I 

110TH CONGRESS 

1ST SESSION H. R. 2465 

To allow for the consolidation of Federal student loans into a single direct 

income-contingent loan repayment program. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 23, 2007 

Mr. PETRI introduced the following bill; which was referred to the Committee 

on Education and Labor, and in addition to the Committee on Ways and 

Means, for a period to be subsequently determined by the Speaker, in 

each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To allow for the consolidation of Federal student loans into 

a single direct income-contingent loan repayment program. 

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 ‘‘Income-Dependent 

5 Education Assistance Act of 2007’’. 


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1 TITLE I—SYSTEM FOR MAKING 

2 INCOME-DEPENDENT EDU3 CATION ASSISTANCE LOANS 

4 SEC. 101. PROGRAM AUTHORITY. 

5 (a) IN GENERAL.—The Secretary of the Education 

6 shall, in accordance with the provisions of this title, estab7 lish a program to provide the borrowers of Federal student 

8 loans with the option of converting their loans to income 

9 contingent repayment by providing direct loans for the dis10 charge of such loans. Such income contingent repayment 

11 loans are hereinafter in this title referred to as ‘‘direct 

12 IDEA loans’’. 

13 (b) DURATION OF PROGRAM AUTHORITY.— 

14 (1) DURATION.—The authority to conduct the 

15 program authorized by subsection (a) is effective on 

16 July 1, 2008, and expires on July 1, 2014. 

17 (2) AUTHORITY TO PREPARE FOR PROGRAM.— 

18 Notwithstanding paragraph (1), the Secretary may, 

19 before July 1, 2008— 

20 (A) prescribe regulations to carry out this 

21 title; and 

22 (B) expend funds appropriated pursuant to 

23 this title to carry out activities necessary to the 

24 implementation of the programs authorized by 

25 subsection (a). 


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1 (3) LAPSE OF AUTHORITY NOT TO AFFECT OB2 LIGATIONS.—The expiration of authority under 

3 paragraph (1) shall not affect the obligations of any 

4 party to any insurance or loan agreement under this 

5 title entered into before such expiration. 

6 SEC. 102. LOAN AMOUNTS, TERMS, AND CONDITIONS. 

7 (a) PARALLEL TERMS, CONDITIONS, AND BENE8 FITS.—Unless otherwise specified in this title or section 

9 6307 of the Internal Revenue Code of 1986, loans made 

10 to borrowers under this title shall have the same terms, 

11 conditions, and benefits, as loans made to borrowers under 

12 section 428 of the Higher Education Act of 1965. 

13 (b) FORM OF NOTE: COLLECTION BY IRS.—The Sec14 retary shall, by regulation, prescribe the form of the note 

15 or other evidence of indebtedness for direct IDEA loans 

16 consistent with the requirements of this title. Such note 

17 or other evidence shall— 

18 (1) provide that the loan shall be collectible on 

19 an income contingent basis in accordance with sec20 tion 6307 of the Internal Revenue Code of 1986; 

21 (2) provide that the borrower agrees that— 

22 (A) any payment owed with respect to such 

23 loan shall be considered as an income tax, and 

24 shall be subject to collection by the Internal 


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1 Revenue Service in the same manner, and sub2 ject to the same penalties, as a tax due; 

3 (B) the borrower’s taxpayer identification 

4 number may be used for the purposes of identi5 fying the borrower’s IDEA account; 

6 (C) the borrower will make payments on 

7 such loan using the income tax withholding sys8 tem and will make appropriate adjustments to 

9 his or her withholding or estimated tax pay10 ments for such purposes; and 

11 (D) if the borrower files for relief under 

12 title 11, United States Code, the borrower’s re13 payment obligations on the IDEA loan will be 

14 treated the same as Federal income tax obliga15 tions; and 

16 (3) contains such additional terms and condi17 tions as the Secretary of the Treasury may prescribe 

18 by regulation. 

19 (c) NOTICE OF CONVERSION IN FEDERAL STUDENT

20 LOAN NOTES.—The Secretary shall, by regulation, require 

21 that any note or other evidence of indebtedness for any 

22 Federal student loan, disbursed on or after July 1, 2008, 

23 shall— 

24 (1) provide that, if the borrower defaults on re25 payment, the loan shall be collectible on an income 


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1 contingent basis in accordance with section 6307 of 

2 the Internal Revenue Code of 1986; 

3 (2) provide that, if the loan is collectible on an 

4 income contingent basis, the borrower agrees to the 

5 provisions described in subparagraphs (A) through 

6 (D) of subsection (b)(2); and 

7 (3) contains such additional terms and condi8 tions as the Secretary of the Treasury may prescribe 

9 by regulation. 

