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[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 1712 Introduced in Senate (IS)]

<DOC>

115th Congress
  1st Session
                                S. 1712

To amend the Higher Education Act of 1965 to provide for the automatic 
 recertification of income for income-driven repayment plans, and for 
                            other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             August 2, 2017

   Mr. Wyden introduced the following bill; which was read twice and 
  referred to the Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL

 
To amend the Higher Education Act of 1965 to provide for the automatic 
 recertification of income for income-driven repayment plans, and for 
                            other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Streamlining Income-driven, 
Manageable Payments on Loans for Education Act'' or the ``SIMPLE Act''.

SEC. 2. AUTOMATIC INCOME MONITORING PROCEDURES AFTER A TOTAL AND 
              PERMANENT DISABILITY DISCHARGE.

    Section 437(a) of the Higher Education Act of 1965 (20 U.S.C. 
1087(a)) is amended by adding at the end the following:
            ``(3) Automatic income monitoring.--
                    ``(A) In general.--Not later than 2 years after the 
                date of enactment of the Streamlining Income-driven, 
                Manageable Payments on Loans for Education Act, the 
                Secretary shall establish and implement, with respect 
                to any borrower described in subparagraph (B), 
                procedures to--
                            ``(i) obtain (for each year of the income-
                        monitoring period described in subparagraph (B) 
                        and without further action by the borrower) 
                        such information as is reasonably necessary 
                        regarding the income of such borrower (and the 
                        borrower's spouse, if applicable) for the 
                        purpose of determining the borrower's continued 
                        eligibility for the loan discharge described in 
                        subparagraph (B) for such year, and any other 
                        information necessary to determine such 
                        continued eligibility of the borrower for such 
                        year, except that--
                                    ``(I) in the case of a borrower 
                                whose returns and return information 
                                indicate that the borrower has no 
                                earned income for any year of such 
                                income-monitoring period, such borrower 
                                shall be treated as not having earned 
                                income in excess of the poverty line 
                                for such year; and
                                    ``(II) this clause shall be subject 
                                to clause (ii);
                            ``(ii) allow the borrower, at any time, to 
                        opt out of clause (i) and prevent the Secretary 
                        from obtaining information under such clause 
                        without further action by the borrower; and
                            ``(iii) provide the borrower with an 
                        opportunity to update the information obtained 
                        under clause (i) before the determination of 
                        the borrower's continued eligibility for such 
                        loan discharge for such year.
                    ``(B) Applicability.--Subparagraph (A) shall 
                apply--
                            ``(i) to each borrower of a covered loan 
                        (defined in section 455(d)(8)) that is 
                        discharged under this subsection or section 
                        464(c)(1)(F) due to the permanent and total 
                        disability of the borrower; and
                            ``(ii) during the income-monitoring period 
                        under this subsection, defined in this 
                        paragraph as the period--
                                    ``(I) beginning on the date on 
                                which such loan is so discharged; and
                                    ``(II) during which the Secretary 
                                determines whether a reinstatement of 
                                the obligation of, and resumption of 
                                collection on, such loan may be 
                                necessary.
                    ``(C) Availability of returns and return 
                information.--Returns and return information may be 
                obtained under subparagraph (A)(i) only to the extent 
                authorized by section 6103(l)(13) of the Internal 
                Revenue Code of 1986.
                    ``(D) Definition.--In this paragraph, the term 
                `returns and return information' has the meaning given 
                the term in section 6103 of the Internal Revenue Code 
                of 1986.''.

SEC. 3. NOTIFICATION AND AUTOMATIC ENROLLMENT PROCEDURES FOR BORROWERS 
              WHO ARE DELINQUENT ON LOANS AND FOR BORROWERS WHO 
              REHABILITATED DEFAULTED LOANS.

