I 

111TH CONGRESS 

2D SESSION H. R. 5055 

To provide funds for Pell Grants by amending title IV of the Higher 

Education Act of 1965. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 15, 2010 

Ms. FUDGE (for herself, Mr. TOWNS, Mr. JOHNSON of Georgia, and Mr. 

RUSH) introduced the following bill; which was referred to the Committee 

on Education and Labor 

A BILL 

To provide funds for Pell Grants by amending title IV of 

the Higher Education Act of 1965. 

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; PURPOSE. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘College Debt Swap Act of 2010’’. 

6 (b) PURPOSE.—The purposes of this Act are to pro7 vide additional funds for Pell Grants, and to establish a 

8 temporary private education loan debt consolidation pro9 gram to assist eligible borrowers in refinancing all or a 


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1 portion of their private education debt as Federal Direct 

2 Consolidation Loans. 

3 TITLE I—CONSOLIDATION OF 

4 PRIVATE EDUCATION LOANS 

5 SEC. 101. CONSOLIDATION OF PRIVATE EDUCATION LOANS. 

6 Section 455(g) of the Higher Education Act of 1965 

7 (20 U.S.C. 1087e(g)) is amended— 

8 (1) by striking ‘‘A borrower’’; and inserting the 

9 following: 

10 ‘‘(1) IN GENERAL.—A borrower’’; 

11 (2) by inserting ‘‘, including any loan made 

12 under part B and first disbursed before July 1, 

13 2010, and any loan described in paragraph (2),’’ 

14 after ‘‘section 428C(a)(4)’’; 

15 (3) by striking the third sentence; and 

16 (4) by adding at the end the following new 

17 paragraph: 

18 ‘‘(2) CONSOLIDATION OF PRIVATE EDUCATION

19 LOANS AS A FEDERAL DIRECT CONSOLIDATION

20 LOAN.— 

21 ‘‘(A) IN GENERAL.—Notwithstanding any 

22 other provision of law, a borrower who meets 

23 the eligibility criteria described in paragraph 

24 (1) and subparagraph (B) of this paragraph 


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1 may be eligible to obtain a Federal Direct Con2 solidation loan under this paragraph that— 

3 ‘‘(i) shall include an eligible private 

4 education loan; and 

5 ‘‘(ii) may include a loan described in 

6 section 428C(a)(4). 

7 ‘‘(B) ELIGIBLE BORROWER.—A borrower 

8 of an eligible private education loan is eligible 

9 to obtain a Federal Direct Consolidation Loan 

10 under this paragraph if the borrower— 

11 ‘‘(i) is not in default on a loan made, 

12 insured, or guaranteed under this title or 

13 in default (as such term is defined in sec14 tion 435(l)) on any eligible private edu15 cation loan that the borrower is seeking to 

16 consolidate under this paragraph, except 

17 that a borrower who entered such default 

18 at any time during the period beginning on 

19 December 1, 2007, through December 31, 

20 2009, due to an economic hardship (as 

21 such term is defined in section 435(o)), as 

22 determined by the Secretary, shall not be 

23 ineligible under this clause; 

24 ‘‘(ii) was— 


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1 ‘‘(I) at any time on or after July 

2 1, 1994, and before July 1, 2010, en3 rolled as an undergraduate, graduate, 

4 or professional student who was eligi5 ble to borrow a loan under section 

6 428H or a Federal Direct Unsub7 sidized Stafford Loan; or 

8 ‘‘(II) at any time on or after July 

9 1, 2006, and July 1, 2010, enrolled as 

10 a graduate or professional student 

11 who was eligible to borrow a loan 

12 under section 428B or a Federal Di13 rect PLUS loan; 

14 ‘‘(iii) borrowed at least one eligible 

15 private education loan for a period of en16 rollment described in clause (ii); 

17 ‘‘(iv) is in— 

18 ‘‘(I) repayment status on the eli19 gible private education loan that the 

20 borrower is seeking to consolidate 

21 under this paragraph; or 

22 ‘‘(II) a grace period preceding re23 payment on such loan; 

24 ‘‘(v) does not have an adverse credit 

25 history, as such term is defined by the SecVerDate Nov 24 2008 03:16 Apr 17, 2010 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5055.IH H5055

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1 retary, by regulation, with respect to Fed2 eral Direct PLUS loans; and 

3 ‘‘(vi) has not previously obtained a 

4 Federal Direct Consolidation Loan under 

5 this paragraph. 

