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[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3959 Introduced in House (IH)]

113th CONGRESS
  2d Session
                                H. R. 3959

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

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            January 29, 2014

  Ms. Bonamici (for herself and Mr. Kildee) introduced the following 
    bill; which was referred to the Committee on Education and the 
                               Workforce

_______________________________________________________________________

                                 A BILL

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

    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 ``Pay It Forward College Affordability 
Act of 2014''.

SEC. 2. FINDINGS; PURPOSE.

    (a) Findings.--Congress finds the following:
            (1) Postsecondary education has expanded opportunities for 
        people in the United States to qualify for high-quality jobs 
        and entry into the middle class, providing clear benefits to 
        the Nation's economy.
            (2) Public investment by the States in higher education has 
        decreased significantly, especially in the past 5 years before 
        the date of enactment of this Act, as a result of the 2008 
        fiscal collapse.
            (3) With college costs rising beyond the reach of many 
        people in the United States, financial aid programs are 
        inadequate to reach all students with financial need.
            (4) The increasing unaffordability of a college education 
        has forced students to borrow more money to pay for higher 
        education, causing two-thirds of college seniors to graduate 
        with an average student debt of $26,600.
            (5) High levels of student debt are damaging not only to 
        the individual student's ability to succeed financially but 
        also will have grave consequences for the future economy of the 
        United States.
            (6) Congress must halt the decrease in State support for 
        education and, over time, must catalyze increases in State 
        funding for higher education.
            (7) There is a need to encourage a new approach to 
        financing the students' share of the cost of higher education 
        that will not result in graduates who are overburdened with 
        student debt.
            (8) The Pay It Forward model presents a new opportunity for 
        financing and expanding higher education, through the 
        replacement of tuition and mandatory fees with a post-
        graduation contribution program that establishes the funding 
        for access to higher education for the next generational cohort 
        of students.
    (b) Purpose.--The purpose of this Act is to test and encourage the 
development of Pay It Forward model financing programs.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Annual income.--The term ``annual income'' means an 
        amount equal to the sum of--
                    (A) annual adjusted gross income, as defined in 
                section 62 of the Internal Revenue Code of 1986; and
                    (B) any amount described under section 103 of the 
                Internal Revenue Code of 1986.
            (2) Cost of attendance.--The term ``cost of attendance'' 
        has the meaning given the term in section 472 of the Higher 
        Education Act of 1965 (20 U.S.C. 1087ll).
            (3) Institution of higher education.--
                    (A) Institution of higher education.--The term 
                ``institution of higher education'' has the meaning 
                given the term in section 102 of the Higher Education 
                Act of 1965 (20 U.S.C. 1002), except that for purposes 
                of this Act, an institution of higher education does 
                not include any program of postsecondary education or 
                training, including a degree or certificate program, 
                that is designed to prepare students for entry into a 
                recognized occupation or profession that requires 
                licensing or other established requirements as a pre-
                condition for entry into such occupation or profession, 
                unless--
                            (i) the successful completion of the 
                        program fully qualifies a student, in the State 
                        in which the institution offering the program 
                        is located (and in any State in which the 
                        institution indicates, through advertising or 
                        marketing activities or direct contact with 
                        potential students, that a student will be 
                        prepared to work in the occupation or 
                        profession after successfully completing the 
                        program), to--
                                    (I) take any examination required 
                                for entry into the recognized 
                                occupation or profession in the State, 
                                including satisfying all State or 
                                professionally mandated programmatic 
                                and specialized accreditation 
                                requirements, if any; and
                                    (II) be certified or licensed or 
                                meet any other academically related 
                                pre-conditions that are required for 
                                entry into the recognized occupation or 
                                profession in the State;
                            (ii) the institution offering the program 
                        provides timely placement for all of the 
                        academically related pre-licensure requirements 
                        for entry into the recognized occupation or 
                        profession in the State, such as clinical 
                        placements, internships, or apprenticeships;
                            (iii) in the case of State licensing or 
                        professionally mandated requirements for entry 
                        into the recognized occupation or profession in 
                        the State in which the institution offering the 
                        program is located (and in any State in which 
