II 

117TH CONGRESS 

2D SESSION S. 4459 

To provide targeted relief for student borrowers, improve the affordability 

of higher education, provide reforms to the student loan system, and 

for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 23, 2022 

Ms. CORTEZ MASTO introduced the following bill; which was read twice and 

referred to the Committee on Finance 

A BILL 

To provide targeted relief for student borrowers, improve 

the affordability of higher education, provide reforms 

to the student loan system, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Student Debt Relief 

5 and College Affordability Act’’. 


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1 TITLE I—STUDENT LOAN CAN2 CELLATION AND FORGIVE3 NESS FOR FEDERAL PELL 

4 GRANT RECIPIENTS 

5 SEC. 101. FEDERAL STUDENT LOAN CANCELLATION AND 

6 FORGIVENESS FOR FEDERAL PELL GRANT 

7 RECIPIENTS. 

8 (a) FEDERAL DIRECT LOANS.—Section 455 of the 

9 Higher Education Act of 1965 (20 U.S.C. 1087e) is 

10 amended by adding at the end the following: 

11 ‘‘(r) LOAN CANCELLATION FOR FEDERAL PELL

12 GRANT RECIPIENTS.— 

13 ‘‘(1) IN GENERAL.—Beginning not later than 

14 180 days after the date of enactment of the Student 

15 Debt Relief and College Affordability Act, the Sec16 retary shall cancel the amount determined under 

17 paragraph (2) of interest and principal due, in ac18 cordance with paragraph (3), on eligible Federal Di19 rect Loans that are in repayment status on or after 

20 such date of enactment for a borrower who received 

21 a Federal Pell Grant. 

22 ‘‘(2) AMOUNT.—The amount determined under 

23 this paragraph is equal to— 

24 ‘‘(A) if the total amount of Federal Pell 

25 Grants received by the borrower is equal to or 


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1 less than the balance of interest and principal 

2 due on the date of cancellation on eligible Fed3 eral Direct Loans received by the borrower, the 

4 total amount of Federal Pell Grants received by 

5 the borrower; or 

6 ‘‘(B) if the total amount of Federal Pell 

7 Grants received by the borrower is more than 

8 the balance of interest and principal due on the 

9 date of cancellation on eligible Federal Direct 

10 Loans received by the borrower, the balance of 

11 interest and principal due on the date of can12 cellation on eligible Federal Direct Loans re13 ceived by the borrower. 

14 ‘‘(3) LOAN CANCELLATION.—The Secretary 

15 shall cancel the obligation to repay the amount de16 termined under paragraph (2) of principal and inter17 est due on the date of cancellation on the eligible 

18 Federal Direct Loans made to the borrower under 

19 this part. 

20 ‘‘(4) ELIGIBLE FEDERAL DIRECT LOAN.—In 

21 this subsection, the term ‘eligible Federal Direct 

22 Loan’ means a Federal Direct Stafford Loan, Fed23 eral Direct PLUS Loan, or Federal Direct Unsub24 sidized Stafford Loan, or a Federal Direct Consoli25 dation Loan. 


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1 ‘‘(5) MAXIMUM ASSISTANCE.—A borrower shall 

2 not receive a total amount of loan cancellation and 

3 loan forgiveness, if applicable, under this subsection, 

4 section 493E, and section 470, that exceeds the total 

5 amount of Federal Pell Grants received by the bor6 rower.’’. 

7 (b) FFEL LOAN.—Part G of title IV of the Higher 

8 Education Act of 1965 (20 U.S.C. 1088 et seq.) is amend9 ed by adding at the end the following: 

10 ‘‘SEC. 493E. FEDERAL FAMILY EDUCATION LOAN FORGIVE11 NESS FOR FEDERAL PELL GRANT RECIPI12 ENTS. 

13 ‘‘(a) AUTHORIZATION OF LOAN FORGIVENESS.— 

14 ‘‘(1) IN GENERAL.—Beginning not later than 

15 180 days after the date of enactment of the Student 

16 Debt Relief and College Affordability Act, the Sec17 retary shall forgive, in accordance with this section, 

18 the amount determined under subsection (b) of the 

19 student loan obligation on loans made, insured, or 

20 guaranteed under this part that are in repayment 

21 status on or after such date of enactment for a bor22 rower who received a Federal Pell Grant. 

23 ‘‘(2) METHOD OF LOAN FORGIVENESS.—To 

24 provide loan forgiveness under paragraph (1), the 

25 Secretary is authorized to carry out a program 


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1 through the holder of the loan, to assume the obliga2 tion to repay the amount determined under sub3 section (b) for loans made, insured, or guaranteed 

4 under this part. 

5 ‘‘(b) AMOUNT.—The amount determined under this 

6 subsection is equal to— 

7 ‘‘(1) if the total amount of Federal Pell Grants 

8 received by the borrower is equal to or less than the 

9 student loan obligation on the date of forgiveness of 

10 loans made, insured, or guaranteed under this part 

11 received by the borrower, the total amount of Fed12 eral Pell Grants received by the borrower; or 

13 ‘‘(2) if the total amount of Federal Pell Grants 

14 received by the borrower is more than the student 

15 loan obligation on the date of forgiveness of loans 

16 made, insured, or guaranteed under this part re17 ceived by the borrower, the student loan obligation 

18 on the date of forgiveness of loans made, insured, or 

19 guaranteed under this part received by the borrower. 

20 ‘‘(c) MAXIMUM ASSISTANCE.—A borrower shall not 

21 receive a total amount of loan forgiveness and loan can22 cellation, if applicable, under this section, section 455(r), 

23 and section 470, that exceeds the total amount of Federal 

24 Pell Grants received by the borrower.’’. 


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1 (c) PERKINS LOANS.—Part E of title IV of the High2 er Education Act of 1965 (20 U.S.C. 1087aa et seq.) is 

3 amended by adding at the end the following: 

4 ‘‘SEC. 470. LOAN CANCELLATION FOR FEDERAL PELL 

5 GRANT RECIPIENTS. 

6 ‘‘(a) IN GENERAL.—Beginning not later than 180 

7 days after the date of enactment of the Student Debt Re8 lief and College Affordability Act, the Secretary shall can9 cel the amount determined under subsection (b) of interest 

10 and principal due, in accordance with subsection (c), on 

11 loans made under this part that are in repayment status 

12 on or after such date of enactment for a borrower who 

13 received a Federal Pell Grant. 

14 ‘‘(b) AMOUNT.—The amount determined under this 

15 subsection is equal to— 

16 ‘‘(1) if the total amount of Federal Pell Grants 

17 received by the borrower is equal to or less than the 

18 interest and principal due on the date of cancellation 

19 on loans made under this part received by the bor20 rower, the total amount of Federal Pell Grants re21 ceived by the borrower; or 

22 ‘‘(2) if the total amount of Federal Pell Grants 

23 received by the borrower is more than the interest 

24 and principal due on the date of cancellation on 

25 loans made under this part, the interest and prinVerDate Sep 11 2014 16:45 Jun 30, 2022 Jkt 029200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S4459.IS S4459

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1 cipal due on the date of cancellation on loans made 

2 under this part received by the borrower. 

3 ‘‘(c) REIMBURSEMENT FOR CANCELLATION.—The 

4 Secretary shall pay to each institution for each fiscal year 

5 an amount equal to the aggregate of the amounts of loans 

6 from its student loan fund which are canceled pursuant 

7 to this section for such year, minus an amount equal to 

8 the aggregate of the amounts of any such loans so can9 celed which were made from Federal capital contributions 

10 to its student loan fund provided by the Secretary under 

11 section 468. None of the funds appropriated pursuant to 

12 section 461(b) shall be available for payments pursuant 

13 to this subsection. To the extent feasible, the Secretary 

14 shall pay the amounts for which any institution qualifies 

15 under this subsection not later than 3 months after the 

16 institution files an institutional application for campus17 based funds. 

18 ‘‘(d) MAXIMUM ASSISTANCE.—A borrower shall not 

19 receive a total amount of loan cancellation and loan for20 giveness, if applicable, under this section, section 455(r), 

21 and section 493E, that exceeds the total amount of Fed22 eral Pell Grants received by the borrower.’’. 


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1 TITLE II—INCREASE IN MAX2 IMUM FEDERAL PELL GRANT 

3 SEC. 201. INCREASE IN MAXIMUM FEDERAL PELL GRANTS. 

4 (a) AWARD YEAR 2023–2024.—Section 

5 401(b)(7)(C)(iii) of the Higher Education Act of 1965 (20 

6 U.S.C. 1070a(b)(7)(C)(iii)) is amended— 

7 (1) by inserting ‘‘(except as provided in the sec8 ond sentence of this clause)’’ after ‘‘each subsequent 

9 award year’’; and 

10 (2) by adding at the end the following: ‘‘For 

11 award year 2023–2024, the amount determined 

12 under this subparagraph for purposes of subpara13 graph (B)(iii) shall be equal to $1,475.’’. 

14 (b) SUBSEQUENT AWARD YEARS.— 

15 (1) IN GENERAL.—Section 401(b) of the High16 er Education Act of 1965 (20 U.S.C. 1070a(b)), as 

17 amended by section 703 of the FAFSA Simplifica18 tion Act (title VII of division FF of Public Law 

19 116–260), is further amended— 

20 (A) in paragraph (1)(B)(i), by striking 

21 ‘‘paragraph (5)(A)’’ and inserting ‘‘paragraph 

22 (5)’’; and 

23 (B) by striking paragraph (5) and insert24 ing the following: 

25 ‘‘(5) MAXIMUM FEDERAL PELL GRANT.— 


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1 ‘‘(A) AWARD YEAR 2024–2025.—For award 

2 year 2024–2025, the total maximum Federal 

3 Pell Grant award shall be $9,000. 

4 ‘‘(B) AWARD YEAR 2025–2026.—For award 

5 year 2025–2026, the total maximum Federal 

6 Pell Grant award shall be $9,500. 

7 ‘‘(C) AWARD YEAR 2026–2027.—For award 

8 year 2026–2027, the total maximum Federal 

9 Pell Grant award shall be $10,000. 

10 ‘‘(D) AWARD YEAR 2027–2028.—For award 

11 year 2027–2028, the total maximum Federal 

12 Pell Grant award shall be $10,500. 

13 ‘‘(E) AWARD YEAR 2028–2029.—For award 

14 year 2028–2029, the total maximum Federal 

15 Pell Grant award shall be $11,000. 

16 ‘‘(F) AWARD YEAR 2029–2030.—For award 

17 year 2029–2030, the total maximum Federal 

18 Pell Grant award shall be $11,500. 

19 ‘‘(G) AWARD YEAR 2030–2031.—For award 

20 year 2030–2031, the total maximum Federal 

21 Pell Grant award shall be $12,000. 

22 ‘‘(H) AWARD YEAR 2031–2032.—For award 

23 year 2031–2032, the total maximum Federal 

24 Pell Grant award shall be $12,500. 


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1 ‘‘(I) AWARD YEAR 2032–2033 AND SUBSE2 QUENT YEARS.—For award year 2032–2033, 

3 and each subsequent award year, the total max4 imum Federal Pell Grant award shall be 

5 $13,000.’’. 

6 (2) EFFECTIVE DATE.—The amendments made 

7 by paragraph (1) shall take effect as if included in 

8 section 703 of the FAFSA Simplification Act (title 

9 VII of division FF of Public Law 116–260; 134 

10 Stat. 3191) and in accordance with section 701(b) 

11 of such Act. 

12 TITLE III—AFFORDABLE LOANS 

13 FOR ANY STUDENT 

14 SEC. 301. SHORT TITLE. 

15 This title may be cited as the ‘‘Affordable Loans for 

16 Any Student Act’’. 

17 SEC. 302. REFERENCES IN TITLE. 

18 Except as otherwise expressly provided in this title, 

19 wherever an amendment or repeal is expressed in terms 

20 of an amendment to or repeal of a section or other provi21 sion, the reference shall be considered to be made to that 

22 section or other provision of the Higher Education Act of 

23 1965 (20 U.S.C. 1001 et seq.). 


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1 Subtitle A—Simplifying Repayment 

2 Plans 

3 SEC. 311. INCOME-BASED REPAYMENT PLAN. 

4 Section 493C (20 U.S.C. 1098e) is amended to read 

5 as follows: 

6 ‘‘SEC. 493C. INCOME-BASED REPAYMENT. 

7 ‘‘(a) DEFINITIONS.—In this section: 

8 ‘‘(1) EXCEPTED PLUS LOAN.—The term ‘ex9 cepted PLUS loan’ means a loan under section 

10 428B, or a Federal Direct PLUS Loan, that is 

11 made, insured, or guaranteed on behalf of a depend12 ent student. 

13 ‘‘(2) EXCEPTED CONSOLIDATION LOAN.—The 

14 term ‘excepted consolidation loan’ means a consoli15 dation loan under section 428C, or a Federal Direct 

16 Consolidation Loan, if the proceeds of such loan 

17 were used to the discharge the liability on an ex18 cepted PLUS loan. 

19 ‘‘(3) PARTIAL FINANCIAL HARDSHIP.—The 

20 term ‘partial financial hardship’, when used with re21 spect to a borrower, means that for such borrower— 

22 ‘‘(A) the annual amount due on the total 

23 amount of loans made, insured, or guaranteed 

24 under part B or D (other than an excepted 

25 PLUS loan or excepted consolidation loan) to a 


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1 borrower as calculated under the standard re2 payment plan under section 428(b)(9)(A)(i) or 

3 455(d)(1)(A), based on a 10-year repayment 

4 period; exceeds 

5 ‘‘(B) 15 percent of the result obtained by 

6 calculating, on at least an annual basis, the 

7 amount by which— 

8 ‘‘(i) the borrower’s, and the bor9 rower’s spouse’s (if applicable), adjusted 

10 gross income; exceeds 

11 ‘‘(ii) 150 percent of the poverty line 

12 applicable to the borrower’s family size as 

13 determined under section 673(2) of the 

14 Community Services Block Grant Act (42 

15 U.S.C. 9902(2)). 

16 ‘‘(b) INCOME-BASED REPAYMENT PROGRAM FOR

17 BORROWERS WHO ENTER INCOME-BASED REPAYMENT

18 BEFORE JANUARY 1, 2026.—Notwithstanding any other 

19 provision of this Act, the Secretary shall carry out a pro20 gram under which— 

21 ‘‘(1) a borrower of any loan made, insured, or 

22 guaranteed under part B or D (other than an ex23 cepted PLUS loan or excepted consolidation loan) 

24 who has a partial financial hardship (whether or not 

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1 anty agency for default aversion or had been in de2 fault) may elect, during any period the borrower has 

3 the partial financial hardship, to have the borrower’s 

4 aggregate monthly payment for all such loans not 

5 exceed the result described in subsection (a)(3)(B) 

6 divided by 12; 

7 ‘‘(2) the holder of such a loan shall apply the 

8 borrower’s monthly payment under this subsection 

9 first toward interest due on the loan, next toward 

10 any fees due on the loan, and then toward the prin11 cipal of the loan; 

12 ‘‘(3) any interest due and not paid under para13 graph (2)— 

14 ‘‘(A) shall, on subsidized loans, be paid by 

15 the Secretary for a period of not more than 3 

16 years after the date of the borrower’s election 

17 under paragraph (1); and 

18 ‘‘(B) beginning on the effective date of the 

19 Affordable Loans for Any Student Act, for an 

20 eligible loan made, insured, or guaranteed 

21 under this title, shall not be capitalized and 

22 shall be added to the balance of interest due for 

23 the loan; 

24 ‘‘(4) any principal due and not paid under 

25 paragraph (2) shall be deferred; 


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1 ‘‘(5) the amount of time the borrower makes 

2 monthly payments under paragraph (1) may exceed 

3 10 years; 

