HIGHER ED Act

To amend the Higher Education Act of 1965 to improve loans, and for other purposes. 1. Short title; table of contents (a) Short title This Act may be cited as the Helping Individuals Get a Higher Education while Reducing Education Debt Act HIGHER ED Act (b) Table of contents The table of contents of this Act is as follows: Sec. 1. Short title; table of contents. Title I—Reinstatement of authority to make Federal Direct Stafford Loans to graduate and professional students; Discharging student loans in bankruptcy Sec. 101. Reinstatement of authority to make Federal Direct Stafford Loans to graduate and professional students. Sec. 102. Discharge Student Loans in Bankruptcy. Title II—Refinancing programs Sec. 201. Program authority. Sec. 202. Refinancing Program. Sec. 203. Amendments to public service repayment plan provisions. Sec. 204. Income-based repayment. Title III—Loan forgiveness Sec. 301. Loan forgiveness for adjunct faculty. Title IV—Income-driven repayment plans Sec. 401. Income-based repayment plan. Sec. 402. Termination of certain repayment plan options. Sec. 403. Notification and automatic enrollment procedures. Sec. 404. Automatic recertification of income. Sec. 405. Study and procedures on determining family size. Sec. 406. Disclosure of tax return information to carry out certain higher education loan programs. I Reinstatement of authority to make Federal Direct Stafford Loans to graduate and professional students; Discharging student loans in bankruptcy 101. Reinstatement of authority to make Federal Direct Stafford Loans to graduate and professional students (a) Amendments Section 455(a)(3) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(a)(3) (1) in the paragraph heading, by inserting Temporary Termination (2) in subparagraph (A), in the matter preceding clause (i), by inserting , and ending on or before June 30, 2018 2012 (b) Inapplicability of rulemaking requirements Sections 482(c) and 492 of the Higher Education Act of 1965 ( 20 U.S.C. 1089(c) 102. Discharge Student Loans in Bankruptcy (a) Exception To discharge Section 523(a) of title 11, United States Code, is amended— (1) by striking paragraph (8); and (2) by redesignating paragraphs (9) through (14B) as paragraphs (8) through (14A), respectively. (b) Conforming amendments Title 11, United States Code, is amended— (1) in section 704(c)(1)(C)(iv)(I) by striking (14A) (14) (2) in section 1106(c)(1)(C)(iv)(I) by striking (14A) (14) (3) in section 1202(c)(1)(C)(iv)(I) by striking (14A) (14) (4) in section 1328(a)(2) by striking (8), or (9) or (8) (c) Effective date; application of amendments (1) Effective date Except as provided in subsection (b), this section and the amendments made by this section shall take effect on the date of the enactment of this Act. (2) Application of amendments The amendments made by this section shall apply only with respect to cases commenced under title 11 of the United States Code on or after the date of the enactment of this Act. II Refinancing programs 201. Program authority Section 451(a) of the Higher Education Act of 1965 ( 20 U.S.C. 1087a(a) (1) by striking and (2) (2) (2) by inserting ; and (3) to make loans under section 460A and section 460B section 459A 202. Refinancing Program Part D of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1087a 460A. Refinancing FFEL and Federal Direct Loans (a) In general Beginning not later than 180 days after the date of enactment of the Helping Individuals Get a Higher Education while Reducing Education Debt Act (b) Refinancing Direct Loans (1) Federal Direct Loans Upon application of a qualified borrower, the Secretary shall repay a Federal Direct Stafford Loan, a Federal Direct Unsubsidized Stafford Loan, a Federal Direct PLUS Loan, or a Federal Direct Consolidation Loan of the qualified borrower, for which the first disbursement was made, or the application for the consolidation loan was received, before July 1, 2016, with the proceeds of a refinanced Federal Direct Stafford Loan, a Federal Direct Unsubsidized Stafford Loan, a Federal Direct PLUS Loan, or a Federal Direct Consolidation Loan, respectively, issued to the borrower in an amount equal to the sum of the unpaid principal, accrued unpaid interest, and late charges of the original loan. (2) Refinancing FFEL program loans as refinanced Federal Direct Loans Upon application of a qualified borrower for any loan that was made, insured, or guaranteed under part B and for which the first disbursement was made, or the application for the consolidation loan was received, before July 1, 2010, the Secretary shall make a loan under this part, in an amount equal to