6 ‘‘(C) DEFINITION OF ELIGIBLE PRIVATE

7 EDUCATION LOAN.—For purposes of this para8 graph, the term ‘eligible private education loan’ 

9 means a private education loan (as such term 

10 is defined in section 140 of the Truth in Lend11 ing Act (15 U.S.C. 1650)) that was disbursed 

12 to a borrower on or after July 1, 1994, and be13 fore July 1, 2010. 

14 ‘‘(D) AMOUNT THAT MAY BE CONSOLI15 DATED.—The aggregate maximum amount of 

16 eligible private education loans that may be 

17 consolidated by a borrower under this para18 graph is— 

19 ‘‘(i) for loans made to a borrower for 

20 a period of enrollment described in sub21 paragraph (B)(ii)(I), an amount equal to 

22 the amount of outstanding principal, ac23 crued interest, and related fees and costs 

24 (as determined by the Secretary) owed by 

25 the borrower on eligible private education 


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1 loans, except that the outstanding principal 

2 on the eligible private education loans shall 

3 not exceed— 

4 ‘‘(I) the maximum aggregate 

5 amount of loans under section 428H, 

6 as of the date of the enactment of the 

7 College Debt Swap Act of 2010— 

8 ‘‘(aa) for an undergraduate 

9 dependent student, if the bor10 rower was enrolled as an under11 graduate dependent student dur12 ing the period of enrollment; 

13 ‘‘(bb) for an undergraduate 

14 independent student, if the bor15 rower was enrolled as an under16 graduate independent student 

17 during the period of enrollment; 

18 or 

19 ‘‘(cc) for a graduate or pro20 fessional student, if the borrower 

21 was enrolled as a graduate or 

22 professional student during the 

23 period of enrollment; 

24 minus 


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1 ‘‘(II) the aggregate amount of 

2 loans under section 428H and Federal 

3 Direct Unsubsidized Stafford Loans 

4 borrowed by the borrower for such pe5 riod of enrollment; plus 

6 ‘‘(ii) for loans made to a borrower for 

7 a period of enrollment described in sub8 paragraph (B)(ii)(II), an amount equal 

9 to— 

10 ‘‘(I) the total outstanding prin11 cipal, accrued interest, and related 

12 fees and costs (as determined by the 

13 Secretary) owed by the borrower on 

14 eligible private education loans; minus 

15 ‘‘(II) the aggregate amount of 

16 loans under section 428B and Federal 

17 Direct PLUS loans borrowed by the 

18 borrower for such period of enroll19 ment. 

20 ‘‘(E) INTEREST RATE.—Notwithstanding 

21 subsection (b), a Federal Direct Consolidation 

22 loan made under this paragraph shall bear in23 terest at an annual rate on the unpaid principal 

24 balance of the loan that is the weighted averVerDate Nov 24 2008 03:16 Apr 17, 2010 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H5055.IH H5055

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1 age, rounded to the nearest higher one-eighth of 

2 1 percent, of— 

3 ‘‘(i) for loans consolidated under this 

4 paragraph that were made to a borrower 

5 for a period described in subparagraph 

6 (B)(ii)(I), the interest rate for a Federal 

7 Direct Unsubsidized Stafford Loan for 

8 which the first disbursement is made on 

9 the date of enactment of the College Debt 

10 Swap Act of 2010; and 

11 ‘‘(ii) for loans consolidated under this 

12 paragraph that were made to a borrower 

13 for a period described in subparagraph 

14 (B)(ii)(II), the interest rate for a Federal 

15 Direct PLUS loan for which the first dis16 bursement is made on the date of enact17 ment of the College Debt Swap Act of 

18 2010. 

