II 

114TH CONGRESS 

1ST SESSION S. 1948 

To increase awareness of the Federal student loan income-based repayment 

plan, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

AUGUST 5, 2015 

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

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

A BILL 

To increase awareness of the Federal student loan incomebased repayment plan, and for other purposes. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Access to Fair Finan5 cial Options for Repaying Debt Act of 2015’’ or the ‘‘AF6 FORD Act’’. 


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1 SEC. 2. NOTICE OF REPAYMENT PLAN OPTIONS AT THE 

2 TIME OF ENTRANCE COUNSELING. 

3 Section 485(l)(2) of the Higher Education Act of 

4 1965 (20 U.S.C. 1092(l)(2)) is amended by adding at the 

5 end the following: 

6 ‘‘(L) Information on the 2 repayment op7 tions that the borrower of a loan made on or 

8 after July 1, 2016, will have for repaying the 

9 loan, including— 

10 ‘‘(i) an income-based repayment plan, 

11 as described under section 493C(f); and 

12 ‘‘(ii) a fixed repayment plan described 

13 in section 493E.’’. 

14 SEC. 3. ANNUAL LOAN COUNSELING. 

15 Section 485 of the Higher Education Act of 1965 (20 

16 U.S.C. 1092) is amended by adding at the end the fol17 lowing: 

18 ‘‘(n) ANNUAL LOAN COUNSELING.— 

19 ‘‘(1) INVITATION.—Each institution of higher 

20 education participating in any program under this 

21 title shall annually provide each student described in 

22 paragraph (3) with a written notification (which 

23 may be in electronic form) inviting the student to at24 tend financial counseling described in paragraph (2). 

25 ‘‘(2) CONTENTS OF ANNUAL LOAN COUN26 SELING.—The counseling described in paragraph (1) 


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1 may be provided in person or via telephone or elec2 tronic form, and shall include each of the following: 

3 ‘‘(A) Information on each student loan 

4 that the institution is aware that the student 

5 has borrowed, including Federal loans, private 

6 loans, and loans from the institution. 

7 ‘‘(B) The total amount of the cumulative 

8 student loan debt from the loans described in 

9 subparagraph (A). 

10 ‘‘(C) The student’s estimated monthly re11 payment amount for Federal loans, which shall 

12 include— 

13 ‘‘(i) estimates based on each applica14 ble debt bracket for the fixed repayment 

15 plan described under section 493E; and 

16 ‘‘(ii) an additional estimate based on 

17 the income-based repayment plan described 

18 under section 493C(f), calculated on the 

19 basis of a hypothetical income and a family 

20 size of 1. 

21 ‘‘(D) A statement that the monthly 

22 amount described in subparagraph (C) does not 

23 include any amounts that the student may be 

24 required to repay for private or institutional 

25 loans. 


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1 ‘‘(E) For each Federal loan described in 

2 subparagraph (A), the interest rate for the 

3 loan, as of the date of the counseling, and a 

4 statement that the interest rate on student 

5 loans may vary based on when the loan was 

6 borrowed and other factors. 

7 ‘‘(F) A notification that some students 

8 may qualify for a Federal Pell Grant. 

9 ‘‘(G) The percentage of the total aggregate 

10 borrowing limit that the student has reached, as 

11 of the date of the counseling, for Federal Direct 

12 Stafford Loans and Federal Direct Unsub13 sidized Stafford Loans, and a statement that 

14 such aggregate borrowing limit may change 

15 based on the borrower’s student status (whether 

16 undergraduate or graduate) or if there is a 

17 change in the borrower’s dependency status. 

18 ‘‘(H) Any information, including financial 

19 planning resources, that the institution deter20 mines is appropriate to include in the coun21 seling. 

22 ‘‘(I) A statement that the information pro23 vided through the counseling contains only esti24 mates and information relevant to the student 

25 to the best of the institution’s knowledge. 


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1 ‘‘(3) STUDENTS RECEIVING NOTIFICATION.— 

2 The notification described in paragraph (1) shall be 

3 provided to each student— 

4 ‘‘(A) who is enrolled in the institution; and 

5 ‘‘(B) who is a student for which the insti6 tution has knowledge that the student has 1 or 

7 more student loans, including any such loans 

8 from another institution that a student may 

9 have transferred from or been previously en10 rolled in.’’. 

