II 

114TH CONGRESS 

1ST SESSION S. 793 

To amend the Higher Education Act of 1965 to provide for the refinancing 

of certain Federal student loans, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 18, 2015 

Ms. WARREN (for herself, Mr. FRANKEN, Mr. BENNET, Mr. REED, Mr. 

LEAHY, Ms. MIKULSKI, Mrs. BOXER, Mrs. MURRAY, Mr. WYDEN, Mr. 

DURBIN, Ms. STABENOW, Mr. MENENDEZ, Mr. CARDIN, Mr. BROWN, 

Mr. CASEY, Mrs. MCCASKILL, Mr. WHITEHOUSE, Mr. UDALL, Mrs. SHAHEEN, Mr. MERKLEY, Mrs. GILLIBRAND, Mr. BLUMENTHAL, Mr. 

SCHATZ, Ms. BALDWIN, Ms. HIRONO, Mr. HEINRICH, Ms. HEITKAMP, 

Mr. MARKEY, and Mr. PETERS) introduced the following bill; which was 

read twice and referred to the Committee on Finance 

A BILL 

To amend the Higher Education Act of 1965 to provide 

for the refinancing of certain Federal student loans, 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 ‘‘Bank on Students 

5 Emergency Loan Refinancing Act’’. 


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1 TITLE I—REFINANCING 

2 PROGRAMS 

3 SEC. 101. REFINANCING PROGRAMS. 

4 (a) PROGRAM AUTHORITY.—Section 451(a) of the 

5 Higher Education Act of 1965 (20 U.S.C. 1087a(a)) is 

6 amended— 

7 (1) by striking ‘‘and (2)’’ and inserting ‘‘(2)’’; 

8 and 

9 (2) by inserting ‘‘; and (3) to make loans under 

10 section 460A and section 460B’’ after ‘‘section 

11 459A’’. 

12 (b) REFINANCING PROGRAM.—Part D of title IV of 

13 the Higher Education Act of 1965 (20 U.S.C. 1087a et 

14 seq.) is amended by adding at the end the following: 

15 ‘‘SEC. 460A. REFINANCING FFEL AND FEDERAL DIRECT 

16 LOANS. 

17 ‘‘(a) IN GENERAL.—Beginning not later than 180 

18 days after the date of enactment of the Bank on Students 

19 Emergency Loan Refinancing Act, the Secretary shall es20 tablish a program under which the Secretary, upon the 

21 receipt of an application from a qualified borrower, makes 

22 a loan under this part, in accordance with the provisions 

23 of this section, in order to permit the borrower to obtain 

24 the interest rate provided under subsection (c). 

25 ‘‘(b) REFINANCING DIRECT LOANS.— 


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1 ‘‘(1) FEDERAL DIRECT LOANS.—Upon applica2 tion of a qualified borrower, the Secretary shall 

3 repay a Federal Direct Stafford Loan, a Federal Di4 rect Unsubsidized Stafford Loan, a Federal Direct 

5 PLUS Loan, or a Federal Direct Consolidation 

6 Loan of the qualified borrower, for which the first 

7 disbursement was made, or the application for the 

8 consolidation loan was received, before July 1, 2015, 

9 with the proceeds of a refinanced Federal Direct 

10 Stafford Loan, a Federal Direct Unsubsidized Staf11 ford Loan, a Federal Direct PLUS Loan, or a Fed12 eral Direct Consolidation Loan, respectively, issued 

13 to the borrower in an amount equal to the sum of 

14 the unpaid principal, accrued unpaid interest, and 

15 late charges of the original loan. 

16 ‘‘(2) REFINANCING FFEL PROGRAM LOANS AS

17 REFINANCED FEDERAL DIRECT LOANS.—Upon ap18 plication of a qualified borrower for any loan that 

19 was made, insured, or guaranteed under part B and 

20 for which the first disbursement was made, or the 

21 application for the consolidation loan was received, 

22 before July 1, 2010, the Secretary shall make a loan 

23 under this part, in an amount equal to the sum of 

24 the unpaid principal, accrued unpaid interest, and 


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1 late charges of the original loan to the borrower in 

2 accordance with the following: 

3 ‘‘(A) The Secretary shall pay the proceeds 

4 of such loan to the eligible lender of the loan 

5 made, insured, or guaranteed under part B, in 

6 order to discharge the borrower from any re7 maining obligation to the lender with respect to 

8 the original loan. 