    (a) Amendments.--
            (1) Notification and automatic enrollment procedures.--
        Section 455(d) of the Higher Education Act of 1965 (20 U.S.C. 
        1087e(d)) is amended by adding at the end the following:
            ``(6) Notification and automatic enrollment procedures for 
        borrowers who are delinquent on loans.--
                    ``(A) Authority to obtain income information.--
                            ``(i) In general.--In the case of any 
                        borrower who is at least 60 days delinquent on 
                        a covered loan, the Secretary may obtain such 
                        information as is reasonably necessary 
                        regarding the income and family size of the 
                        borrower (and the borrower's spouse, if 
                        applicable).
                            ``(ii) Availability of returns and return 
                        information.--Returns and return information 
                        (as defined in section 6103 of the Internal 
                        Revenue Code of 1986) may be obtained under 
                        this subparagraph only to the extent authorized 
                        by section 6103(l)(13) of such Code.
                    ``(B) Borrower notification.--With respect to each 
                borrower of a covered loan who is at least 60 days 
                delinquent on such loan and who has not been subject to 
                the procedures under this paragraph for such loan in 
                the preceding 120 days, the Secretary shall, as soon as 
                practicable after such 60-day delinquency, provide to 
                the borrower the following:
                            ``(i) Notification that the borrower is at 
                        least 60 days delinquent on at least 1 covered 
                        loan, and a description of all delinquent 
                        covered loans, nondelinquent covered loans, and 
                        noncovered loans of the borrower.
                            ``(ii) A brief description of the repayment 
                        plans for which the borrower is eligible and 
                        the covered loans and noncovered loans of the 
                        borrower that may be eligible for such plans, 
                        based on information available to the 
                        Secretary.
                            ``(iii) Clear and simple instructions on 
                        how to select the repayment plans.
                            ``(iv) The amount of monthly payments for 
                        the covered and noncovered loans under the 
                        repayment plans for which the borrower is 
                        eligible, based on information available to the 
                        Secretary, including, if the income information 
                        of the borrower is available to the Secretary 
                        under subparagraph (A)--
                                    ``(I) the amount of the monthly 
                                payment under each income-driven 
                                repayment plan for which the borrower 
                                is eligible for the borrower's covered 
                                and noncovered loans, based on such 
                                income information; and
                                    ``(II) the income, family size, tax 
                                filing status, and tax year information 
                                on which each monthly payment is based.
                            ``(v) An explanation that in the case of a 
                        borrower for whom adjusted gross income is 
                        unavailable--
                                    ``(I) if the borrower selects to 
                                repay the covered loans of such 
                                borrower pursuant to an income-driven 
                                repayment plan that defines 
                                discretionary income in such a manner 
                                that an individual not required under 
                                section 6012(a)(1) of the Internal 
                                Revenue Code of 1986 to file a return 
                                with respect to income taxes imposed by 
                                subtitle A of such Code may have a 
                                calculated monthly payment greater than 
                                $0, the borrower will be required to 
                                provide the Secretary with other 
                                documentation of income satisfactory to 
                                the Secretary, which documentation the 
                                Secretary may use to determine an 
                                appropriate repayment schedule; and
                                    ``(II) if the borrower selects to 
                                repay such loans pursuant to an income-
                                driven repayment plan that is not 
                                described in subclause (I), the 
                                borrower will not be required to 
                                provide the Secretary with such other 
                                documentation of income, and the 
                                borrower will have a calculated monthly 
                                payment of $0.
                            ``(vi) An explanation that the Secretary 
                        shall take the actions under subparagraph (C) 
                        with respect to such borrower, if--
                                    ``(I) the borrower is 120 days 
                                delinquent on one or more covered loans 
                                and has not selected a new repayment 
                                plan for the covered loans of the 
                                borrower; and
