II 

113TH CONGRESS 

1ST SESSION S. 1884 

To establish a Pay It Forward model for funding postsecondary education. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 20, 2013 

Mr. MERKLEY introduced the following bill; which was read twice and referred 

to the Committee on Health, Education, Labor, and Pensions 

A BILL 

To establish a Pay It Forward model for funding 

postsecondary education. 

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 ‘‘Pay It Forward Col5 lege Affordability Act of 2013’’. 

6 SEC. 2. FINDINGS; PURPOSE. 

7 (a) FINDINGS.—Congress finds the following: 

8 (1) Postsecondary education has expanded op9 portunities for people in the United States to qualify 

10 for high-quality jobs and entry into the middle class, 

11 providing clear benefits to the Nation’s economy. 


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1 (2) Public investment by the States in higher 

2 education has decreased significantly, especially in 

3 the past 5 years before the date of enactment of this 

4 Act, as a result of the 2008 fiscal collapse. 

5 (3) With college costs rising beyond the reach 

6 of many people in the United States, financial aid 

7 programs are inadequate to reach all students with 

8 financial need. 

9 (4) The increasing unaffordability of a college 

10 education has forced students to borrow more money 

11 to pay for higher education, causing two-thirds of 

12 college seniors to graduate with an average student 

13 debt of $26,600. 

14 (5) High levels of student debt are damaging 

15 not only to the individual student’s ability to succeed 

16 financially but also will have grave consequences for 

17 the future economy of the United States. 

18 (6) Congress must halt the decrease in State 

19 support for education and, over time, must catalyze 

20 increases in State funding for higher education. 

21 (7) There is a need to encourage a new ap22 proach to financing the students’ share of the cost 

23 of higher education that will not result in graduates 

24 who are overburdened with student debt. 


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1 (8) The Pay It Forward model presents a new 

2 opportunity for financing and expanding higher edu3 cation, through the replacement of tuition and man4 datory fees with a post-graduation contribution pro5 gram that establishes the funding for access to high6 er education for the next generational cohort of stu7 dents. 

8 (b) PURPOSE.—The purpose of this Act is to test and 

9 encourage the development of Pay It Forward model fi10 nancing programs. 

11 SEC. 3. DEFINITIONS. 

12 In this Act: 

13 (1) ANNUAL INCOME.—The term ‘‘annual in14 come’’ means an amount equal to the sum of— 

15 (A) annual adjusted gross income, as de16 fined in section 62 of the Internal Revenue 

17 Code of 1986; and 

18 (B) any amount described under section 

19 103 of the Internal Revenue Code of 1986. 

20 (2) COST OF ATTENDANCE.—The term ‘‘cost of 

21 attendance’’ has the meaning given the term in sec22 tion 472 of the Higher Education Act of 1965 (20 

23 U.S.C. 1087ll). 

24 (3) INSTITUTION OF HIGHER EDUCATION.— 


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1 (A) INSTITUTION OF HIGHER EDU2 CATION.—The term ‘‘institution of higher edu3 cation’’ has the meaning given the term in sec4 tion 102 of the Higher Education Act of 1965 

5 (20 U.S.C. 1002), except that for purposes of 

6 this Act, an institution of higher education does 

7 not include any program of postsecondary edu8 cation or training, including a degree or certifi9 cate program, that is designed to prepare stu10 dents for entry into a recognized occupation or 

11 profession that requires licensing or other es12 tablished requirements as a pre-condition for 

13 entry into such occupation or profession, un14 less— 

15 (i) the successful completion of the 

16 program fully qualifies a student, in the 

17 State in which the institution offering the 

18 program is located (and in any State in 

19 which the institution indicates, through ad20 vertising or marketing activities or direct 

21 contact with potential students, that a stu22 dent will be prepared to work in the occu23 pation or profession after successfully com24 pleting the program), to— 


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1 (I) take any examination re2 quired for entry into the recognized 

3 occupation or profession in the State, 

4 including satisfying all State or pro5 fessionally mandated programmatic 

6 and specialized accreditation require7 ments, if any; and 

8 (II) be certified or licensed or 

9 meet any other academically related 

10 pre-conditions that are required for 

11 entry into the recognized occupation 

12 or profession in the State; 

13 (ii) the institution offering the pro14 gram provides timely placement for all of 