9 ‘‘(B) A loan made under this section that 

10 was originally— 

11 ‘‘(i) a loan originally made, insured, 

12 or guaranteed under section 428 shall be a 

13 Federal Direct Stafford Loan; 

14 ‘‘(ii) a loan originally made, insured, 

15 or guaranteed under section 428B shall be 

16 a Federal Direct PLUS Loan; 

17 ‘‘(iii) a loan originally made, insured, 

18 or guaranteed under section 428H shall be 

19 a Federal Direct Unsubsidized Stafford 

20 Loan; and 

21 ‘‘(iv) a loan originally made, insured, 

22 or guaranteed under section 428C shall be 

23 a Federal Direct Consolidation Loan. 


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1 ‘‘(C) The interest rate for each loan made 

2 by the Secretary under this paragraph shall be 

3 the rate provided under subsection (c). 

4 ‘‘(c) INTEREST RATES.— 

5 ‘‘(1) IN GENERAL.—The interest rate for the 

6 refinanced Federal Direct Stafford Loans, Federal 

7 Direct Unsubsidized Stafford Loans, Federal Direct 

8 PLUS Loans, and Federal Direct Consolidation 

9 Loans, shall be a rate equal to— 

10 ‘‘(A) in any case where the original loan 

11 was a loan under section 428 or 428H, a Fed12 eral Direct Stafford loan, or a Federal Direct 

13 Unsubsidized Stafford Loan, that was issued to 

14 an undergraduate student, a rate equal to the 

15 rate for Federal Direct Stafford Loans and 

16 Federal Direct Unsubsidized Stafford Loans 

17 issued to undergraduate students for the 12- 

18 month period beginning on July 1, 2013, and 

19 ending on June 30, 2014; 

20 ‘‘(B) in any case where the original loan 

21 was a loan under section 428 or 428H, a Fed22 eral Direct Stafford Loan, or a Federal Direct 

23 Unsubsidized Stafford Loan, that was issued to 

24 a graduate or professional student, a rate equal 

25 to the rate for Federal Direct Unsubsidized 


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1 Stafford Loans issued to graduate or profes2 sional students for the 12-month period begin3 ning on July 1, 2013, and ending on June 30, 

4 2014; 

5 ‘‘(C) in any case where the original loan 

6 was a loan under section 428B or a Federal Di7 rect PLUS Loan, a rate equal to the rate for 

8 Federal Direct PLUS Loans for the 12-month 

9 period beginning on July 1, 2013, and ending 

10 on June 30, 2014; and 

11 ‘‘(D) in any case where the original loan 

12 was a loan under section 428C or a Federal Di13 rect Consolidation Loan, a rate calculated in ac14 cordance with paragraph (2). 

15 ‘‘(2) INTEREST RATES FOR CONSOLIDATION

16 LOANS.— 

17 ‘‘(A) METHOD OF CALCULATION.—In 

18 order to determine the interest rate for any re19 financed Federal Direct Consolidation Loan 

20 under paragraph (1)(D), the Secretary shall— 

21 ‘‘(i) determine each of the component 

22 loans that were originally consolidated in 

23 the loan under section 428C or the Federal 

24 Direct Consolidation Loan, and calculate 

25 the proportion of the unpaid principal balVerDate Sep 11 2014 21:43 Mar 24, 2015 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S793.IS S793

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1 ance of the loan under section 428C or the 

2 Federal Direct Consolidation Loan that 

3 each component loan represents; 

4 ‘‘(ii) use the proportions determined 

5 in accordance with clause (i) and the inter6 est rate applicable for each component 

7 loan, as determined under subparagraph 

8 (B), to calculate the weighted average of 

9 the interest rates on the loans consolidated 

10 into the loan under section 428C or the 

11 Federal Direct Consolidation Loan; and 

12 ‘‘(iii) apply the weighted average cal13 culated under clause (ii) as the interest 

14 rate for the refinanced Federal Direct Con15 solidation Loan. 