10 (d) ORIGINATION FEES AND INSURANCE PREMIUMS

11 PROHIBITED.—An eligible student shall not be required 

12 to pay any origination fee, insurance premium, or other 

13 fee or charge to obtain a loan under this title. 

14 SEC. 103. CONVERSION TO INCOME CONTINGENT REPAY15 MENT. 

16 (a) CONVERSION AT THE ELECTION OF THE BOR17 ROWER.— 

18 (1) ELECTION.—The borrower of a Federal stu19 dent loan may elect to convert such loan to, and to 

20 consolidate such loan and any other Federal student 

21 loans of such borrower that are selected by the bor22 rower for consolidation in, a direct IDEA loan for 

23 collection under section 6307 of the Internal Rev24 enue Code of 1986 by filing with the lender and the 

25 Secretary a notice in such form and containing such 


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1 information as the Secretary may require by regula2 tion. Such election shall be made— 

3 (A) in the case of Federal student loans 

4 that enter repayment on or after July 1, 

5 2008— 

6 (i) at any time within 180 days be7 fore, and within one year after, the begin8 ning of the repayment period of such loan; 

9 or 

10 (ii) in the case of multiple Federal 

11 student loans selected for consolidation, by 

12 the date by which an election must be 

13 made under clause (i) for the selected loan 

14 that is the last to enter repayment; and 

15 (B) in the case of Federal student loans 

16 that entered repayment before July 1, 2008, 

17 within 180 days after the later of such date or 

18 the date of enactment of this Act. 

19 (2) DISCHARGE OF FEDERAL STUDENT

20 LOAN.—Upon receipt of a notice of election under 

21 paragraph (1) with respect to any loan, and agree22 ment by the borrower to repay the amount of the ob23 ligation in a direct IDEA loan, the Secretary shall— 

24 (A) in the case of a Federal student loan 

25 described in section 104(2)(A), pay to the holdVerDate Aug 31 2005 23:05 May 27, 2007 Jkt 059196 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2465.IH H2465

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1 er of the loan the principal and accrued interest 

2 owing on the loan; and 

3 (B) in the case of a Federal student loan 

4 described in section 104(2)(B), discharge the 

5 obligation of the borrower on such loan. 

6 (b) CONVERSION FOLLOWING DEFAULT.— 

7 (1) AUTHORITY TO CONVERT.— 

8 (A) CONVERSION BY PAYMENT TO LEND9 ER.—Upon default by the student borrower on 

10 any Federal student loan described in section 

11 104(2)(A), and prior to the commencement of 

12 suit or other enforcement proceedings upon se13 curity for that loan, the insurance beneficiary 

14 shall promptly notify the Secretary, and the 

15 Secretary shall if requested (at that time or 

16 after further collection efforts) by the bene17 ficiary, or may on the Secretary’s own motion, 

18 if insurance is still in effect, pay to the bene19 ficiary the amount of the loss sustained by the 

20 insured upon that loan as soon as that amount 

21 has been determined. Such beneficiary shall be 

22 required to meet the standards of due diligence 

23 in the collection of the loan and shall be re24 quired to submit proof that reasonable attempts 

25 were made to locate the borrower (when the loVerDate Aug 31 2005 23:05 May 27, 2007 Jkt 059196 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2465.IH H2465

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1 cation of the borrower is unknown) and proof 

2 that contact was made with the borrower (when 

3 the location is known). The Secretary shall 

4 make the determination required to carry out 

5 the provisions of this subparagraph not later 

6 than 90 days after the notification by the insur7 ance beneficiary and shall make payment in full 

8 on the amount of the beneficiary’s loss pending 

9 completion of the due diligence investigation. 

10 (B) CONVERSION BY CANCELLATION.— 

11 Upon default by the student borrower on any 

12 Federal student loan described in section 

13 104(2)(B), the Secretary may, within 90 days 

14 after such default— 

15 (i) determine the amount of the loss 

16 on such loan; and 

17 (ii) notify the borrower of the conver18 sion of the obligation on the loan to the ob19 ligation to repay a direct IDEA loan. 