the sum of the unpaid principal, accrued unpaid interest, and late charges of the original loan to the borrower in accordance with the following: (A) The Secretary shall pay the proceeds of such loan to the eligible lender of the loan made, insured, or guaranteed under part B, in order to discharge the borrower from any remaining obligation to the lender with respect to the original loan. (B) A loan made under this section that was originally— (i) a loan originally made, insured, or guaranteed under section 428 shall be a Federal Direct Stafford Loan; (ii) a loan originally made, insured, or guaranteed under section 428B shall be a Federal Direct PLUS Loan; (iii) a loan originally made, insured, or guaranteed under section 428H shall be a Federal Direct Unsubsidized Stafford Loan; and (iv) a loan originally made, insured, or guaranteed under section 428C shall be a Federal Direct Consolidation Loan. (C) The interest rate for each loan made by the Secretary under this paragraph shall be the rate provided under subsection (c). (c) Interest rates (1) In general The interest rate for the refinanced Federal Direct Stafford Loans, Federal Direct Unsubsidized Stafford Loans, Federal Direct PLUS Loans, and Federal Direct Consolidation Loans, shall be a rate equal to— (A) in any case where the original loan was a loan under section 428 or 428H, a Federal Direct Stafford loan, or a Federal Direct Unsubsidized Stafford Loan, that was issued to an undergraduate student, a rate equal to the rate for Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans issued to undergraduate students for the 12-month period beginning on July 1, 2016, and ending on June 30, 2017; (B) in any case where the original loan was a loan under section 428 or 428H, a Federal Direct Stafford Loan, or a Federal Direct Unsubsidized Stafford Loan, that was issued to a graduate or professional student, a rate equal to the rate for Federal Direct Unsubsidized Stafford Loans issued to graduate or professional students for the 12-month period beginning on July 1, 2016, and ending on June 30, 2017; (C) in any case where the original loan was a loan under section 428B or a Federal Direct PLUS Loan, a rate equal to the rate for Federal Direct PLUS Loans for the 12-month period beginning on July 1, 2016, and ending on June 30, 2017; and (D) in any case where the original loan was a loan under section 428C or a Federal Direct Consolidation Loan, a rate calculated in accordance with paragraph (2). (2) Interest Rates for Consolidation Loans (A) Method of calculation In order to determine the interest rate for any refinanced Federal Direct Consolidation Loan under paragraph (1)(D), the Secretary shall— (i) determine each of the component loans that were originally consolidated in the loan under section 428C or the Federal Direct Consolidation Loan, and calculate the proportion of the unpaid principal balance of the loan under section 428C or the Federal Direct Consolidation Loan that each component loan represents; (ii) use the proportions determined in accordance with clause (i) and the interest rate applicable for each component loan, as determined under subparagraph (B), to calculate the weighted average of the interest rates on the loans consolidated into the loan under section 428C or the Federal Direct Consolidation Loan; and (iii) apply the weighted average calculated under clause (ii) as the interest rate for the refinanced Federal Direct Consolidation Loan. (B) Interest rates for component loans The interest rates for the component loans of a loan made under section 428C or a Federal Direct Consolidation Loan shall be the following: (i) The interest rate for any loan under section 428 or 428H, Federal Direct Stafford Loan, or Federal Direct Unsubsidized Stafford Loan issued to an undergraduate student shall be a rate equal to the lesser of— (I) the rate for Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans issued to undergraduate students for the 12-month period beginning on July 1, 2016, and ending on June 30, 2017; or (II) the original interest rate of the component loan. (ii) The interest rate for any loan under section 428 or 428H, Federal Direct Stafford Loan, or Federal Direct Unsubsidized Stafford Loan issued to a graduate or professional student shall be a rate equal to the lesser of— (I) the rate for Federal Direct Unsubsidized Stafford Loans issued to graduate or professional students for the 12-month period beginning on July 1, 2016, and ending on June 30, 2017; or (II) the original interest rate of the component loan. (iii) The interest rate for any loan under section 428B or Federal Direct PLUS Loan shall