16 ‘‘(B) INTEREST RATES FOR COMPONENT

17 LOANS.—The interest rates for the component 

18 loans of a loan made under section 428C or a 

19 Federal Direct Consolidation Loan shall be the 

20 following: 

21 ‘‘(i) The interest rate for any loan 

22 under section 428 or 428H, Federal Direct 

23 Stafford Loan, or Federal Direct Unsub24 sidized Stafford Loan issued to an underVerDate Sep 11 2014 21:43 Mar 24, 2015 Jkt 049200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S793.IS S793

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1 graduate student shall be a rate equal to 

2 the lesser of— 

3 ‘‘(I) the rate for Federal Direct 

4 Stafford Loans and Federal Direct 

5 Unsubsidized Stafford Loans issued 

6 to undergraduate students for the 12- 

7 month period beginning on July 1, 

8 2013, and ending on June 30, 2014; 

9 or 

10 ‘‘(II) the original interest rate of 

11 the component loan. 

12 ‘‘(ii) The interest rate for any loan 

13 under section 428 or 428H, Federal Direct 

14 Stafford Loan, or Federal Direct Unsub15 sidized Stafford Loan issued to a graduate 

16 or professional student shall be a rate 

17 equal to the lesser of— 

18 ‘‘(I) the rate for Federal Direct 

19 Unsubsidized Stafford Loans issued 

20 to graduate or professional students 

21 for the 12-month period beginning on 

22 July 1, 2013, and ending on June 30, 

23 2014; or 

24 ‘‘(II) the original interest rate of 

25 the component loan. 


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1 ‘‘(iii) The interest rate for any loan 

2 under section 428B or Federal Direct 

3 PLUS Loan shall be a rate equal to the 

4 lesser of— 

5 ‘‘(I) the rate for Federal Direct 

6 PLUS Loans for the 12-month period 

7 beginning on July 1, 2013, and end8 ing on June 30, 2014; or 

9 ‘‘(II) the original interest rate of 

10 the component loan. 

11 ‘‘(iv) The interest rate for any compo12 nent loan that is a loan under section 

13 428C or a Federal Direct Consolidation 

14 Loan shall be the weighted average of the 

15 interest rates that would apply under this 

16 subparagraph for each loan comprising the 

17 component consolidation loan. 

18 ‘‘(v) The interest rate for any eligible 

19 loan that is a component of a loan made 

20 under section 428C or a Federal Direct 

21 Consolidation Loan and is not described in 

22 clauses (i) through (iv) shall be the inter23 est rate on the original component loan. 

24 ‘‘(3) FIXED RATE.—The applicable rate of in25 terest determined under paragraph (1) for a refiVerDate Sep 11 2014 21:43 Mar 24, 2015 Jkt 049200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S793.IS S793

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1 nanced loan under this section shall be fixed for the 

2 period of the loan. 

3 ‘‘(d) TERMS AND CONDITIONS OF LOANS.— 

4 ‘‘(1) IN GENERAL.—A loan that is refinanced 

5 under this section shall have the same terms and 

6 conditions as the original loan, except as otherwise 

7 provided in this section. 

8 ‘‘(2) NO AUTOMATIC EXTENSION OF REPAY9 MENT PERIOD.—Refinancing a loan under this sec10 tion shall not result in the extension of the duration 

11 of the repayment period of the loan, and the bor12 rower shall retain the same repayment term that 

13 was in effect on the original loan. Nothing in this 

14 paragraph shall be construed to prevent a borrower 

15 from electing a different repayment plan at any time 

16 in accordance with section 455(d)(3). 

17 ‘‘(e) DEFINITION OF QUALIFIED BORROWER.— 

18 ‘‘(1) IN GENERAL.—For purposes of this sec19 tion, the term ‘qualified borrower’ means a bor20 rower— 

21 ‘‘(A) of a loan under this part or part B 

22 for which the first disbursement was made, or 

23 the application for a consolidation loan was re24 ceived, before July 1, 2015; and 


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1 ‘‘(B) who meets the eligibility requirements 

2 based on income or debt-to-income ratio estab3 lished by the Secretary. 

4 ‘‘(2) INCOME REQUIREMENTS.—Not later than 

5 180 days after the date of enactment of the Bank 

6 on Students Emergency Loan Refinancing Act, the 

7 Secretary shall establish eligibility requirements 

8 based on income or debt-to-income ratio that take 

9 into consideration providing access to refinancing 

10 under this section for borrowers with the greatest fi11 nancial need. 

12 ‘‘(f) NOTIFICATION TO BORROWERS.—The Secretary, 

13 in coordination with the Director of the Bureau of Con14 sumer Financial Protection, shall undertake a campaign 

15 to alert borrowers of loans that are eligible for refinancing 

16 under this section that the borrowers are eligible to apply 

17 for such refinancing. The campaign shall include the fol18 lowing activities: 

19 ‘‘(1) Developing consumer information mate20 rials about the availability of Federal student loan 

21 refinancing. 