                        the institution indicates, through advertising 
                        or marketing activities or direct contact with 
                        potential students, that a student will be 
                        prepared to work in the occupation or 
                        profession after successfully completing the 
                        program) that require specialized 
                        accreditation--
                                    (I) the program meets that 
                                requirement for specialized 
                                accreditation through its accreditation 
                                or pre-accreditation by an accrediting 
                                agency or association recognized by the 
                                Secretary of Education as a reliable 
                                authority as to the quality or training 
                                offered by the institution in that 
                                program; and
                                    (II) if the program is in a pre-
                                accredited, probation, or show cause 
                                status by an accrediting agency or 
                                association described in subclause (I), 
                                and the requirement for specialized 
                                accreditation is for full 
                                accreditation, the institution--
                                            (aa) establishes, to the 
                                        satisfaction of the Secretary 
                                        of Education, that each student 
                                        who enrolls before the program 
                                        is fully accredited attests of 
                                        being advised that the program 
                                        is in a pre-accredited, 
                                        probation, or show cause status 
                                        and of being informed of the 
                                        effect on the student's 
                                        eligibility for assistance 
                                        under this Act and on the 
                                        student's ability to satisfy 
                                        State or professionally 
                                        mandated requirements for entry 
                                        into the recognized occupation 
                                        or profession if full 
                                        accreditation is delayed, 
                                        denied, terminated, or 
                                        withdrawn; and
                                            (bb) publicly and 
                                        prominently discloses in any 
                                        advertising, marketing, or 
                                        recruitment materials and 
                                        activities for the institution, 
                                        the institution's pre-
                                        accredited, probation, or show 
                                        cause status and the 
                                        implications of such status for 
                                        prospective students; and
                            (iv) the institution--
                                    (I) discloses on the application to 
                                enroll in the institution that its 
                                program does not necessarily satisfy 
                                out-of-State requirements, if 
                                applicable; and
                                    (II) upon receipt of an application 
                                to enroll in the institution, notifies 
                                the student, prior to enrollment, if 
                                the program in which the student 
                                intends to enroll does not satisfy the 
                                requirements of the State in which the 
                                student is a resident, if applicable.
                    (B) School, department, or program.--The term 
                ``institution of higher education'' may include a 
                particular school, department, or program within an 
                institution of higher education described in 
                subparagraph (A).
            (4) Pay it forward model.--The term ``Pay It Forward 
        model'' means a system in which--
                    (A) the Secretary, a State, or an institution of 
                higher education pays all or part of a participating 
                student's cost of attendance, but not less than an 
                amount equal to the cost of tuition and mandatory fees, 
                for each such student during some or all of the time 
                that the student is enrolled at an institution of 
                higher education in order to replace the student's need 
                to borrow under the Federal Direct Stafford Loan and 
                Federal Direct Unsubsidized Stafford Loan Programs 
                under part D of title IV of the Higher Education Act of 
                1965 (20 U.S.C. 1087a et seq.); and
                    (B) such student signs a contract agreeing to 
                contribute to the Secretary, a State, or an institution 
                of higher education, as the case may be, a certain 
                percentage (not to exceed 5 percent) of the student's 
                annual income, for a specified number of years upon 
                graduation or when the student ceases to be enrolled at 
                such institution of higher education, except that the 
                specified number of years for which the student agrees 
                to contribute according to such contract shall not 
                exceed 25 years, which shall be known as the ``Pay It 
                Forward Contribution Plan''.
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of Education.
            (6) Tuition and mandatory fees.--The term ``tuition and 
        mandatory fees'' means tuition and fees normally assessed a 
        student carrying the same academic workload as determined by 
        the institution of higher education.