15 the academically related pre-licensure re16 quirements for entry into the recognized 

17 occupation or profession in the State, such 

18 as clinical placements, internships, or ap19 prenticeships; 

20 (iii) in the case of State licensing or 

21 professionally mandated requirements for 

22 entry into the recognized occupation or 

23 profession in the State in which the insti24 tution offering the program is located (and 

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1 cates, through advertising or marketing ac2 tivities or direct contact with potential stu3 dents, that a student will be prepared to 

4 work in the occupation or profession after 

5 successfully completing the program) that 

6 require specialized accreditation— 

7 (I) the program meets that re8 quirement for specialized accreditation 

9 through its accreditation or pre-ac10 creditation by an accrediting agency 

11 or association recognized by the Sec12 retary of Education as a reliable au13 thority as to the quality or training 

14 offered by the institution in that pro15 gram; and 

16 (II) if the program is in a pre-ac17 credited, probation, or show cause sta18 tus by an accrediting agency or asso19 ciation described in subclause (I), and 

20 the requirement for specialized accred21 itation is for full accreditation, the in22 stitution— 

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1 rolls before the program is fully 

2 accredited attests of being ad3 vised that the program is in a 

4 pre-accredited, probation, or 

5 show cause status and of being 

6 informed of the effect on the stu7 dent’s eligibility for assistance 

8 under this Act and on the stu9 dent’s ability to satisfy State or 

10 professionally mandated require11 ments for entry into the recog12 nized occupation or profession if 

13 full accreditation is delayed, de14 nied, terminated, or withdrawn; 

15 and 

16 (bb) publicly and promi17 nently discloses in any adver18 tising, marketing, or recruitment 

19 materials and activities for the 

20 institution, the institution’s pre21 accredited, probation, or show 

22 cause status and the implications 

23 of such status for prospective 

24 students; and 

25 (iv) the institution— 


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1 (I) discloses on the application to 

2 enroll in the institution that its pro3 gram does not necessarily satisfy out4 of-State requirements, if applicable; 

5 and 

6 (II) upon receipt of an applica7 tion to enroll in the institution, noti8 fies the student, prior to enrollment, if 

9 the program in which the student in10 tends to enroll does not satisfy the re11 quirements of the State in which the 

12 student is a resident, if applicable. 

13 (B) SCHOOL, DEPARTMENT, OR PRO14 GRAM.—The term ‘‘institution of higher edu15 cation’’ may include a particular school, depart16 ment, or program within an institution of high17 er education described in subparagraph (A). 

18 (4) PAY IT FORWARD MODEL.—The term ‘‘Pay 

19 It Forward model’’ means a system in which— 

20 (A) the Secretary, a State, or an institu21 tion of higher education pays all or part of a 

22 participating student’s cost of attendance, but 

23 not less than an amount equal to the cost of 

24 tuition and mandatory fees, for each such stu25 dent during some or all of the time that the 


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1 student is enrolled at an institution of higher 

2 education in order to replace the student’s need 

3 to borrow under the Federal Direct Stafford 

4 Loan and Federal Direct Unsubsidized Stafford 

5 Loan Programs under part D of title IV of the 

6 Higher Education Act of 1965 (20 U.S.C. 

7 1087a et seq.); and 

8 (B) such student signs a contract agreeing 

9 to contribute to the Secretary, a State, or an 

10 institution of higher education, as the case may 

11 be, a certain percentage (not to exceed 5 per12 cent) of the student’s annual income, for a 

13 specified number of years upon graduation or 

14 when the student ceases to be enrolled at such 

15 institution of higher education, except that the 

16 specified number of years for which the student 

17 agrees to contribute according to such contract 

18 shall not exceed 25 years, which shall be known 

19 as the ‘‘Pay It Forward Contribution Plan’’. 

20 (5) SECRETARY.—The term ‘‘Secretary’’ means 

21 the Secretary of Education. 

22 (6) TUITION AND MANDATORY FEES.—The 

23 term ‘‘tuition and mandatory fees’’ means tuition 

24 and fees normally assessed a student carrying the 


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1 same academic workload as determined by the insti2 tution of higher education. 