22 ‘‘(2) Requiring servicers of loans under this 

23 part or part B to provide such consumer information 

24 to borrowers in a manner determined appropriate by 


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1 the Secretary, in consultation with the Director of 

2 the Bureau of Consumer Financial Protection. 

3 ‘‘SEC. 460B. FEDERAL DIRECT REFINANCED PRIVATE LOAN 

4 PROGRAM. 

5 ‘‘(a) DEFINITIONS.—In this section: 

6 ‘‘(1) ELIGIBLE PRIVATE EDUCATION LOAN.— 

7 The term ‘eligible private education loan’ means a 

8 private education loan, as defined in section 140(a) 

9 of the Truth in Lending Act (15 U.S.C. 1650(a)), 

10 that— 

11 ‘‘(A) was disbursed to the borrower before 

12 July 1, 2015; and 

13 ‘‘(B) was for the borrower’s own postsec14 ondary educational expenses for an eligible pro15 gram at an institution of higher education par16 ticipating in the loan program under this part, 

17 as of the date that the loan was disbursed. 

18 ‘‘(2) FEDERAL DIRECT REFINANCED PRIVATE

19 LOAN.—The term ‘Federal Direct Refinanced Pri20 vate Loan’ means a loan issued under subsection 

21 (b)(1). 

22 ‘‘(3) PRIVATE EDUCATIONAL LENDER.—The 

23 term ‘private educational lender’ has the meaning 

24 given the term in section 140(a) of the Truth in 

25 Lending Act (15 U.S.C. 1650(a)). 


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1 ‘‘(4) QUALIFIED BORROWER.—The term ‘quali2 fied borrower’ means an individual who— 

3 ‘‘(A) has an eligible private education loan; 

4 ‘‘(B) has been current on payments on the 

5 eligible private education loan for the 6 months 

6 prior to the date of the qualified borrower’s ap7 plication for refinancing under this section, and 

8 is in good standing on the loan at the time of 

9 such application; 

10 ‘‘(C) is not in default on the eligible pri11 vate education loan or on any loan made, in12 sured, or guaranteed under this part or part B 

13 or E; and 

14 ‘‘(D) meets the eligibility requirements de15 scribed in subsection (b)(2). 

16 ‘‘(b) PROGRAM AUTHORIZED.— 

17 ‘‘(1) IN GENERAL.—The Secretary, in consulta18 tion with the Secretary of the Treasury, shall carry 

19 out a program under which the Secretary, upon ap20 plication by a qualified borrower who has an eligible 

21 private education loan, shall issue such borrower a 

22 loan under this part in accordance with the fol23 lowing: 

24 ‘‘(A) The loan issued under this program 

25 shall be in an amount equal to the sum of the 


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1 unpaid principal, accrued unpaid interest, and 

2 late charges of the private education loan. 

3 ‘‘(B) The Secretary shall pay the proceeds 

4 of the loan issued under this program to the 

5 private educational lender of the private edu6 cation loan, in order to discharge the qualified 

7 borrower from any remaining obligation to the 

8 lender with respect to the original loan. 

9 ‘‘(C) The Secretary shall require that the 

10 qualified borrower undergo loan counseling that 

11 provides all of the information and counseling 

12 required under clauses (i) through (viii) of sec13 tion 485(b)(1)(A) before the loan is refinanced 

14 in accordance with this section, and before the 

15 proceeds of such loan are paid to the private 

16 educational lender. 

17 ‘‘(D) The Secretary shall issue the loan as 

18 a Federal Direct Refinanced Private Loan, 

19 which shall have the same terms, conditions, 

20 and benefits as a Federal Direct Unsubsidized 

21 Stafford Loan, except as otherwise provided in 

22 this section. 