20 (2) AMOUNT OF THE LOSS.—The ‘‘amount of 

21 the loss’’ on any loan shall be deemed to be an 

22 amount equal to the sum— 

23 (A) the unpaid balance of the principal 

24 amount and accrued interest, including interest 

25 accruing during the period from the date of the 


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1 default to the date on which payment is author2 ized by the Secretary under paragraph (1)(A) 

3 or notice is sent under paragraph (1)(B), ex4 cept that such period shall not exceed 180 days; 

5 and 

6 (B) unpaid penalties and costs of collection 

7 incurred on the loan prior to the date of the de8 fault. 

9 (3) EFFECT OF PAYMENT OF LOSS.—Upon pay10 ment of the amount of the loss pursuant to para11 graph (1)(A), the United States shall be subrogated 

12 for all of the rights of the holder of the obligation 

13 upon the Federal student loan and shall be entitled 

14 to an assignment of the note or other evidence of the 

15 loan. 

16 (4) FORBEARANCE NOT PRECLUDED.—Nothing 

17 in this section or in this title shall be construed to 

18 preclude any forbearance for the benefit of the stu19 dent borrower which may be agreed upon by the par20 ties to a student loan described in section 104(2)(A) 

21 and approved by the Secretary, or to preclude for22 bearance by the Secretary in the enforcement of the 

23 obligation after conversion under paragraph (1). Any 

24 forbearance which is approved by the Secretary 

25 under this paragraph with respect to the repayment 


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1 of a loan, including a forbearance during default, 

2 shall not be considered as indicating that a holder 

3 of a Federal student loan has failed to exercise rea4 sonable care and due diligence in the collection of 

5 the loan. 

6 (5) CONVERSION.—Any loan which is repaid or 

7 cancelled by the Secretary under paragraph (1) 

8 shall, after the date of such repayment or cancella9 tion, be treated as a direct IDEA loan for purposes 

10 of collection under section 6307 of the Internal Rev11 enue Code of 1986. 

12 (c) NOTICE TO SECRETARY OF THE TREASURY.— 

13 The Secretary shall notify the Secretary of the Treasury 

14 of the loans that are converted to direct IDEA loans under 

15 this section. Such notice shall contain— 

16 (1) the name, address, and taxpayer identifica17 tion number of the borrower; 

18 (2) the amount owed by the borrower on any 

19 loan or loans that are converted under this section 

20 to an obligation under a direct IDEA loan; 

21 (3) such other information as the Secretary and 

22 the Secretary of the Treasury may require. 

23 SEC. 104. DEFINITIONS. 

24 As used in this title: 


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1 (1) SECRETARY.—The term ‘‘Secretary’’ means 

2 the Secretary of Education. 

3 (2) FEDERAL STUDENT LOANS.—The term 

4 ‘‘Federal student loans’’ means— 

5 (A) any loan made under part B of title IV 

6 of the Higher Education Act of 1965 (20 

7 U.S.C. 1071 et seq.), other than a loan made 

8 under section 428B of such Act to the parent 

9 of a dependent student; and 

10 (B) any loan made under part D of such 

11 title, other than a Federal Direct Plus Loan to 

12 the parent of a dependent student. 

13 (3) ELIGIBLE LENDER.—The term ‘‘eligible 

14 lender’’ has the meaning provided by section 435(b) 

15 of such Act (20 U.S.C. 1085(d)). 

16 (4) ELIGIBLE STUDENT.—The term ‘‘eligible 

17 student’’ means any student that is an eligible stu18 dent under section 484 of such Act (20 U.S.C. 

19 1091). 


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1 TITLE II—COLLECTION OF IN2 COME-DEPENDENT EDU3 CATION ASSISTANCE LOANS 

4 SEC. 201. REPAYMENTS USING INCOME TAX COLLECTION 

5 SYSTEM. 

6 (a) IN GENERAL.—Subchapter A of chapter 64 of the 

7 Internal Revenue Code of 1986 (relating to collection) is 

8 amended by adding at the end the following new section: 

9 ‘‘SEC. 6307. COLLECTION OF DIRECT INCOME-DEPENDENT 

10 EDUCATION ASSISTANCE LOANS. 

11 ‘‘(a) REPAYMENT OBLIGATION.— 

12 ‘‘(1) IN GENERAL.—If an individual is fur13 nished a notice under paragraph (2) for a calendar 

14 year that such individual is in repayment status for 

15 such year with respect to any direct IDEA loan, 

16 such individual shall make a payment under this sec17 tion for the taxable year beginning in such calendar 

18 year. 