3 SEC. 4. INITIAL STUDIES. 

4 (a) IN GENERAL.—Not later than 180 days after the 

5 date of enactment of this Act, the Secretary, in consulta6 tion with the Secretary of the Treasury— 

7 (1) and the Director of the Consumer Financial 

8 Protection Bureau, shall conduct a study on the fea9 sibility of, and options for, implementing the Pay It 

10 Forward model, in a manner that is in the best in11 terests of students; and 

12 (2) shall conduct a study— 

13 (A) on whether the student loan servicer 

14 payment program or the Internal Revenue Serv15 ice income tax withholding mechanism (such as 

16 preauthorized automatic electronic funds trans17 fers) of collection for the Pay It Forward model 

18 would work best; 

19 (B) on how best to establish a participant’s 

20 agreement described under section 5(g)(3), or a 

21 similar agreement made under another Pay It 

22 Forward model, including what percentage of a 

23 participant’s income the participant should be 

24 required to contribute and what is an appro25 priate time period for contribution; 


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1 (C) on how the rates of contribution under 

2 the Pay It Forward model may differ— 

3 (i) according to different income lev4 els; and 

5 (ii) based on whether the student pur6 sues a graduate or professional education 

7 program immediately after completing 

8 their undergraduate education or at a fu9 ture time; 

10 (D) on how best to streamline the collec11 tion process and ensure compliance; and 

12 (E) on ways to prevent increases in tuition 

13 and other education costs. 

14 (b) REPORT.—Not later than 30 days after the com15 pletion of the studies described in subsection (a), the Sec16 retary shall prepare and submit a report containing the 

17 results of the initial studies described in subsection (a), 

18 to the Committee on Health, Education, Labor, and Pen19 sions of the Senate, the Committee on Banking, Housing, 

20 and Urban Affairs of the Senate, the Committee on Fi21 nance of the Senate, the Committee on Education and the 

22 Workforce of the House of Representatives, the Com23 mittee on Financial Services of the House of Representa24 tives, and the Committee on Ways and Means of the 

25 House of Representatives. 


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1 SEC. 5. GRANTS FOR STATE PAY IT FORWARD PILOT PRO2 GRAM. 

3 (a) IN GENERAL.—Unless the Secretary determines, 

4 as a result of the initial studies described in section 4, 

5 that the Pay It Forward model is not feasible or otherwise 

6 not in the public interest or in the best interest of stu7 dents, the Secretary shall, not later than 1 year after the 

8 completion of such initial study, award grants, on a com9 petitive basis, to not more than 3 States in the first 2 

10 years and not more than 7 additional States in subsequent 

11 years (while limiting the number of students participating 

12 to 15,000 annually in the first 2 years and 50,000 annu13 ally in subsequent years in all States) to enable such 

14 States to establish and carry out a Pay It Forward model 

15 State pilot program as described in subsection (e). 

16 (b) APPLICATION; DURATION.— 

17 (1) APPLICATION.—Each State that desires to 

18 receive a grant under this section shall submit an 

19 application to the Secretary at such time, in such 

20 manner, and containing such information as the Sec21 retary may reasonably require. 

22 (2) DURATION.—Grants awarded under this 

23 section shall be for a period of not less than 10 

24 years and not more than 25 years and the Secretary 

25 shall make grant funds available to each State on an 

26 annual basis. 


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1 (c) STATE CONTRIBUTION REQUIREMENT.—A State 

2 receiving a grant under this section shall provide, either 

3 directly or through private contributions, non-Federal 

4 funds for each award year in an amount that is not less 

5 than the greater of— 

6 (1) the difference between— 

7 (A) the amount for an award year that the 

8 State has agreed to pay for all students partici9 pating in the State Pay It Forward Contribu10 tion Plan described in subsection (e); and 

11 (B) the amount of the Federal funds de12 scribed in subsection (e)(2); or 

13 (2) the amount that is 10 percent of the 

14 amount of the Federal funds described in subsection 

15 (e)(2). 