be a rate equal to the lesser of— (I) the rate for Federal Direct PLUS Loans for the 12-month period beginning on July 1, 2016, and ending on June 30, 2017; or (II) the original interest rate of the component loan. (iv) The interest rate for any component loan that is a loan under section 428C or a Federal Direct Consolidation Loan shall be the weighted average of the interest rates that would apply under this subparagraph for each loan comprising the component consolidation loan. (v) The interest rate for any eligible loan that is a component of a loan made under section 428C or a Federal Direct Consolidation Loan and is not described in clauses (i) through (iv) shall be the interest rate on the original component loan. (3) Fixed Rate The applicable rate of interest determined under paragraph (1) for a refinanced loan under this section shall be fixed for the period of the loan. (d) Terms and conditions of loans (1) In general A loan that is refinanced under this section shall have the same terms and conditions as the original loan, except as otherwise provided in this section. (2) No automatic extension of repayment period Refinancing a loan under this section shall not result in the extension of the duration of the repayment period of the loan, and the borrower shall retain the same repayment term that was in effect on the original loan. Nothing in this paragraph shall be construed to prevent a borrower from electing a different repayment plan at any time in accordance with section 455(d)(3). (e) Definition of qualified borrower (1) In General For purposes of this section, the term qualified borrower (A) of a loan under this part or part B for which the first disbursement was made, or the application for a consolidation loan was received, before July 1, 2016; and (B) who meets the eligibility requirements based on income or debt-to-income ratio established by the Secretary. (2) Income requirements Not later than 180 days after the date of enactment of the Helping Individuals Get a Higher Education while Reducing Education Debt Act (f) Notification to borrowers The Secretary, in coordination with the Director of the Bureau of Consumer Financial Protection, shall undertake a campaign to alert borrowers of loans that are eligible for refinancing under this section that the borrowers are eligible to apply for such refinancing. The campaign shall include the following activities: (1) Developing consumer information materials about the availability of Federal student loan refinancing. (2) Requiring servicers of loans under this part or part B to provide such consumer information to borrowers in a manner determined appropriate by the Secretary, in consultation with the Director of the Bureau of Consumer Financial Protection. 460B. Federal Direct Refinanced Private Loan program (a) Definitions In this section: (1) Eligible private education loan The term eligible private education loan 15 U.S.C. 1650(a) (A) was disbursed to the borrower before July 1, 2018; and (B) was for the borrower’s own postsecondary educational expenses for an eligible program at an institution of higher education participating in the loan program under this part, as of the date that the loan was disbursed. (2) Federal Direct Refinanced Private Loan The term Federal Direct Refinanced Private Loan (3) Private educational lender The term private educational lender 15 U.S.C. 1650(a) (4) Qualified borrower The term qualified borrower (A) has an eligible private education loan; (B) has been current on payments on the eligible private education loan for the 6 months prior to the date of the qualified borrower's application for refinancing under this section, and is in good standing on the loan at the time of such application; (C) is not in default on the eligible private education loan or on any loan made, insured, or guaranteed under this part or part B or E; and (D) meets the eligibility requirements described in subsection (b)(2). (b) Program authorized (1) In general The Secretary, in consultation with the Secretary of the Treasury, shall carry out a program under which the Secretary, upon application by a qualified borrower who has an eligible private education loan, shall issue such borrower a loan under this part in accordance with the following: (A) The loan issued under this program shall be in an amount equal to the sum of the unpaid principal, accrued unpaid interest, and late charges of the private education loan. (B) The Secretary shall pay the proceeds of the loan issued under this program to the private educational lender of the private education loan, in order to discharge the qualified borrower from any