19 ‘‘(2) NOTICE TO BORROWER.— 

20 ‘‘(A) IN GENERAL.—During January of 

21 each calendar year, the Secretary of Education 

22 shall furnish to each borrower of a direct IDEA 

23 loan a notice as to— 

24 ‘‘(i) whether the records of the Sec25 retary indicate that such borrower is in reVerDate Aug 31 2005 23:05 May 27, 2007 Jkt 059196 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H2465.IH H2465

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1 payment status for the taxable year begin2 ning in the preceding calendar year, 

3 ‘‘(ii) the maximum account balance of 

4 such borrower, 

5 ‘‘(iii) the current account balance of 

6 such borrower as of the close of the pre7 ceding calendar year, and 

8 ‘‘(iv) the procedure for computing the 

9 amount of repayment owing for the taxable 

10 year beginning in the preceding calendar 

11 year. 

12 ‘‘(B) FORM, ETC.—The notice under sub13 paragraph (A)— 

14 ‘‘(i) shall be in such form as the Sec15 retary may by regulations prescribe, and 

16 ‘‘(ii) shall be treated as furnished if 

17 sent by mail to the individual’s last known 

18 address or left at the dwelling or usual 

19 place of business of such individual. 

20 ‘‘(b) COMPUTATION OF ANNUAL REPAYMENT

21 AMOUNT.— 

22 ‘‘(1) IN GENERAL.—The annual amount pay23 able under this section by the taxpayer for any tax24 able year shall be the lesser of— 

25 ‘‘(A) the product of— 


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1 ‘‘(i) the base amortization amount, 

2 and 

3 ‘‘(ii) the progressivity factor for the 

4 taxpayer for such taxable year, or 

5 ‘‘(B) 15 percent of the excess of— 

6 ‘‘(i) the modified adjusted gross in7 come of the taxpayer for such taxable year, 

8 over 

9 ‘‘(ii) the base income amount. 

10 ‘‘(2) BASE AMORTIZATION AMOUNT.— 

11 ‘‘(A) IN GENERAL.—For purposes of this 

12 section, the term ‘base amortization amount’ 

13 means the amount which, if paid at the close of 

14 each year for a period of 12 consecutive years, 

15 would fully repay (with interest) at the close of 

16 such period the maximum account balance of 

17 the borrower. 

18 ‘‘(B) INTEREST.—For purposes of sub19 paragraph (A)— 

20 ‘‘(i) ANNUAL RATE.—With respect to 

21 a direct IDEA loan that was made on any 

22 date by conversion of a Federal student 

23 loan (at the election of the borrower or at 

24 the direction of the Secretary of Edu25 cation) under title I of the Income-DependVerDate Aug 31 2005 23:05 May 27, 2007 Jkt 059196 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\H2465.IH H2465

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1 ent Education Assistance Act of 2007, the 

2 interest rate on such direct IDEA loan 

3 shall be assumed to be equal to the inter4 est rate applicable to a consolidation loan 

5 made under section 428C of the Higher 

6 Education Act of 1965 (20 U.S.C. 1078– 

7 3) on that same date. 

8 ‘‘(ii) LIMITATION.—The aggregate 

9 amount of interest shall not exceed 110 

10 percent of the amount determined under 

11 subparagraph (A) without regard to inter12 est. 

13 ‘‘(C) JOINT RETURNS.—In the case of a 

14 joint return where each spouse has an account 

15 balance and is in repayment status, the amount 

16 determined under subparagraph (A) shall be 

17 the sum of the base amortization amounts of 

18 each spouse. 