4 ‘‘(6) if the borrower no longer has a partial fi5 nancial hardship or no longer wishes to continue the 

6 election under this subsection, then— 

7 ‘‘(A) the maximum monthly payment re8 quired to be paid for all loans made to the bor9 rower under part B or D (other than an ex10 cepted PLUS loan or excepted consolidation 

11 loan) shall not exceed the monthly amount cal12 culated under section 428(b)(9)(A)(i) or 

13 455(d)(1)(A), based on a 10-year repayment 

14 period, when the borrower first made the elec15 tion described in this subsection; and 

16 ‘‘(B) the amount of time the borrower is 

17 permitted to repay such loans may exceed 10 

18 years; 

19 ‘‘(7) the Secretary shall repay or cancel any 

20 outstanding balance of principal and interest due on 

21 all loans made under part B or D (other than a loan 

22 under section 428B or a Federal Direct PLUS 

23 Loan) to a borrower who— 


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1 ‘‘(A) at any time, elected to participate in 

2 income-based repayment under paragraph (1); 

3 and 

4 ‘‘(B) for a period of time prescribed by the 

5 Secretary, not to exceed 25 years, meets 1 or 

6 more of the following requirements— 

7 ‘‘(i) has made reduced monthly pay8 ments under paragraph (1) or paragraph 

9 (6); 

10 ‘‘(ii) has made monthly payments of 

11 not less than the monthly amount cal12 culated under section 428(b)(9)(A)(i) or 

13 455(d)(1)(A), based on a 10-year repay14 ment period, when the borrower first made 

15 the election described in this subsection; 

16 ‘‘(iii) has made payments of not less 

17 than the payments required under a stand18 ard repayment plan under section 

19 428(b)(9)(A)(i) or 455(d)(1)(A) with a re20 payment period of 10 years; 

21 ‘‘(iv) has made payments under an in22 come-contingent repayment plan under sec23 tion 455(d)(1)(D); or 


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1 ‘‘(v) has been in deferment due to an 

2 economic hardship described in section 

3 435(o); 

4 ‘‘(8) a borrower who is repaying a loan made 

5 under part B or D pursuant to income-based repay6 ment may elect, at any time, to terminate repayment 

7 pursuant to income-based repayment and repay such 

8 loan under the fixed repayment plan under section 

9 493E; and 

10 ‘‘(9) the special allowance payment to a lender 

11 calculated under section 438(b)(2)(I), when cal12 culated for a loan in repayment under this section, 

13 shall be calculated on the principal balance of the 

14 loan and on any accrued interest unpaid by the bor15 rower in accordance with this section. 

16 ‘‘(c) INCOME-BASED REPAYMENT PROGRAM FOR

17 BORROWERS WHO ENTER INCOME-BASED REPAYMENT

18 ON OR AFTER JANUARY 1, 2026.— 

19 ‘‘(1) IN GENERAL.—Notwithstanding any other 

20 provision of this section, the provisions of this sub21 section shall apply— 

22 ‘‘(A) with respect to any loan made, in23 sured, or guaranteed under this title for which 

24 the borrower enters repayment on or after Jan25 uary 1, 2026, and for which the borrower elects 


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1 the income-based repayment plan under this 

2 section; and 

3 ‘‘(B) with respect to any loan made, in4 sured, or guaranteed under this title for which 

5 the borrower enrolled in an income-based repay6 ment plan before January 1, 2026, if such bor7 rower elects to enter the income-based repay8 ment plan under this subsection, in accordance 

9 with paragraph (3). 

10 ‘‘(2) SPECIAL TERMS.—With respect to a loan 

11 described in paragraph (1), the following terms shall 

12 apply to the income-based repayment plan carried 

13 out under this section: 

14 ‘‘(A)(i) Notwithstanding subsection 

15 (a)(3)(B), (b), or (e)— 

16 ‘‘(I) the annual repayment amount 

17 under this subsection— 

18 ‘‘(aa) with respect to a borrower 

19 whose (and whose spouse’s, if applica20 ble) adjusted gross income equals or 

21 exceeds 1,300 percent of the poverty 

22 line that is applicable to the bor23 rower’s family size as determined 

24 under section 673(2) of the Commu25 nity Services Block Grant Act (42 


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1 U.S.C. 9902(2)) shall be an amount 

2 equal to 10 percent of such adjusted 

3 gross income; 

4 ‘‘(bb) with respect to a borrower 

5 whose (and whose spouse’s, if applica6 ble) adjusted gross income equals or 

7 exceeds 800 percent of the poverty 

8 line but is less than 1,300 percent of 

9 the poverty line that is applicable to 

10 the borrower’s family size as deter11 mined under section 673(2) of the 

12 Community Services Block Grant Act 

13 (42 U.S.C. 9902(2)) shall be equal to 

14 the amount determined under clause 

15 (ii)(I); 

16 ‘‘(cc) with respect to a borrower 

17 whose (and whose spouse’s, if applica18 ble) adjusted gross income exceeds 

19 250 percent of the poverty line but is 

20 less than 800 percent of the poverty 

21 line that is applicable to the bor22 rower’s family size as determined 

23 under section 673(2) of the Commu24 nity Services Block Grant Act (42 

25 U.S.C. 9902(2)) shall be equal to the 


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1 amount determined under clause 

2 (ii)(II); and 

3 ‘‘(dd) with respect to a borrower 

4 whose (and whose spouse’s, if applica5 ble) adjusted gross income equals or 

6 is less than 250 percent of the poverty 

7 line that is applicable to the bor8 rower’s family size as determined 

9 under section 673(2) of the Commu10 nity Services Block Grant Act (42 

11 U.S.C. 9902(2)) shall be an amount 

12 equal to 0 percent of such adjusted 

13 gross income; and 

14 ‘‘(II) a borrower’s monthly payment 

15 shall be determined in accordance with 

16 subclause (I) divided by 12, which amount 

17 may exceed the monthly repayment 

18 amount under a standard 10-year repay19 ment plan or a fixed repayment plan de20 scribed in section 493E. 

21 ‘‘(ii)(I)(aa) For purposes of clause 

22 (i)(I)(bb), the annual repayment amount for 

23 borrowers described in such clause shall be an 

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1 tained by calculating, on at least an annual 

2 basis, the amount by which— 

3 ‘‘(AA) the borrower’s, and the bor4 rower’s spouse’s (if applicable), adjusted 

5 gross income; exceeds 

6 ‘‘(BB) the percent determined under 

7 item (bb) of the poverty line that is appli8 cable to the borrower’s family size as de9 termined under section 673(2) of the Com10 munity Services Block Grant Act (42 

11 U.S.C. 9902(2)). 

12 ‘‘(bb) The percent shall be determined 

13 under this item as follows: 

14 ‘‘(AA) If the borrower’s, and the bor15 rower’s spouse’s (if applicable), adjusted 

16 gross income equals 800 percent of the 

17 poverty line that is applicable to the bor18 rower’s family size as determined under 

19 section 673(2) of the Community Services 

20 Block Grant Act (42 U.S.C. 9902(2)), the 

21 percent shall be equal to 250 percent. 

22 ‘‘(BB) If the borrower’s, and the bor23 rower’s spouse’s (if applicable), adjusted 

24 gross income exceeds 800 percent of the 

25 poverty line but is less than 1,300 percent 


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1 of the poverty line that is applicable to the 

2 borrower’s family size as determined under 

3 section 673(2) of the Community Services 

4 Block Grant Act (42 U.S.C. 9902(2)), the 

5 percent shall be equal to 250 percent re6 duced by 0.5 percentage points for every 1 

7 percentage point increase in the bor8 rower’s, and the borrower’s spouse’s (if ap9 plicable), adjusted gross income that is 

10 more than 800 percent. 

11 ‘‘(II) For purposes of clause (i)(I)(cc), the an12 nual repayment amount for borrowers described in 

13 such clause shall be an amount equal to 10 percent 

14 of the result obtained by calculating, on at least an 

15 annual basis, the amount by which— 

16 ‘‘(aa) the borrower’s, and the borrower’s 

17 spouse’s (if applicable), adjusted gross income; 

18 exceeds 

19 ‘‘(bb) 250 percent of the poverty line that 

20 is applicable to the borrower’s family size as de21 termined under section 673(2) of the Commu22 nity Services Block Grant Act (42 U.S.C. 

23 9902(2)). 


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1 ‘‘(B) Notwithstanding subsection (e)(2), sub2 section (b)(7)(B) shall be applied by substituting ‘20 

3 years’ for ‘25 years’. 

4 ‘‘(C) Notwithstanding subparagraph (A) of sub5 section (b)(6), a borrower of such a loan shall not 

6 be required to have a partial financial hardship and 

7 may elect, and remain enrolled in, the income-based 

8 repayment plan under this section regardless of in9 come level, with the repayment amount calculated 

10 under subparagraph (A). 

11 ‘‘(D) Notwithstanding subsection (b), a bor12 rower of an excepted PLUS loan or excepted consoli13 dation loan may elect the income-based repayment 

14 plan under this subsection for the excepted PLUS 

15 loan or excepted consolidation loan, and the Sec16 retary shall treat such loan, only for the purposes of 

17 the repayment terms, as a Federal Direct PLUS 

18 Loan issued to a student borrower. The Secretary 

19 may issue rules and regulations, as the Secretary de20 termines necessary, regarding the treatment of ex21 cepted PLUS loans or excepted consolidation loans 

22 that are to be repaid under an income-based repay23 ment plan under this subsection. 

24 ‘‘(3) RULE FOR BORROWERS IN INCOME-BASED

25 REPAYMENT BEFORE JANUARY 1, 2026.—A borrower 


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1 of a loan made, insured, or guaranteed under this 

2 title who enrolled in an income-based repayment 

3 plan before January 1, 2026, may choose to retain 

4 such repayment plan or elect to enter an income5 based repayment plan under this subsection or a 

6 fixed repayment plan described in section 493E, as 

7 provided in section 428(b)(1)(D)(ii) or section 

8 455(d)(7) (as applicable). 

9 ‘‘(4) INTEREST ACCRUAL.—Notwithstanding 

10 any other provision of this Act, if a borrower’s 

11 monthly payment for a loan under an income-based 

12 repayment plan under this subsection is insufficient 

13 to pay the accrued interest on the borrower’s loan 

14 for such month, any interest due and not paid on 

15 the loan for that month shall be paid or forgiven by 

16 the Secretary. 

17 ‘‘(5) WRITTEN, ELECTRONIC, OR VERBAL EN18 ROLLMENT IN INCOME-BASED REPAYMENT.— 

19 ‘‘(A) IN GENERAL.—A borrower of a loan 

20 made under this part may elect to repay such 

21 loan under the income-based repayment plan 

22 under this subsection by providing written, elec23 tronic, or verbal notice to the Secretary of the 

24 borrower’s desire to make such election, subject 

25 to subparagraph (C). 


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1 ‘‘(B) USE OF INFORMATION.— 

2 ‘‘(i) IN GENERAL.—The estimated 

3 monthly payment amount under this sec4 tion for a loan for a borrower who makes 

5 an election described in subparagraph (A) 

6 shall be immediately calculated using the 

7 income and family size information pro8 vided through the borrower’s written, elec9 tronic, or verbal statement. 

10 ‘‘(ii) VERIFICATION.—The informa11 tion described in clause (i) shall be verified 

12 by the Secretary not later than 90 days 

13 after the date the borrower states such in14 come and family size information. If the 

15 Secretary is unable to verify the informa16 tion by the end of the 90-day period, the 

17 borrower’s payment after such 90-day pe18 riod will be the amount applicable under 

19 the fixed repayment plan under section 

20 493E. 

21 ‘‘(iii) ADJUSTMENT IF NECESSARY.— 

22 Upon verification by the Secretary under 

23 clause (ii), the Secretary shall adjust the 

24 estimated monthly payment described in 

25 clause (i) based on the verified income and 


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1 family size information of the borrower, if 

2 necessary. Any adjusted monthly payment 

3 shall take effect beginning with the pay4 ment due not less than 60 days after the 

5 Secretary notifies the borrower of the ad6 justed amount. The Secretary shall con7 sider any payments made prior to the ad8 justed monthly payment as having satisfied 

9 the amount due to qualify toward loan can10 cellation or forgiveness options under this 

11 title. 

12 ‘‘(C) LIMITATION.—The Secretary shall 

13 permit a borrower to make an election of in14 come-based repayment in the written, elec15 tronic, or verbal manner described in subpara16 graph (A) only in connection with the first in17 stance of each of the following: 

18 ‘‘(i) The borrower’s selection of a re19 payment plan during the grace period for 

20 such loan. 

21 ‘‘(ii) The borrower changing from the 

22 fixed repayment plan under section 493E 

23 to income-based repayment. 


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1 ‘‘(iii) The borrower’s failure to com2 plete the verification process described in 

3 subparagraph (B)(ii). 

4 ‘‘(iv) The borrower’s failure to recer5 tify enrollment in income-based repayment 

6 under this subsection. 

7 ‘‘(d) CALCULATION OF ADJUSTED GROSS INCOME

8 FOR MARRIED BORROWERS.—The Secretary shall cal9 culate the adjusted gross income of a married borrower 

10 under this section— 

11 ‘‘(1) in the case of a married borrower and 

12 spouse who jointly file a Federal income tax return, 

13 based on the adjusted gross income of the borrower 

14 and spouse as reported on the Federal income tax 

15 return; and 

16 ‘‘(2) in the case of a married borrower who files 

17 a Federal income tax return separately from the 

18 borrower’s spouse, based on the sum of the adjusted 

19 gross income of the borrower and the spouse, as re20 ported on the applicable Federal income tax returns, 

21 unless the borrower certifies, on a form approved by 

22 the Secretary, that the borrower is— 

23 ‘‘(A) separated from the borrower’s spouse; 

24 or 


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1 ‘‘(B) unable to reasonably access the in2 come information of the borrower’s spouse. 

3 ‘‘(e) SPECIAL TERMS FOR NEW BORROWERS ON AND

4 AFTER JULY 1, 2014.—With respect to any loan made 

5 to a new borrower on or after July 1, 2014— 

6 ‘‘(1) subsection (a)(3)(B) shall be applied by 

7 substituting ‘10 percent’ for ‘15 percent’; and 

8 ‘‘(2) subsection (b)(7)(B) shall be applied by 

9 substituting ‘20 years’ for ‘25 years’. 

10 ‘‘(f) ELIGIBILITY DETERMINATIONS AND AUTOMATIC

11 RECERTIFICATION.— 

12 ‘‘(1) IN GENERAL.—Beginning as soon as the 

13 Secretary determines practicable after the Secretary 

14 finalizes the procedures under section 315 of the Af15 fordable Loans for Any Student Act, the Secretary 

16 shall establish and implement, with respect to any 

17 borrower described in paragraph (2), procedures 

18 to— 

19 ‘‘(A) obtain (for each year of repayment 

20 and without further action by the borrower) 

21 such information as is reasonably necessary re22 garding the income of such borrower (and the 

23 borrower’s spouse, if applicable), for the pur24 pose of determining the repayment obligation of 

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1 tion with respect to the borrower’s family size 

2 in accordance with the procedures under such 

3 section 105, subject to subparagraph (B); 

4 ‘‘(B) allow the borrower, at any time, to 

5 opt out of subparagraph (A) and prevent the 

6 Secretary from obtaining information under 

7 such subparagraph without further action by 

8 the borrower; 

9 ‘‘(C) provide the borrower with an oppor10 tunity to update the information obtained under 

11 subparagraph (A) before the determination of 

12 the annual repayment obligation of the bor13 rower; and 

14 ‘‘(D) in the case of a borrower for whom 

15 adjusted gross income can be obtained under 

16 this subsection and meets the qualifications of 

17 a payment amount of $0, ensure that the bor18 rower will not be required to provide the Sec19 retary with other documentation of income and 

20 provide the borrower with a calculated monthly 

21 payment of $0. 