11 SEC. 4. INCOME-BASED REPAYMENT PLAN. 

12 Section 493C of the Higher Education Act of 1965 

13 (20 U.S.C. 1098e) is amended— 

14 (1) in subsection (b)— 

15 (A) in paragraph (8), by striking ‘‘and’’ 

16 after the semicolon; 

17 (B) in paragraph (9), by striking the pe18 riod at the end and inserting ‘‘; and’’; and 

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

20 ‘‘(10) a borrower who is repaying a loan made 

21 under part B or D pursuant to this section may 

22 repay such loan in full at any time without pen23 alty.’’; and 

24 (2) by adding at the end the following: 


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1 ‘‘(f) INCOME-BASED REPAYMENT FOR NEW LOANS

2 ON AND AFTER JULY 1, 2016, AND FOR BORROWERS

3 WHO ENTER IBR AFTER JULY 1, 2016.— 

4 ‘‘(1) IN GENERAL.—The income-based repay5 ment plan shall be carried out in accordance with 

6 this section, except as otherwise specified in this 

7 subsection (including through the special terms de8 scribed in paragraph (2))— 

9 ‘‘(A) with respect to any loan issued on or 

10 after July 1, 2016, if such borrower elects the 

11 income-based repayment plan for that loan; and 

12 ‘‘(B) with respect to any borrower who is 

13 repaying a loan made, insured, or guaranteed 

14 under part B or D, if such borrower elects to 

15 repay the loan under the income-based repay16 ment plan on or after July 1, 2016. 

17 ‘‘(2) SPECIAL TERMS.—Notwithstanding any 

18 other provision of this section, with respect to a loan 

19 described under paragraph (1), the following terms 

20 shall apply to the income-based repayment plan: 

21 ‘‘(A)(i) Notwithstanding subsection 

22 (a)(3)(B), the repayment amount under this 

23 subsection shall be an amount equal to 10 per24 cent of the result obtained by calculating, on at 

25 least an annual basis, the amount by which— 


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1 ‘‘(I) the borrower’s, and the bor2 rower’s spouse’s (if applicable), adjusted 

3 gross income; exceeds 

4 ‘‘(II) the applicable percentage of the 

5 poverty line in accordance with clause (ii) 

6 that is applicable to the borrower’s family 

7 size as determined under section 673(2) of 

8 the Community Services Block Grant Act 

9 (42 U.S.C. 9902(2)). 

10 ‘‘(ii) For purposes of clause (i), the term 

11 ‘applicable percentage’ means 150 percent re12 duced by 1 percentage point for each $1,000 by 

13 which the borrower’s adjusted gross income ex14 ceeds $100,000. 

15 ‘‘(B) Subsection (b)(7)(B) shall be applied 

16 by substituting ‘20 years’ for ‘25 years’. 

17 ‘‘(C) A borrower of such a loan shall not 

18 be required to have a partial financial hardship 

19 and may elect, and remain enrolled in, the in20 come-based repayment plan under this sub21 section regardless of income level. 

22 ‘‘(D) Subparagraph (A) of subsection 

23 (b)(6) shall not apply and a borrower’s monthly 

24 payment shall be determined in accordance with 

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1 ceed the monthly repayment amount under a 

2 standard 10-year repayment plan or a fixed re3 payment plan described in section 493E. 

4 ‘‘(E) Subparagraph (B) of subsection 

5 (b)(3) shall not apply. 

6 ‘‘(3) ADDITIONAL SPECIAL TERMS FOR CER7 TAIN BORROWERS.—A borrower described in para8 graph (1)(B)— 

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

10 plan in which the borrower is enrolled on June 

11 30, 2016; 

12 ‘‘(B) may elect to— 

13 ‘‘(i) leave the repayment plan de14 scribed in subparagraph (A) and enter the 

15 income-based repayment plan under this 

16 subsection; 

17 ‘‘(ii) leave the repayment plan de18 scribed in subparagraph (A) and enter a 

19 fixed repayment plan described in section 

20 493E; or 

21 ‘‘(iii) not more than once per calendar 

22 year, switch between the repayment plans 

23 described in clauses (i) and (ii); 

24 ‘‘(C) after electing to leave a repayment 

25 plan other than an income-based repayment 


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1 plan described under this subsection or the 

2 fixed repayment plan described in section 493E, 

3 shall not be permitted to re-elect a repayment 

4 plan that is not an income-based repayment 

5 plan under this subsection or a fixed repayment 

6 plan described in section 493E; and 

7 ‘‘(D) shall retain, for purposes of repay8 ment or cancellation of any outstanding balance 

9 of principal and interest due on a loan (as de10 scribed in subsection (b)(7)) any years of repay11 ment under another income-based or income 

12 contingent repayment plan under this title. 

13 ‘‘(4) CAP ON INTEREST ACCRUAL.—Notwith14 standing any other provision of this Act, the total 

15 amount of interest that accrues during a borrower’s 

16 grace period and the time that a borrower is in re17 payment under this subsection shall not exceed 50 

18 percent of the original principal amount of the 

19 loan.’’. 

20 SEC. 5. FIXED REPAYMENT PLAN. 

21 Part G of title IV of the Higher Education Act of 

22 1965 (20 U.S.C. 1088 et seq.) is amended by adding at 

23 the end the following: 


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1 ‘‘SEC. 493E. FIXED REPAYMENT PLAN. 

