 
                        in such Directory regarding such persons to the 
                        Secretary of Education in accordance with this 
                        paragraph, for the purposes specified in this 
                        paragraph.
                            ``(ii) Condition on disclosure.--The 
                        Secretary shall make disclosures in accordance 
                        with clause (i) only to the extent that the 
                        Secretary determines that such disclosures do 
                        not interfere with the effective operation of 
                        the program under this part.
                    ``(D) Prohibition and unauthorized use.--
                            ``(i) In general.--Individual data 
                        collected under this paragraph shall not be 
                        used for any purpose not specifically 
                        authorized by Federal law.
                            ``(ii) Penalties for unauthorized 
                        disclosure of data.--Any individual who 
                        willfully discloses information provided under 
                        this paragraph, in any manner to an entity not 
                        entitled to receive the information, shall be 
                        fined under title 18, United States Code, 
                        imprisoned not more than 5 years, or both.
                    ``(E) Use or disclosure of information by the 
                secretary of education.--The Secretary of Education may 
                use or disclose information provided under this 
                paragraph only for purposes of collecting the debts 
                owed on the loans described in subparagraph (A).
                    ``(F) Reimbursement of hhs costs.--The Secretary of 
                Education shall reimburse the Secretary, in accordance 
                with subsection (k)(3), for the costs incurred by the 
                Secretary in furnishing the information requested under 
                this paragraph.
                    ``(G) Compliance with ferpa.--In carrying out this 
                paragraph, the Secretary and the Secretary of Education 
                shall not share any personally identifiable information 
                and shall act in accordance with section 444 of the 
                General Education Provisions Act (20 U.S.C. 1232g, 
                commonly known as the `Family Educational Rights and 
                Privacy Act of 1974').''.

SEC. 6. DISCLOSURE OF RETURN INFORMATION FOR PURPOSES OF IDEA LOAN 
              REPAYMENT PROGRAM.

    (a) In General.--Subsection (l) of section 6103 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(23) Disclosure of return information to department of 
        education for purposes of administering idea loan repayment 
        program.--
                    ``(A) In general.--The Secretary shall, upon 
                written request, disclose to the Department of 
                Education such return information as is necessary for 
                purposes of carrying out the IDEA Loan Repayment 
                Program established under subpart 2 of part J of the 
                Higher Education Act of 1965.
                    ``(B) Restriction on disclosure.--Return 
                information disclosed under subparagraph (A) may be 
                used by officers, employees, and contractors of the 
                Department of Education only for purposes of, and to 
                the extent necessary in--
                            ``(i) determining income-based repayment 
                        obligations under the IDEA Loan Repayment 
                        Program, and
                            ``(ii) determining amounts deducted and 
                        withheld, and amounts paid concurrently with 
                        quarterly estimated taxes, under the IDEA Loan 
                        Repayment Program.''.
    (b) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 7. SENSE OF CONGRESS.

    It is the sense of Congress that any loan repayment or forgiveness 
program available under a Federal law outside of the Higher Education 
Act of 1965 (20 U.S.C. 1001 et seq.) to students with loans made under 
part D of title IV of the Higher Education Act of 1965 (20 U.S.C. 1087a 
et seq.) should be available to students with loans made under part J 
of such title of such Act.
                                 <all>
```