22 ‘‘(2) APPLICABILITY.— 

23 ‘‘(A) IN GENERAL.—Paragraph (1) shall 

24 apply to each borrower of a loan made under 

25 this part who, on or after the date on which the 


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•S 4459 IS

1 Secretary establishes procedures under such 

2 paragraph— 

3 ‘‘(i) selects, or for whom the Secretary 

4 selected under subparagraph (C) or (D) of 

5 paragraph (8), or paragraph (9), of sub6 section (d), or section 428(m)(1), an in7 come-based repayment plan; or 

8 ‘‘(ii) recertifies income and family size 

9 under such plan. 

10 ‘‘(B) ELIGIBILITY EXCEPTION.—A bor11 rower for whom adjusted gross income is un12 available because the borrower has been granted 

13 an extension on filing the borrower’s income 

14 taxes or is undergoing an audit or examination 

15 by the Internal Revenue Service shall not auto16 matically be eligible for the calculated monthly 

17 payment of $0 in accordance with paragraph 

18 (1)(D) during such period. When the extension, 

19 audit, or examination is completed, the Sec20 retary shall resume consideration of the bor21 rower for automatic recertification under the 

22 procedures described in paragraph (1), includ23 ing subparagraph (D) of such paragraph (if ap24 plicable). 


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1 ‘‘(3) AVAILABILITY OF RETURNS AND RETURN

2 INFORMATION.—Returns and return information (as 

3 defined in section 6103 of the Internal Revenue 

4 Code of 1986) may be obtained under paragraph 

5 (1)(A) only to the extent authorized by section 

6 6103(l)(13) of such Code.’’. 

7 SEC. 312. FIXED REPAYMENT PLAN. 

8 Part G of title IV (20 U.S.C. 1088 et seq.) is amend9 ed by adding at the end the following: 

10 ‘‘SEC. 493E. FIXED REPAYMENT PLAN. 

11 ‘‘(a) IN GENERAL.—A borrower of a loan made under 

12 part D on or after January 1, 2026, and a borrower who 

13 is in repayment on a loan made, insured, or guaranteed 

14 under part B or D before January 1, 2026, may elect to 

15 repay such loan under the fixed repayment plan described 

16 in this section. 

17 ‘‘(b) FIXED REPAYMENT PLAN.—Under the fixed re18 payment plan, a borrower shall repay each loan described 

19 in subsection (a) with a fixed monthly repayment amount 

20 paid over a period of 10 years, subject to subsection (c). 

21 ‘‘(c) SPECIAL RULES.— 

22 ‘‘(1) MINIMUM.—If a borrower’s monthly pay23 ment under this section (except for the final pay24 ment on the loan) is less than $25, the Secretary 


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1 shall establish the borrower’s monthly payment as 

2 $25. 

3 ‘‘(2) ALTERNATIVE MINIMUM PAYMENTS.—Not4 withstanding paragraph (1), the Secretary may ac5 cept an alternative minimum payment amount, 

6 which may include an amount of less than $25, to 

7 account for a borrower’s exceptional cir8 cumstances.’’. 

9 SEC. 313. TERMINATION OF CERTAIN REPAYMENT PLAN 

10 OPTIONS. 

11 (a) FFEL PROGRAM REPAYMENT PLAN OPTIONS.— 

12 Section 428(b) (20 U.S.C. 1078(b)) is amended— 

13 (1) in paragraph (1)— 

14 (A) in subparagraph (D)— 

15 (i) in clause (ii), by striking ‘‘may an16 nually change the selection of a repayment 

17 plan under this part,’’ and inserting ‘‘may 

18 at any time on or after January 1, 2026, 

19 change the selection of a repayment plan 

20 under this part or part G to one of the 2 

21 repayment plans described in paragraph 

22 (9)(C),’’; and 

23 (ii) in clause (iii), by inserting ‘‘or, in 

24 the case of a default that occurs on or 

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1 come-based repayment in accordance with 

2 section 493C(c)’’ before the semicolon at 

3 the end; 

4 (B) in subparagraph (E)(i), by striking 

5 ‘‘the option of repaying the loan in accordance 

6 with a standard, graduated, income-sensitive, or 

7 extended repayment schedule (as described in 

8 paragraph (9)) established by the lender in ac9 cordance with regulations of the Secretary; 

10 and’’ and inserting ‘‘the option of repaying the 

11 loan in accordance with an applicable repay12 ment plan described in paragraph (9)(C)’’; and 

13 (C) by striking subparagraph (L); and 

14 (2) in paragraph (9)— 

15 (A) in subparagraph (A)— 

16 (i) in the subparagraph heading, by 

17 inserting ‘‘BEFORE JANUARY 1, 2026’’ after 

18 ‘‘SELECTION’’; and 

19 (ii) in the matter preceding clause 

20 (i)— 

21 (I) by inserting ‘‘or subparagraph 

22 (C), as applicable,’’ after ‘‘this sub23 paragraph’’; and 


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1 (II) by striking ‘‘The borrower’’ 

2 and inserting ‘‘Before January 1, 

3 2026, the borrower’’; 

4 (B) in subparagraph (B), by inserting be5 fore the period at the end ‘‘or, for a borrower 

6 entering repayment on or after January 1, 

7 2026, the lender shall provide the borrower with 

8 the fixed repayment plan described in section 

9 493E’’; and 

10 (C) by adding at the end the following: 

11 ‘‘(C) SELECTION OF REPAYMENT PLANS

12 ON AND AFTER JANUARY 1, 2026.—Notwith13 standing any other provision of law, and in ac14 cordance with regulations promulgated, begin15 ning on January 1, 2026, a lender shall offer 

16 a borrower of a loan made, insured, or guaran17 teed under this part the opportunity to change 

18 repayment plans at any time on or after Janu19 ary 1, 2026, and then not more than once per 

20 calendar year thereafter. The borrower may 

21 choose between the following repayment plans: 

22 ‘‘(i) A fixed repayment plan described 

23 in section 493E. 

24 ‘‘(ii) The income-based repayment 

25 plan under section 493C(c).’’. 


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1 (b) FEDERAL DIRECT LOAN PROGRAM REPAYMENT

2 PLAN OPTIONS.—Section 455(d) (20 U.S.C. 1087e(d)) is 

3 amended— 

4 (1) by redesignating paragraphs (2) through 

5 (5) as paragraphs (3) through (6), respectively; 

6 (2) in paragraph (1)— 

7 (A) in the paragraph heading, by inserting 

8 ‘‘BEFORE JANUARY 1, 2026’’ after ‘‘SELEC9 TION’’; and 

10 (B) in the matter preceding subparagraph 

11 (A), by inserting ‘‘that enters repayment before 

12 January 1, 2026,’’ before ‘‘a variety’’; 

13 (3) by inserting after paragraph (1) the fol14 lowing: 

15 ‘‘(2) DESIGN AND SELECTION BEGINNING JAN16 UARY 1, 2026.— 

17 ‘‘(A) IN GENERAL.—Notwithstanding para18 graph (1), for any borrower of a loan made 

19 under this part that enters repayment on or 

20 after January 1, 2026, and for any borrower 

21 subject to paragraph (7), the Secretary shall 

22 offer the borrower a choice between the fol23 lowing 2 plans for repayment of such loan, in24 cluding principal and interest on the loan. The 

25 borrower may choose— 


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•S 4459 IS

1 ‘‘(i) a fixed repayment plan described 

2 in section 493E; or 

3 ‘‘(ii) an income-based repayment plan 

4 under section 493C(c). 

5 ‘‘(B) ACCELERATION.—A borrower in re6 payment shall be entitled to accelerate, without 

7 penalty, repayment on the borrower’s loans 

8 under this part. 

9 ‘‘(C) SELECTION BY THE SECRETARY.—If 

10 a borrower of a loan made under this part that 

11 enters repayment on or after January 1, 2026, 

12 does not select a repayment plan described in 

13 subparagraph (A) before the first payment on 

14 such loan is due, the Secretary shall provide the 

15 borrower with a fixed repayment plan described 

16 in section 493E. 

17 ‘‘(D) CHANGES IN SELECTIONS.—A bor18 rower of a loan made under this part that en19 ters repayment or on after January 1, 2026, 

20 may change the borrower’s selection of a repay21 ment plan in accordance with subparagraphs 

22 (B) and (C) of paragraph (7). 

23 ‘‘(E) BORROWER IN DEFAULT.—Beginning 

24 on January 1, 2026, in lieu of the requirements 

25 of paragraph (6), the Secretary may require 


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•S 4459 IS

1 any borrower who has defaulted on a loan made 

2 under this part on or after January 1, 2026, to 

3 repay the loan pursuant to an income-based re4 payment plan under section 493C(c).’’; and 

5 (4) by adding at the end the following: 

6 ‘‘(7) BORROWERS OF LOANS MADE BEFORE

7 JANUARY 1, 2026.—A borrower who is in repayment 

8 on a loan made under this part before January 1, 

9 2026— 

10 ‘‘(A) may choose to retain the repayment 

11 plan that the borrower was enrolled in on the 

12 day before such date; 

13 ‘‘(B) may elect to— 

14 ‘‘(i) enter an income-based repayment 

15 plan under section 493C(c); 

16 ‘‘(ii) enter a fixed repayment plan de17 scribed in section 493E; or 

18 ‘‘(iii) switch between the repayment 

19 plans described in clauses (i) and (ii); 

20 ‘‘(C) after switching to a repayment plan 

21 described in clause (i) or (ii) of subparagraph 

22 (B), shall not be permitted to select a repay23 ment plan not described in subparagraph (B) 

24 for the loan; and 


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1 ‘‘(D) shall retain, for purposes of repay2 ment or cancellation of any outstanding balance 

3 of principal and interest due on a loan (as de4 scribed in section 493C(b)(7)), any payments 

5 on such loan under another income-based or in6 come contingent repayment plan under this title 

7 that would otherwise be qualifying.’’. 

8 (c) CONFORMING AMENDMENT.—Section 

9 433(b)(7)(B) (20 U.S.C. 1083(b)(7)(B)) is amended by 

10 striking ‘‘on a standard repayment plan’’ and inserting ‘‘, 

11 in the case of a borrower who has not selected a repayment 

12 plan, on the repayment plan designated under subpara13 graph (B) of section 428(b)(9)’’. 

14 SEC. 314. PROVIDING INCENTIVES TO SWITCH INTO SIM15 PLIFIED REPAYMENT PLANS. 

16 (a) ENABLING CONSOLIDATION IN ORDER TO SIM17 PLIFY REPAYMENT.—Section 455(g) (20 U.S.C. 

18 1087e(g)) is amended— 

19 (1) by striking ‘‘A borrower of’’ and inserting 

20 the following: 

21 ‘‘(1) IN GENERAL.—A borrower of’’; 

22 (2) by striking the second sentence; and 

23 (3) by adding at the end the following: 

24 ‘‘(2) ELIGIBILITY.—To be eligible for a Federal 

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1 rower shall meet the eligibility criteria set forth in 

2 section 428C(a)(3), except that, notwithstanding 

3 section 428C(a)(3)(B), a borrower may obtain a 

4 Federal Direct Consolidation Loan if the borrower— 

5 ‘‘(A) obtains the Federal Direct Consolida6 tion Loan for the purpose of— 

7 ‘‘(i) selecting the income-based repay8 ment plan under section 493C(c) or fixed9 income repayment plan under section 

10 495E; or 

11 ‘‘(ii) participating in the pause pay12 ment process under section 460B; and 

13 ‘‘(B) meets the requirements of section 

14 428C(a)(3)(A).’’. 

15 (b) INCENTIVES FOR SIMPLIFIED REPAYMENT

16 PLANS.—Part G of title IV (20 U.S.C. 1088 et seq.), as 

17 amended by section 312, is further amended by adding 

18 at the end the following: 

19 ‘‘SEC. 493F. INCENTIVES FOR SIMPLIFIED REPAYMENT 

20 PLANS. 

21 ‘‘(a) IN GENERAL.—To facilitate the transition of 

22 borrowers to simplified repayment plan options, the Sec23 retary shall reduce the interest rate applicable under sec24 tion 455(b) or 427A to a loan under part B or D held 

25 by a borrower as of January 1, 2026, by 100 basis points 


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•S 4459 IS

1 (or the equivalent), if the borrower of the loan, after the 

2 effective date of the Affordable Loans for Any Student 

3 Act— 

4 ‘‘(1) changes from a repayment plan described 

5 in subparagraphs (A) through (E) of section 

6 455(d)(1) for such loan to an income-based repay7 ment plan under section 493C(c) or a fixed repay8 ment plan under section 493E; or 

9 ‘‘(2) consolidates 1 or more loans under this 

10 title, or described in section 428C(a)(4), that were 

11 under a repayment plan described in subparagraphs 

12 (A) through (E) of section 455(d)(1), or clauses (i) 

13 through (v) of section 428(b)(9), into a Federal Di14 rect Consolidation Loan and selects an income-based 

15 repayment plan under section 493C(c) or a fixed re16 payment plan under section 493E for the loan. 

17 ‘‘(b) LIMITATION.—The interest rate for a loan eligi18 ble for the incentive under subsection (a) may be reduced 

19 only once under this section. 

20 ‘‘(c) RULES AND WAIVERS.—The Secretary shall pro21 mulgate rules carrying out the incentive program estab22 lished under this section. In promulgating such rules, the 

23 Secretary may waive the application of— 


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1 ‘‘(1) subchapter I of chapter 35 of title 44, 

2 United States Code (commonly known as the ‘Paper3 work Reduction Act’); 

4 ‘‘(2) the master calendar requirements under 

5 section 482; 

6 ‘‘(3) negotiated rulemaking under section 492; 

7 and 

8 ‘‘(4) the requirement to publish the notices re9 lated to the system of records of the agency before 

10 implementation required under paragraphs (4) and 

11 (11) of section 552a(e) of title 5, United States 

12 Code (commonly known as the ‘Privacy Act of 

13 1974’), except that the notices shall be published not 

14 later than 180 days after the date of implementation 

15 of this Act.’’. 

16 SEC. 315. STUDY AND PROCEDURES ON DETERMINING FAM17 ILY SIZE. 

18 (a) IN GENERAL.—The Secretary of Education, act19 ing jointly with the Secretary of the Treasury, shall— 

20 (1) not later than 1 year after the date of en21 actment of this Act, publish, in the Federal Register, 

22 notice of the Secretary’s intent to conduct a study 

23 on the effect of using data from the Internal Rev24 enue Service such as personal exemptions, filing sta25 tus, or child tax credits, as proxies for family size 


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•S 4459 IS

1 in an income-driven repayment plan, and invite pub2 lic comment regarding the study; 

3 (2) after reviewing any public comments pro4 vided under paragraph (1), conduct the study and 

5 publish the results of the study in the Federal Reg6 ister; 

7 (3) use the results of the study conducted under 

8 paragraph (1) to develop procedures for determining 

9 family size for the automatic recertification of in10 come for an income-driven repayment plan in a man11 ner that minimizes burdens and unintended harm to 

12 borrowers; 

13 (4) publish the procedures developed under 

14 paragraph (3) in the Federal Register; and 

15 (5) after a notice and comment period on such 

16 procedures, use such comments to finalize the proce17 dures. 

18 (b) SPECIFICATIONS.—The study conducted under 

19 subsection (a) shall— 

20 (1) be completed, with the results published 

21 pursuant to subsection (a)(2), not later than 3 years 

22 after the date of enactment of this Act; 

23 (2) determine how closely personal exemptions, 

24 filing status, or child tax credits match the family 


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•S 4459 IS

1 size that borrowers report on their income-driven re2 payment plan request form; 

3 (3) compare the borrower’s actual monthly pay4 ment amount with the monthly payment amount 

5 borrowers would have using family size information 

6 derived from tax returns; 

7 (4) include data from tax year 2018 or later tax 

8 years; and 

9 (5) use data from more than one year, where 

10 possible, to analyze how much family size changes 

11 over time. 