16 (d) MAINTENANCE OF EFFORT.—Each State receiv17 ing a grant under this section for a fiscal year shall pro18 vide the Secretary with an assurance that the aggregate 

19 expenditures by the State, from funds derived from non20 Federal sources, for the contribution to higher education 

21 costs, including student loans and grants for higher edu22 cation for each fiscal year for which a grant is awarded 

23 under this section (excluding funds for a State Pay It For24 ward model) are not less than the aggregate expenditures 

25 by the State for the contribution to higher education costs, 


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1 including student loans and grants for higher education, 

2 for the fiscal year preceding the first fiscal year for which 

3 a grant was awarded to the State under this section, as 

4 adjusted for inflation using the Consumer Price Index for 

5 All Urban Consumers published by the Department of 

6 Labor (CPI–U). 

7 (e) STATE PILOT PROGRAM.— 

8 (1) STATE ACTIVITIES.—In accordance with 

9 subsection (a), each State receiving a grant under 

10 this section shall establish and carry out a State Pay 

11 It Forward model pilot program, through which the 

12 State shall— 

13 (A) select eligible institutions, in accord14 ance with subsection (f), for participation in the 

15 program; 

16 (B) in coordination with the Secretary, es17 tablish an application and enrollment process 

18 through which a student who is enrolled at a 

19 participating eligible institution who wishes to 

20 participate in the program, and fulfills the re21 quirements of the enrollment process, as deter22 mined by the State, shall be enrolled in the Pay 

23 It Forward Contribution Plan, subject to para24 graph (3); 


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1 (C) provide each student at each partici2 pating eligible institution with a written no3 tice— 

4 (i) that such student has the option to 

5 participate, or to decline to participate, in 

6 the Pay It Forward Contribution Plan on 

7 an annual renewable basis, subject to para8 graph (3); 

9 (ii) of the application and enrollment 

10 process described in subparagraph (B); 

11 and 

12 (iii) of the terms and conditions of the 

13 Pay It Forward Contribution Plan, as de14 scribed in subsection (g); 

15 (D) ensure that, subject to subsection 

16 (g)(5)(A) and in accordance with paragraphs 

17 (4) and (5) of subsection (g), an eligible stu18 dent’s cost of attendance will be reduced by the 

19 amount of any assistance considered estimated 

20 financial assistance, as defined in section 

21 428(a)(2)(C) of the Higher Education Act of 

22 1965 (20 U.S.C. 1078(a)(2)(C)) prior to the 

23 awarding of aid under the Pay It Forward Con24 tribution Plan toward the student’s cost of at25 tendance; 


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1 (E) award funds, from amounts made 

2 available under subsection (c), any other State 

3 funds, and amounts made available under para4 graph (2)(B) to pay— 

5 (i) each participating institution an 

6 amount equal to the tuition and mandatory 

7 fees for each student at that institution 

8 who is enrolled in the Pay It Forward Con9 tribution Plan, as described in subsection 

10 (g), except that such amount shall, for 

11 each student not exceed— 

12 (I) the amount of the tuition and 

13 mandatory fees for each such student 

14 at the most expensive public institu15 tion of higher education in the State 

16 for the type of institution the partici17 pating student attends (including a 4- 

18 year institution, 2-year institution, or 

19 1-year institution) for that award 

20 year; or 

21 (II) the cost of attendance for 

22 each such student to attend the insti23 tution at which the student is en24 rolled; and 


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1 (ii) each participating student any ad2 ditional costs of attendance that have been 

3 agreed to in the student’s contract de4 scribed in subsection (g), except that such 

5 additional costs shall be in an amount such 

6 that the sum of such additional costs and 

7 the amount of tuition and fees described in 

8 clause (i) shall, for each such student, not 

9 exceed— 

10 (I) the amount of the tuition and 

11 mandatory fees for a student at the 

12 most expensive public institution of 

13 higher education in the State for the 

14 type of institution the participating 

15 student attends (including a 4-year 

16 institution, 2-year institution, or 1- 

17 year institution) for that award year; 

18 or 

19 (II) the cost of attendance for 

20 the student to attend the institution 

21 at which the student is enrolled. 

22 (2) FEDERAL FUNDS.—The Secretary shall pay 

23 each State receiving a grant under this section, for 

24 each award year for the purpose of carrying out 


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1 paragraph (1)(E), an amount equal to the product 

2 of— 

3 (A) the number of students in the State 

4 that are enrolled in the Pay It Forward Con5 tribution Plan for that award year; multiplied 

6 by 

7 (B) an amount equal to the sum of— 

8 (i) the maximum amount that a stu9 dent is eligible to receive through a Fed10 eral Direct Stafford loan under part D of 

11 title IV of the Higher Education Act of 

12 1965 (20 U.S.C. 1087a et seq.) for that 

13 award year; plus 

14 (ii) the maximum amount that a stu15 dent is eligible to receive through a Fed16 eral Direct Unsubsidized Stafford loan 

17 under part D of title IV of the Higher 

18 Education Act of 1965 (20 U.S.C. 1087a 

19 et seq.) for that award year. 