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

3 this part on or after July 1, 2016, and a borrower who 

4 is in repayment on a loan made under part B or part D 

5 before July 1, 2016, may elect to repay such loan under 

6 the fixed repayment plan described in this section. 

7 ‘‘(b) FIXED REPAYMENT PLAN.—Under the fixed re8 payment plan, a borrower with a total Federal student 

9 loan debt amount that— 

10 ‘‘(1) is equal to or less than $10,000, shall 

11 repay each loan described in subsection (a) with a 

12 fixed monthly repayment amount paid over a period 

13 of 10 years; 

14 ‘‘(2) is more than $10,000 and less than 

15 $20,000, shall repay each loan described in sub16 section (a) with a fixed monthly repayment amount 

17 paid over a period of— 

18 ‘‘(A) 15 years; or 

19 ‘‘(B) the period described in paragraph 

20 (1), if the borrower chooses; 

21 ‘‘(3) is equal to or greater than $20,000, and 

22 less than $30,000, shall repay each loan described in 

23 subsection (a) with a fixed monthly repayment 

24 amount paid over a period of— 

25 ‘‘(A) 20 years; or 


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1 ‘‘(B) the period described in paragraph (1) 

2 or (2), if the borrower chooses; and 

3 ‘‘(4) is equal to or greater than $30,000, shall 

4 repay each loan described in subsection (a) with a 

5 fixed monthly repayment amount paid over a period 

6 of— 

7 ‘‘(A) 25 years; or 

8 ‘‘(B) the period described in any of para9 graphs (1) through (3), if the borrower choos10 es.’’. 

11 SEC. 6. COUNSELING FOR BORROWERS. 

12 Section 485 of the Higher Education Act of 1965 (20 

13 U.S.C. 1092) is amended— 

14 (1) in subsection (b)(1)(A)— 

15 (A) in clause (iii), by inserting ‘‘on an an16 nual basis, in accordance with section 

17 428(b)(1)(D)(ii) or paragraph (2) or (7) of sec18 tion 455(d) (as applicable)’’ after ‘‘repayment 

19 plans’’; and 

20 (B) in clause (vii)(III), by inserting ‘‘on an 

21 annual basis, in accordance with section 

22 428(b)(1)(D)(ii) or paragraph (2) or (7) of sec23 tion 455(d) (as applicable)’’ after ‘‘repayment 

24 plans’’; and 


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1 (2) in subsection (d)(1), by striking ‘‘including 

2 income-sensitive’’ and all that follows through ‘‘part 

3 D’’ and inserting ‘‘including, beginning on July 1, 

4 2016, income-based repayment plans described in 

5 section 493C(f) and fixed repayment plans under 

6 section 493E’’. 

7 SEC. 7. TERMINATION OF CERTAIN REPAYMENT PLAN OP8 TIONS. 

9 (a) EFFECTIVE DATE; RULEMAKING REGARDING

10 TERMINATION OF CERTAIN REPAYMENT PLANS.— 

11 (1) EFFECTIVE DATE.—This Act, and the 

12 amendments made by this Act, shall take effect on 

13 July 1, 2016. 

14 (2) REGULATIONS.—Before the effective date 

15 described in paragraph (1), the Secretary of Edu16 cation shall carry out a plan to end all eligibility for 

17 repayment plans other than a fixed repayment plan 

18 described in section 493E and an income-based re19 payment plan described under section 493C(f) for 

20 loans made under part B or D of title IV of the 

21 Higher Education Act of 1965, unless the borrower 

22 is enrolled in another repayment plan before such ef23 fective date, in accordance with the amendments 

24 made by this Act. 

25 (b) CHANGES TO CURRENT LAW.— 


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1 (1) Section 428(b) of the Higher Education Act 

2 of 1965 (20 U.S.C. 1078(b)) is amended— 

3 (A) in paragraph (1)— 

4 (i) in subparagraph (D)— 

5 (I) in clause (ii), by striking 

6 ‘‘may annually change the selection of 

7 a repayment plan under this part,’’ 

8 and inserting ‘‘may at any time after 

9 July 1, 2016, and not more frequently 

10 than once per calendar year there11 after, change the selection of a repay12 ment plan under this part to one of 

13 the 2 repayment plans described in 

14 paragraph (9)(C),’’; and 

15 (II) in clause (iii), by striking 

16 ‘‘be subject to income contingent re17 payment in accordance with sub18 section (m);’’ and inserting ‘‘be sub19 ject to income-based repayment in ac20 cordance with section 493C(f);’’; and 

21 (ii) in subparagraph (E)(i), by strik22 ing ‘‘the option of repaying the loan in ac23 cordance with a standard, graduated, in24 come-sensitive, or extended repayment 