SEC. 4. INITIAL STUDIES.

    (a) In General.--Not later than 180 days after the date of 
enactment of this Act, the Secretary, in consultation with the 
Secretary of the Treasury--
            (1) and the Director of the Consumer Financial Protection 
        Bureau, shall conduct a study on the feasibility of, and 
        options for, implementing the Pay It Forward model, in a manner 
        that is in the best interests of students; and
            (2) shall conduct a study--
                    (A) on whether the student loan servicer payment 
                program or the Internal Revenue Service income tax 
                withholding mechanism (such as preauthorized automatic 
                electronic funds transfers) of collection for the Pay 
                It Forward model would work best;
                    (B) on how best to establish a participant's 
                agreement described under section 5(g)(3), or a similar 
                agreement made under another Pay It Forward model, 
                including what percentage of a participant's income the 
                participant should be required to contribute and what 
                is an appropriate time period for contribution;
                    (C) on how the rates of contribution under the Pay 
                It Forward model may differ--
                            (i) according to different income levels; 
                        and
                            (ii) based on whether the student pursues a 
                        graduate or professional education program 
                        immediately after completing their 
                        undergraduate education or at a future time;
                    (D) on how best to streamline the collection 
                process and ensure compliance; and
                    (E) on ways to prevent increases in tuition and 
                other education costs.
    (b) Report.--Not later than 30 days after the completion of the 
studies described in subsection (a), the Secretary shall prepare and 
submit a report containing the results of the initial studies described 
in subsection (a), to the Committee on Health, Education, Labor, and 
Pensions of the Senate, the Committee on Banking, Housing, and Urban 
Affairs of the Senate, the Committee on Finance of the Senate, the 
Committee on Education and the Workforce of the House of 
Representatives, the Committee on Financial Services of the House of 
Representatives, and the Committee on Ways and Means of the House of 
Representatives.