remaining obligation to the lender with respect to the original loan. (C) The Secretary shall require that the qualified borrower undergo loan counseling that provides all of the information and counseling required under clauses (i) through (viii) of section 485(b)(1)(A) before the loan is refinanced in accordance with this section, and before the proceeds of such loan are paid to the private educational lender. (D) The Secretary shall issue the loan as a Federal Direct Refinanced Private Loan, which shall have the same terms, conditions, and benefits as a Federal Direct Unsubsidized Stafford Loan, except as otherwise provided in this section. (2) Borrower eligibility Not later than 180 days after the date of enactment of the Helping Individuals Get a Higher Education while Reducing Education Debt Act (A) based on income or debt-to-income ratio that take into consideration providing access to refinancing under this section for borrowers with the greatest financial need; (B) to ensure eligibility only for borrowers in good standing; (C) to minimize inequities between Federal Direct Refinanced Private Loans and other Federal student loans; (D) to preclude windfall profits for private educational lenders; and (E) to ensure full access to the program authorized in this subsection for borrowers with private loans who otherwise meet the criteria established in accordance with subparagraphs (A) and (B). (c) Interest rate (1) In general The interest rate for a Federal Direct Refinanced Private Loan is— (A) in the case of a Federal Direct Refinanced Private Loan for a private education loan originally issued for undergraduate postsecondary educational expenses, a rate equal to the rate for Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans issued to undergraduate students for the 12-month period beginning on July 1, 2016, and ending on June 30, 2017; and (B) in the case of a Federal Direct Refinanced Private Loan for a private education loan originally issued for graduate or professional degree postsecondary educational expenses, a rate equal to the rate for Federal Direct Unsubsidized Stafford Loans issued to graduate or professional students for the 12-month period beginning on July 1, 2016, and ending on June 30, 2017. (2) Combined undergraduate and graduate study loans If a Federal Direct Refinanced Private Loan is for a private education loan originally issued for both undergraduate and graduate or professional postsecondary educational expenses, the interest rate shall be a rate equal to the rate for Federal Direct PLUS Loans for the 12-month period beginning on July 1, 2016, and ending on June 30, 2017. (3) Fixed Rate The applicable rate of interest determined under this subsection for a Federal Direct Refinanced Private Loan shall be fixed for the period of the loan. (d) No inclusion in aggregate limits The amount of a Federal Direct Refinanced Private Loan, or a Federal Direct Consolidated Loan to the extent such loan was used to repay a Federal Direct Refinanced Private Loan, shall not be included in calculating a borrower's annual or aggregate loan limits under section 428 or 428H. (e) No eligibility for service-Related repayment Notwithstanding sections 428K(a)(2)(A), 428L(b)(2), 455(m)(3)(A), and 460(b), a Federal Direct Refinanced Private Loan, or any Federal Direct Consolidation Loan to the extent such loan was used to repay a Federal Direct Refinanced Private Loan, shall not be eligible for any loan repayment or loan forgiveness program under section 428K, 428L, or 460 or for the repayment plan for public service employees under section 455(m). (f) Private educational lender reporting requirement (1) Reporting required Not later than 180 days after the date of enactment of the Helping Individuals Get a Higher Education while Reducing Education Debt Act (2) Contents of reporting The data that private educational lenders shall report in accordance with paragraph (1) shall include each of the following about private education loans (as defined in section 140(a) of the Truth in Lending Act ( 15 U.S.C. 1650(a) (A) The total amount of private education loan debt the lender holds. (B) The total number of private education loan borrowers the lender serves. (C) The average interest rate on the outstanding private education loan debt held by the lender. (D) The proportion of private education loan borrowers who are in default on a loan held by the lender. (E) The proportion of the outstanding private education loan volume held by the lender that is in default. (F) The proportions of outstanding private education loan borrowers who are 30, 60, and 90 days delinquent. (G) The proportions of outstanding private education loan volume that is 30, 60, and 90 days delinquent. (g) Notification to borrowers The Secretary, in coordination with the Secretary of the Treasury and the Director of the Bureau of Consumer Financial Protection, shall undertake a campaign to alert borrowers about the availability of private student loan refinancing under this section. . 