20 (f) ELIGIBLE INSTITUTIONS.— 

21 (1) IN GENERAL.—An eligible institution, for 

22 purposes of this section, means an institution of 

23 higher education, that— 

24 (A) submits an application to the State at 

25 such time, in such manner, and containing such 


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1 information as the State may reasonably re2 quire; 

3 (B) agrees to participate in the Pay It 

4 Forward Contribution Plan and commits to 

5 participation in research that may be related to 

6 the Pay It Forward Contribution Plan; and 

7 (C) agrees to maintain— 

8 (i) in the case of an institution of 

9 higher education in which the entire insti10 tution is participating, the level of institu11 tional financial aid, including the level of 

12 institutional funding for student grants 

13 and loans, as adjusted for inflation by the 

14 Consumer Price Index for All Urban Con15 sumers published by the Department of 

16 Labor (CPI–U), that the institution pro17 vides at the time of the application to par18 ticipate in the Pay It Forward Contribu19 tion Plan throughout the duration of the 

20 Pay It Forward Contribution Plan; or 

21 (ii) in the case of a department, 

22 school, or program within an institution of 

23 higher education, maintain the level of aid 

24 described in clause (i) on a department, 

25 school, or program-wide basis. 


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1 (2) SELECTION OF PARTICIPATING INSTITU2 TIONS.— 

3 (A) IN GENERAL.—If a sufficient number 

4 of eligible institutions in a State receiving a 

5 grant under this section wish to participate in 

6 the Pay It Forward Contribution Plan, such 

7 State shall establish methods for selecting eligi8 ble institutions to participate, or otherwise set 

9 standards for participation, in such a way that 

10 meets the requirements of this paragraph and 

11 maximizes the utility of the research that re12 sults from the evaluation of the Pay It Forward 

13 Contribution Plan. 

14 (B) CRITERIA.—In selecting eligible insti15 tutions under subparagraph (A), the State shall 

16 consider the extent to which selected institu17 tions will represent varied geographic locations 

18 and types of institutions (such as community 

19 colleges, institutions that offer 4-year programs, 

20 or other variations in the types of institutions 

21 that are selected). 

22 (C) PREFERENCE.—In selecting eligible in23 stitutions under subparagraph (A), the State 

24 shall give preference to eligible institutions that 

25 have a history of making an effort to reduce or 


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1 hold constant tuition and mandatory fees and 

2 cost of attendance or have a plan to reduce or 

3 hold constant tuition and mandatory fees and 

4 cost of attendance, as determined by the State. 

5 (3) ANNOUNCEMENT OF PARTICIPANTS.—Each 

6 State receiving a grant under this section shall an7 nounce each eligible institution that is selected for 

8 participation in the Pay It Forward Contribution 

9 Plan at a time that provides students at partici10 pating eligible institutions with adequate notice in 

11 advance of the commencement of the Pay It For12 ward Contribution Plan at that institution. 

13 (4) STATE AS GRANT RECIPIENT.—The Sec14 retary may award grants to States that have devel15 oped, or are in the process of developing, pilot Pay 

16 It Forward grant programs at the State level to en17 able the State to carry out the activities described 

18 in this Act as if such State were an eligible institu19 tion selected for participation in the Pay It Forward 

20 Contribution Plan. 

21 (g) TERMS OF THE PAY IT FORWARD CONTRIBUTION

22 PLAN.—If a student who attends a participating eligible 

23 institution has applied for and enrolled in the Pay It For24 ward Contribution Plan as described in subsection 

25 (e)(1)(B)— 


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1 (1) the State shall pay— 

2 (A) to the participating institution that 

3 such student attends not less than an amount 

4 equal to the cost of tuition and mandatory fees 

5 during the time that the student is enrolled as 

6 an undergraduate at the participating eligible 

7 institution and is participating in the Pay It 

8 Forward Contribution Plan, and for a period of 

9 not more than— 

10 (i) 4 years; or 

11 (ii) another period of time (such as a 

12 certain number of college credits or aca13 demic years completed) that the State, the 