SEC. 5. GRANTS FOR STATE PAY IT FORWARD PILOT PROGRAM.

    (a) In General.--Unless the Secretary determines, as a result of 
the initial studies described in section 4, that the Pay It Forward 
model is not feasible or otherwise not in the public interest or in the 
best interest of students, the Secretary shall, not later than 1 year 
after the completion of such initial study, award grants, on a 
competitive basis, to not more than 3 States in the first 2 years and 
not more than 7 additional States in subsequent years (while limiting 
the number of students participating to 15,000 annually in the first 2 
years and 50,000 annually in subsequent years in all States) to enable 
such States to establish and carry out a Pay It Forward model State 
pilot program as described in subsection (e).
    (b) Application; Duration.--
            (1) Application.--Each State that desires to receive a 
        grant under this section shall submit an application to the 
        Secretary at such time, in such manner, and containing such 
        information as the Secretary may reasonably require.
            (2) Duration.--Grants awarded under this section shall be 
        for a period of not less than 10 years and not more than 25 
        years and the Secretary shall make grant funds available to 
        each State on an annual basis.
    (c) State Contribution Requirement.--A State receiving a grant 
under this section shall provide, either directly or through private 
contributions, non-Federal funds for each award year in an amount that 
is not less than the greater of--
            (1) the difference between--
                    (A) the amount for an award year that the State has 
                agreed to pay for all students participating in the 
                State Pay It Forward Contribution Plan described in 
                subsection (e); and
                    (B) the amount of the Federal funds described in 
                subsection (e)(2); or
            (2) the amount that is 10 percent of the amount of the 
        Federal funds described in subsection (e)(2).
    (d) Maintenance of Effort.--Each State receiving a grant under this 
section for a fiscal year shall provide the Secretary with an assurance 
that the aggregate expenditures by the State, from funds derived from 
non-Federal sources, for the contribution to higher education costs, 
including student loans and grants for higher education for each fiscal 
year for which a grant is awarded under this section (excluding funds 
for a State Pay It Forward model) are not less than the aggregate 
expenditures by the State for the contribution to higher education 
costs, including student loans and grants for higher education, for the 
fiscal year preceding the first fiscal year for which a grant was 
awarded to the State under this section, as adjusted for inflation 
using the Consumer Price Index for All Urban Consumers published by the 
Department of Labor (CPI-U).
    (e) State Pilot Program.--
            (1) State activities.--In accordance with subsection (a), 
        each State receiving a grant under this section shall establish 
        and carry out a State Pay It Forward model pilot program, 
        through which the State shall--
                    (A) select eligible institutions, in accordance 
                with subsection (f), for participation in the program;
                    (B) in coordination with the Secretary, establish 
                an application and enrollment process through which a 
                student who is enrolled at a participating eligible 
                institution who wishes to participate in the program, 
                and fulfills the requirements of the enrollment 
                process, as determined by the State, shall be enrolled 
                in the Pay It Forward Contribution Plan, subject to 
                paragraph (3);
                    (C) provide each student at each participating 
                eligible institution with a written notice--
                            (i) that such student has the option to 
                        participate, or to decline to participate, in 
                        the Pay It Forward Contribution Plan on an 
                        annual renewable basis, subject to paragraph 
                        (3);
                            (ii) of the application and enrollment 
                        process described in subparagraph (B); and
                            (iii) of the terms and conditions of the 
                        Pay It Forward Contribution Plan, as described 
                        in subsection (g);
                    (D) ensure that, subject to subsection (g)(5)(A) 
                and in accordance with paragraphs (4) and (5) of 
                subsection (g), an eligible student's cost of 
                attendance will be reduced by the amount of any 
                assistance considered estimated financial assistance, 
                as defined in section 428(a)(2)(C) of the Higher 
                Education Act of 1965 (20 U.S.C. 1078(a)(2)(C)) prior 
                to the awarding of aid under the Pay It Forward 
                Contribution Plan toward the student's cost of 
                attendance;
                    (E) award funds, from amounts made available under 
                subsection (c), any other State funds, and amounts made 
                available under paragraph (2)(B) to pay--
                            (i) each participating institution an 
                        amount equal to the tuition and mandatory fees 
                        for each student at that institution who is 
                        enrolled in the Pay It Forward Contribution 
                        Plan, as described in subsection (g), except 
                        that such amount shall, for each student, not 
                        exceed the lesser of--
                                    (I) the amount of the tuition and 
                                mandatory fees for each such student at 
                                the most expensive public institution 
                                of higher education in the State for 
                                the type of institution the 
                                participating student attends 
                                (including a 4-year institution, 2-year 
                                institution, or 1-year institution) for 
                                that award year; or
                                    (II) the cost of attendance for 
                                each such student to attend the 
                                institution at which the student is 
                                enrolled; and
                            (ii) each participating student any 
                        additional costs of attendance that have been 
                        agreed to in the student's contract described 
                        in subsection (g), except that such additional 
                        costs shall be in an amount such that the sum 
                        of such additional costs and the amount of 
                        tuition and fees described in clause (i) shall, 
                        for each such student, not exceed the lesser 
                        of--
                                    (I) the amount of the tuition and 