203. Amendments to public service repayment plan provisions Section 455(m) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(m) (1) by redesignating paragraphs (3) and (4) as paragraphs (4) and (5), respectively; (2) by inserting after paragraph (2) the following: (3) Special rules for section 460A loans (A) Refinanced Federal Direct loans Notwithstanding paragraph (1), in determining the number of monthly payments that meet the requirements of such paragraph for an eligible Federal Direct Loan refinanced under section 460A that was originally a loan under this part, the Secretary shall include all monthly payments made on the original loan that meet the requirements of such paragraph. (B) Refinanced FFEL loans In the case of an eligible Federal Direct Loan refinanced under section 460A that was originally a loan under part B, only monthly payments made after the date on which the loan was refinanced may be included for purposes of paragraph (1). ; and (3) in paragraph (4)(A) (as redesignated by paragraph (1))— (A) by inserting (including any Federal Direct Stafford Loan, Federal Direct PLUS Loan, Federal Direct Unsubsidized Stafford Loan, or Federal Direct Consolidation Loan refinanced under section 460A) (B) by striking The term (i) In general The term ; and (C) by adding at the end the following: (ii) Treatment of certain consolidation loan payments In a case in which a borrower makes a monthly payment under paragraph (1)(A) on a Federal Direct Consolidation Loan that was used to repay an eligible Federal Direct Loan described in clause (i) for which at least one monthly payment has been made under paragraph (1)(A) prior to the consolidation, the monthly payment on such Federal Direct Consolidation Loan shall be treated as a monthly payment on such eligible Federal Direct Loan. . 204. Income-based repayment Section 493C of the Higher Education Act of 1965 ( 20 U.S.C. 1098e (f) Special rule for refinanced loans (1) Refinanced Federal Direct and FFEL loans In calculating the period of time during which a borrower of a loan that is refinanced under section 460A has made monthly payments for purposes of subsection (b)(7), the Secretary shall deem the period to include all monthly payments made for the original loan, and all monthly payments made for the refinanced loan, that otherwise meet the requirements of this section. (2) Federal Direct Refinanced Private Loans In calculating the period of time during which a borrower of a Federal Direct Refinanced Private Loan under section 460B has made monthly payments for purposes of subsection (b)(7), the Secretary shall include only payments— (A) that are made after the date of the issuance of the Federal Direct Refinanced Private Loan; and (B) that otherwise meet the requirements of this section. . III Loan forgiveness 301. Loan forgiveness for adjunct faculty Section 455(m)(3)(B)(ii) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(m)(3)(B)(ii) (1) by striking teaching as teaching— (I) as ; (2) by striking , foreign language faculty, and part-time faculty at community colleges), as determined by the Secretary. and foreign language faculty), as determined by the Secretary; or (3) by adding at the end the following: (II) as a part-time faculty member or instructor who— (aa) teaches not less than 1 course at an institution of higher education (as defined in section 101(a)), a postsecondary vocational institution (as defined in section 102(c)), or a Tribal College or University (as defined in section 316(b)); and (bb) is not employed on a full-time basis by any other employer. . IV Income-driven repayment plans 401. Income-based repayment plan Section 493C of the Higher Education Act of 1965 ( 20 U.S.C. 1098e (1) in subsection (b)— (A) in paragraph (8), by striking and (B) in paragraph (9), by striking the period at the end and inserting ; and (C) by adding at the end the following: (10) a borrower who is repaying a loan made under part B or D pursuant to this section may repay such loan in full at any time without penalty. ; and (2) by adding at the end the following: (f) Income-Based repayment for new loans on and after July 1, 2018, and for borrowers who enter IBR after July 1, 2018 (1) In General The income-based repayment plan shall be carried out in