                                    ``(II) in the case of such a 
                                borrower whose repayment plan for the 
                                covered loans of the borrower is not an 
                                income-driven repayment plan, the 
                                monthly payments under such repayment 
                                plan are higher than such monthly 
                                payments would be under an income-
                                driven repayment plan for such loans.
                            ``(vii) Instructions on updating the 
                        information of the borrower obtained under 
                        subparagraph (A).
                    ``(C) Secretary's initial selection of plan.--With 
                respect to each borrower described in subparagraph (B) 
                who has a repayment plan for the covered loans of the 
                borrower that meets the requirements of clause (vi)(II) 
                of subparagraph (B) and has not selected a new 
                repayment plan for such loans in accordance with the 
                notice received under such subparagraph, and who is at 
                least 120 days delinquent on such a loan, the Secretary 
                shall, as soon as practicable--
                            ``(i) in a case in which any of the 
                        borrower's covered loans are eligible for an 
                        income-driven repayment plan--
                                    ``(I)(aa) provide the borrower with 
                                the income-driven repayment plan that 
                                requires the lowest monthly payment 
                                amount for each covered loan of the 
                                borrower, compared to any other such 
                                plan for which the borrower is 
                                eligible; or
                                    ``(bb) if more than one income-
                                driven repayment plan would offer the 
                                borrower the same lowest monthly 
                                payment amount, provide the borrower 
                                with the income-driven repayment plan 
                                that has the most favorable terms for 
                                the borrower;
                                    ``(II) if the plan selected under 
                                subclause (I) is not the income-driven 
                                repayment plan that would have the 
                                lowest monthly payment amount if the 
                                borrower were eligible for such plan 
                                for the borrower's covered loans and 
                                noncovered loans, notify the borrower 
                                of the actions, if any, the borrower 
                                may take to become eligible for such 
                                income-driven repayment plan; and
                                    ``(III) authorize the borrower to 
                                change the Secretary's selection of a 
                                plan under this clause to any plan 
                                described in paragraph (1) for which 
                                the borrower is eligible; and
                            ``(ii) in a case in which none of the 
                        borrower's covered loans are eligible for an 
                        income-driven repayment plan, notify the 
                        borrower of the actions, if any, the borrower 
                        may take for such loans to become eligible for 
                        such a plan.
                    ``(D) Secretary's additional selection of plan.--
                            ``(i) In general.--With respect to each 
                        borrower of a covered loan who selects a new 
                        repayment plan in accordance with the notice 
                        received under subparagraph (B) and who 
                        continues to be delinquent on such loan for a 
                        period described in clause (ii), the Secretary 
                        shall, as soon as practicable after such 
                        period, carry out the procedures described in 
                        clauses (i) and (ii) of subparagraph (C) for 
                        the covered loans of the borrower, if such 
                        procedures would result in lower monthly 
                        repayment amounts on such loan.
                            ``(ii) Description of period.--The duration 
                        of the period described in clause (i) shall be 
                        the amount of time that the Secretary 
                        determines is sufficient to indicate that the 
                        borrower may benefit from repaying such loan 
                        under a new repayment plan, but in no case 
                        shall such period be less than 60 days.
                    ``(E) Opt-out.--A borrower of a covered loan shall 
                have the right to opt out of the procedures under this 
                paragraph.
                    ``(F) Procedures.--The Secretary shall establish 
                procedures as are necessary to effectively implement 
                this paragraph.
            ``(7) Notification and automatic enrollment procedures for 
        borrowers who are rehabilitating defaulted loans.--
                    ``(A) Authority to obtain income information.--
                            ``(i) In general.--In the case of any 
                        borrower who is rehabilitating a covered loan 
                        pursuant to section 428F(a), the Secretary may 
                        obtain such information as is reasonably 
                        necessary regarding the income and family size 
                        of the borrower (and the borrower's spouse, if 
