I 

112TH CONGRESS 

1ST SESSION H. R. 2410 

To establish a temporary private education loan debt consolidation program 

to assist eligible borrowers in refinancing all or a portion of their private 

education debt as Federal Direct Consolidation Loans. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 6, 2011 

Mr. TOWNS (for himself, Mr. PAYNE, Mr. JACKSON of Illinois, Ms. MOORE, 

Mr. JOHNSON of Georgia, Ms. FUDGE, Mr. MEEKS, and Mr. CARSON of 

Indiana) introduced the following bill; which was referred to the Committee on Education and the Workforce 

A BILL 

To establish a temporary private education loan debt consolidation program to assist eligible borrowers in refinancing 

all or a portion of their private education debt as Federal 

Direct Consolidation Loans. 

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 2011’’. 

6 (b) PURPOSE.—The purpose of this Act is to estab7 lish a temporary private education loan debt consolidation 


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1 program to assist eligible borrowers in refinancing all or 

2 a portion of their private education debt as Federal Direct 

3 Consolidation Loans. 

4 SEC. 2. CONSOLIDATION OF PRIVATE EDUCATION LOANS. 

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

6 (20 U.S.C. 1087e(g)) is amended— 

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

8 following: 

9 ‘‘(1) IN GENERAL.—A borrower’’; 

10 (2) by inserting ‘‘, and any loan described in 

11 paragraph (2),’’ after ‘‘July 1, 2010’’; and 

12 (3) by adding at the end the following new 

13 paragraph: 

14 ‘‘(2) CONSOLIDATION OF PRIVATE EDUCATION

15 LOANS AS A FEDERAL DIRECT CONSOLIDATION

16 LOAN.— 

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

18 other provision of law, a borrower who meets 

19 the eligibility criteria described in paragraph 

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

21 shall be eligible to obtain a Federal Direct Con22 solidation loan under this paragraph that— 

23 ‘‘(i) shall include an eligible private 

24 education loan; and 


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

2 section 428C(a)(4). 

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

4 of an eligible private education loan is eligible 

5 to obtain a Federal Direct Consolidation Loan 

6 under this paragraph if the borrower— 

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

8 insured, or guaranteed under this title or 

9 in default (as such term is defined in sec10 tion 435(l)) on any eligible private edu11 cation loan that the borrower is seeking to 

12 consolidate under this paragraph, except 

13 that a borrower who entered such default 

14 at any time during the period beginning on 

15 December 1, 2007, through December 31, 

16 2009, due to an economic hardship (as 

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

18 determined by the Secretary, shall not be 

19 ineligible under this clause; 

20 ‘‘(ii) was— 

21 ‘‘(I) at any time on or after July 

22 1, 1994, and before July 1, 2010, en23 rolled as an undergraduate, graduate, 

24 or professional student who was eligi25 ble to borrow a loan under section 


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1 428H or a Federal Direct Unsub2 sidized Stafford Loan; or 

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

4 1, 2006, and July 1, 2010, enrolled as 

5 a graduate or professional student 

6 who was eligible to borrow a loan 

7 under section 428B or a Federal Di8 rect PLUS loan; 

9 ‘‘(iii) borrowed at least one eligible 

10 private education loan for a period of en11 rollment described in clause (ii); 

12 ‘‘(iv) is in— 

13 ‘‘(I) repayment status on the eli14 gible private education loan that the 

15 borrower is seeking to consolidate 

16 under this paragraph; or 

17 ‘‘(II) a grace period preceding re18 payment on such loan; 

19 ‘‘(v) with respect to Federal Direct 

20 PLUS loans, does not have an adverse 

21 credit history, as such term is defined by 

22 the Secretary by regulation; and 

23 ‘‘(vi) has not previously obtained a 

24 Federal Direct Consolidation Loan under 

25 this paragraph. 


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1 ‘‘(C) DEFINITION OF ELIGIBLE PRIVATE

2 EDUCATION LOAN.—For purposes of this para3 graph, the term ‘eligible private education loan’ 

4 means a private education loan (as such term 

5 is defined in section 140 of the Truth in Lend6 ing Act (15 U.S.C. 1650)) that was disbursed 

7 to a borrower on or after July 1, 1994, and be8 fore July 1, 2010. 

9 ‘‘(D) AMOUNT THAT MAY BE CONSOLI10 DATED.—The aggregate maximum amount of 

11 eligible private education loans that may be 

12 consolidated by a borrower under this para13 graph is— 

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

15 a period of enrollment described in sub16 paragraph (B)(ii)(I), an amount equal to 

17 the amount of outstanding principal, ac18 crued interest, and related fees and costs 

19 (as determined by the Secretary) owed by 

20 the borrower on eligible private education 

21 loans, except that the outstanding principal 

22 on the eligible private education loans shall 

23 not exceed— 

24 ‘‘(I) the maximum aggregate 

25 amount of loans under section 428H, 


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1 as of the date of the enactment of the 

2 College Debt Swap Act of 2011— 

3 ‘‘(aa) for an undergraduate 

4 dependent student, if the bor5 rower was enrolled as an under6 graduate dependent student dur7 ing the period of enrollment; 