                                mandatory fees for a student at the 
                                most expensive public institution of 
                                higher education in the State for the 
                                type of institution the participating 
                                student attends (including a 4-year 
                                institution, 2-year institution, or 1-
                                year institution) for that award year; 
                                or
                                    (II) the cost of attendance for the 
                                student to attend the institution at 
                                which the student is enrolled.
            (2) Federal funds.--The Secretary shall pay each State 
        receiving a grant under this section, for each award year for 
        the purpose of carrying out paragraph (1)(E), an amount equal 
        to the product of--
                    (A) the number of students in the State that are 
                enrolled in the Pay It Forward Contribution Plan for 
                that award year; multiplied by
                    (B) an amount equal to the sum of--
                            (i) the maximum amount that a student is 
                        eligible to receive through a Federal Direct 
                        Stafford loan under part D of title IV of the 
                        Higher Education Act of 1965 (20 U.S.C. 1087a 
                        et seq.) for that award year; plus
                            (ii) the maximum amount that a student is 
                        eligible to receive through a Federal Direct 
                        Unsubsidized Stafford loan under part D of 
                        title IV of the Higher Education Act of 1965 
                        (20 U.S.C. 1087a et seq.) for that award year.
    (f) Eligible Institutions.--
            (1) In general.--An eligible institution, for purposes of 
        this section, means an institution of higher education, that--
                    (A) submits an application to the State at such 
                time, in such manner, and containing such information 
                as the State may reasonably require;
                    (B) agrees to participate in the Pay It Forward 
                Contribution Plan and commits to participation in 
                research that may be related to the Pay It Forward 
                Contribution Plan; and
                    (C) agrees to maintain--
                            (i) in the case of an institution of higher 
                        education in which the entire institution is 
                        participating, the level of institutional 
                        financial aid, including the level of 
                        institutional funding for student grants and 
                        loans, as adjusted for inflation by the 
                        Consumer Price Index for All Urban Consumers 
                        published by the Department of Labor (CPI-U), 
                        that the institution provides at the time of 
                        the application to participate in the Pay It 
                        Forward Contribution Plan throughout the 
                        duration of the Pay It Forward Contribution 
                        Plan; or
                            (ii) in the case of a department, school, 
                        or program within an institution of higher 
                        education, maintain the level of aid described 
                        in clause (i) on a department, school, or 
                        program-wide basis.
            (2) Selection of participating institutions.--
                    (A) In general.--If a sufficient number of eligible 
                institutions in a State receiving a grant under this 
                section wish to participate in the Pay It Forward 
                Contribution Plan, such State shall establish methods 
                for selecting eligible institutions to participate, or 
                otherwise set standards for participation, in such a 
                way that meets the requirements of this paragraph and 
                maximizes the utility of the research that results from 
                the evaluation of the Pay It Forward Contribution Plan.
                    (B) Criteria.--In selecting eligible institutions 
                under subparagraph (A), the State shall consider the 
                extent to which selected institutions will represent 
                varied geographic locations and types of institutions 
                (such as community colleges, institutions that offer 4-
                year programs, or other variations in the types of 
                institutions that are selected).
                    (C) Preference.--In selecting eligible institutions 
                under subparagraph (A), the State shall give preference 
                to eligible institutions that have a history of making 
                an effort to reduce or hold constant tuition and 
                mandatory fees and cost of attendance or have a plan to 
                reduce or hold constant tuition and mandatory fees and 
                cost of attendance, as determined by the State.
            (3) Announcement of participants.--Each State receiving a 
        grant under this section shall announce each eligible 
        institution that is selected for participation in the Pay It 
        Forward Contribution Plan at a time that provides students at 
        participating eligible institutions with adequate notice in 
        advance of the commencement of the Pay It Forward Contribution 
        Plan at that institution.
            (4) State as grant recipient.--The Secretary may award 
        grants to States that have developed, or are in the process of 
        developing, pilot Pay It Forward grant programs at the State 
        level to enable the State to carry out the activities described 
        in this Act as if such State were an eligible institution 
        selected for participation in the Pay It Forward Contribution 
        Plan.
    (g) Terms of the Pay It Forward Contribution Plan.--If a student 
who attends a participating eligible institution has applied for and 
enrolled in the Pay It Forward Contribution Plan as described in 
subsection (e)(1)(B)--
            (1) the State shall pay--
                    (A) to the participating institution that such 
                student attends not less than an amount equal to the 
                cost of tuition and mandatory fees during the time that 
                the student is enrolled as an undergraduate at the 
                participating eligible institution and is participating 
                in the Pay It Forward Contribution Plan, and for a 
                period of not more than--
                            (i) 4 years; or
                            (ii) another period of time (such as a 
                        certain number of college credits or academic 
                        years completed) that the State, the 
                        institution, and the student shall determine 
                        and specify in the agreement described under 
                        paragraph (3); and
                    (B) a student who attends a participating eligible 
                institution and has applied for and enrolled in the Pay 