                        applicable).
                            ``(ii) Availability of returns and return 
                        information.--Returns and return information 
                        (as defined in section 6103 of the Internal 
                        Revenue Code of 1986) may be obtained under 
                        this subparagraph only to the extent authorized 
                        by section 6103(l)(13) of such Code.
                    ``(B) Borrower notification.--Not later than 30 
                days after a borrower makes the 6th payment required 
                for the loan rehabilitation described in subparagraph 
                (A), the Secretary shall notify the borrower of the 
                process under subparagraph (C) with respect to such 
                loan.
                    ``(C) Secretary's selection of plan.--With respect 
                to each borrower who has made the 9th payment required 
                for the loan rehabilitation described in subparagraph 
                (A), the Secretary shall, as soon as practicable after 
                such payment--
                            ``(i) in a case in which any of the 
                        borrower's covered loans, without regard to 
                        whether the loan has been so rehabilitated, is 
                        eligible for an income-driven repayment plan--
                                    ``(I)(aa) provide the borrower with 
                                the income-driven repayment plan that 
                                requires the lowest monthly payment 
                                amount for each covered loan of the 
                                borrower, compared to any other such 
                                plan for which the borrower is 
                                eligible; or
                                    ``(bb) if more than one income-
                                driven repayment plan would offer the 
                                borrower the same lowest monthly 
                                payment amount, provide the borrower 
                                with the income-driven repayment plan 
                                that has the most favorable terms for 
                                the borrower; and
                                    ``(II) if the plan selected under 
                                subclause (I) is not the income-driven 
                                repayment plan that would have the 
                                lowest monthly payment amount if the 
                                borrower were eligible for such plan 
                                for the borrower's covered loans and 
                                noncovered loans, notify the borrower 
                                of the actions, if any, the borrower 
                                may take to become eligible for such 
                                income-driven repayment plan; and
                            ``(ii) in a case in which none of the 
                        borrower's covered loans are eligible for an 
                        income-driven repayment plan, notify the 
                        borrower of the actions, if any, the borrower 
                        may take for such a loan to become eligible for 
                        such a plan.
                    ``(D) Opt-out.--A borrower of a covered loan shall 
                have the right to opt out of the procedures under this 
                paragraph.
                    ``(E) Procedures.--The Secretary shall establish 
                procedures as are necessary to effectively implement 
                this paragraph.''.
            (2) Definitions.--Section 455(d) of the Higher Education 
        Act of 1965 (20 U.S.C. 1087e(d)), as amended by paragraph (1), 
        is further amended by adding at the end the following:
            ``(8) Definitions.--In this subsection:
                    ``(A) Covered loan.--The term `covered loan' 
                means--
                            ``(i) a loan made under this part;
                            ``(ii) a loan purchased under section 459A; 
                        or
                            ``(iii) a loan that has been assigned to 
                        the Secretary under section 428(c)(8) or part 
                        E.
                    ``(B) Income-driven repayment plan.--The term 
                `income-driven repayment plan' means a plan described 
                in subparagraph (D) or (E) of paragraph (1).
                    ``(C) Noncovered loan.--The term `noncovered loan' 
                means a loan made, insured, or guaranteed under this 
                title that is not a covered loan.''.
            (3) Changing plans.--Section 493C(b)(8) of the Higher 
        Education Act of 1965 (20 U.S.C. 1098e(b)(8)) is amended to 
        read as follows:
            ``(8) a borrower who is repaying a loan made, insured, or 
        guaranteed under part B or D pursuant to income-based repayment 
        may elect, at any time, to terminate repayment pursuant to 
        income-based repayment and repay such loan under any repayment 
        plan for which the loan is eligible in accordance with the 
        requirements of part B or part D, respectively; and''.
    (b) Effective Date; Application.--
            (1) Automatic enrollment.--The amendments made by 
        paragraphs (1) and (2) of subsection (a) shall--
                    (A) take effect as soon as the Secretary of 
                Education determines practicable after the Secretary 
                finalizes the procedures under section 5, but not later 
                than 2 years after the date of enactment of this Act; 
                and
                    (B) apply to all borrowers of covered loans (as 
                defined in section 455(d)(8) of the Higher Education 
                Act of 1965, as added by subsection (a)).
            (2) Changing plans.--The amendment made by subsection 
        (a)(3) shall take effect on the date of enactment of this Act.