8 ‘‘(bb) for an undergraduate 

9 independent student, if the bor10 rower was enrolled as an under11 graduate independent student 

12 during the period of enrollment; 

13 or 

14 ‘‘(cc) for a graduate or pro15 fessional student, if the borrower 

16 was enrolled as a graduate or 

17 professional student during the 

18 period of enrollment; 

19 minus 

20 ‘‘(II) the aggregate amount of 

21 loans under section 428H and Federal 

22 Direct Unsubsidized Stafford Loans 

23 borrowed by the borrower for such pe24 riod of enrollment; plus 


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

2 a period of enrollment described in sub3 paragraph (B)(ii)(II), an amount equal 

4 to— 

5 ‘‘(I) the total outstanding prin6 cipal, accrued interest, and related 

7 fees and costs (as determined by the 

8 Secretary) owed by the borrower on 

9 eligible private education loans; minus 

10 ‘‘(II) the aggregate amount of 

11 loans under section 428B and Federal 

12 Direct PLUS loans borrowed by the 

13 borrower for such period of enroll14 ment. 

15 ‘‘(E) INTEREST RATE.—Notwithstanding 

16 subsection (b), a Federal Direct Consolidation 

17 loan made under this paragraph shall bear in18 terest at an annual rate on the unpaid principal 

19 balance of the loan that is the weighted aver20 age, rounded to the nearest higher one-eighth of 

21 1 percent, of— 

22 ‘‘(i) for loans consolidated under this 

23 paragraph that were made to a borrower 

24 for a period described in subparagraph 

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


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1 Direct Unsubsidized Stafford Loan for 

2 which the first disbursement is made on 

3 the day before the date of enactment of the 

4 College Debt Swap Act of 2011; and 

5 ‘‘(ii) for loans consolidated under this 

6 paragraph that were made to a borrower 

7 for a period described in subparagraph 

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

9 Direct PLUS loan for which the first dis10 bursement is made on the day before the 

11 date of enactment of the College Debt 

12 Swap Act of 2011. 

13 ‘‘(F) PAYMENT TO THE HOLDER.— 

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

15 private education loan that a borrower is 

16 consolidating under this paragraph, the 

17 Secretary shall make a payment to the 

18 holder of such loan in an amount equal to 

19 the amount consolidated under this para20 graph with respect to such loan. 

21 ‘‘(ii) HOLDER.—Upon receipt of a 

22 payment described in clause (i), a holder 

23 shall discharge the liability on the loan 

24 consolidated under this paragraph in the 

25 amount of such payment. 


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1 ‘‘(G) OUTREACH ACTIVITIES REQUIRED.— 

2 ‘‘(i) IN GENERAL.—The Secretary 

3 shall conduct outreach activities described 

4 in clause (ii) to inform and educate stu5 dents and their families about the tem6 porary private education loan consolidation 

7 program under this paragraph. 

8 ‘‘(ii) REQUIRED COMPONENTS OF

9 OUTREACH.—The Secretary shall provide 

10 for the broad dissemination of information 

11 on the program under this paragraph by— 

12 ‘‘(I) operating and maintaining 

13 an Internet website through which in14 dividuals may obtain information on 

15 changes made to the program; 

16 ‘‘(II) developing and dissemi17 nating information to alumni of un18 dergraduate, graduate, and profes19 sional schools who may be eligible for 

20 the program; 

21 ‘‘(III) providing assistance to in22 stitutions of higher education to edu23 cate graduates on the availability of 

24 the program; and 


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1 ‘‘(IV) ensuring that all outreach 

2 efforts are developed using plain lan3 guage and are culturally- and lan4 guage-appropriate. 

5 ‘‘(iii) USE OF OTHER ENTITIES.—In 

6 carrying out this subparagraph, the Sec7 retary may work with other appropriate 

8 entities to facilitate the dissemination of 

9 information under this subparagraph and 

10 provide assistance as described in this sub11 paragraph. 

12 ‘‘(H) AUTHORIZATION AND APPROPRIA13 TION.—There are authorized to be appro14 priated, and there are appropriated, such sums 

15 as may be necessary to carry out this para16 graph. The amounts made available under this 

17 subparagraph shall remain available until June 

18 30, 2012. 

19 ‘‘(I) PERIOD OF AUTHORITY.—The author20 ity to make Federal Direct Consolidation loans 

21 under this paragraph shall begin 30 days after 

22 the date of the enactment of the College Debt 

23 Swap Act of 2011 and shall expire on June 30, 

24 2012.’’. 


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1 SEC. 3. CONFORMING AMENDMENT. 

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

3 Act of 1965 (20 U.S.C. 1078–3(a)(3)(B)(i)(V)) is amend4 ed— 

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

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

7 (cc) and inserting ‘‘; or’’; and 

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

9 ‘‘(dd) for the purpose of 

10 consolidating an eligible private 

11 education loan under section 

12 455(g)(2), whether such loan is 

13 consolidated only with other eligi14 ble private education loans or 

15 consolidated with loans described 

16 in paragraph (4).’’. 

Æ 


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