12 (c) DEFINITION.—The term ‘‘income-driven repay13 ment plan’’ means any of the following authorized under 

14 the Higher Education Act of 1965 (20 U.S.C. 1001 et 

15 seq.): 

16 (1) The income-contingent repayment plan. 

17 (2) The income-based repayment plan. 

18 (3) The PAYE repayment plan. 

19 (4) The REPAYE repayment plan. 

20 Subtitle B—Ending Interest Cap21 italization and Origination Fees 

22 SEC. 321. ENDING INTEREST CAPITALIZATION FOR FED23 ERAL DIRECT LOANS. 

24 Section 455 (20 U.S.C. 1087e) is amended— 

25 (1) in subsection (b)— 


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1 (A) in the subsection heading, by inserting 

2 ‘‘and Practices’’ after ‘‘Rate’’; and 

3 (B) by adding at the end the following: 

4 ‘‘(11) INTEREST PRACTICES.— 

5 ‘‘(A) IN GENERAL.—Beginning on the ef6 fective date of the Affordable Loans for Any 

7 Student Act, interest on a loan made under this 

8 part shall accrue and only be added to the bal9 ance of interest due on the loan, and shall not 

10 ever be capitalized. 

11 ‘‘(B) NO CAPITALIZATION OF INTEREST

12 DURING IN-SCHOOL OR GRACE PERIODS.— 

13 ‘‘(i) IN GENERAL.—Beginning on the 

14 effective date of the Affordable Loans for 

15 Any Student Act, interest on loans made 

16 under this part for which payments of 

17 principal are not required during the in18 school and grace periods or for which pay19 ments are deferred in accordance with sec20 tions 427(a)(2)(C) and 428(b)(1)(M) shall 

21 accrue and be added to the balance of in22 terest due from the borrower when the 

23 loan enters repayment, but shall not ever 

24 be capitalized. 


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1 ‘‘(ii) NOTICE REQUIREMENT.—The 

2 Secretary shall adjust any forbearance no3 tice required in accordance with section 

4 428(a)(3)(A)(iii) to reflect the availability 

5 of the pause payment process pursuant to 

6 section 460B and the treatment of interest 

7 under such section. 

8 ‘‘(C) LIMITED RETROACTIVITY.—For a 

9 borrower of a loan made under this part on or 

10 before the effective date of the Affordable 

11 Loans for Any Student Act that is in a status, 

12 on the day before such effective date, that in13 volves interest capitalization, such loan shall 

14 have capitalization pro-rated to the effective 

15 date of such Act, but shall not be subject to 

16 further capitalization after the effective date of 

17 such Act.’’; and 

18 (2) in subsection (e)(5)— 

19 (A) by inserting ‘‘(which, beginning after 

20 the effective date of the Affordable Loans for 

21 Any Student Act, shall not be capitalized)’’ 

22 after ‘‘accrued interest’’; and 

23 (B) by striking the second sentence. 


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1 SEC. 322. ELIMINATION OF ORIGINATION FEES FOR FED2 ERAL DIRECT LOANS. 

3 (a) REPEAL OF ORIGINATION FEES.—Subsection (c) 

4 of section 455 (20 U.S.C. 1087e(c)) is repealed. 

5 (b) EFFECTIVE DATE.—The amendment made by 

6 subsection (a) shall apply with respect to loans made 

7 under part D of title IV of the Higher Education Act of 

8 1965 (20 U.S.C. 1087a et seq.) for which the first dis9 bursement of principal is made on or after January 1, 

10 2026. 

11 Subtitle C—Providing Assistance in 

12 Situations of Borrower Distress 

13 SEC. 331. LIMITS ON SEIZING INCOME FOR DEBT. 

14 Part D of title IV (20 U.S.C. 1087a et seq.) is 

15 amended by adding at the end the following: 

16 ‘‘SEC. 460A. LIMITS ON SEIZING INCOME FOR DEBT RELAT17 ING TO FEDERAL STUDENT LOANS. 

18 ‘‘(a) DEFINITIONS.—In this section— 

19 ‘‘(1) the term ‘adjusted gross income’ has the 

20 meaning given the term in section 62 of the Internal 

21 Revenue Code of 1986; and 

22 ‘‘(2) the term ‘poverty line’ means the poverty 

23 line (as defined by the Office of Management and 

24 Budget and revised annually in accordance with sec25 tion 673(2) of the Community Services Block Grant 


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•S 4459 IS

1 Act (42 U.S.C. 9902(2))) applicable to a family of 

2 the size involved. 

3 ‘‘(b) LIMITATION ON COLLECTION.— 

4 ‘‘(1) IN GENERAL.—Notwithstanding any other 

5 provision of law, any entity engaged in the collection 

6 of debts relating to loans made under this title may 

7 not take any action to cause, or seek to cause, the 

8 collection of such a debt that is taken from the 

9 wages, Federal benefits, or other amounts due to a 

10 borrower through garnishment, deduction, offset, or 

11 seizure in an amount on a monthly basis that is 

12 more than the amount described in paragraph (2). 

13 ‘‘(2) CALCULATION.—The amount described in 

14 this paragraph is the amount obtained by calculating 

15 what the monthly repayment amount would be for 

16 loans made under this title, with respect to the bor17 rower, under the income-based repayment plan 

18 under section 493C(c). 

19 ‘‘(3) PRESUMPTION.—For purposes of this sec20 tion, if an entity described in paragraph (1) is un21 able to determine the family size of a borrower after 

22 taking reasonable steps to collect the information 

23 necessary to do so, that person shall presume that 

24 the family size of the borrower is 1 individual. 


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1 ‘‘(c) COMMUNICATIONS.—Any communication by an 

2 entity described in subsection (b)(1) that is for the pur3 pose of seizing income of a consumer for debt that relates 

4 to a loan made under this title shall— 

5 ‘‘(1) be considered— 

6 ‘‘(A) an attempt to collect a debt; and 

7 ‘‘(B) conduct in connection with the collec8 tion of a debt for the purposes of this title; and 

9 ‘‘(2) contain a notice to the borrower that, con10 sistent with the procedures for rehabilitating a loan 

11 pursuant to section 428F(a) or consolidating loans 

12 out of default as described in section 

13 428C(a)(3)(B)(i)(V), the borrower may exit default 

14 and reenter current repayment status (as defined in 

15 section 428(l)(2)(C)) with a similar monthly pay16 ment amount on an income-based repayment plan 

17 under section 493C(c) and thereby obtain the full 

18 flexibility and benefits of such status, including the 

19 ability to adjust family size and make qualifying 

20 payments for purposes of repayment or cancellation 

21 of any outstanding balance of principal and interest 

22 due on a loan (as described in section 493C(b)(7)). 

23 ‘‘(d) REMEDIES.— 

24 ‘‘(1) FIRST TIER.—The Secretary may impose a 

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1 tion not to exceed $5,000 for each day during which 

2 such violation continues. 

3 ‘‘(2) SECOND TIER.—Notwithstanding para4 graph (1), the Secretary may impose a civil penalty 

5 on an entity that recklessly engages in a violation of 

6 this section not to exceed $25,000 for each day dur7 ing which such violation continues. 

8 ‘‘(3) THIRD TIER.—Notwithstanding para9 graphs (1) and (2), the Secretary may impose a civil 

10 penalty on an entity that knowingly violates this sec11 tion not to exceed $1,000,000 for each day during 

12 which such violation continues. 

13 ‘‘(4) NO EXEMPLARY OR PUNITIVE DAMAGES.— 

14 Nothing in this subsection shall be construed as au15 thorizing the imposition of exemplary or punitive 

16 damages. 

17 ‘‘(5) ENTITIES SUBJECT TO PENALTY.—An en18 tity subject to a penalty under this subsection may 

19 include a contractor or agent of the Department.’’. 

20 SEC. 332. ALLOWING FOR MULTIPLE LOAN REHABILI21 TATIONS. 

22 (a) FFEL LOANS.—Section 428F(a)(5) (20 U.S.C. 

23 1078–6(a)(5)) is amended by striking ‘‘one time per loan’’ 

24 and inserting ‘‘2 times per loan’’. 


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1 (b) DIRECT LOANS.—Section 455(d) (20 U.S.C. 

2 1087e(d)), as amended by section 313, is further amended 

3 by adding at the end the following: 

4 ‘‘(8) LOAN REHABILITATION.—In carrying out 

5 the process for loan rehabilitation described in sec6 tion 428F(a)(5) with respect to loans made under 

7 this part and in accordance with subsection (a), the 

8 Secretary shall allow a borrower to obtain the bene9 fits available under such section not more than 2 

10 times per loan.’’. 

11 SEC. 333. PAUSE PAYMENT PROCESS. 

12 (a) ESTABLISHMENT OF PAUSE PAYMENT PROC13 ESS.—Part D of title IV (20 U.S.C. 1087a et seq.), as 

14 amended by section 331, is further amended by adding 

15 at the end the following: 

16 ‘‘SEC. 460B. PAUSE PAYMENT PROCESS. 

17 ‘‘(a) IN GENERAL.—The Secretary shall establish a 

18 single, streamlined pause payment process available in a 

19 single application with respect to loans made under this 

20 part that replaces the deferment and forbearance options 

21 and their respective applications that are available to bor22 rowers before the effective date of the Affordable Loans 

23 for Any Student Act and provides temporary relief from 

24 repayment of such loans in accordance with this section. 


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1 ‘‘(b) APPLICATION FOR RELIEF.—Notwithstanding 

2 any other provision of this Act, a borrower of a loan made 

3 under this part that desires to receive temporary relief 

4 from repayment with respect to such loan shall request 

5 relief in accordance with the pause payment process estab6 lished by the Secretary under subsection (a), which shall 

7 include the options to select a temporary cessation of pay8 ments and to make smaller payments than the monthly 

9 payments required under the borrower’s repayment plan. 

10 ‘‘(c) PAUSE PAYMENT.— 

11 ‘‘(1) IN GENERAL.—A borrower of a loan made 

12 under this part who meets the requirements de13 scribed in paragraph (2) shall be eligible for a pause 

14 payment, during which periodic installments of prin15 cipal need not be paid, and interest— 

16 ‘‘(A) shall not accrue, in the case of a— 

17 ‘‘(i) Federal Direct Stafford Loan; or 

18 ‘‘(ii) a Federal Direct Consolidation 

19 Loan that consolidated only Federal Direct 

20 Stafford Loans, or a combination of such 

21 loans and Federal Stafford Loans for 

22 which the student borrower received an in23 terest subsidy under section 428; or 

24 ‘‘(B) shall accrue and be added to the bal25 ance of interest due but not be capitalized, or 


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•S 4459 IS

1 be paid by the borrower, in the case of a Fed2 eral Direct PLUS Loan, a Federal Direct Un3 subsidized Stafford Loan, or a Federal Direct 

4 Consolidation Loan not described in subpara5 graph (A)(ii). 

6 ‘‘(2) ELIGIBILITY.—A borrower of a loan made 

7 under this part shall be eligible for a pause payment 

8 during any period— 

9 ‘‘(A) during which— 

10 ‘‘(i) the borrower is carrying at least 

11 one-half the normal full-time work load for 

12 the course of study that the borrower is 

13 pursuing, as determined by the eligible in14 stitution (as such term is defined in sec15 tion 435(a)) the student is attending; or 

16 ‘‘(ii) in the case of a parent borrower, 

17 the borrower or the student on whose be18 half the loan was borrowed is carrying at 

19 least one-half the normal full-time work 

20 load, in accordance with clause (i); 

21 ‘‘(B) during which the borrower is pur22 suing a course of study pursuant to a graduate 

23 fellowship program approved by the Secretary; 


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1 ‘‘(C) during which the borrower is serving 

2 in a medical or dental internship or residency 

3 program; 

4 ‘‘(D) during which the borrower is in a re5 habilitation training program for individuals 

6 with disabilities approved by the Secretary; 

7 ‘‘(E) during which the borrower— 

8 ‘‘(i) is serving on active duty during a 

9 war or other military operation or national 

10 emergency and for the 180-day period fol11 lowing the demobilization date for the serv12 ice; or 

13 ‘‘(ii) qualifies for partial repayment of 

14 the borrower’s loans under a provision of 

15 chapter 109 or 1609 of title 10, United 

16 States Code; 

17 ‘‘(F) during which the borrower is per18 forming qualifying National Guard duty during 

19 a war or other military operation or national 

20 emergency and for the 180-day period following 

21 the demobilization date for the service; 

22 ‘‘(G) during which the borrower is serving 

23 in— 

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1 tional and Community Service Act of 1990 

2 (42 U.S.C. 12511)) in an Americorps pro3 gram (defined for purposes of this sub4 paragraph as a program carried out under 

5 subtitle C or E of title I of the National 

6 and Community Service Act of 1990 (42 

7 U.S.C. 12571 et seq., 12611 et seq.) or 

8 title I of the Domestic Volunteer Service 

9 Act of 1973 (42 U.S.C. 4951 et seq.)); 

10 ‘‘(ii) in the Peace Corps; or 

11 ‘‘(iii) in a teaching position that would 

12 qualify for teacher loan forgiveness under 

13 section 428J or 460; 

14 ‘‘(H) not in excess of a total period of 3 

15 years of repayment of a loan during which the 

16 Secretary determines, in accordance with regu17 lations prescribed under section 435(o), that 

18 the borrower has experienced or will experience 

19 an economic hardship, such as experiencing fi20 nancial difficulties, having unexpected or sig21 nificant medical expenses, or being unable to 

22 find full-time employment; 

23 ‘‘(I) during which a borrower’s ability to 

24 make payments, as determined by the Sec25 retary, has been adversely affected by— 


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1 ‘‘(i) any major disaster or emergency 

2 declared by the President under section 

3 401 or 501, respectively, of the Robert T. 

4 Stafford Disaster Relief and Emergency 34 

5 Assistance Act (42 U.S.C. 5170, 5191); 

6 ‘‘(ii) a local emergency, as declared by 

7 the appropriate government agency; or 

8 ‘‘(iii) a military mobilization; 

9 ‘‘(J) during which the borrower is awaiting 

10 a determination by the Secretary of the bor11 rower’s request for a pause payment, change in 

12 repayment plan, loan forgiveness or cancella13 tion, or consolidation loan; or 

14 ‘‘(K) during which the borrower is experi15 encing other exceptional circumstances for 

16 which pause payment under this section is in 

17 the best interest of the borrower, as determined 

18 by the Secretary through regulation.’’. 

19 (b) CONFORMING AMENDMENTS.—Section 455 (20 

20 U.S.C. 1087e) is amended— 

21 (1) in subsection (e)(7)(B)(i), by striking ‘‘is in 

22 deferment’’ and inserting ‘‘is under pause payment 

23 pursuant to section 460B’’; 

24 (2) by striking subsection (f) and inserting the 

25 following: 


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1 ‘‘(f) reserved’’; and 

2 (3) in subsection (l)— 

3 (A) by striking ‘‘PROGRAM.—’’ and all 

4 that follows through ‘‘Using funds’’ and insert5 ing the following: ‘‘PROGRAM.—USING

6 FUNDS’’; and 

7 (B) by striking paragraph (2). 