14 institution, and the student shall determine 

15 and specify in the agreement described 

16 under paragraph (3); and 

17 (B) a student who attends a participating 

18 eligible institution and has applied for and en19 rolled in the Pay It Forward Contribution Plan 

20 any additional costs of attendance that are 

21 agreed to by the State, the institution, and the 

22 student and are established in the contract de23 scribed in paragraph (3), except that such addi24 tional costs shall be in an amount such that the 

25 sum of such additional costs and the amount of 


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1 tuition and fees described in subparagraph (A) 

2 shall, for each such student and for each award 

3 year, not exceed the amount of the tuition and 

4 mandatory fees for a student at the most ex5 pensive public institution of higher education in 

6 the State for the type of institution the partici7 pating student attends (including a 4-year insti8 tution, 2-year institution, or 1-year institution) 

9 for that award year; 

10 (2) the State shall ensure that variations in the 

11 time that a student’s tuition and mandatory fees is 

12 paid by the State shall be reflected in— 

13 (A) the length of the contribution period 

14 established in the student’s Pay It Forward 

15 Contribution Plan agreement described under 

16 paragraph (3), except that the length of such 

17 contribution period shall not exceed 25 years; 

18 and 

19 (B) the percentage of annual income that 

20 such student shall contribute, as established in 

21 the student’s Pay It Forward Contribution Plan 

22 agreement described under paragraph (3); 

23 (3) the student shall sign a contract agreement, 

24 which shall include— 


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1 (A) the period of time (such as a certain 

2 number of college credits or academic years 

3 completed) during which the State will pay the 

4 institution that the student attends not less 

5 than an amount equal to the cost of tuition and 

6 mandatory fees that the student requests to 

7 have provided through the Pay It Forward Con8 tribution Plan while the student is enrolled at 

9 such participating eligible institution; and 

10 (B) any additional costs of attendance that 

11 the State agrees to pay for such student 

12 through the Pay It Forward Contribution Plan 

13 while the student is enrolled at such partici14 pating eligible institution; and 

15 (C) a statement that the student will con16 tribute to the State a certain percentage (not to 

17 exceed 5 percent) of the student’s annual in18 come for a specified number of years upon 

19 graduation from such institution of higher edu20 cation, successful completion of the student’s 

21 course of study, or when such student ceases to 

22 be enrolled at such institution of higher edu23 cation, as determined by the State, and the stu24 dent shall be required to begin making such 

25 contributions on the date that is the later of— 


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1 (i) 1 calendar year after graduation 

2 from such institution of higher education, 

3 successful completion of the student’s 

4 course of study, or when such student 

5 ceases to be enrolled at such institution of 

6 higher education, as determined by the 

7 State; or 

8 (ii) 1 calendar year after the comple9 tion of a year that the student is enrolled 

10 in the Pay It Forward Contribution Plan; 

11 (4) the student shall continue to be eligible to 

12 obtain any grants, scholarships, or funds that do not 

13 have to be repaid (including Federal Pell Grants or 

14 any other Federal, State, or institutional grant 

15 money) that the student would otherwise be eligible 

16 to receive if the student was not a participant in the 

17 Pay It Forward Contribution Plan and that are ap18 plied toward the student’s tuition and mandatory 

19 fees at the eligible institution, and the amount of 

20 such grants, scholarships, or funds shall be deducted 

21 from the amount that the State would otherwise pay 

22 toward the student’s tuition and mandatory fees 

23 under the Pay It Forward Contribution Plan, there24 by proportionately reducing the percentage of a par25 ticipating student’s annual income that the student 


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1 will be required to contribute or the duration of the 

2 student’s contribution period, as described under 

3 paragraph (3); 

4 (5) the student shall continue to be eligible to 

5 obtain any other student loans, including Federal 

6 student loans (except for Federal Direct Stafford 

7 Loans under part D of title IV of the Higher Edu8 cation Act of 1965 (20 U.S.C. 1087a et seq.)), that 

9 the student would otherwise be eligible to receive if 

10 the student was not a participant in the Pay It For11 ward Contribution Plan except that— 