SEC. 4. AUTOMATIC RECERTIFICATION OF INCOME.

    (a) Income Contingent Repayment.--Section 455(e) of the Higher 
Education Act of 1965 (20 U.S.C. 1087e(e)) is amended--
            (1) in paragraph (3)--
                    (A) by striking ``does not reasonably reflect the 
                borrower's current income'' and inserting ``whose 
                income has decreased relative to the adjusted gross 
                income available to the Secretary''; and
                    (B) by inserting ``, consistent with the procedures 
                established under paragraph (8)(B)(iv)'' before the 
                period at the end; and
            (2) by adding at the end the following:
            ``(8) Automatic recertification.--
                    ``(A) Definition.--In this paragraph, the term 
                `covered loan' has the meaning given the term in 
                subsection (d)(8).
                    ``(B) In general.--Beginning as soon as the 
                Secretary determines practicable after the Secretary 
                finalizes the procedures under section 5 of the 
                Streamlining Income-driven, Manageable Payments on 
                Loans for Education Act, but not later than 2 years 
                after the date of enactment of such Act, the Secretary 
                shall establish and implement, with respect to any 
                borrower described in subparagraph (C), procedures to--
                            ``(i) obtain (for each year of repayment 
                        and without further action by the borrower) 
                        such information as is reasonably necessary 
                        regarding the income of such borrower (and the 
                        borrower's spouse, if applicable), for the 
                        purpose of determining the repayment obligation 
                        of the borrower for such year, including 
                        information with respect to the borrower's 
                        family size in accordance with the procedures 
                        under section 5 of the Streamlining Income-
                        driven, Manageable Payments on Loans for 
                        Education Act, subject to clause (ii);
                            ``(ii) allow the borrower, at any time, to 
                        opt out of clause (i) and prevent the Secretary 
                        from obtaining information under such clause 
                        without further action by the borrower;
                            ``(iii) provide the borrower with an 
                        opportunity to update the information obtained 
                        under clause (i) before the determination of 
                        the annual repayment obligation of the 
                        borrower; and
                            ``(iv) in the case of a borrower for whom 
                        adjusted gross income is unavailable--
                                    ``(I) if the borrower has selected 
                                to repay the covered loans of such 
                                borrower pursuant to an income 
                                contingent repayment plan that defines 
                                discretionary income in such a manner 
                                that an individual not required under 
                                section 6012(a)(1) of the Internal 
                                Revenue Code of 1986 to file a return 
                                with respect to income taxes imposed by 
                                subtitle A of such Code may have a 
                                calculated monthly payment greater than 
                                $0, the borrower will be required to 
                                provide the Secretary with other 
                                documentation of income satisfactory to 
                                the Secretary, which documentation the 
                                Secretary may use to determine an 
                                appropriate repayment schedule; or
                                    ``(II) if the borrower has selected 
                                to repay such loans pursuant to an 
                                income contingent repayment that is not 
                                described in subclause (I), the 
                                borrower will not be required to 
                                provide the Secretary with such other 
                                documentation of income, and the 
                                borrower will have a calculated monthly 
                                payment of $0.
                    ``(C) Applicability.--Subparagraph (B) shall apply 
                to each borrower of a covered loan who, on or after the 
                date on which the Secretary establishes procedures 
                under such subparagraph--
                            ``(i) selects, or for whom the Secretary 
                        selects under subparagraph (C) or (D) of 
                        paragraph (6) or paragraph (7)(C) of subsection 
                        (d), or section 428(m)(1), an income contingent 
                        repayment plan; or
                            ``(ii) recertifies income and family size 
                        under such plan.
                    ``(D) Availability of returns and return 
                information.--Returns and return information (as 
                defined in section 6103 of the Internal Revenue Code of 
                1986) may be obtained under subparagraph (B)(i) only to 
                the extent authorized by section 6103(l)(13) of such 
                Code.
                    ``(E) Other requirements.--The procedures 
                established by the Secretary under this paragraph shall 
                be consistent with the requirements of paragraphs (1) 
                through (7), except as otherwise provided in this 
                paragraph.''.
    (b) Income-Based Repayment.--Section 493C(c) of the Higher 
Education Act of 1965 (20 U.S.C. 1098e(c)) is amended--
            (1) by striking ``The Secretary shall establish'' and 
        inserting the following:
            ``(1) In general.--The Secretary shall establish''; and
            (2) by striking ``The Secretary shall consider'' and 
        inserting the following:
            ``(2) Procedures for eligibility.--The Secretary shall--
                    ``(A) consider'';
            (3) by striking ``428C(b)(1)(E).'' and inserting the 
        following: ``428C(b)(1)(E); and
                    ``(B) beginning as soon as the Secretary determines 
                practicable after the Secretary finalizes the 
                procedures under section 5 of the Streamlining Income-
                driven, Manageable Payments on Loans for Education Act, 
                but not later than 2 years after the date of enactment 
                of such Act, carry out, with respect to borrowers of 
                any covered loan (as defined in section 455(d)(8)), 
                procedures for income-based repayment plans that are 
                equivalent to the procedures carried out under section 
                455(e)(8) with respect to income contingent repayment 
                plans.''.