8 SEC. 334. AUTOMATIC ENROLLMENT INTO INCOME-BASED 

9 REPAYMENT FOR BORROWERS WHO ARE DE10 LINQUENT ON LOANS AND FOR BORROWERS 

11 WHO REHABILITATE DEFAULTED LOANS. 

12 (a) NOTIFICATION AND AUTOMATIC ENROLLMENT

13 PROCEDURES.—Section 455(d) (20 U.S.C. 1087e(d)), as 

14 amended by sections 313 and 332, is further amended by 

15 adding at the end the following: 

16 ‘‘(9) NOTIFICATION AND AUTOMATIC ENROLL17 MENT PROCEDURES FOR BORROWERS WHO ARE DE18 LINQUENT ON LOANS.— 

19 ‘‘(A) AUTHORITY TO OBTAIN INCOME IN20 FORMATION.— 

21 ‘‘(i) IN GENERAL.—In the case of any 

22 borrower who is at least 60 days delin23 quent on a loan made under this part, the 

24 Secretary may obtain such information as 

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1 come and family size of the borrower (and 

2 the borrower’s spouse, if applicable). 

3 ‘‘(ii) AVAILABILITY OF RETURNS AND

4 RETURN INFORMATION.—Returns and re5 turn information (as defined in section 

6 6103 of the Internal Revenue Code of may 

7 be obtained under this subparagraph only 

8 to the extent authorized by section 

9 6103(l)(13) of such Code). 

10 ‘‘(B) BORROWER NOTIFICATION.—With re11 spect to each borrower of a loan made under 

12 this part who is at least 60 days delinquent on 

13 such loan and who has not been subject to the 

14 procedures under this paragraph for such loan 

15 in the preceding 120 days, the Secretary shall, 

16 as soon as practicable after such 60-day delin17 quency, provide to the borrower the following: 

18 ‘‘(i) Notification that the borrower is 

19 at least 60 days delinquent on at least 1 

20 loan under this part, and a description of 

21 all delinquent loans under this part, and 

22 nondelinquent loans under this part, of the 

23 borrower. 

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1 ble and the borrower’s loans made under 

2 this part, and loans made, insured, or 

3 guaranteed under part B or E, that may 

4 be eligible for such plans, based on infor5 mation available to the Secretary. 

6 ‘‘(iii) Clear and simple instructions on 

7 how to select the repayment plans. 

8 ‘‘(iv) The amount of monthly pay9 ments for the loans made under this part, 

10 and any loans made, insured, or guaran11 teed under part B or E, under the repay12 ment plans for which the borrower is eligi13 ble, based on information available to the 

14 Secretary, including, if the income infor15 mation of the borrower is available to the 

16 Secretary under subparagraph (A)— 

17 ‘‘(I) the amount of the monthly 

18 payment under the income-based re19 payment plan under section 493C(c) 

20 for which the borrower is eligible for 

21 the borrower’s loans made under this 

22 part, based on such income informa23 tion; and 

24 ‘‘(II) the income, family size, tax 

25 filing status, and tax year information 


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1 on which each the monthly payment is 

2 based. 

3 ‘‘(v) An explanation that the Sec4 retary shall take the actions under sub5 paragraph (C) with respect to such bor6 rower, if— 

7 ‘‘(I) the borrower is 120 days de8 linquent on one or more loans under 

9 this part and has not selected a new 

10 repayment plan for the borrower’s 

11 loans under this part; and 

12 ‘‘(II) in the case of such a bor13 rower whose repayment plan for any 

14 loans made under this part is not an 

15 income-based repayment plan under 

16 section 493C(c), the monthly pay17 ments under such repayment plan are 

18 higher than such monthly payments 

19 would be under an income-based re20 payment plan for such loans. 

21 ‘‘(vi) Instructions on updating the in22 formation of the borrower obtained under 

23 subparagraph (A). 

24 ‘‘(C) SECRETARY’S INITIAL SELECTION OF

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1 scribed in subparagraph (B) who has a repay2 ment plan for loans made under this part that 

3 meets the requirements of clause (v)(II) of sub4 paragraph (B), who has not selected a new re5 payment plan for such loans in accordance with 

6 the notice received under such subparagraph, 

7 and who is at least 120 days delinquent on such 

8 a loan, the Secretary shall, as soon as prac9 ticable— 

10 ‘‘(i) in a case in which any of the bor11 rower’s loans made under part B or E are 

12 eligible for an income-based repayment 

13 plan under section 493C(c), provide the 

14 borrower with the income-based repayment 

15 plan; and 

16 ‘‘(ii) in a case in which none of the 

17 borrower’s loans made under part B or E 

18 are eligible for an income-based repayment 

19 plan under section 493C(c), notify the bor20 rower of the actions, if any, the borrower 

21 may take for such loans to become eligible 

22 for such a plan. 

23 ‘‘(D) SECRETARY’S ADDITIONAL SELEC24 TION OF PLAN.— 


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1 ‘‘(i) IN GENERAL.—With respect to 

2 each borrower of a loan made under this 

3 part who selects a new repayment plan in 

4 accordance with the notice received under 

5 subparagraph (B) and who continues to be 

6 delinquent on such loan for a period de7 scribed in clause (ii), the Secretary shall, 

8 as soon as practicable after such period, 

9 carry out the procedures described in sub10 paragraph (C) for the borrower’s loans 

11 made under this part, if such procedures 

12 would result in lower monthly repayment 

13 amounts on such loan. 

14 ‘‘(ii) DESCRIPTION OF PERIOD.—The 

15 duration of the period described in clause 

16 shall be the amount of time that the Sec17 retary determines is sufficient to indicate 

18 that the borrower may benefit from repay19 ing such loan under a new repayment plan, 

20 but in no case shall such period be less 

21 than 60 days. 

22 ‘‘(E) OPT-OUT.—A borrower of a loan 

23 made under this part shall have the right to opt 

24 out of the procedures under this paragraph. 


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1 ‘‘(F) PROCEDURES.—The Secretary shall 

2 establish procedures as are necessary to effec3 tively implement this paragraph. 

4 ‘‘(10) NOTIFICATION AND AUTOMATIC ENROLL5 MENT PROCEDURES FOR BORROWERS WHO ARE RE6 HABILITATING DEFAULTED LOANS.— 

7 ‘‘(A) AUTHORITY TO OBTAIN INCOME IN8 FORMATION.— 

9 ‘‘(i) IN GENERAL.—In the case of any 

10 borrower who is rehabilitating a loan made 

11 under this part pursuant to section 

12 428F(a), the Secretary may obtain such 

13 information as is reasonably necessary re14 garding the income and family size of the 

15 borrower (and the borrower’s spouse, if ap16 plicable). 

17 ‘‘(ii) AVAILABILITY OF RETURNS AND

18 RETURN INFORMATION.—Returns and re19 turn information (as defined in section 

20 6103 of the Internal Revenue Code of may 

21 be obtained under this subparagraph only 

22 to the extent authorized by section 

23 6103(l)(13) of such Code). 

24 ‘‘(B) BORROWER NOTIFICATION.—Not 

25 later than 30 days after a borrower makes the 


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•S 4459 IS

1 6th payment required for the loan rehabilitation 

2 described in subparagraph (A), the Secretary 

3 shall notify the borrower of the process under 

4 subparagraph (C) with respect to such loan. 

5 ‘‘(C) SECRETARY’S AUTOMATIC ENROLL6 MENT.—With respect to each borrower who has 

7 made the 9th payment required for the loan re8 habilitation described in subparagraph (A) and 

9 is eligible for the income-based repayment plan 

10 under section 493C(c), the Secretary shall, as 

11 soon as practicable after such payment, provide 

12 the borrower with the income-based repayment 

13 plan. 

14 ‘‘(D) OPT-OUT.—A borrower of a loan 

15 made under this part shall have the right to opt 

16 out of the procedures for enrollment in an in17 come-based repayment plan under this para18 graph. 

19 ‘‘(E) PROCEDURES.—The Secretary shall 

20 establish procedures as are necessary to effec21 tively implement this paragraph.’’. 

22 (b) EFFECTIVE DATE.—The amendments made by 

23 subsection (a) shall— 


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1 (1) take effect as soon as the Secretary of Edu2 cation determines practicable after the Secretary fi3 nalizes the procedures under section 315; and 

4 (2) apply to all borrowers of loans made under 

5 part D of title IV of the Higher Education Act of 

6 1965 (20 U.S.C. 1087a et seq.). 

7 SEC. 335. SEPARATING JOINT CONSOLIDATION LOANS. 

8 (a) IN GENERAL.—Section 455(g) (20 U.S.C. 

9 1087e(g)), as amended by section 314, is further amended 

10 by adding at the end the following: 

11 ‘‘(3) SEPARATING JOINT CONSOLIDATION

12 LOANS.— 

13 ‘‘(A) IN GENERAL.—A married couple, or 

14 2 individuals who were previously a married 

15 couple, and who received a joint consolidation 

16 loan as such married couple under subpara17 graph (C) of section 428C(a)(3) (as such sub18 paragraph was in effect on or before June 30, 

19 2006), may apply to the Secretary for each in20 dividual borrower in the married couple (or pre21 viously married couple) to receive a separate 

22 Federal Direct Consolidation Loan under this 

23 part— 

24 ‘‘(i) that shall— 


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1 ‘‘(I) unless the Secretary receives 

2 notice of an agreement described in 

3 subclause (II)(aa), be equal to the 

4 sum of— 

5 ‘‘(aa) the unpaid principal 

6 and accrued unpaid interest of 

7 the percentage of the joint con8 solidation loan that, as of the day 

9 before such joint consolidation 

10 loan was made, was attributable 

11 to the loans of the individual bor12 rower for whom such separate 

13 consolidation loan is being made; 

14 and 

15 ‘‘(bb) any other loans de16 scribed in section 428C(a)(4) 

17 that such individual borrower se18 lects for consolidation under this 

19 part; or 

20 ‘‘(II) be equal to the sum of— 

21 ‘‘(aa) the unpaid principal 

22 and accrued unpaid interest of 

23 the percentage of the joint con24 solidation loan that, as of the 

25 date of application under this 


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1 paragraph, the married couple 

2 (or previously married couple) 

3 agrees shall be considered attrib4 utable to the loans of the indi5 vidual borrower for whom such 

6 separate consolidation loan is 

7 being made; and 

8 ‘‘(bb) any other loans de9 scribed in section 428C(a)(4) 

10 that such individual borrower se11 lects for consolidation under this 

12 part; 

13 ‘‘(ii) the proceeds of which shall be 

14 paid by the Secretary to the holder or 

15 holders— 

16 ‘‘(I) of the joint consolidation 

17 loan for the purpose of discharging 

18 the liability on the percentage of such 

19 joint consolidation loan described in 

20 subclause (I)(aa) or (II)(aa) of clause 

21 (i); and 

22 ‘‘(II) of the loans selected for 

23 consolidation under subclause (I)(bb) 

24 or of clause (i) for the purpose of dis25 charging the liability on such loans; 


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1 ‘‘(iii) except as otherwise provided in 

2 this paragraph, that has the same terms 

3 and conditions, and rate of interest as the 

4 joint consolidation loan, except if other 

5 loans are included in such Federal Direct 

6 Consolidation Loan after the date the Fed7 eral Direct Consolidation Loan is first 

8 made under this paragraph; 

9 ‘‘(iv) for which any payment made 

10 under subsection (m)(1)(A) on the joint 

11 consolidation loan during a period in which 

12 the individual borrower for whom such sep13 arate consolidation loan is being made was 

14 employed in a public service job described 

15 in subsection (m)(1)(B) shall be treated as 

16 if such payment were made on such sepa17 rate consolidation loan; and 

18 ‘‘(v) for which any payment made 

19 under an income contingent repayment 

20 plan under subsection (d)(1)(D), or an in21 come-based repayment plan under para22 graph (1)(E) or (2)(A)(ii) of subsection 

23 (d), on the joint consolidation loan shall be 

24 treated as if such payment were made on 

25 such separate consolidation loan. 


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1 ‘‘(B) APPLICATION FOR SEPARATE DIRECT

2 CONSOLIDATION LOANS.— 

3 ‘‘(i) JOINT APPLICATION.—Except as 

4 provided in clause (ii), to receive separate 

5 consolidation loans under subparagraph 

6 (A), both individual borrowers in a married 

7 couple (or previously married couple) shall 

8 jointly apply under such subparagraph. 

9 ‘‘(ii) SEPARATE APPLICATION.—An 

10 individual borrower in a married couple (or 

11 previously married couple) may apply for a 

12 separate consolidation loan under subpara13 graph (A) separately and without regard to 

14 whether or when the other individual bor15 rower in the married couple (or previously 

16 married couple) applies under such sub17 paragraph, and shall be relieved of any re18 maining liability for the joint consolidation 

19 loan, in a case in which— 

20 ‘‘(I) the individual borrower has 

21 experienced from the other individual 

22 borrower— 

23 ‘‘(aa) domestic violence (as 

24 defined in section 40002(a) of 


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1 the Violence Against Women Act 

2 of 1994 (34 U.S.C. 12291(a))); 

3 ‘‘(bb) economic abuse (in4 cluding behaviors that control 

5 such borrower’s ability to ac6 quire, use, and maintain access 

7 to money, credit, or the joint fi8 nancial obligations of both bor9 rowers); or 

10 ‘‘(cc) other exceptional cir11 cumstances, as determined by the 

12 Secretary; and 

13 ‘‘(II) the Secretary determines 

14 that authorizing each individual bor15 rower to apply separately under sub16 paragraph (A) would be in the best 

17 fiscal interests of the Federal Govern18 ment, including by reducing the risk 

19 of delinquency or default. 

20 ‘‘(C) BORROWER ELIGIBILITY.—Notwith21 standing section 428C(a)(3)(A), the Secretary 

22 shall provide a consolidation loan under this 

23 part to each borrower who— 

24 ‘‘(i) applies for such loan under sub25 paragraph (A); and 


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1 ‘‘(ii) meets the requirements of sub2 paragraphs (A) and (B).’’. 

3 (b) CONFORMING AMENDMENT.—Section 

4 428C(a)(3)(B)(i)(V) (20 U.S.C. 1078–3(3)(B)(i)(V)) is 

5 amended— 

6 (1) by striking ‘‘or’’ at the end of item (bb); 

7 (2) by striking the period at the end of item 

8 (cc) and inserting ‘‘; or’’; and 

9 (3) by adding at the end the following: 

10 ‘‘(dd) for the purpose of sep11 arating a joint consolidation loan 

12 into 2 separate Federal Direct 

13 Consolidation Loans under sec14 tion 455(g)(3).’’. 

15 SEC. 336. REMOVING THE COLLECTION COST REQUIRE16 MENT. 

17 (a) REMOVAL OF REQUIREMENT.—Section 

18 484A(b)(1) (20 U.S.C. 1091a(b)(1)) is amended by strik19 ing ‘‘shall be required to pay, in addition to other charges 

20 specified in this title, reasonable collection costs’’ and in21 serting ‘‘shall not be required to pay collection costs’’. 

22 (b) REPAYMENT AFTER DEFAULT.—Section 

23 455(d)(6) (20 U.S.C. 1087e(d)(6)), as redesignated under 

24 section 313(b), is amended by striking ‘‘to—’’ and all that 

25 follows through the period at the end and inserting ‘‘to 


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1 repay the loan pursuant to an income-based repayment 

2 plan under section 493C(c).’’. 

3 Subtitle D—Improving Loan 

4 Information and Counseling 

5 SEC. 341. STUDENT LOAN CONTRACT; SIMPLIFYING LOAN 

6 DISCLOSURES. 

7 (a) STUDENT LOAN CONTRACT.—Section 455 (20 

8 U.S.C. 1087e), as amended by section 322, is further 

9 amended by inserting after subsection (b) the following: 

10 ‘‘(c) STUDENT LOAN CONTRACT; SIMPLIFYING LOAN

11 DISCLOSURES.— 

12 ‘‘(1) STUDENT LOAN CONTRACT.— 

13 ‘‘(A) IN GENERAL.—Any master promis14 sory note form described in section 

15 432(m)(1)(D) that is developed or used for cov16 ered loans shall be referred to as a ‘student 

17 loan contract’. 