accordance with this section, except as otherwise specified in this subsection (including through the special terms described in paragraph (2))— (A) with respect to any loan issued on or after July 1, 2018, if such borrower elects the income-based repayment plan for that loan; and (B) with respect to any borrower who is repaying a loan made, insured, or guaranteed under part B or D, if such borrower elects to repay the loan under the income-based repayment plan on or after July 1, 2018. (2) Special terms Notwithstanding any other provision of this section, with respect to a loan described under paragraph (1), the following terms shall apply to the income-based repayment plan: (A) (i) Notwithstanding subsection (a)(3)(B), the repayment amount under this subsection shall be an amount equal to 10 percent of the result obtained by calculating, on at least an annual basis, the amount by which— (I) the borrower's, and the borrower's spouse's (if applicable), adjusted gross income; exceeds (II) the applicable percentage of the poverty line in accordance with clause (ii) that is applicable to the borrower's family size as determined under section 673(2) of the Community Services Block Grant Act ( 42 U.S.C. 9902(2) (ii) For purposes of clause (i), the term applicable percentage (B) A borrower may elect— (i) during any period during which the borrower’s (and the borrower’s spouse, if applicable) adjusted gross income is equal to or less than 225 percent of the poverty line applicable to the borrower's family size as determined under section 673(2) of the Community Services Block Grant Act ( 42 U.S.C. 9902(2) (ii) during any period during which the borrower’s (and the borrower’s spouse, applicable) adjusted gross income exceeds 225 percent of such poverty line, to have the borrower’s aggregate monthly payment for all such loans not exceed, the lesser of— (I) the result described in subparagraph (A) divided by 12; or (II) the monthly amount calculated under section 455(d)(1)(A), based on a 10-year repayment period, when the borrower first made the election described in this subsection. (C) With respect to any loan for which payments may be made under subparagraph (B), be paid, or be treated as if no interest has accrued, by the Secretary— (i) for any period described in subparagraph (B)(i); and (ii) for the 6-month period after the date the borrower ceases to carry at least one-half the normal full-time academic workload at an institution of higher education, as determined by the institution, and during which the borrower is not earning any income. (D) Subsection (b)(7)(B) shall be applied by substituting 20 years 25 years (E) A borrower of such a loan shall not be required to have a partial financial hardship and may elect, and remain enrolled in, the income-based repayment plan under this subsection regardless of income level. (F) Subparagraph (A) of subsection (b)(6) shall not apply and a borrower's monthly payment shall be determined in accordance with subparagraph (A) divided by 12, which may exceed the monthly repayment amount under a standard 10-year repayment plan. (G) Subparagraph (B) of subsection (b)(3) shall not apply. (3) Additional special terms for certain borrowers A borrower described in paragraph (1)(B)— (A) may choose to retain the repayment plan in which the borrower is enrolled on June 30, 2018; (B) may elect to— (i) leave the repayment plan described in subparagraph (A) and enter the income-based repayment plan under this subsection; (ii) leave the repayment plan described in subparagraph (A) and enter a standard 10-year repayment plan under section 455(d)(A)(A); or (iii) not more than once per calendar year, switch between the repayment plans described in clauses (i) and (ii); (C) after electing to leave a repayment plan other than an income-based repayment plan described under this subsection or a standard 10-year repayment plan under section 455(d)(A)(A), shall not be permitted to re-elect a repayment plan that is not an income-based repayment plan under this subsection or such standard 10-year repayment plan; and (D) shall retain, for purposes of repayment or cancellation of any outstanding balance of principal and interest due on a loan (as described in subsection (b)(7)) any years of repayment under another income-based or income-contingent repayment plan under this title. (4) Cap on interest accrual Notwithstanding any other provision of this Act, the total amount of interest that accrues during a borrower's grace period and the time that a borrower is in repayment under this subsection shall not exceed 50 percent of the original principal amount of the loan. . 