23 ‘‘(2) BORROWER ELIGIBILITY.—Not later than 

24 180 days after the date of enactment of the Bank 

25 on Students Emergency Loan Refinancing Act, the 


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1 Secretary, in consultation with the Secretary of the 

2 Treasury and the Director of the Bureau of Con3 sumer Financial Protection, shall establish eligibility 

4 requirements— 

5 ‘‘(A) based on income or debt-to-income 

6 ratio that take into consideration providing ac7 cess to refinancing under this section for bor8 rowers with the greatest financial need; 

9 ‘‘(B) to ensure eligibility only for bor10 rowers in good standing; 

11 ‘‘(C) to minimize inequities between Fed12 eral Direct Refinanced Private Loans and other 

13 Federal student loans; 

14 ‘‘(D) to preclude windfall profits for pri15 vate educational lenders; and 

16 ‘‘(E) to ensure full access to the program 

17 authorized in this subsection for borrowers with 

18 private loans who otherwise meet the criteria 

19 established in accordance with subparagraphs 

20 (A) and (B). 

21 ‘‘(c) INTEREST RATE.— 

22 ‘‘(1) IN GENERAL.—The interest rate for a 

23 Federal Direct Refinanced Private Loan is— 

24 ‘‘(A) in the case of a Federal Direct Refi25 nanced Private Loan for a private education 


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1 loan originally issued for undergraduate post2 secondary educational expenses, a rate equal to 

3 the rate for Federal Direct Stafford Loans and 

4 Federal Direct Unsubsidized Stafford Loans 

5 issued to undergraduate students for the 12- 

6 month period beginning on July 1, 2013, and 

7 ending on June 30, 2014; and 

8 ‘‘(B) in the case of a Federal Direct Refi9 nanced Private Loan for a private education 

10 loan originally issued for graduate or profes11 sional degree postsecondary educational ex12 penses, a rate equal to the rate for Federal Di13 rect Unsubsidized Stafford Loans issued to 

14 graduate or professional students for the 12- 

15 month period beginning on July 1, 2013, and 

16 ending on June 30, 2014. 

17 ‘‘(2) COMBINED UNDERGRADUATE AND GRAD18 UATE STUDY LOANS.—If a Federal Direct Refi19 nanced Private Loan is for a private education loan 

20 originally issued for both undergraduate and grad21 uate or professional postsecondary educational ex22 penses, the interest rate shall be a rate equal to the 

23 rate for Federal Direct PLUS Loans for the 12- 

24 month period beginning on July 1, 2013, and ending 

25 on June 30, 2014. 


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1 ‘‘(3) FIXED RATE.—The applicable rate of in2 terest determined under this subsection for a Fed3 eral Direct Refinanced Private Loan shall be fixed 

4 for the period of the loan. 

5 ‘‘(d) NO INCLUSION IN AGGREGATE LIMITS.—The 

6 amount of a Federal Direct Refinanced Private Loan, or 

7 a Federal Direct Consolidated Loan to the extent such 

8 loan was used to repay a Federal Direct Refinanced Pri9 vate Loan, shall not be included in calculating a bor10 rower’s annual or aggregate loan limits under section 428 

11 or 428H. 

12 ‘‘(e) NO ELIGIBILITY FOR SERVICE-RELATED RE13 PAYMENT.—Notwithstanding sections 428K(a)(2)(A), 

14 428L(b)(2), 455(m)(3)(A), and 460(b), a Federal Direct 

15 Refinanced Private Loan, or any Federal Direct Consoli16 dation Loan to the extent such loan was used to repay 

17 a Federal Direct Refinanced Private Loan, shall not be 

18 eligible for any loan repayment or loan forgiveness pro19 gram under section 428K, 428L, or 460 or for the repay20 ment plan for public service employees under section 

21 455(m). 

22 ‘‘(f) PRIVATE EDUCATIONAL LENDER REPORTING

23 REQUIREMENT.— 

24 ‘‘(1) REPORTING REQUIRED.—Not later than 

25 180 days after the date of enactment of the Bank 


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1 on Students Emergency Loan Refinancing Act, the 

2 Secretary, in consultation with the Secretary of the 

3 Treasury and the Director of the Bureau of Con4 sumer Financial Protection, shall establish a re5 quirement that private educational lenders report 

6 the data described in paragraph (2) to the Sec7 retary, to Congress, to the Secretary of the Treas8 ury, and to the Director of the Bureau of Consumer 

9 Financial Protection, in order to allow for an assess10 ment of the private education loan market. 

11 ‘‘(2) CONTENTS OF REPORTING.—The data 

12 that private educational lenders shall report in ac13 cordance with paragraph (1) shall include each of 

14 the following about private education loans (as de15 fined in section 140(a) of the Truth in Lending Act 

16 (15 U.S.C. 1650(a))): 

17 ‘‘(A) The total amount of private education 

18 loan debt the lender holds. 