18 ‘‘(B) CLARIFICATION ON USE.—Notwith19 standing section 432(m)(1)(D)(i), each student 

20 loan contract for a covered loan shall— 

21 ‘‘(i) not be entered into by a student 

22 unless the student has completed all re23 quired counseling related to such loan, in24 cluding counseling required under section 

25 485(l); 


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1 ‘‘(ii) be signed by the student entering 

2 such student loan contract after completion 

3 of such counseling; 

4 ‘‘(iii) be signed by the student during 

5 the first award year of such student’s en6 rollment at an institution; 

7 ‘‘(iv) be valid for each award year 

8 after the award year described in clause 

9 (iii) in which the student remains enrolled 

10 at the same institution; and 

11 ‘‘(v) include options for the student to 

12 enter both the student’s current contact in13 formation and permanent contact informa14 tion that is likely to remain valid upon the 

15 student’s exit from the institution. 

16 ‘‘(C) COVERED LOAN.— 

17 ‘‘(i) IN GENERAL.—In this subsection, 

18 the term ‘covered loan’ means a loan made 

19 under this part on or after the effective 

20 date of the Affordable Loans for Any Stu21 dent Act, except with respect to a borrower 

22 described in clause (ii). 

23 ‘‘(ii) EXCEPTION.—A borrower is de24 scribed in this clause if the loan made 

25 under this part on or after the effective 


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1 date of the Affordable Loans for Any Stu2 dent Act with respect to such borrower is 

3 for the award year during which the Af4 fordable Loans for Any Student Act is en5 acted and the borrower has already taken 

6 out a loan under this part (other than a 

7 Federal Direct Consolidation Loan) for 

8 such award year (including any such loan 

9 for attendance at another institution from 

10 which the student transferred or in which 

11 the student had previously enrolled). 

12 ‘‘(2) LOAN DISCLOSURES.—For loans made 

13 under this part for periods of enrollment beginning 

14 on or after the effective date of the Affordable 

15 Loans for Any Student Act, the Secretary shall take 

16 such steps as are necessary to streamline the stu17 dent loan disclosure requirements under this Act. 

18 The Secretary shall ensure that information required 

19 to be disclosed to a student who is applying for, re20 ceiving, or preparing to repay a loan under this part 

21 shall be consumer-tested and delivered in a manner 

22 that— 

23 ‘‘(A) reduces and simplifies the paperwork 

24 students are required to complete; 


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1 ‘‘(B) limits the number of times a student 

2 is presented with disclosures by incorporating 

3 the streamlined disclosures into required stu4 dent loan counseling under section 485(l), the 

5 student loan contract under this subsection, or 

6 both; and 

7 ‘‘(C) is effective in helping the student un8 derstand the student’s rights and obligations as 

9 a Federal student loan borrower. 

10 ‘‘(3) LOAN ACCEPTANCE.—Prior to making the 

11 first disbursement of a covered loan (other than a 

12 Federal Direct Consolidation Loan) to a borrower, 

13 the eligible institution shall ensure that the bor14 rower— 

15 ‘‘(A) has completed the applicable coun16 seling under paragraph (2) or (3) of section 

17 485(l); and 

18 ‘‘(B) after completing such counseling, ac19 cepts the loan by— 

20 ‘‘(i) signing and returning to the insti21 tution the student loan contract described 

22 in section 455(c)(1) that affirmatively 

23 states that the borrower accepts the loan; 

24 or 


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1 ‘‘(ii) electronically signing an elec2 tronic version of such student loan con3 tract, which may be done through the on4 line counseling tool in accordance with sec5 tion 485(n)(1)(B).’’. 

6 (b) CONFORMING AMENDMENT.—Section 487(a)(7) 

7 (20 U.S.C. 1094(a)(7)) is amended by striking ‘‘section 

8 485’’ and inserting ‘‘sections 455(c)(3) and 485’’. 

9 SEC. 342. PRE-LOAN INFORMATION AND COUNSELING RE10 QUIREMENTS. 

11 Section 485(l) (20 U.S.C. 1092(l)) is amended to 

12 read as follows: 

13 ‘‘(l) STUDENT LOAN ENTRANCE COUNSELING.— 

14 ‘‘(1) STUDENT LOAN ENTRANCE COUNSELING

15 REQUIREMENT FOR INSTITUTIONS.— 

16 ‘‘(A) IN GENERAL.—Each eligible institu17 tion shall ensure that, prior to the date of the 

18 disbursement of a loan for a period of enroll19 ment at such institution, each individual for 

20 whom the institution has knowledge that the in21 dividual has accepted, or will accept, 1 or more 

22 student loans under part D (including any such 

23 loans for attendance at another institution from 

24 which the student transferred or in which the 

25 student had previously enrolled, other than a 


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1 Federal Direct Consolidation Loan) for such pe2 riod of enrollment, receives comprehensive in3 formation on the terms and conditions of such 

4 loans and the responsibilities the individual has 

5 with respect to such loans. Such information 

6 shall be provided in a simple, understandable, 

7 and consumer-friendly manner during a coun8 seling session conducted— 

9 ‘‘(i) in person; 

10 ‘‘(ii) online, with the individual ac11 knowledging receipt of the information; or 

12 ‘‘(iii) through the use of the online 

13 counseling tool described in subsection 

14 (n)(1)(B). 

15 ‘‘(B) USE OF INTERACTIVE PROGRAMS.— 

16 In the case of institutions not using the online 

17 counseling tool described in subsection 

18 (n)(1)(B), the Secretary shall require such in19 stitutions to carry out the requirements of sub20 paragraph (A) through the use of interactive 

21 programs, during a counseling session that is 

22 in-person or online, that test the individual’s 

23 understanding of the terms and conditions of 

24 the loan awarded to the individual, using simple 


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1 and understandable language and clear for2 matting. 

3 ‘‘(2) LOAN COUNSELING FOR BORROWERS RE4 CEIVING LOANS MADE UNDER PART D (OTHER THAN

5 PARENT PLUS LOANS).—The information to be pro6 vided under paragraph (1)(A) to a borrower of a 

7 loan made under part D (other than a Federal Di8 rect PLUS Loan made on behalf of a dependent stu9 dent) shall include the following: 

10 ‘‘(A) A notification that some students 

11 may qualify for other financial aid that does not 

12 need to be repaid, and an explanation that the 

13 borrower should consider accepting any such 

14 grant, scholarship, military tuition assistance, 

15 veterans benefits, Federal or State work-study, 

16 or other programs for which the borrower is eli17 gible, prior to accepting student loans. 

18 ‘‘(B) An explanation of the use of the stu19 dent loan contract referred to in section 455(c). 

20 ‘‘(C) A recommendation to the borrower to 

21 exhaust the borrower’s Federal student loan op22 tions prior to taking out private education 

23 loans, an explanation that Federal student 

24 loans typically offer better terms and conditions 

25 than private education loans, an explanation 


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1 that Federal student loans offer consumer pro2 tections typically not available in the private 

3 education loan market, an explanation of treat4 ment of loans made under part D and private 

5 education loans in bankruptcy, and an expla6 nation that if a borrower decides to take out a 

7 private education loan— 

8 ‘‘(i) the borrower has the ability to se9 lect a private educational lender of the bor10 rower’s choice; 

11 ‘‘(ii) the proposed private education 

12 loan may impact the borrower’s potential 

13 eligibility for other financial assistance, in14 cluding Federal financial assistance under 

15 this title; and 

16 ‘‘(iii) the borrower has a right— 

17 ‘‘(I) to accept the terms of the 

18 private education loan within 30 cal19 endar days following the date on 

20 which the application for such loan is 

21 approved and the borrower receives 

22 the required disclosure documents, 

23 pursuant to section 128(e) of the 

24 Truth in Lending Act (15 U.S.C. 

25 1638(e)); and 


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1 ‘‘(II) to cancel such loan within 3 

2 business days of the date on which the 

3 loan is consummated, pursuant to sec4 tion 128(e)(7) of such Act (15 U.S.C. 

5 1638(e)(7)). 

6 ‘‘(D) An explanation of the importance of 

7 contacting the appropriate offices at the institu8 tion of higher education if the student with9 draws prior to completing a program of study 

10 so that the institution can provide exit coun11 seling, including information regarding the bor12 rower’s repayment options and loan consolida13 tion. 

14 ‘‘(E) A general description of the terms 

15 and conditions under which the student may ob16 tain forgiveness or cancellation of any principal 

17 and interest of a loan issued under this title. 

18 ‘‘(F) Information as to how the borrower 

19 can access their loan records and the contact 

20 information for inquiries regarding repaying the 

21 loan. 

22 ‘‘(G) The contact information for the fi23 nancial aid office, or other appropriate office, at 

24 the institution that the borrower may contact if 

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1 rower’s rights and responsibilities or the terms 

2 and conditions of the loan. 

3 ‘‘(H) An explanation that the borrower has 

4 the right to annually request a copy of the cred5 it report of the borrower from a consumer re6 porting agency pursuant to section 612(a) of 

7 the Fair Credit Reporting Act (15 U.S.C. 

8 1681j(a)). 

9 ‘‘(I) An explanation that— 

10 ‘‘(i) the borrower may be contacted 

11 during the repayment period by a third12 party student debt relief company; 

13 ‘‘(ii) the borrower should use caution 

14 when dealing with such a company; and 

15 ‘‘(iii) the services that such a com16 pany typically provides are offered to bor17 rowers free of charge through the Depart18 ment or the borrower’s servicer. 

19 ‘‘(3) BORROWERS RECEIVING PARENT PLUS

20 LOANS FOR DEPENDENT STUDENTS.—The informa21 tion to be provided under paragraph (1)(A) to a bor22 rower of a Federal Direct PLUS Loan made on be23 half of a dependent student shall include the fol24 lowing: 


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1 ‘‘(A) A notification that some students 

2 may qualify for other financial aid and an ex3 planation that the student for whom the bor4 rower is taking out the loan should consider ac5 cepting any such grant, scholarship, military 

6 tuition assistance, veterans benefits, Federal or 

7 State work-study jobs, or other programs for 

8 which the student for whom the borrower is 

9 taking out the loan is eligible, prior to bor10 rowing any Federal Direct PLUS Loan on be11 half of a dependent student. 

12 ‘‘(B) The information described in sub13 paragraphs (B) through (I) of paragraph (2), 

14 as applicable. 

15 ‘‘(C) The circumstances under which a 

16 borrower of a Federal Direct PLUS Loan made 

17 on behalf of a dependent student may transfer 

18 such loan to the student for whom the loan was 

19 taken out.’’. 

20 SEC. 343. EXIT COUNSELING. 

21 Section 485(b) (20 U.S.C. 1092(b)) is amended to 

22 read as follows: 

23 ‘‘(b) STUDENT LOAN EXIT COUNSELING.— 

24 ‘‘(1) IN GENERAL.— 


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1 ‘‘(A) COUNSELING INCLUDED.—Each eligi2 ble institution shall provide counseling to bor3 rowers of loans made under part D (including 

4 any such loans for attendance at another insti5 tution from which the student transferred or in 

6 which the student had previously enrolled, other 

7 than a Federal Direct Consolidation Loan) 

8 prior to the completion of the course of study 

9 for which the borrower enrolled at the institu10 tion or at the time of departure from such insti11 tution. The counseling required by this sub12 section shall be provided through the use of an 

13 interactive program, during an exit counseling 

14 session that is in-person or online, or through 

15 the use of the online counseling tool described 

16 in subsection (n)(1)(A), and shall include— 

17 ‘‘(i) an explanation of the grace period 

18 preceding repayment and the expected date 

19 that the borrower will enter repayment; 

20 ‘‘(ii) an explanation that the borrower 

21 has the option to pay any interest that has 

22 accrued while the borrower was in school 

23 or that may accrue during the grace period 

24 preceding repayment or during an author25 ized period of pause payment; 


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1 ‘‘(iii) the outstanding balance of prin2 cipal and interest owed by the borrower at 

3 the time of such counseling on loans made, 

4 insured, or guaranteed to the borrower 

5 under this title; 

6 ‘‘(iv) information on the repayment 

7 plans available, including a description of 

8 the different features of each plan and 

9 sample information showing the average 

10 anticipated monthly payments, and the dif11 ference in interest paid and total pay12 ments, under each plan; 

13 ‘‘(v) a description of the borrower’s 

14 options for pause payment under section 

15 460B; 

16 ‘‘(vi) a description of the Federal tax 

17 benefits that may be available for repaying 

18 loans made under this title; 

19 ‘‘(vii) a description of the terms and 

20 conditions under which the student may 

21 obtain forgiveness or cancellation of any 

22 principal and interest of a loan made 

23 under this title; 

24 ‘‘(viii) an explanation that the bor25 rower has the option to prepay each loan, 


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1 pay each loan on a shorter schedule, and 

2 change repayment plans; 

3 ‘‘(ix) the implications of, and options 

4 to get out of, default on a loan; 

5 ‘‘(x) information as to how the stu6 dent borrower can access their loan 

7 records; 

8 ‘‘(xi) an explanation that— 

9 ‘‘(I) the borrower may be con10 tacted during the repayment period by 

11 a third-party student debt relief com12 pany; 

13 ‘‘(II) the borrower should use 

14 caution when dealing with such a 

15 company; and 

16 ‘‘(III) the services that such a 

17 company typically provides are offered 

18 to borrowers free of charge through 

19 the Department or the borrower’s 

20 servicer; and 

21 ‘‘(xii) an explanation that the bor22 rower has the right to annually request a 

23 copy of the credit report of the borrower 

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1 ant to section 612(a) of the Fair Credit 

2 Reporting Act (15 U.S.C. 1681j(a)). 

3 ‘‘(B) STUDENTS LEAVING WITHOUT PRIOR

4 NOTICE TO THE INSTITUTION.—In the case of 

5 borrower who leaves an institution without the 

6 prior knowledge of the institution, the institu7 tion shall attempt to provide the information 

8 described in subparagraph (A) to the borrower 

9 in online or in writing, except that in the case 

10 of an institution using the online counseling 

11 tool described in subsection (n)(1)(A), the Sec12 retary shall attempt to provide such information 

13 to the borrower in the manner described in sub14 section (n)(3)(C). 

15 ‘‘(2) INFORMATION TO BE SUBMITTED BY BOR16 ROWER.— 

17 ‘‘(A) IN GENERAL.—Each eligible institu18 tion shall require that the borrower of a loan 

19 made under part D submit to the institution, 

20 during the exit counseling required by this sub21 section— 

22 ‘‘(i) the borrower’s expected perma23 nent address after leaving the institution; 

24 ‘‘(ii) the borrower’s most recent con25 tact information; and 


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1 ‘‘(iii) any corrections in the institu2 tion’s records relating the borrower’s 

3 name, social security number, and driver’s 

4 license number, as applicable. 

5 ‘‘(B) INFORMATION TO BE PROVIDED TO

6 THE SECRETARY.—Each eligible institution 

7 shall, not later than 60 days after the date of 

8 collection of the information described in sub9 paragraph (A), forward the information re10 ceived from the borrower to the Secretary. 

11 ‘‘(C) RULE OF CONSTRUCTION.—Nothing 

12 in this subsection shall be construed to prohibit 

13 an institution of higher education from utilizing 

14 electronic means to provide personalized exit 

15 counseling.’’. 