402. Termination of certain repayment plan options (a) Effective date; Rulemaking regarding termination of certain repayment plans (1) Effective date The amendments made by this section shall take effect on July 1, 2018. (2) Regulations Before the effective date described in paragraph (1), the Secretary of Education shall carry out a plan to end all eligibility for repayment plans other than a standard repayment plan under section 428(b)(9)(A)(i) or 455(d)(1)(A) with a repayment period of 10 years and an income-based repayment plan described under section 493C(f) for loans made under part B or D of title IV of the Higher Education Act of 1965, unless the borrower is enrolled in another repayment plan before such effective date, in accordance with the amendments made by this Act. (b) Changes to current law (1) Section 428(b) of the Higher Education Act of 1965 ( 20 U.S.C. 1078(b) (A) in paragraph (1)— (i) in subparagraph (D)— (I) in clause (ii), by striking may annually change the selection of a repayment plan under this part, may at any time after July 1, 2018, and not more frequently than once per calendar year thereafter, change the selection of a repayment plan under this part to one of the 2 repayment plans described in paragraph (9)(C), (II) in clause (iii), by striking be subject to income-contingent repayment in accordance with subsection (m); be subject to income-based repayment in accordance with section 493C(f); (ii) in subparagraph (E)(i), by striking the option of repaying the loan in accordance with a standard, graduated, income-sensitive, or extended repayment schedule (as described in paragraph (9)) established by the lender in accordance with regulations of the Secretary; and the option of repaying the loan in accordance with a repayment plan described in paragraph (9)(C) established by the lender in accordance with regulations of the Secretary; and (B) in paragraph (9), by adding at the end the following: (C) Selection of repayment plans on and after July 1, 2018 (i) Opportunity to change repayment plans Notwithstanding any other provision of this paragraph, or any other provision of law, and in accordance with regulations, beginning on July 1, 2018, the lender shall offer a borrower of a loan made, insured, or guaranteed under this part the opportunity to change repayment plans not more than once per calendar year, and to enroll in one of the following repayment plans: (I) A standard repayment plan under section 428(b)(9)(A)(i) with a repayment period of 10 years. (II) The income-based repayment plan under section 493C(f). ; and (2) in section 455(d)— (A) by redesignating paragraphs (2) through (5) as paragraphs (3) through (6), respectively; and (B) by inserting after paragraph (1), the following: (2) Design and selection on and after July 1, 2018 (A) In General Notwithstanding paragraph (1), for the borrower of a loan made on or after July 1, 2018, and for other borrowers subject to paragraph (7), the Secretary shall offer a borrower of a loan made under this part 2 plans for repayment of such loan, including principal and interest on the loan. The borrower shall be entitled to accelerate, without penalty, repayment on the borrower's loans under this part. The borrower may choose— (i) a standard repayment plan under section 455(d)(1)(A) with a repayment period of 10 years; or (ii) the income-based repayment plan under section 493C(f). (B) Selection by the Secretary If a borrower of a loan made under this part on or after July 1, 2018, does not select a repayment plan described in subparagraph (A), the Secretary may provide the borrower with a standard repayment plan under section 455(d)(1)(A) with a repayment period of 10 years. (C) Changes in selections Beginning on July 1, 2018, a borrower of a loan made under this part may change the borrower's selection of a repayment plan in accordance with paragraph (7) and under such terms and conditions as may be established by the Secretary. (D) Borrower in default Beginning on July 1, 2018, the Secretary may require any borrower who has defaulted on a loan made under this part to— (i) pay all reasonable collection costs associated with such loan; and (ii) repay the loan pursuant to an income-based repayment plan under section 493C(f). ; and (3) by adding at the end the following: (7) Borrowers of loans made before July 1, 2018 A borrower who is in repayment on a loan made under part B or part D before July 1, 2018— (A) may choose to retain the repayment plan that the borrower was enrolled in on the day before such date; (B) may elect to— (i) enter the income-based repayment plan under section 493C(f); (ii) enter a standard