19 ‘‘(3) PROGRESSIVITY FACTOR.— 

20 ‘‘(A) IN GENERAL.—For purposes of this 

21 section, the progressivity factor with respect to 

22 a calendar year shall be determined under the 

23 following table on the basis of the ratio of the 

24 taxpayer’s modified adjusted gross income bears 

25 to the median State income of the State in 


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1 which the taxpayer is resident on the last day 

2 of the taxable year ending in or with the cal3 endar year: 

‘‘Ratio of modified adjusted gross income to 

median State income is: 

Progressivity factor is: 

Less than or equal to 0.25 .................................................... 0.5052 

Greater than 0.25 and less than or equal to 0.35 ................ 0.5668 

Greater than 0.35 and less than or equal to 0.50 ................ 0.6283 

Greater than 0.50 and less than or equal to 0.65 ................ 0.6907 

Greater than 0.65 and less than or equal to 0.75 ................ 0.8146 

Greater than 0.75 and less than or equal to 1.00 ................ 0.9073 

Greater than 1.00 and less than or equal to 1.25 ................ 1.0000 

Greater than 1.25 and less than or equal to 1.50 ................ 1.0000 

Greater than 1.50 and less than or equal to 1.75 ................ 1.1520 

Greater than 1.75 and less than or equal to 2.00 ................ 1.2700 

Greater than 2.00 and less than or equal to 2.50 ................ 1.3640 

Greater than 2.50 and less than or equal to 3.00 ................ 1.4850 

Greater than 3.00 and less than or equal to 3.50 ................ 1.6000 

Greater than 3.50 .................................................................. 2.0000 

4 ‘‘(B) MEDIAN STATE INCOME.—For pur5 poses of subparagraph (A), the median State 

6 income shall be the most recent census estimate 

7 of the median income of such State released by 

8 the Bureau of Census before the beginning of 

9 such calendar year. 

10 ‘‘(4) MODIFIED ADJUSTED GROSS INCOME.— 

11 For purposes of this subsection, the term ‘modified 

12 adjusted gross income’ means adjusted gross income 

13 for the taxable year— 

14 ‘‘(A) determined without regard to— 

15 ‘‘(i) sections 135, 911, 931, and 933, 

16 ‘‘(ii) the deductions from gross income 

17 allowable under section 62(a) by reason 

18 of— 


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1 ‘‘(I) paragraph (6) thereof (relat2 ing to profit-sharing, annuities, and 

3 bond-purchase plans of self-employed 

4 individuals), 

5 ‘‘(II) paragraph (7) thereof (re6 lating to retirement savings), and 

7 ‘‘(III) paragraph (17) (relating 

8 to interest on education loans), and 

9 ‘‘(B) increased by the amount of interest 

10 received or accrued by the taxpayer during the 

11 taxable year which is exempt from tax. 

12 ‘‘(5) BASE INCOME AMOUNT.—For purposes of 

13 this subsection, the term ‘base income amount’ 

14 means— 

15 ‘‘(A) in the case of a joint return, the sum 

16 of the standard deduction applicable to such re17 turn and twice the exemption amount for the 

18 taxable year, and 

19 ‘‘(B) in any other case, the sum of the 

20 standard deduction applicable to such individual 

21 and the exemption amount for the taxable year. 

22 For purposes of this paragraph, the term ‘standard 

23 deduction’ has the meaning given such term by sec24 tion 63(c), and the term ‘exemption amount’ has the 

25 meaning given such term by section 151(d). 


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1 ‘‘(c) TERMINATION OF BORROWER’S REPAYMENT

2 OBLIGATION.— 

3 ‘‘(1) IN GENERAL.—All direct IDEA loans of a 

4 borrower shall be canceled as of the close of the first 

5 taxable year for which the current account balance 

6 of such borrower is not greater than zero. 

7 ‘‘(2) DETERMINATION OF CURRENT ACCOUNT

8 BALANCE.— 

9 ‘‘(A) IN GENERAL.—For purposes of deter10 mining the current account balance of the bor11 rower for any taxable year after the 12th tax12 able year that the borrower is in repayment sta13 tus under this section, the current account bal14 ance shall be the amount which would be such 

15 balance if— 

16 ‘‘(i) the initial account balance of the 

17 borrower equaled 90 percent of such initial 

18 account balance (determined without re19 gard to this clause), and 

20 ‘‘(ii) clause (ii) of section 

21 102(d)(3)(C) of the Income-Dependent 

22 Education Assistance Act of 2007 had 

23 been applied for all prior periods of repay24 ment status under this section by sub25 stituting ‘2 percent’ for ‘3 percent’. 