16 SEC. 344. ONLINE COUNSELING TOOLS. 

17 Section 485 (20 U.S.C. 1092), as amended by this 

18 Act, is further amended by adding at the end the fol19 lowing: 

20 ‘‘(n) ONLINE COUNSELING TOOLS.— 

21 ‘‘(1) IN GENERAL.—Beginning not later than 1 

22 year after the date of enactment of the Affordable 

23 Loans for Any Student Act, the Secretary shall 

24 maintain— 


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1 ‘‘(A) an online counseling tool that pro2 vides the exit counseling required under sub3 section (b) and meets the applicable require4 ments of this subsection; and 

5 ‘‘(B) an online counseling tool that pro6 vides the counseling required under subsection 

7 (l), enables a borrower to electronically sign and 

8 accept the borrower’s student loan contract, 

9 and meets the applicable requirements of this 

10 subsection. 

11 ‘‘(2) REQUIREMENTS OF TOOLS.—In maintain12 ing the online counseling tools described in para13 graph (1), the Secretary shall ensure that each such 

14 tool, and its underlying content— 

15 ‘‘(A) are consumer tested, in consultation 

16 with other relevant Federal agencies, students, 

17 borrowers, institutions of higher education, sec18 ondary school and postsecondary counselors, 

19 and consumer advocacy organizations, to ensure 

20 that the tool is effective in helping individuals 

21 understand their rights and obligations with re22 spect to borrowing a loan made under part D; 

23 ‘‘(B) are understandable to borrowers of 

24 loans made under part D; 


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1 ‘‘(C) are freely available to all eligible in2 stitutions; and 

3 ‘‘(D) integrate applicable loan data from 

4 the National Student Loan Data System or a 

5 successor system, including data regarding 

6 loans made, insured, or guaranteed under this 

7 title and data regarding private education 

8 loans, pursuant to section 485B(i). 

9 ‘‘(3) RECORD OF COUNSELING COMPLETION.— 

10 The Secretary shall— 

11 ‘‘(A) use each online counseling tool de12 scribed in paragraph (1) to— 

13 ‘‘(i) keep a record of which individuals 

14 have received counseling using the tool; 

15 and 

16 ‘‘(ii) notify the applicable institutions 

17 of the individual’s completion of such coun18 seling; 

19 ‘‘(B) in the case of a borrower who re20 ceives counseling for a loan made under part D 

21 using the tool described in paragraph (1)(B)— 

22 ‘‘(i) enable the borrower to accept and 

23 electronically sign the student loan con24 tract as required under section 

25 455(c)(3)(B)(ii), and notify the applicable 


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1 institutions that the individual completed 

2 the counseling and electronically signed the 

3 contract; and 

4 ‘‘(ii) if the borrower chooses not to 

5 sign the student loan contract through the 

6 online counseling tool— 

7 ‘‘(I) inform the borrower, 

8 through the online counseling tool, of 

9 the date by when the borrower should 

10 accept and sign the student loan con11 tract for which the borrower has re12 ceived such counseling; and 

13 ‘‘(II) notify the applicable insti14 tution that the borrower completed 

15 the counseling but did not sign the 

16 student loan contract; and 

17 ‘‘(C) in the case of a borrower described in 

18 subsection (b)(1)(B) at an institution that uses 

19 the online counseling tool described in para20 graph (1)(A) of this subsection, attempt to pro21 vide the information described in subsection 

22 (b)(1)(A) to the borrower through such tool.’’. 


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1 SEC. 345. PRIVATE EDUCATION LOAN CERTIFICATION AND 

2 INFORMATION. 

3 (a) AMENDMENTS TO THE HIGHER EDUCATION ACT

4 OF 1965.— 

5 (1) IN GENERAL.—Section 487(a) (20 U.S.C. 

6 1094(a)) is amended by striking paragraph (28) and 

7 inserting the following: 

8 ‘‘(28)(A) The institution shall— 

9 ‘‘(i) upon the request of a private edu10 cational lender, acting in connection with an ap11 plication initiated by a borrower for a private 

12 education loan in accordance with section 

13 128(e)(3) of the Truth in Lending Act, provide 

14 certification to such private educational lend15 er— 

16 ‘‘(I) that the student who initiated the 

17 application for the private education loan, 

18 or on whose behalf the application was ini19 tiated, is enrolled or is scheduled to enroll 

20 at the institution; 

21 ‘‘(II) of such student’s cost of attend22 ance at the institution as determined under 

23 part F; and 

24 ‘‘(III) of the difference between— 

25 ‘‘(aa) the cost of attendance at 

26 the institution; and 


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1 ‘‘(bb) the student’s estimated fi2 nancial assistance received under this 

3 title and other assistance known to 

4 the institution, as applicable; and 

5 ‘‘(ii) provide the certification described in 

6 clause (i), or notify the private educational 

7 lender that the institution has received the re8 quest for certification and will need additional 

9 time to comply with the certification request— 

10 ‘‘(I) within 15 business days of receipt 

11 of such certification request; and 

12 ‘‘(II) only after the institution has 

13 completed the activities described in sub14 paragraph (B). 

15 ‘‘(B) The institution shall, upon receipt of a 

16 certification request described in subparagraph 

17 (A)(i), and prior to providing such certification— 

18 ‘‘(i) determine whether the student who 

19 initiated the application for the private edu20 cation loan, or on whose behalf the application 

21 was initiated, has applied for and exhausted the 

22 Federal financial assistance available to such 

23 student under this title and inform the student 

24 accordingly; and 


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1 ‘‘(ii) provide the borrower whose loan ap2 plication has prompted the certification request 

3 by a private education lender, as described in 

4 subparagraph (A)(i), with the following infor5 mation and disclosures: 

6 ‘‘(I) If the borrower has not yet ex7 hausted the financial assistance available 

8 to the borrower under this title, the 

9 amount of additional Federal student as10 sistance for which the borrower is eligible 

11 and the potential advantages of Federal 

12 loans under this title, including disclosure 

13 of— 

14 ‘‘(aa) the fixed interest rates and 

15 pause payment processes; 

16 ‘‘(bb) the option for and terms of 

17 income-based repayment, loan forgive18 ness programs, and additional protec19 tions; and 

20 ‘‘(cc) the higher student loan lim21 its for dependent students whose par22 ents are not eligible for a Federal Di23 rect PLUS Loan. 


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1 ‘‘(II) The borrower’s ability to select a 

2 private educational lender of the bor3 rower’s choice. 

4 ‘‘(III) The impact of a proposed pri5 vate education loan on the borrower’s po6 tential eligibility for other financial assist7 ance, including Federal financial assistance 

8 under this title. 

9 ‘‘(IV) The borrower’s right to accept 

10 or reject a private education loan within 

11 the 30-day period following a private edu12 cational lender’s approval of a borrower’s 

13 application, and a borrower’s 3-day right 

14 to cancel period under section 128(e)(7) of 

15 the Truth in Lending Act (15 U.S.C. 

16 1650(e)(7)). 

17 ‘‘(C) For purposes of this paragraph, the terms 

18 ‘private educational lender’ and ‘private education 

19 loan’ have the meanings given such terms in section 

20 140 of the Truth in Lending Act (15 U.S.C. 

21 1650).’’. 

22 (2) NATIONAL STUDENT LOAN DATA SYSTEM.— 

23 Section 485B (20 U.S.C. 1092b) is amended— 

24 (A) in subsection (a), by striking ‘‘and 

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1 ing ‘‘, loans made under parts D and E, and 

2 private education loans (in accordance with sub3 section (i))’’; 

4 (B) in subsection (g), in the subsection 

5 heading, by inserting ‘‘FOR FEDERAL LOANS’’ 

6 after ‘‘DATA REPORTING’’; and 

7 (C) by adding at the end the following: 

8 ‘‘(j) PRIVATE EDUCATION LOAN REPORTING.—The 

9 Secretary shall include in the National Student Loan Data 

10 System the information regarding private education loans 

11 that the Director of the Consumer Financial Protection 

12 Bureau, in coordination with the Secretary, determines 

13 necessary to be included pursuant to section 

14 128(e)(9)(B)(ii) of the Truth in Lending Act (15 U.S.C. 

15 1638(e)(9)(B)(ii)).’’. 

16 (3) EFFECTIVE DATE.—The amendments made 

17 by paragraphs (1) and (2) shall take effect on the 

18 effective date of the regulations described in sub19 section (b)(3). 

20 (b) AMENDMENTS TO THE TRUTH IN LENDING

21 ACT.— 

22 (1) IN GENERAL.—Section 128(e) of the Truth 

23 in Lending Act (15 U.S.C. 1638(e)) is amended— 

24 (A) by striking paragraph (3) and insert25 ing the following: 


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1 ‘‘(3) INSTITUTIONAL CERTIFICATION RE2 QUIRED.— 

3 ‘‘(A) IN GENERAL.—Except as provided in 

4 subparagraph (B), before a private educational 

5 lender may issue any funds with respect to a 

6 private education loan, the private educational 

7 lender shall obtain, from the relevant institution 

8 of higher education where such loan is to be 

9 used for a student, a certification in accordance 

10 with section 485(a)(28)(A) of the Higher Edu11 cation Act of 1965 (20 U.S.C. 

12 1094(a)(28)(A))— 

13 ‘‘(i) confirming that the student is en14 rolled or is scheduled to be enrolled at the 

15 institution; and 

16 ‘‘(ii) stating— 

17 ‘‘(I) the student’s cost of attend18 ance at the institution, as determined 

19 by the institution under part F of title 

20 IV of the Higher Education Act of 

21 1965 (20 U.S.C. 1087kk et seq.); and 

22 ‘‘(II) the difference between— 

23 ‘‘(aa) such cost of attend24 ance; and 


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1 ‘‘(bb) the student’s esti2 mated financial assistance, in3 cluding such assistance received 

4 under title IV of the Higher Edu5 cation Act of 1965 (20 U.S.C. 

6 1070 et seq.) and other financial 

7 assistance known to the institu8 tion, as applicable. 

9 ‘‘(B) TIMING.—Pursuant to section 

10 485(a)(28)(A) of the Higher Education Act of 

11 1965 (20 U.S.C. 1094(a)(28)(A)), a private 

12 education lender shall receive the certification 

13 described in subparagraph (A) within 15 days 

14 of a request by the private education lender, 

15 unless the institution of higher education noti16 fies the private educational lender pursuant to 

17 section 485(a)(28)(A)(ii) of such Act that addi18 tional time is needed. 

19 ‘‘(C) ADDITIONAL REQUIREMENTS.—Upon 

20 receiving the certification described in subpara21 graph (A) for a private education loan, the pri22 vate educational lender— 

23 ‘‘(i) may proceed to issue funds with 

24 respect to the private education loan; and 


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1 ‘‘(ii) after issuing the private edu2 cation loan, shall— 

3 ‘‘(I) notify the institution of 

4 higher education involved that the pri5 vate education loan has been issued to 

6 the borrower, and the amount of such 

7 loan; and 

8 ‘‘(II) provide the Director of the 

9 Consumer Financial Protection Bu10 reau and the Secretary of Education 

11 with the information described in 

12 paragraph (9)(B).’’; 

13 (B) by redesignating paragraphs (9), (10), 

14 and (11), as paragraphs (10), (11), and (12), 

15 respectively; and 

16 (C) by inserting after paragraph (8) the 

17 following: 

18 ‘‘(9) PROVISION OF INFORMATION.— 

19 ‘‘(A) PROVISION OF INFORMATION TO BOR20 ROWERS.— 

21 ‘‘(i) LOAN STATEMENTS.—A private 

22 educational lender that issues any funds 

23 with respect to a private education loan 

24 shall— 


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1 ‘‘(I) send loan statements, if the 

2 loan is to be used for a student, to 

3 borrowers of the funds not less than 

4 once every 3 months during the time 

5 that the student is enrolled at an in6 stitution of higher education; and 

7 ‘‘(II) in the case of a private edu8 cation loan that includes a cosigner, 

9 annually send a loan statement to the 

10 borrower’s cosigner, notifying the co11 signer of the terms, conditions, and 

12 status of such private education loan. 

13 ‘‘(ii) CONTENTS OF LOAN STATE14 MENT.—Each statement described in 

15 clause (i) shall— 

16 ‘‘(I) report the borrower’s total 

17 remaining debt to the private edu18 cational lender, including accrued but 

19 unpaid interest and capitalized inter20 est; 

21 ‘‘(II) report any debt increases 

22 since the last statement; and 

23 ‘‘(III) list the current interest 

24 rate for each loan. 


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1 ‘‘(B) PROVISION OF INFORMATION TO

2 FEDERAL AGENCIES.— 

3 ‘‘(i) INFORMATION FROM LENDER.— 

4 Each private educational lender shall— 

5 ‘‘(I) submit to the Director of the 

6 Consumer Financial Protection Bu7 reau and the Secretary of Education 

8 such information regarding a private 

9 education loan as may be determined 

10 necessary by the Director and the 

11 Secretary under clause (ii) for inclu12 sion in the National Student Loan 

13 Data System under section 485B(i) of 

14 the Higher Education Act of 1965 (20 

15 U.S.C. 1092b(i)); and 

16 ‘‘(II) prepare and submit an an17 nual report to the Consumer Finan18 cial Protection Bureau regarding the 

19 private education loans issued by the 

20 private educational lender. 

21 ‘‘(ii) PROMULGATION OF REGULA22 TIONS.—Not later than 1 year after the 

23 date of enactment of the Affordable Loans 

24 for Any Student Act, the Director of the 

25 Consumer Financial Protection Bureau, in 


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1 coordination with the Secretary of Edu2 cation, shall promulgate regulations re3 garding the private education loan infor4 mation required to be submitted under 

5 clause (i), including the content, method, 

6 and format for submission. The informa7 tion required for inclusion in the National 

8 Student Loan Data System shall include— 

9 ‘‘(I) information identifying the 

10 borrower, including the borrower’s 

11 name and social security number; 

12 ‘‘(II) the name of the institution 

13 of higher education that has certified 

14 the private education loan; 

15 ‘‘(III) the name of the lender; 

16 ‘‘(IV) the amount of the private 

17 education loan; 

18 ‘‘(V) the term, or other enroll19 ment period, for which the private 

20 education loan is issued; and 

21 ‘‘(VI) whether a cosigner was re22 quired as a condition of the private 

23 education loan.’’. 


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1 (2) DEFINITION OF PRIVATE EDUCATION

2 LOAN.—Section 140(a)(8)(A) of the Truth in Lend3 ing Act (15 U.S.C. 1650(a)(8)(A)) is amended— 

4 (A) by redesignating clause (ii) as clause 

5 (iii); 

6 (B) in clause (i), by striking ‘‘and’’ after 

7 the semicolon; and 

8 (C) by adding after clause (i) the following: 

9 ‘‘(ii) is not made, insured, or guaran10 teed under title VII or title VIII of the 

11 Public Health Service Act (42 U.S.C. 292 

12 et seq. and 296 et seq.); and’’. 

13 (3) REGULATIONS.— 

14 (A) IN GENERAL.—Not later than 1 year 

15 after the date of enactment of this Act, the Di16 rector of the Consumer Financial Protection 

17 Bureau, in coordination with the Secretary of 

18 Education, shall promulgate regulations to im19 plement paragraphs (3) and (9) of section 

20 128(e) of the Truth in Lending Act (15 U.S.C. 

21 1638(e)), as amended by paragraph (1) of this 

22 subsection. 

23 (B) EFFECTIVE DATE.—The regulations 

24 promulgated under subparagraph (A) shall take 


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1 effect on the date that is 180 days after the 

2 date on which the regulations are promulgated. 

3 Subtitle E—Effective Date; 

4 Transition; Implementation 

5 SEC. 351. EFFECTIVE DATE; RULEMAKING REGARDING TER6 MINATION OF CERTAIN REPAYMENT PLANS; 

7 IMPLEMENTATION. 

8 (a) EFFECTIVE DATE.—Except as otherwise specifi9 cally provided, this title, and the amendments made by 

10 this title, shall take effect on January 1, 2026. 