12 (A) any funds received by a student under 

13 the Pay It Forward Contribution Plan shall be 

14 considered estimated financial assistance for 

15 purposes of calculations under section 

16 428(a)(2)(C) of the Higher Education Act of 

17 1965 (20 U.S.C. 1078(a)(2)(C)); and 

18 (B) the amount of such loans shall be de19 ducted from the amount that the State would 

20 otherwise pay toward the student’s tuition and 

21 mandatory fees under the Pay It Forward Con22 tribution Plan, thereby proportionately reducing 

23 the percentage of a participating student’s an24 nual income that the student will be required to 

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1 tribution period, as described under paragraph 

2 (3); and 

3 (6) if the student obtains Federal student 

4 loans, such student shall remain eligible for applica5 ble Federal loan repayment, forgiveness, or similar 

6 programs regarding such Federal student loans to 

7 the same extent that the student would be eligible 

8 for such repayment, forgiveness, or similar programs 

9 if the student were not also participating in the Pay 

10 It Forward Contribution Plan. 

11 (h) METHOD OF CONTRIBUTION COLLECTION.—The 

12 Secretary, in consultation with the Secretary of the Treas13 ury or a designee of the Secretary of the Treasury, shall 

14 work with appropriate State agencies to develop an effi15 cient mechanism for students who enroll in the Pay It 

16 Forward Contribution Plan, including using existing stu17 dent loan repayment structures, wage withholding (such 

18 as preauthorized automatic electronic funds transfers), or 

19 other suitable methods as the respective State agencies 

20 may determine and as approved by the Secretary. 

21 (i) STATE REPORT.—Each State receiving a grant 

22 under this section shall annually prepare and submit a re23 port to the Secretary containing such information about 

24 the grant program as the Secretary may require. 


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1 SEC. 6. ADVISORY COUNCIL. 

2 (a) IN GENERAL.—The Secretary shall establish, and 

3 appoint members to, a technical advisory council to make 

4 recommendations to the Secretary about— 

5 (1) how to design an evaluation of the Pay It 

6 Forward Contribution Plan described under section 

7 5; 

8 (2) how to maximize the utility of the research 

9 results that may be used to evaluate such program; 

10 and 

11 (3) implementation issues and solutions for 

12 State-based Pay It Forward model pilot programs, 

13 which may include applying a State-based Pay It 

14 Forward model pilot program for nontraditional stu15 dents, including students who are older, already 

16 working, or attending school at night, and in cases 

17 in which graduates voluntarily leave the workforce. 

18 (b) MEMBERS OF THE COUNCIL.—The technical ad19 visory council established under this section shall include 

20 not more than 11 members, of whom— 

21 (1) not less than 3 members shall be academic 

22 researchers with expertise in higher education; 

23 (2) not less than 2 members shall have exper24 tise in quantitative program evaluation; 

25 (3) not less than 2 members shall be student 

26 advocates; and 


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1 (4) not less than 2 members shall be experts in 

2 budgetary and financial matters. 

3 (c) REPORT.—The technical advisory council estab4 lished under this section shall prepare and submit a report 

5 to the Secretary containing the recommendations de6 scribed in subsection (a). 

7 SEC. 7. IMPLEMENTATION STUDY. 

8 (a) INITIAL EVALUATION.—Not later than 5 years 

9 after the establishment of the State Pay It Forward mod10 els under section 5, the Secretary shall, after consideration 

11 of the advisory council recommendations regarding how to 

12 evaluate the Pay It Forward Contribution Plan described 

13 under section 6(a), conduct an initial evaluation of the 

14 Pay It Forward Contribution Plan, which may include an 

15 evaluation of— 

16 (1) how the rates of contribution under the Pay 

17 It Forward model may differ according to different 

18 income levels; 

19 (2) the rates of students who fail to contribute 

20 funds as agreed to under the Pay It Forward model; 

21 (3) how best to establish a student’s agreement 

22 described under section 5(g)(3), or a similar agree23 ment made under another Pay It Forward model, in24 cluding what percentage of a student’s income the 


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1 student should be required to contribute and what is 

2 an appropriate time period for contribution; 

3 (4) ways to prevent increases in tuition and 

4 other education costs; and 

5 (5) ways to integrate existing Federal student 

6 loan repayment and forgiveness programs into the 

7 Pay It Forward model. 

8 (b) EVALUATION.—Not later than 10 years after the 

9 establishment of the Pay It Forward Contribution Plan 

10 described under section 5, the Secretary shall, after con11 sideration of the advisory council recommendations re12 garding how to evaluate the Pay It Forward Contribution 