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1 In the case of any taxable year after the 16th 

2 taxable year that the borrower is in repayment 

3 status under this section, clause (ii) shall be ap4 plied by substituting ‘1 percent’ for ‘2 percent’. 

5 ‘‘(B) INITIAL ACCOUNT BALANCE.—For 

6 purposes of subparagraph (A), the term ‘initial 

7 account balance’ means, with respect to any 

8 borrower, the sum of the amounts owed by the 

9 borrower on any direct IDEA loan, as contained 

10 in notices furnished under subsection (a)(2) to 

11 the Secretary. 

12 ‘‘(3) NO REPAYMENT REQUIRED AFTER 25

13 YEARS IN REPAYMENT STATUS.—The borrower has 

14 no repayment obligation under this section any tax15 able year after the 25th taxable year for which the 

16 borrower is in repayment status under this section. 

17 ‘‘(4) DETERMINATION OF YEARS IN REPAY18 MENT STATUS.—For purposes of paragraphs (2) and 

19 (3), the number of taxable years in which a borrower 

20 is in repayment status under this section shall be de21 termined without regard to any taxable year before 

22 the most recent taxable year in which the borrower 

23 received a direct IDEA loan. 

24 ‘‘(5) EXTENSION OF REPAYMENT YEARS FOR

25 MEDICAL INTERNS.—The number of years specified 


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1 in paragraphs (2) and (3) shall be increased by 1 

2 year for each calendar year during any 5 months of 

3 which the individual is an intern in medicine, den4 tistry, veterinary medicine, or osteopathic medicine. 

5 ‘‘(d) DEFINITIONS.—For purposes of this section— 

6 ‘‘(1) MAXIMUM ACCOUNT BALANCE.—The term 

7 ‘maximum account balance’ means the highest 

8 amount (as of the close of any calendar year) of un9 paid principal and unpaid accrued interest on all di10 rect IDEA loan obligations of a borrower. 

11 ‘‘(2) CURRENT ACCOUNT BALANCE.—The term 

12 ‘current account balance’ means the amount (as of 

13 the close of a calendar year) of unpaid principal and 

14 unpaid accrued interest on all IDEA loans of a bor15 rower. 

16 ‘‘(3) REPAYMENT STATUS.—A borrower is in 

17 repayment status for any taxable year unless— 

18 ‘‘(A) such borrower was, during at least 7 

19 months of such year, an eligible student, as 

20 that term is defined in section 104(4) of the In21 come-Dependent Education Assistance Act of 

22 2007; or 

23 ‘‘(B) such taxable year was the first year 

24 in which the borrower was such an eligible stu25 dent and the borrower was such an eligible stuVerDate Aug 31 2005 23:05 May 27, 2007 Jkt 059196 PO 00000 Frm 00020 Fmt 6652 Sfmt 6201 E:\BILLS\H2465.IH H2465

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1 dent during any of the last 6 months of such 

2 taxable year. 

3 ‘‘(4) DIRECT IDEA LOAN.—The term ‘direct 

4 IDEA loan’ has the meaning given such term by 

5 title I of the Income-Dependent Education Assist6 ance Act of 2007. Such term includes any loan 

7 which is treated as such under section 103 of such 

8 title. 

9 ‘‘(e) PAYMENT OF AMOUNT OWING.—Any amount to 

10 be collected from an individual under this section shall be 

11 paid— 

12 ‘‘(1) not later than the last date (determined 

13 without regard to extensions) prescribed for filing 

14 his return of tax imposed by chapter 1 for the tax15 able year ending before the date the notice under 

16 subsection (a) is sent, and 

17 ‘‘(2)(A) if such return is filed not later than 

18 such date, with such return, or 

19 ‘‘(B) in any case not described in subparagraph 

20 (A), in such manner as the Secretary may by regula21 tions prescribe. 

22 ‘‘(f) FAILURE TO PAY AMOUNT OWING.—If an indi23 vidual fails to pay the full amount required to be paid on 

24 or before the last date described in subsection (e)(1), the 

25 Secretary shall assess and collect the unpaid amount in 


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1 the same manner, with the same powers, and subject to 

2 the same limitations applicable to a tax imposed by sub3 title C the collection of which would be jeopardized by 

4 delay. 