SEC. 5. STUDY AND PROCEDURES ON DETERMINING FAMILY SIZE.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Secretary of Education shall--
            (1) jointly with the Secretary of the Treasury, conduct a 
        study, which meets the specifications described in subsection 
        (b), on the effect of using data from the Internal Revenue 
        Service on the deduction for personal exemptions provided by 
        section 151 of the Internal Revenue Code of 1986 for a proxy 
        for family size in an income-driven repayment plan, and publish 
        such study in the Federal Register;
            (2) use the results of the study conducted under paragraph 
        (1) to develop procedures for determining family size for the 
        automatic recertification of income for an income-driven 
        repayment plan in a manner that minimizes burdens and 
        unintended harm to borrowers;
            (3) publish the procedures developed under paragraph (2) in 
        the Federal Register; and
            (4) after a notice and comment period on such procedures, 
        use such comments to finalize the procedures.
    (b) Specifications.--The study conducted under subsection (a)(1) 
shall--
            (1) determine how closely such personal exemptions match 
        the family size that borrowers report on their income-driven 
        repayment plan request form;
            (2) compare the borrower's actual monthly payment amount 
        with the monthly payment amount borrowers would have using 
        family size information derived from tax returns; and
            (3) use data from more than one year, where possible, to 
        analyze how much family size changes over time.
    (c) Definition.--The term ``income-driven repayment plan'' has the 
meaning given the term in section 455(d)(8) of the Higher Education Act 
of 1965, as amended by this Act.