11 (b) APPLICABILITY WITH RESPECT TO FORBEAR12 ANCE AND DEFERMENT FOR DIRECT LOAN BOR13 ROWERS.—With respect to any borrower of a loan under 

14 part D of title IV of the Higher Education Act of 1965 

15 (20 U.S.C. 1087a et seq.) that is, or has been, in forbear16 ance or deferment as of the day before the effective date 

17 described in subsection (a), the Secretary shall take such 

18 steps as are necessary— 

19 (1) to transfer a borrower with a loan in for20 bearance or deferment as of such day automatically 

21 into relief provided under the pause payment process 

22 established under section 460B of such Act (as 

23 amended by this Act); and 

24 (2) to ensure that the period of time for which 

25 a borrower is eligible for pause payment under such 


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1 section 460B for a loan is appropriately reduced to 

2 account for any time the loan was previously in for3 bearance or deferment. 

4 (c) REGULATIONS.—Before the effective date de5 scribed in subsection (a), the Secretary of Education shall 

6 carry out a plan to end all eligibility for repayment plans 

7 other than a fixed repayment plan described in section 

8 493E of the Higher Education Act of 1965, as added by 

9 this Act, and an income-based repayment plan under sec10 tion 493C(c) of such Act (20 U.S.C. 1098e(f)) for loans 

11 made under part B or D of title IV of such Act, unless 

12 the borrower is enrolled in another repayment plan before 

13 such effective date, in accordance with the amendments 

14 made by this Act. 

15 (d) IMPLEMENTATION.—In carrying out the amend16 ments made by this Act, or any regulations promulgated 

17 under this Act, the Secretary of Education may waive the 

18 application of— 

19 (1) subchapter I of chapter 35 of title 44, 

20 United States Code (commonly known as the ‘‘Pa21 perwork Reduction Act’’); 

22 (2) the master calendar requirements under 

23 section 482 of the Higher Education Act of 1965 

24 (20 U.S.C. 1089); 


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1 (3) negotiated rulemaking under section 492 of 

2 the Higher Education Act of 1965 (20 U.S.C. 

3 1098a); and 

4 (4) the requirement to publish the notices re5 lated to the system of records of the agency before 

6 implementation required under paragraphs (4) and 

7 (11) of section 552a(e) of title 5, United States 

8 Code (commonly known as the ‘‘Privacy Act of 

9 1974’’). 

10 TITLE IV—OFFSETS 

11 SEC. 401. EXCISE TAX ON REPURCHASE OF CORPORATE 

12 STOCK. 

13 (a) IN GENERAL.—Subtitle D is amended by insert14 ing after chapter 36 the following new chapter: 

15 ‘‘CHAPTER 37—REPURCHASE OF 

16 CORPORATE STOCK 

‘‘Sec. 4501. Repurchase of corporate stock. 

17 ‘‘SEC. 4501. REPURCHASE OF CORPORATE STOCK. 

18 ‘‘(a) GENERAL RULE.—There is hereby imposed on 

19 each covered corporation a tax equal to 1 percent of the 

20 fair market value of any stock of the corporation which 

21 is repurchased by such corporation during the taxable 

22 year. 

23 ‘‘(b) COVERED CORPORATION.—For purposes of this 

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1 tic corporation the stock of which is traded on an estab2 lished securities market (within the meaning of section 

3 7704(b)(1)). 

4 ‘‘(c) REPURCHASE.—For purposes of this section— 

5 ‘‘(1) IN GENERAL.—The term ‘repurchase’ 

6 means— 

7 ‘‘(A) a redemption within the meaning of 

8 section 317(b) with regard to the stock of a 

9 covered corporation, and 

10 ‘‘(B) any transaction determined by the 

11 Secretary to be economically similar to a trans12 action described in subparagraph (A). 

13 ‘‘(2) TREATMENT OF PURCHASES BY SPECIFIED

14 AFFILIATES.— 

15 ‘‘(A) IN GENERAL.—The acquisition of 

16 stock of a covered corporation by a specified af17 filiate of such covered corporation, from a per18 son who is not the covered corporation or a 

19 specified affiliate of such covered corporation, 

20 shall be treated as a repurchase of the stock of 

21 the covered corporation by such covered cor22 poration. 

23 ‘‘(B) SPECIFIED AFFILIATE.—For pur24 poses of this section, the term ‘specified affil25 iate’ means, with respect to any corporation— 


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1 ‘‘(i) any corporation more than 50 

2 percent of the stock of which is owned (by 

3 vote or by value), directly or indirectly, by 

4 such corporation, and 

5 ‘‘(ii) any partnership more than 50 

6 percent of the capital interests or profits 

7 interests of which is held, directly or indi8 rectly, by such corporation. 

9 ‘‘(3) ADJUSTMENT.—The amount taken into 

10 account under subsection (a) with respect to any 

11 stock repurchased by a covered corporation shall be 

12 reduced by the fair market value of any stock issued 

13 by the covered corporation during the taxable year, 

14 including the fair market value of any stock issued 

15 to employees of such covered corporation or a speci16 fied affiliate of such covered corporation during the 

17 taxable year, whether or not such stock is issued in 

18 response to the exercise of an option to purchase 

19 such stock. 

20 ‘‘(d) SPECIAL RULES FOR ACQUISITION OF STOCK OF

21 CERTAIN FOREIGN CORPORATIONS.— 

22 ‘‘(1) IN GENERAL.—In the case of an acquisi23 tion of stock of an applicable foreign corporation by 

24 a specified affiliate of such corporation (other than 

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1 less such partnership has a domestic entity as a di2 rect or indirect partner)) from a person who is not 

3 the applicable foreign corporation or a specified affil4 iate of such applicable foreign corporation, for pur5 poses of this section— 

6 ‘‘(A) such specified affiliate shall be treat7 ed as a covered corporation with respect to such 

8 acquisition, 

9 ‘‘(B) such acquisition shall be treated as a 

10 repurchase of stock of a covered corporation by 

11 such covered corporation, and 

12 ‘‘(C) the adjustment under subsection 

13 (c)(3) shall be determined only with respect to 

14 stock issued by such specified affiliate to em15 ployees of the specified affiliate. 

16 ‘‘(2) SURROGATE FOREIGN CORPORATIONS.—In 

17 the case of a repurchase of stock of a covered surro18 gate foreign corporation by such covered surrogate 

19 foreign corporation, or an acquisition of stock of a 

20 covered surrogate foreign corporation by a specified 

21 affiliate of such corporation, for purposes of this sec22 tion— 

23 ‘‘(A) the expatriated entity with respect to 

24 such covered surrogate foreign corporation shall 


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1 be treated as a covered corporation with respect 

2 to such repurchase or acquisition, 

3 ‘‘(B) such repurchase or acquisition shall 

4 be treated as a repurchase of stock of a covered 

5 corporation by such covered corporation, and 

6 ‘‘(C) the adjustment under subsection 

7 (c)(3) shall be determined only with respect to 

8 stock issued by such expatriated entity to em9 ployees of the expatriated entity. 

10 ‘‘(3) DEFINITIONS.—For purposes of this sub11 section— 

12 ‘‘(A) APPLICABLE FOREIGN CORPORA13 TION.—The term ‘applicable foreign corpora14 tion’ means any foreign corporation the stock of 

15 which is traded on an established securities 

16 market (within the meaning of section 

17 7704(b)(1)). 

18 ‘‘(B) COVERED SURROGATE FOREIGN COR19 PORATION.—The term ‘covered surrogate for20 eign corporation’ means any surrogate foreign 

21 corporation (as determined under section 

22 7874(a)(2)(B) by substituting ‘September 20, 

23 2021’ for ‘March 4, 2003’ each place it ap24 pears) the stock of which is traded on an estab25 lished securities market (within the meaning of 


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1 section 7704(b)(1)), but only with respect to 

2 taxable years which include any portion of the 

3 applicable period with respect to such corpora4 tion under section 7874(d)(1). 

5 ‘‘(C) EXPATRIATED ENTITY.—The term 

6 ‘expatriated entity’ has the meaning given such 

7 term by section 7874(a)(2)(A). 

8 ‘‘(e) EXCEPTIONS.—Subsection (a) shall not apply— 

9 ‘‘(1) to the extent that the repurchase is part 

10 of a reorganization (within the meaning of section 

11 368(a)) and no gain or loss is recognized on such re12 purchase by the shareholder under chapter 1 by rea13 son of such reorganization, 

14 ‘‘(2) in any case in which the stock repurchased 

15 is, or an amount of stock equal to the value of the 

16 stock repurchased is, contributed to an employer17 sponsored retirement plan, employee stock ownership 

18 plan, or similar plan, 

19 ‘‘(3) in any case in which the total value of the 

20 stock repurchased during the taxable year does not 

21 exceed $1,000,000, 

22 ‘‘(4) under regulations prescribed by the Sec23 retary, in cases in which the repurchase is by a deal24 er in securities in the ordinary course of business, 


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1 ‘‘(5) to repurchases by a regulated investment 

2 company (as defined in section 851) or a real estate 

3 investment trust, or 

4 ‘‘(6) to the extent that the repurchase is treated 

5 as a dividend for purposes of this title. 

6 ‘‘(f) REGULATIONS AND GUIDANCE.—The Secretary 

7 shall prescribe such regulations and other guidance as are 

8 necessary or appropriate to administer and to prevent the 

9 avoidance of the purposes of this section, including regula10 tions and other guidance— 

11 ‘‘(1) to prevent the abuse of the exceptions pro12 vided by subsection (e), 

13 ‘‘(2) to address special classes of stock and pre14 ferred stock, and 

15 ‘‘(3) for the application of the rules under sub16 section (d).’’. 

17 (b) TAX NOT DEDUCTIBLE.—Paragraph (6) of sec18 tion 275(a) is amended by inserting ‘‘37,’’ before ‘‘41’’. 

19 (c) CLERICAL AMENDMENT.—The table of chapters 

20 for subtitle D is amended by inserting after the item relat21 ing to chapter 36 the following new item: 

‘‘CHAPTER 37—REPURCHASE OF CORPORATE STOCK’’. 

22 (d) EFFECTIVE DATE.—The amendments made by 

23 this section shall apply to repurchases (within the meaning 

24 of section 4501(c) of the Internal Revenue Code of 1986, 


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1 as added by this section) of stock after December 31, 

2 2022. 

3 SEC. 402. APPLICATION OF NET INVESTMENT INCOME TAX 

4 TO TRADE OR BUSINESS INCOME OF CER5 TAIN HIGH INCOME INDIVIDUALS. 

6 (a) IN GENERAL.—Section 1411 of the Internal Rev7 enue Code of 1986 is amended by adding at the end the 

8 following new subsection: 

9 ‘‘(f) APPLICATION TO CERTAIN HIGH INCOME INDI10 VIDUALS.— 

11 ‘‘(1) IN GENERAL.—In the case of any indi12 vidual whose modified adjusted gross income for the 

13 taxable year exceeds the high income threshold 

14 amount, subsection (a)(1) shall be applied by sub15 stituting ‘the greater of specified net income or net 

16 investment income’ for ‘net investment income’ in 

17 subparagraph (A) thereof. 

18 ‘‘(2) PHASE-IN OF INCREASE.—The increase in 

19 the tax imposed under subsection (a)(1) by reason of 

20 the application of paragraph (1) of this subsection 

21 shall not exceed the amount which bears the same 

22 ratio to the amount of such increase (determined 

23 without regard to this paragraph) as— 

24 ‘‘(A) the excess described in paragraph (1) 

25 bears to; and 


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‘‘(B) $100,000 (1 1 ⁄2 such amount in the 

2 case of a married taxpayer (as defined in sec3 tion 7703) filing a separate return). 

4 ‘‘(3) HIGH INCOME THRESHOLD AMOUNT.—For 

5 purposes of this subsection, the term ‘high income 

6 threshold amount’ means— 

7 ‘‘(A) except as provided in subparagraph 

8 (B) or (C), $400,000; 

9 ‘‘(B) in the case of a taxpayer making a 

10 joint return under section 6013 or a surviving 

11 spouse (as defined in section 2(a)), $500,000; 

12 and 

13 ‘‘(C) in the case of a married taxpayer (as 

14 defined in section 7703) filing a separate return, 1 15 ⁄2 of the dollar amount determined under 

16 subparagraph (B). 

17 ‘‘(4) SPECIFIED NET INCOME.—For purposes of 

18 this section, the term ‘specified net income’ means 

19 net investment income determined— 

20 ‘‘(A) without regard to the phrase ‘other 

21 than such income which is derived in the ordi22 nary course of a trade or business not described 

23 in paragraph (2)’ in subsection (c)(1)(A)(i); 


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1 ‘‘(B) without regard to the phrase ‘de2 scribed in paragraph (2)’ in subsection 

3 (c)(1)(A)(ii); 

4 ‘‘(C) without regard to the phrase ‘other 

5 than property held in a trade or business not 

6 described in paragraph (2)’ in subsection 

7 (c)(1)(A)(iii); 

8 ‘‘(D) without regard to paragraphs (2), 

9 (3), and (4) of subsection (c); and 

10 ‘‘(E) by treating paragraphs (5) and (6) of 

11 section 469(c) as applying for purposes of sub12 section (c) of this section.’’. 

13 (b) APPLICATION TO TRUSTS AND ESTATES.—Sec14 tion 1411(a)(2)(A) of the Internal Revenue Code of 1986 

15 is amended by striking ‘‘undistributed net investment in16 come’’ and inserting ‘‘the greater of undistributed speci17 fied net income or undistributed net investment income’’. 

18 (c) CLARIFICATIONS WITH RESPECT TO DETER19 MINATION OF NET INVESTMENT INCOME.— 

20 (1) WAGES SUBJECT TO FICA NOT TAKEN INTO

21 ACCOUNT.—Section 1411(c)(6) of the Internal Rev22 enue Code of 1986 is amended by inserting ‘‘or 

23 wages received with respect to employment on which 

24 a tax is imposed under section 3101(b)’’ before the 

25 period at the end. 


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1 (2) NET OPERATING LOSSES NOT TAKEN INTO

2 ACCOUNT.—Section 1411(c)(1)(B) of the Internal 

3 Revenue Code of 1986 is amended by inserting 

4 ‘‘(other than section 172)’’ after ‘‘this subtitle’’. 

5 (3) INCLUSION OF CERTAIN FOREIGN IN6 COME.— 

7 (A) IN GENERAL.—Section 1411(c)(1)(A) 

8 of the Internal Revenue Code of 1986 is 

9 amended by striking ‘‘and’’ at the end of clause 

10 (ii), by striking ‘‘over’’ at the end of clause (iii) 

11 and inserting ‘‘and’’, and by adding at the end 

12 the following new clause: 

13 ‘‘(iv) any amount includible in gross 

14 income under section 951, 951A, 1293, or 

15 1296, over.’’. 

16 (B) PROPER TREATMENT OF CERTAIN

17 PREVIOUSLY TAXED INCOME.—Section 1411(c) 

18 of the Internal Revenue Code of 1986 is 

19 amended by adding at the end the following 

20 new paragraph: 

21 ‘‘(7) CERTAIN PREVIOUSLY TAXED INCOME.— 

22 The Secretary shall issue regulations or other guid23 ance providing for the treatment of distributions of 

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1 poses of chapter 1 but not previously subject to tax 

2 under this section.’’. 

3 (d) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to taxable years beginning after 

5 December 31, 2022. 

6 (e) TRANSITION RULE.—The regulations or other 

7 guidance issued by the Secretary under section 1411(c)(7) 

8 of the Internal Revenue Code of 1986 (as added by this 

9 section) shall include provisions which provide for the 

10 proper coordination and application of clauses (i) and (iv) 

11 of section 1411(c)(1)(A) with respect to— 

12 (1) taxable years beginning on or before De13 cember 31, 2022; and 

14 (2) taxable years beginning after such date. 

Æ 


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