19 ‘‘(B) The total number of private edu20 cation loan borrowers the lender serves. 

21 ‘‘(C) The average interest rate on the out22 standing private education loan debt held by the 

23 lender. 


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1 ‘‘(D) The proportion of private education 

2 loan borrowers who are in default on a loan 

3 held by the lender. 

4 ‘‘(E) The proportion of the outstanding 

5 private education loan volume held by the lend6 er that is in default. 

7 ‘‘(F) The proportions of outstanding pri8 vate education loan borrowers who are 30, 60, 

9 and 90 days delinquent. 

10 ‘‘(G) The proportions of outstanding pri11 vate education loan volume that is 30, 60, and 

12 90 days delinquent. 

13 ‘‘(g) NOTIFICATION TO BORROWERS.—The Sec14 retary, in coordination with the Secretary of the Treasury 

15 and the Director of the Bureau of Consumer Financial 

16 Protection, shall undertake a campaign to alert borrowers 

17 about the availability of private student loan refinancing 

18 under this section.’’. 

19 (c) AMENDMENTS TO PUBLIC SERVICE REPAYMENT

20 PLAN PROVISIONS.—Section 455(m) of the Higher Edu21 cation Act of 1965 (20 U.S.C. 1087e(m)) is amended— 

22 (1) by redesignating paragraphs (3) and (4) as 

23 paragraphs (4) and (5), respectively; 

24 (2) by inserting after paragraph (2) the fol25 lowing: 


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1 ‘‘(3) SPECIAL RULES FOR SECTION 460A

2 LOANS.— 

3 ‘‘(A) REFINANCED FEDERAL DIRECT

4 LOANS.—Notwithstanding paragraph (1), in de5 termining the number of monthly payments 

6 that meet the requirements of such paragraph 

7 for an eligible Federal Direct Loan refinanced 

8 under section 460A that was originally a loan 

9 under this part, the Secretary shall include all 

10 monthly payments made on the original loan 

11 that meet the requirements of such paragraph. 

12 ‘‘(B) REFINANCED FFEL LOANS.—In the 

13 case of an eligible Federal Direct Loan refi14 nanced under section 460A that was originally 

15 a loan under part B, only monthly payments 

16 made after the date on which the loan was refi17 nanced may be included for purposes of para18 graph (1).’’; and 

19 (3) in paragraph (4)(A) (as redesignated by 

20 paragraph (1)), by inserting ‘‘(including any Federal 

21 Direct Stafford Loan, Federal Direct PLUS Loan, 

22 Federal Direct Unsubsidized Stafford Loan, or Fed23 eral Direct Consolidation Loan refinanced under sec24 tion 460A)’’ before the period at the end. 


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1 (d) INCOME-BASED REPAYMENT.—Section 493C of 

2 the Higher Education Act of 1965 (20 U.S.C. 1098e) is 

3 amended by adding at the end the following: 

4 ‘‘(f) SPECIAL RULE FOR REFINANCED LOANS.— 

5 ‘‘(1) REFINANCED FEDERAL DIRECT AND FFEL

6 LOANS.—In calculating the period of time during 

7 which a borrower of a loan that is refinanced under 

8 section 460A has made monthly payments for pur9 poses of subsection (b)(7), the Secretary shall deem 

10 the period to include all monthly payments made for 

11 the original loan, and all monthly payments made 

12 for the refinanced loan, that otherwise meet the re13 quirements of this section. 

14 ‘‘(2) FEDERAL DIRECT REFINANCED PRIVATE

15 LOANS.—In calculating the period of time during 

16 which a borrower of a Federal Direct Refinanced 

17 Private Loan under section 460B has made monthly 

18 payments for purposes of subsection (b)(7), the Sec19 retary shall include only payments— 

20 ‘‘(A) that are made after the date of the 

21 issuance of the Federal Direct Refinanced Pri22 vate Loan; and 

23 ‘‘(B) that otherwise meet the requirements 

24 of this section.’’. 


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1 TITLE II—FAIR SHARE TAX 

2 SEC. 201. AMENDMENT OF 1986 CODE. 

3 Except as otherwise expressly provided, whenever in 

4 this title an amendment or repeal is expressed in terms 

5 of an amendment to, or repeal of, a section or other provi6 sion, the reference shall be considered to be made to a 

7 section or other provision of the Internal Revenue Code 

8 of 1986. 