25 schedule (as described in paragraph (9)) 


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1 established by the lender in accordance 

2 with regulations of the Secretary; and’’ 

3 and inserting ‘‘the option of repaying the 

4 loan in accordance with a repayment plan 

5 described in paragraph (9)(C) established 

6 by the lender in accordance with regula7 tions of the Secretary; and’’; and 

8 (B) in paragraph (9), by adding at the end 

9 the following: 

10 ‘‘(C) SELECTION OF REPAYMENT PLANS

11 ON AND AFTER JULY 1, 2016.— 

12 ‘‘(i) OPPORTUNITY TO CHANGE RE13 PAYMENT PLANS.—Notwithstanding any 

14 other provision of this paragraph, or any 

15 other provision of law, and in accordance 

16 with regulations, beginning on July 1, 

17 2016, the lender shall offer a borrower of 

18 a loan made, insured, or guaranteed under 

19 this part the opportunity to change repay20 ment plans not more than once per cal21 endar year, and to enroll in one of the fol22 lowing repayment plans: 

23 ‘‘(I) A fixed repayment plan de24 scribed in section 493E. 


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1 ‘‘(II) The income-based repay2 ment plan under section 493C(f).’’; 

3 and 

4 (2) in section 455(d)— 

5 (A) by redesignating paragraphs (2) 

6 through (5) as paragraphs (3) through (6), re7 spectively; and 

8 (B) by inserting after paragraph (1), the 

9 following: 

10 ‘‘(2) DESIGN AND SELECTION ON AND AFTER

11 JULY 1, 2016.— 

12 ‘‘(A) IN GENERAL.—Notwithstanding para13 graph (1), for the borrower of a loan made on 

14 or after July 1, 2016, and for other borrowers 

15 subject to paragraph (7), the Secretary shall 

16 offer a borrower of a loan made under this part 

17 2 plans for repayment of such loan, including 

18 principal and interest on the loan. The borrower 

19 shall be entitled to accelerate, without penalty, 

20 repayment on the borrower’s loans under this 

21 part. The borrower may choose— 

22 ‘‘(i) a fixed repayment plan described 

23 in section 493E; or 

24 ‘‘(ii) the income-based repayment plan 

25 under section 493C(f). 


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1 ‘‘(B) SELECTION BY THE SECRETARY.—If 

2 a borrower of a loan made under this part on 

3 or after July 1, 2016, does not select a repay4 ment plan described in subparagraph (A), the 

5 Secretary may provide the borrower with a 

6 fixed repayment plan described in section 493E. 

7 ‘‘(C) CHANGES IN SELECTIONS.—Begin8 ning on July 1, 2016, a borrower of a loan 

9 made under this part may change the bor10 rower’s selection of a repayment plan in accord11 ance with paragraph (7) and under such terms 

12 and conditions as may be established by the 

13 Secretary. 

14 ‘‘(D) BORROWER IN DEFAULT.—Beginning 

15 on July 1, 2016, the Secretary may require any 

16 borrower who has defaulted on a loan made 

17 under this part to— 

18 ‘‘(i) pay all reasonable collection costs 

19 associated with such loan; and 

20 ‘‘(ii) repay the loan pursuant to an in21 come-based repayment plan under section 

22 493C(f).’’; and 

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

24 ‘‘(7) BORROWERS OF LOANS MADE BEFORE

25 JULY 1, 2016.—A borrower who is in repayment on 


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1 a loan made under part B or part D before July 1, 

2 2016— 

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

4 plan that the borrower was enrolled in on the 

5 day before such date; 

6 ‘‘(B) may elect to— 

7 ‘‘(i) enter the income-based repayment 

8 plan under section 493C(f); 

9 ‘‘(ii) enter a fixed repayment plan de10 scribed in section 493E; or 

11 ‘‘(iii) switch between the repayment 

12 plans described in clauses (i) and (ii) not 

13 more than once during a calendar year; 

14 ‘‘(C) after electing to leave a repayment 

15 plan other than an income-based repayment 

16 plan described under this subsection or a fixed 

17 repayment plan described in section 493E, shall 

18 not be permitted to re-elect a repayment plan 

19 that is not an income-based repayment plan 

20 under this subsection or a fixed repayment plan 

21 described in section 493E; and 

22 ‘‘(D) shall retain, for purposes of repay23 ment or cancellation of any outstanding balance 

24 of principal and interest due on a loan (as de25 scribed in section 493C(b)(7)) any years of reVerDate Sep 11 2014 17:57 Aug 11, 2015 Jkt 049200 PO 00000 Frm 00017 Fmt 6652 Sfmt 6201 E:\BILLS\S1948.IS S1948

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1 payment under another income-based or income 

2 contingent repayment plan under this title.’’. 

Æ 


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