                It Forward Contribution Plan any additional costs of 
                attendance that are agreed to by the State, the 
                institution, and the student and are established in the 
                contract described in paragraph (3), except that such 
                additional costs shall be in an amount such that the 
                sum of such additional costs and the amount of tuition 
                and fees described in subparagraph (A) shall, for each 
                such student and for each award year, not exceed the 
                amount of the tuition and mandatory fees for a student 
                at the most expensive public institution of higher 
                education in the State for the type of institution the 
                participating student attends (including a 4-year 
                institution, 2-year institution, or 1-year institution) 
                for that award year;
            (2) the State shall ensure that variations in the time that 
        a student's tuition and mandatory fees is paid by the State 
        shall be reflected in--
                    (A) the length of the contribution period 
                established in the student's Pay It Forward 
                Contribution Plan agreement described under paragraph 
                (3), except that the length of such contribution period 
                shall not exceed 25 years; and
                    (B) the percentage of annual income that such 
                student shall contribute, as established in the 
                student's Pay It Forward Contribution Plan agreement 
                described under paragraph (3);
            (3) the student shall sign a contract agreement, which 
        shall include--
                    (A) the period of time (such as a certain number of 
                college credits or academic years completed) during 
                which the State will pay the institution that the 
                student attends not less than an amount equal to the 
                cost of tuition and mandatory fees that the student 
                requests to have provided through the Pay It Forward 
                Contribution Plan while the student is enrolled at such 
                participating eligible institution; and
                    (B) any additional costs of attendance that the 
                State agrees to pay for such student through the Pay It 
                Forward Contribution Plan while the student is enrolled 
                at such participating eligible institution; and
                    (C) a statement that the student will contribute to 
                the State a certain percentage (not to exceed 5 
                percent) of the student's annual income for a specified 
                number of years upon graduation from such institution 
                of higher education, successful completion of the 
                student's course of study, or when such student ceases 
                to be enrolled at such institution of higher education, 
                as determined by the State, and the student shall be 
                required to begin making such contributions on the date 
                that is the later of--
                            (i) 1 calendar year after graduation from 
                        such institution of higher education, 
                        successful completion of the student's course 
                        of study, or when such student ceases to be 
                        enrolled at such institution of higher 
                        education, as determined by the State; or
                            (ii) 1 calendar year after the completion 
                        of a year that the student is enrolled in the 
                        Pay It Forward Contribution Plan;
            (4) the student shall continue to be eligible to obtain any 
        grants, scholarships, or funds that do not have to be repaid 
        (including Federal Pell Grants or any other Federal, State, or 
        institutional grant money) that the student would otherwise be 
        eligible to receive if the student was not a participant in the 
        Pay It Forward Contribution Plan and that are applied toward 
        the student's tuition and mandatory fees at the eligible 
        institution, and the amount of such grants, scholarships, or 
        funds shall be deducted from the amount that the State would 
        otherwise pay toward the student's tuition and mandatory fees 
        under the Pay It Forward Contribution Plan, thereby 
        proportionately reducing the percentage of a participating 
        student's annual income that the student will be required to 
        contribute or the duration of the student's contribution 
        period, as described under paragraph (3);
            (5) the student shall continue to be eligible to obtain any 
        other student loans, including Federal student loans (except 
        for Federal Direct Stafford Loans under part D of title IV of 
        the Higher Education Act of 1965 (20 U.S.C. 1087a et seq.)), 
        that the student would otherwise be eligible to receive if the 
        student was not a participant in the Pay It Forward 
        Contribution Plan except that--
                    (A) any funds received by a student under the Pay 
                It Forward Contribution Plan shall be considered 
                estimated financial assistance for purposes of 
                calculations under section 428(a)(2)(C) of the Higher 
                Education Act of 1965 (20 U.S.C. 1078(a)(2)(C)); and
                    (B) the amount of such loans shall be deducted from 
                the amount that the State would otherwise pay toward 
                the student's tuition and mandatory fees under the Pay 
                It Forward Contribution Plan, thereby proportionately 
                reducing the percentage of a participating student's 
                annual income that the student will be required to 
                contribute or the duration of the student's 
                contribution period, as described under paragraph (3); 
                and
            (6) if the student obtains Federal student loans, such 
        student shall remain eligible for applicable Federal loan 
        repayment, forgiveness, or similar programs regarding such 
        Federal student loans to the same extent that the student would 
        be eligible for such repayment, forgiveness, or similar 
        programs if the student were not also participating in the Pay 
        It Forward Contribution Plan.
    (h) Method of Contribution Collection.--The Secretary, in 
consultation with the Secretary of the Treasury or a designee of the 
Secretary of the Treasury, shall work with appropriate State agencies 
to develop an efficient mechanism for students who enroll in the Pay It 
Forward Contribution Plan, including using existing student loan 
repayment structures, wage withholding (such as preauthorized automatic 
electronic funds transfers), or other suitable methods as the 
respective State agencies may determine and as approved by the 
Secretary.
    (i) State Report.--Each State receiving a grant under this section 
shall annually prepare and submit a report to the Secretary containing 
such information about the grant program as the Secretary may require.