9 SEC. 202. FAIR SHARE TAX ON HIGH-INCOME TAXPAYERS. 

10 (a) IN GENERAL.—Subchapter A of chapter 1 is 

11 amended by adding at the end the following new part: 

12 ‘‘PART VII—FAIR SHARE TAX ON HIGH-INCOME 

13 TAXPAYERS 

‘‘Sec. 59A. Fair share tax. 

14 ‘‘SEC. 59A. FAIR SHARE TAX. 

15 ‘‘(a) GENERAL RULE.— 

16 ‘‘(1) PHASE-IN OF TAX.—In the case of any 

17 high-income taxpayer, there is hereby imposed for a 

18 taxable year (in addition to any other tax imposed 

19 by this subtitle) a tax equal to the product of— 

20 ‘‘(A) the amount determined under para21 graph (2), and 

22 ‘‘(B) a fraction (not to exceed 1)— 

23 ‘‘(i) the numerator of which is the ex24 cess of— 


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1 ‘‘(I) the taxpayer’s adjusted 

2 gross income, over 

3 ‘‘(II) the dollar amount in effect 

4 under subsection (c)(1), and 

5 ‘‘(ii) the denominator of which is the 

6 dollar amount in effect under subsection 

7 (c)(1). 

8 ‘‘(2) AMOUNT OF TAX.—The amount of tax de9 termined under this paragraph is an amount equal 

10 to the excess (if any) of— 

11 ‘‘(A) the tentative fair share tax for the 

12 taxable year, over 

13 ‘‘(B) the excess of— 

14 ‘‘(i) the sum of— 

15 ‘‘(I) the regular tax liability (as 

16 defined in section 26(b)) for the tax17 able year, determined without regard 

18 to any tax liability determined under 

19 this section, 

20 ‘‘(II) the tax imposed by section 

21 55 for the taxable year, plus 

22 ‘‘(III) the payroll tax for the tax23 able year, over 


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1 ‘‘(ii) the credits allowable under part 

2 IV of subchapter A (other than sections 

3 27(a), 31, and 34). 

4 ‘‘(b) TENTATIVE FAIR SHARE TAX.—For purposes 

5 of this section— 

6 ‘‘(1) IN GENERAL.—The tentative fair share tax 

7 for the taxable year is 30 percent of the excess of— 

8 ‘‘(A) the adjusted gross income of the tax9 payer, over 

10 ‘‘(B) the modified charitable contribution 

11 deduction for the taxable year. 

12 ‘‘(2) MODIFIED CHARITABLE CONTRIBUTION

13 DEDUCTION.—For purposes of paragraph (1)— 

14 ‘‘(A) IN GENERAL.—The modified chari15 table contribution deduction for any taxable 

16 year is an amount equal to the amount which 

17 bears the same ratio to the deduction allowable 

18 under section 170 (section 642(c) in the case of 

19 a trust or estate) for such taxable year as— 

20 ‘‘(i) the amount of itemized deduc21 tions allowable under the regular tax (as 

22 defined in section 55) for such taxable 

23 year, determined after the application of 

24 section 68, bears to 


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1 ‘‘(ii) such amount, determined before 

2 the application of section 68. 

3 ‘‘(B) TAXPAYER MUST ITEMIZE.—In the 

4 case of any individual who does not elect to 

5 itemize deductions for the taxable year, the 

6 modified charitable contribution deduction shall 

7 be zero. 

8 ‘‘(c) HIGH-INCOME TAXPAYER.—For purposes of this 

9 section— 

10 ‘‘(1) IN GENERAL.—The term ‘high-income tax11 payer’ means, with respect to any taxable year, any 

12 taxpayer (other than a corporation) with an adjusted 

13 gross income for such taxable year in excess of 

14 $1,000,000 (50 percent of such amount in the case 

15 of a married individual who files a separate return). 

16 ‘‘(2) INFLATION ADJUSTMENT.— 

17 ‘‘(A) IN GENERAL.—In the case of a tax18 able year beginning after 2016, the $1,000,000 

19 amount under paragraph (1) shall be increased 

20 by an amount equal to— 

21 ‘‘(i) such dollar amount, multiplied by 

22 ‘‘(ii) the cost-of-living adjustment de23 termined under section 1(f)(3) for the cal24 endar year in which the taxable year be25 gins, determined by substituting ‘calendar 


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1 year 2015’ for ‘calendar year 1992’ in sub2 paragraph (B) thereof. 