SEC. 6. DISCLOSURE OF TAX RETURN INFORMATION TO CARRY OUT CERTAIN 
              HIGHER EDUCATION LOAN PROGRAMS.

    (a) In General.--Paragraph (13) of section 6103(l) of the Internal 
Revenue Code of 1986 is amended to read as follows:
            ``(13) Disclosure of returns and return information for 
        purposes of student loan administration.--
                    ``(A) In general.--The Secretary, subject to such 
                requirements and conditions as the Secretary may 
                prescribe, shall upon written request from the 
                Secretary of Education disclose to officers and 
                employees of the Department of Education returns and 
                return information with respect to a taxpayer who has 
                received an applicable student loan.
                    ``(B) Restriction on use of disclosed 
                information.--Return information disclosed under 
                subparagraph (A) may be used by officers and employees 
                of the Department of Education only for the purposes 
                of, and to the extent necessary for purposes of--
                            ``(i) carrying out income monitoring under 
                        section 437(a) of the Higher Education Act of 
                        1965 (20 U.S.C. 1087(a)),
                            ``(ii) establishing the appropriate income 
                        contingent repayment amount in connection with 
                        an applicable student loan,
                            ``(iii) establishing the appropriate 
                        repayment amount under an applicable income-
                        driven repayment plan (as defined in section 
                        455(d)(8) of such Act (20 U.S.C. 1087e(d)) in 
                        connection with an applicable student loan 
                        for--
                                    ``(I) borrowers who have selected 
                                such a plan, and
                                    ``(II) in the case of any 
                                recertification under section 455(e)(8) 
                                or 493C(c)(2)(B) of the Higher 
                                Education Act of 1965 (20 U.S.C. 
                                1087e(e); 1098e(c)), borrowers who are 
                                enrolled in such a plan,
                            ``(iv) in the case of borrowers who are at 
                        least 60 days delinquent on an applicable 
                        student loan--
                                    ``(I) providing notice of 
                                eligibility for an income-driven 
                                repayment plan (as so defined) pursuant 
                                to section 455(d)(6)(B) of the Higher 
                                Education Act of 1965 (20 U.S.C. 
                                1087e(d)), and
                                    ``(II) automatic enrollment in such 
                                an income-driven repayment plan after 
                                such borrowers are at least 120 days 
                                delinquent on such a loan pursuant to 
                                section 455(d)(6)(C) of such Act (20 
                                U.S.C. 1087e(d)), and
                            ``(v) in the case of borrowers who are 
                        rehabilitating defaulted loans, providing 
                        notice of eligibility for an income-driven 
                        repayment plan (as so defined) and automatic 
                        enrollment in such a plan pursuant to section 
                        455(d)(7) of the Higher Education Act of 1965 
                        (20 U.S.C. 1087e(d)).
                    ``(C) Disclosure to certain contractors.--Officers 
                and employees of the Department of Education may 
                disclose the information described in subparagraph (A) 
                to persons awarded contracts by the Secretary of 
                Education under section 456 of the Higher Education Act 
                of 1965 (20 U.S.C. 1087f) to the extent necessary for 
                the purposes described in subparagraph (B).
                    ``(D) Spousal information for married individuals 
                filing separate returns.--For purposes of this 
                paragraph, in the case of a married individual filing a 
                separate return, the term `taxpayer' includes the 
                spouse of that individual if the Secretary of Education 
                requests information from the spouse of that individual 
                and the individual and the spouse have consented in 
                writing.
                    ``(E) Applicable student loan.--
                            ``(i) In general.--For purposes of this 
                        paragraph, the term `applicable student loan' 
                        means--
                                    ``(I) any loan which is made, 
                                insured, or guaranteed under a program 
                                authorized under part B or D of title 
                                IV of the Higher Education Act of 1965 
                                (20 U.S.C. 1071 et seq.; 1087a et 
                                seq.), and
                                    ``(II) any loan which is made under 
                                part E of such title IV (20 U.S.C. 
                                1087aa et seq.) which is in default and 
                                has been assigned to the Department of 
                                Education.
                            ``(ii) Exception.--For purposes of 
                        subparagraph (B)(iv), the term `applicable 
                        student loan' shall not include any loan made, 
                        insured, or guaranteed under part B of title IV 
                        of the Higher Education Act of 1965 (20 U.S.C. 
                        1071 et seq.) unless such loan is in default 
                        and has been assigned to the Department of 
                        Education.''.
    (b) Conforming Amendments.--
            (1) Section 6103(a)(3) of such Code is amended by inserting 
        ``(13),'' after ``(12),''.
            (2) Section 6103(p)(4) of such Code is amended--
                    (A) by inserting ``(13),'' after ``(l)(10),'' each 
                place it occurs, and
                    (B) by inserting ``(13),'' after ``(10),'' in the 
                third sentence thereof.
    (c) Effective Date.--The amendments made by this section shall 
apply to disclosures made after the date of enactment of this Act.
                                 <all>
```