SEC. 6. ADVISORY COUNCIL.

    (a) In General.--The Secretary shall establish, and appoint members 
to, a technical advisory council to make recommendations to the 
Secretary about--
            (1) how to design an evaluation of the Pay It Forward 
        Contribution Plan described under section 5;
            (2) how to maximize the utility of the research results 
        that may be used to evaluate such program; and
            (3) implementation issues and solutions for State-based Pay 
        It Forward model pilot programs, which may include applying a 
        State-based Pay It Forward model pilot program for 
        nontraditional students, including students who are older, 
        already working, or attending school at night, and in cases in 
        which graduates voluntarily leave the workforce.
    (b) Members of the Council.--The technical advisory council 
established under this section shall include not more than 11 members, 
of whom--
            (1) not less than 3 members shall be academic researchers 
        with expertise in higher education;
            (2) not less than 2 members shall have expertise in 
        quantitative program evaluation;
            (3) not less than 2 members shall be student advocates; and
            (4) not less than 2 members shall be experts in budgetary 
        and financial matters.
    (c) Report.--The technical advisory council established under this 
section shall prepare and submit a report to the Secretary containing 
the recommendations described in subsection (a).

SEC. 7. IMPLEMENTATION STUDY.

    (a) Initial Evaluation.--Not later than 5 years after the 
establishment of the State Pay It Forward models under section 5, the 
Secretary shall, after consideration of the advisory council 
recommendations regarding how to evaluate the Pay It Forward 
Contribution Plan described under section 6(a), conduct an initial 
evaluation of the Pay It Forward Contribution Plan, which may include 
an evaluation of--
            (1) how the rates of contribution under the Pay It Forward 
        model may differ according to different income levels;
            (2) the rates of students who fail to contribute funds as 
        agreed to under the Pay It Forward model;
            (3) how best to establish a student's agreement described 
        under section 5(g)(3), or a similar agreement made under 
        another Pay It Forward model, including what percentage of a 
        student's income the student should be required to contribute 
        and what is an appropriate time period for contribution;
            (4) ways to prevent increases in tuition and other 
        education costs; and
            (5) ways to integrate existing Federal student loan 
        repayment and forgiveness programs into the Pay It Forward 
        model.
    (b) Evaluation.--Not later than 10 years after the establishment of 
the Pay It Forward Contribution Plan described under section 5, the 
Secretary shall, after consideration of the advisory council 
recommendations regarding how to evaluate the Pay It Forward 
Contribution Plan--
            (1) evaluate whether existing student loan debt could be 
        converted into a Pay It Forward model;
            (2) evaluate the impact of the Pay It Forward model on a 
        student's career choices and employment, including how such 
        model may impact a student's employment in public service jobs 
        and level of employment (such as whether a student 
        participating in the Pay It Forward model will go on to part 
        time or full time employment);
            (3) evaluate mechanisms through which employers could 
        provide funds toward the contributions that an employee is 
        required to make under a Pay It Forward model contribution 
        agreement;
            (4) examine the long-term solvency and feasibility of an 
        expanded Pay It Forward program; and
            (5) examine the distributional implications of allowing 
        students to opt out of participation in a Pay It Forward model 
        program as compared to requiring all students who are enrolled 
        at a participating institution to participate in a Pay It 
        Forward model program.
    (c) Report.--Upon completion of the evaluation described under 
subsection (a), the Secretary shall prepare and submit a report 
containing the results of such evaluation to the Committee on Health, 
Education, Labor, and Pensions of the Senate, the Committee on Banking, 
Housing, and Urban Affairs of the Senate, the Committee on Finance of 
the Senate, the Committee on Education and the Workforce of the House 
of Representatives, the Committee on Financial Services of the House of 
Representatives, and the Committee on Ways and Means of the House of 
Representatives.

SEC. 8. EXPANDED IMPLEMENTATION.

    The Secretary may expand the Pay It Forward model, including by 
developing Pay It Forward model pilot programs for students pursuing 
post-baccalaureate degrees that relate to the medical profession in 
order to meet the need for more primary medical care providers, 
increasing the number or duration of grants to States for carrying out 
a Pay It Forward State pilot program, or establishing a Federal program 
based on the Pay It Forward model, if the Secretary determines that 
doing so--
            (1) will not increase the cost to the Federal Government 
        for carrying out Federal loan programs under title IV of the 
        Higher Education Act of 1965 (20 U.S.C. 1070 et seq.);
            (2) may be carried out using amounts available for the 
        programs under title IV of the Higher Education Act of 1965 (20 
        U.S.C. 1070 et seq.); and
            (3) is in the best interests of students and the Nation in 
        advancing national priorities for education, health, and 
        economic development.

SEC. 9. WAIVER.

    (a) State Application for Waiver.--A State awarded a grant under 
this Act may apply to the Secretary to waive a requirement of the 
grant.
    (b) Secretary Authority.--The Secretary may waive any provision in 
this Act if the Secretary determines that doing so would be in the best 
interest of students and achieve the goals of the Pay It Forward model.

SEC. 10. PAY IT FORWARD FUND.

    (a) Establishment of a Fund.--There is established in the Treasury 
a fund, to be known as the ``Pay It Forward Fund'' (referred to in this 
section as the ``Fund''), to be administered by the Secretary of 
Education, in which all funds received in Pay It Forward contributions 
under this Act shall be deposited.
    (b) Use.--The amounts in the Fund shall be made available to the 
Secretary of Education in order to carry out this Act.

SEC. 11. AMOUNTS AVAILABLE FOR PAY IT FORWARD FROM STAFFORD LOAN 
              PROGRAM.

    Amounts made available under any Act to carry out the Federal 
Direct Stafford Loan Program under part D of title IV of the Higher 
Education Act of 1965 (20 U.S.C. 1087a et seq.) shall be available to 
the Secretary of Education to carry out the Pay It Forward program 
under this Act.
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