3 ‘‘(B) ROUNDING.—If any amount as ad4 justed under subparagraph (A) is not a multiple 

5 of $10,000, such amount shall be rounded to 

6 the next lowest multiple of $10,000. 

7 ‘‘(d) PAYROLL TAX.—For purposes of this section, 

8 the payroll tax for any taxable year is an amount equal 

9 to the excess of— 

10 ‘‘(1) the taxes imposed on the taxpayer under 

11 sections 1401, 1411, 3101, 3201, and 3211(a) (to 

12 the extent such tax is attributable to the rate of tax 

13 in effect under section 3101) with respect to such 

14 taxable year or wages or compensation received dur15 ing such taxable year, over 

16 ‘‘(2) the deduction allowable under section 

17 164(f) for such taxable year. 

18 ‘‘(e) SPECIAL RULE FOR ESTATES AND TRUSTS.— 

19 For purposes of this section, in the case of an estate or 

20 trust, adjusted gross income shall be computed in the 

21 manner described in section 67(e). 

22 ‘‘(f) NOT TREATED AS TAX IMPOSED BY THIS CHAP23 TER FOR CERTAIN PURPOSES.—The tax imposed under 

24 this section shall not be treated as tax imposed by this 

25 chapter for purposes of determining the amount of any 


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1 credit under this chapter (other than the credit allowed 

2 under section 27(a)) or for purposes of section 55.’’. 

3 (b) CLERICAL AMENDMENT.—The table of parts for 

4 subchapter A of chapter 1 is amended by adding at the 

5 end the following new item: 

‘‘PART VII. FAIR SHARE TAX ON HIGH-INCOME TAXPAYERS’’. 

6 (c) EFFECTIVE DATE.—The amendments made by 

7 this section shall apply to taxable years beginning after 

8 December 31, 2015. 

9 TITLE III—DEFICIT NEUTRAL IM10 PLEMENTATION OF STUDENT 

11 LOAN REFINANCING PRO12 GRAMS 

13 SEC. 301. DEFICIT NEUTRAL IMPLEMENTATION OF STU14 DENT LOAN REFINANCING PROGRAMS; 

15 BUDGETARY EFFECTS. 

16 (a) AMOUNT OF REVENUE.—The Secretary of Edu17 cation shall estimate the amount that is equal to the 

18 amount of the net increase in revenue received in the 

19 Treasury during the 10-year period beginning on the date 

20 of enactment of this Act attributable to the amendments 

21 made by title II of this Act. 

22 (b) DEFICIT-NEUTRAL TERMINATION OF THE REFI23 NANCING PROGRAM.—The Secretary of Education shall 

24 terminate the refinancing programs carried out under sec25 tions 460A and 460B of the Higher Education Act of 


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1 1965 on the date that the net cost of carrying out such 

2 refinancing programs is equal to the amount of additional 

3 revenue estimated under subsection (a) or on the date that 

4 is 2 years after the date of enactment of this Act, which5 ever occurs first. 

6 (c) DEFICIT REDUCTION.—Any remaining increase 

7 in revenue described in subsection (a) and not used for 

8 the refinancing programs carried out under sections 460A 

9 and 460B of the Higher Education Act of 1965 shall be 

10 returned to the general fund of the Treasury for Federal 

11 budget deficit reduction. 

12 (d) METHODOLOGY.—When estimating cost and rev13 enue under this section, the Secretary of Education shall 

14 utilize the accounting methods and assumptions that are 

15 used by the Congressional Budget Office, as of the date 

16 of enactment of this Act, to make such estimations. 

17 SEC. 302. BUDGETARY EFFECTS. 

18 (a) PAYGO SCORECARD.—The budgetary effects of 

19 this Act and the amendments made by this Act shall not 

20 be entered on either PAYGO scorecard maintained pursu21 ant to section 4(d) of the Statutory Pay-As-You-Go Act 

22 of 2010 (2 U.S.C. 933(d)). 

23 (b) SENATE PAYGO SCORECARD.—The budgetary 

24 effects of this Act and the amendments made by this Act 

25 shall not be entered on any PAYGO scorecard maintained 


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1 for purposes of section 201 of S. Con. Res. 21 (110th Con2 gress). 

Æ 


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