13 Plan— 

14 (1) evaluate whether existing student loan debt 

15 could be converted into a Pay It Forward model; 

16 (2) evaluate the impact of the Pay It Forward 

17 model on a student’s career choices and employment, 

18 including how such model may impact a student’s 

19 employment in public service jobs and level of em20 ployment (such as whether a student participating in 

21 the Pay It Forward model will go on to part time 

22 or full time employment); 

23 (3) evaluate mechanisms through which employ24 ers could provide funds toward the contributions 


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1 that an employee is required to make under a Pay 

2 It Forward model contribution agreement; 

3 (4) examine the long-term solvency and feasi4 bility of an expanded Pay It Forward program; and 

5 (5) examine the distributional implications of 

6 allowing students to opt out of participation in a 

7 Pay It Forward model program as compared to re8 quiring all students who are enrolled at a partici9 pating institution to participate in a Pay It Forward 

10 model program. 

11 (c) REPORT.—Upon completion of the evaluation de12 scribed under subsection (a), the Secretary shall prepare 

13 and submit a report containing the results of such evalua14 tion to the Committee on Health, Education, Labor, and 

15 Pensions of the Senate, the Committee on Banking, Hous16 ing, and Urban Affairs of the Senate, the Committee on 

17 Finance of the Senate, the Committee on Education and 

18 the Workforce of the House of Representatives, the Com19 mittee on Financial Services of the House of Representa20 tives, and the Committee on Ways and Means of the 

21 House of Representatives. 

22 SEC. 8. EXPANDED IMPLEMENTATION. 

23 The Secretary may expand the Pay It Forward 

24 model, including by developing Pay It Forward model pilot 

25 programs for students pursuing post-baccalaureate deVerDate Mar 15 2010 21:58 Jan 07, 2014 Jkt 039200 PO 00000 Frm 00031 Fmt 6652 Sfmt 6201 E:\BILLS\S1884.IS S1884

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1 grees that relate to the medical profession in order to meet 

2 the need for more primary medical care providers, increas3 ing the number or duration of grants to States for car4 rying out a Pay It Forward State pilot program, or estab5 lishing a Federal program based on the Pay It Forward 

6 model, if the Secretary determines that doing so— 

7 (1) will not increase the cost to the Federal 

8 Government for carrying out Federal loan programs 

9 under title IV of the Higher Education Act of 1965 

10 (20 U.S.C. 1070 et seq.); 

11 (2) may be carried out using amounts available 

12 for the programs under title IV of the Higher Edu13 cation Act of 1965 (20 U.S.C. 1070 et seq.); and 

14 (3) is in the best interests of students and the 

15 Nation in advancing national priorities for edu16 cation, health, and economic development. 

17 SEC. 9. WAIVER. 

18 (a) STATE APPLICATION FOR WAIVER.—A State 

19 awarded a grant under this Act may apply to the Sec20 retary to waive a requirement of the grant. 

21 (b) SECRETARY AUTHORITY.—The Secretary may 

22 waive any provision in this Act if the Secretary determines 

23 that doing so would be in the best interest of students 

24 and achieve the goals of the Pay It Forward model. 


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1 SEC. 10. PAY IT FORWARD FUND. 

2 (a) ESTABLISHMENT OF A FUND.—There is estab3 lished in the Treasury a fund, to be known as the ‘‘Pay 

4 It Forward Fund’’ (referred to in this section as the 

5 ‘‘Fund’’), to be administered by the Secretary of Edu6 cation, in which all funds received in Pay It Forward con7 tributions under this Act shall be deposited. 

8 (b) USE.—The amounts in the Fund shall be made 

9 available to the Secretary of Education in order to carry 

10 out this Act. 

11 SEC. 11. AMOUNTS AVAILABLE FOR PAY IT FORWARD FROM 

12 STAFFORD LOAN PROGRAM. 

13 Amounts made available under any Act to carry out 

14 the Federal Direct Stafford Loan Program under part D 

15 of title IV of the Higher Education Act of 1965 (20 U.S.C. 

16 1087a et seq.) shall be available to the Secretary of Edu17 cation to carry out the Pay It Forward program under 

18 this Act. 

Æ 


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