5 ‘‘(g) LOANS OF DECEASED AND PERMANENTLY DIS6 ABLED BORROWERS; DISCHARGE BY SECRETARY.— 

7 ‘‘(1) DISCHARGE IN THE EVENT OF DEATH.— 

8 If a borrower of a direct IDEA loan dies or becomes 

9 permanently and totally disabled (as determined in 

10 accordance with regulations of the Secretary), then 

11 the Secretary shall discharge the borrower’s liability 

12 on the loan. 

13 ‘‘(2) LIMITATION ON DISCHARGE.—The dis14 charge of the liability of an individual under this 

15 subsection shall not discharge the liability of any 

16 spouse with respect to any direct IDEA loan made 

17 to such spouse. 

18 ‘‘(h) CREDITING OF COLLECTIONS.— 

19 ‘‘(1) IN GENERAL.—For purposes of deter20 mining whether there is an underpayment or over21 payment of tax imposed by subtitle A for any tax22 able year by an individual who is required to pay an 

23 amount under this section, amounts withheld under 

24 chapter 24 and amounts paid under section 6654 


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1 shall be treated as payments of the amount required 

2 to be paid under this section to the extent thereof. 

3 ‘‘(2) CREDITING OF AMOUNTS PAID ON A JOINT

4 RETURN.—Amounts collected under this section on a 

5 joint return from a husband and wife both of whom 

6 are in repayment status shall be credited to the ac7 counts of such spouses in the following order: 

8 ‘‘(A) First, to repayment of interest added 

9 to each account at the end of the preceding cal10 endar year in proportion to the interest so 

11 added to the respective accounts of the spouses. 

12 ‘‘(B) Then, to repayment of unpaid prin13 cipal, and unpaid interest accrued before such 

14 preceding calendar year, in proportion to the re15 spective maximum account balances of the 

16 spouses. 

17 ‘‘(i) SPECIAL RULES.— 

18 ‘‘(1) EXCLUSION FROM INCOME FOR LOANS

19 DISCHARGED.—No amount shall be includible in 

20 gross income by reason of the discharge under this 

21 section of any loan. 

22 ‘‘(2) COMPUTATION OF ALTERNATIVE ANNUAL

23 PAYMENT FOR INDIVIDUALS WHO HAVE ATTAINED

24 AGE 55.—In the case of an individual who attains 

25 age 55 before the close of the calendar year ending 


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1 in the taxable year, or of an individual filing a joint 

2 return whose spouse attains age 55 before the close 

3 of such calendar year, the progressivity factor appli4 cable to the base amortization amount of such indi5 vidual for such taxable year shall not be less than 

6 1.0. 

7 ‘‘(3) FINALITY OF ASSESSMENT AND COLLEC8 TION.—The first sentence of subsection (b) of sec9 tion 6305 shall apply to assessments and collections 

10 under subsection (f) of this section. 

11 ‘‘(4) INFORMATION TO BE FURNISHED TO SEC12 RETARY.—The borrower of any direct IDEA loan 

13 shall furnish to the Secretary such information as 

14 the Secretary determines to be necessary to carry 

15 out this section with respect to such loan.’’. 

16 (b) APPLICATION OF ESTIMATED TAX.—Subsection 

17 (f) of section 6654 of such Code (relating to failure by 

18 individual to pay estimated income tax) is amended by 

19 striking ‘‘minus’’ at the end of paragraph (2) and insert20 ing ‘‘plus’’, by redesignating paragraph (3) as paragraph 

21 (4), and by inserting after paragraph (2) the following new 

22 paragraph: 

23 ‘‘(3) the amount required to be repaid under 

24 section 6307 (relating to collection of income-de25 pendent education assistance loans), minus’’. 


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25 

•HR 2465 IH

1 (c) FILING REQUIREMENT.—Subsection (a) of sec2 tion 6012 of such Code (relating to persons required to 

3 make returns of income) is amended by inserting after 

4 paragraph (9) the following new paragraph: 

5 ‘‘(10) Every individual required to make a pay6 ment for the taxable year under section 6307 (relat7 ing to collection of income-dependent education as8 sistance loans).’’. 

9 (d) CLERICAL AMENDMENT.—The table of sections 

10 for subchapter A of chapter 64 of such Code is amended 

11 by adding at the end the following new item: 

‘‘Sec. 6307. Collection of direct income-dependent education assistance loans.’’. 

Æ 


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