19 ‘‘(F) PAYMENT TO THE HOLDER.— 

20 ‘‘(i) SECRETARY.—For each eligible 

21 private education loan that a borrower is 

22 consolidating under this paragraph, the 

23 Secretary shall make a payment to the 

24 holder of such loan that is equal to the 

25 amount of such loan, in whole or in part, 


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1 based on the amount (all or a portion) of 

2 such loan the borrower consolidated under 

3 this paragraph. 

4 ‘‘(ii) HOLDER.—Upon receipt of a 

5 payment described in clause (i), a holder 

6 shall discharge the liability on the loan (in 

7 whole or in part, based on the amount of 

8 the payment) for which such payment was 

9 made. 

10 ‘‘(G) OUTREACH ACTIVITIES REQUIRED.— 

11 ‘‘(i) IN GENERAL.—The Secretary 

12 shall conduct outreach activities described 

13 in clause (ii) to inform and educate stu14 dents and their families about the tem15 porary private education loan consolidation 

16 program under this paragraph. 

17 ‘‘(ii) REQUIRED COMPONENTS OF

18 OUTREACH.—The Secretary shall provide 

19 for the broad dissemination of information 

20 on the program under this paragraph by— 

21 ‘‘(I) operating and maintaining 

22 an Internet website through which in23 dividuals may obtain information on 

24 changes made to the program; 


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1 ‘‘(II) developing and dissemi2 nating information to alumni of un3 dergraduate, graduate, and profes4 sional schools who may be eligible for 

5 the program; 

6 ‘‘(III) providing assistance to in7 stitutions of higher education to edu8 cate graduates on the availability of 

9 the program; and 

10 ‘‘(IV) ensuring that all outreach 

11 efforts are developed using plain lan12 guage and are culturally- and lan13 guage-appropriate. 

14 ‘‘(iii) USE OF OTHER ENTITIES.—In 

15 carrying out this subparagraph, the Sec16 retary may work with other appropriate 

17 entities to facilitate the dissemination of 

18 information under this subparagraph and 

19 provide assistance as described in this sub20 paragraph. 

21 ‘‘(H) AUTHORIZATION AND APPROPRIA22 TION.—There are authorized to be appro23 priated, and there are appropriated, such sums 

24 as may be necessary to carry out this para25 graph. The amounts made available under this 


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1 subparagraph shall remain available until June 

2 30, 2012. 

3 ‘‘(I) PERIOD OF AUTHORITY.—The author4 ity to make Federal Direct Consolidation loans 

5 under this paragraph shall begin 30 days after 

6 the date of the enactment of the College Debt 

7 Swap Act of 2010 and shall expire on June 30, 

8 2012.’’. 

9 SEC. 102. CONFORMING AMENDMENT. 

10 Section 428C(a)(3)(B)(i)(V) of the Higher Education 

11 Act of 1965 (20 U.S.C. 1078–3(a)(3)(B)(i)(V)) is amend12 ed— 

13 (1) by striking ‘‘or’’ at the end of item (bb); 

14 (2) by striking the period at the end of item 

15 (cc) and inserting ‘‘; or’’; and 

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

17 ‘‘(dd) for the purpose of 

18 consolidating an eligible private 

19 education loan under section 

20 455(g)(2), whether such loan is 

21 consolidated only with other eligi22 ble private education loans or 

23 consolidated with loans described 

24 in paragraph (4).’’. 


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1 TITLE II—INVESTING IN 

2 STUDENTS 

3 SEC. 201. FEDERAL PELL GRANTS. 

4 Section 401(b)(8) of the Higher Education Act of 

5 1965 (20 U.S.C. 1070a(b)(8)) is amended by adding at 

6 the end the following: 

7 ‘‘(G) ADDITIONAL FUNDS FOR FISCAL

8 YEARS 2011 AND 2012.—In addition to any 

9 amounts appropriated under subparagraph (A) 

10 and any other amounts appropriated to carry 

11 out this section, there are authorized to be ap12 propriated, and there are appropriated, out of 

13 any funds in the Treasury not otherwise appro14 priated, to carry out subparagraph (B) of this 

15 paragraph, $4,000,000,000 for fiscal year 2011 

16 and 2012.’’. 

Æ 


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