repayment plan under section 455(d)(1)(A) with a repayment period of 10 years; or (iii) switch between the repayment plans described in clauses (i) and (ii) not more than once during a calendar year; (C) after electing to leave a repayment plan other than an income-based repayment plan described under this subsection or a standard repayment plan under section 455(d)(1)(A), shall not be permitted to re-elect a repayment plan that is not an income-based repayment plan under this subsection or a standard repayment plan under section 455(d)(1)(A); and (D) shall retain, for purposes of repayment or cancellation of any outstanding balance of principal and interest due on a loan (as described in section 493C(b)(7)) any years of repayment under another income-based or income-contingent repayment plan under this title. . 403. Notification and automatic enrollment procedures (a) Income-Contingent repayment Section 455(d) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(d) (8) Notification and automatic enrollment procedures for borrowers who are delinquent on loans (A) Authority to obtain income information (i) In general In the case of any borrower who is at least 60 days delinquent on a covered loan, the Secretary may obtain such information as is reasonably necessary regarding the income and family size of the borrower (and the borrower's spouse, if applicable). (ii) Availability of returns and return information Returns and return information (as defined in section 6103 (B) Borrower notification With respect to each borrower of a covered loan who is at least 60 days delinquent on such loan and who has not been subject to the procedures under this paragraph for such loan in the preceding 120 days, the Secretary shall, as soon as practicable after such 60-day delinquency, provide to the borrower the following: (i) Notification that the borrower is at least 60 days delinquent on at least 1 covered loan, and a description of all delinquent covered loans, nondelinquent covered loans, and noncovered loans of the borrower. (ii) A brief description of the repayment plans for which the borrower is eligible and the covered loans and noncovered loans of the borrower that may be eligible for such plans, based on information available to the Secretary. (iii) Clear and simple instructions on how to select the repayment plans. (iv) The amount of monthly payments for the covered and noncovered loans under the repayment plans for which the borrower is eligible, based on information available to the Secretary, including, if the income information of the borrower is available to the Secretary under subparagraph (A)— (I) the amount of the monthly payment under each income-driven repayment plan for which the borrower is eligible for the borrower's covered and noncovered loans, based on such income information; and (II) the income, family size, tax filing status, and tax year information on which each monthly payment is based. (v) An explanation that in the case of a borrower for whom adjusted gross income is unavailable— (I) if the borrower selects to repay the covered loans of such borrower pursuant to an income-driven repayment plan that defines discretionary income in such a manner that an individual not required under section 6012(a)(1) (II) if the borrower selects to repay such loans pursuant to an income-driven repayment plan that is not described in subclause (I), the borrower will not be required to provide the Secretary with such other documentation of income, and the borrower will have a calculated monthly payment of $0. (vi) An explanation that the Secretary shall take the actions under subparagraph (C) with respect to such borrower, if— (I) the borrower is 120 days delinquent on one or more covered loans and has not selected a new repayment plan for the covered loans of the borrower; and (II) in the case of such a borrower whose repayment plan for the covered loans of the borrower is not an income-driven repayment plan, the monthly payments under such repayment plan are higher than such monthly payments would be under an income-driven repayment plan for such loans. (vii) Instructions on updating the information of the borrower obtained under subparagraph (A). (C) Secretary's initial selection of plan With respect to each borrower described in subparagraph (B) who has a repayment plan for the covered loans of the borrower that meets the requirements of clause (vi)(II) of subparagraph (B) and has not selected a new repayment plan for such loans in accordance with the notice received under such subparagraph, and who is at least 120 days delinquent on such a loan, the Secretary shall, as soon as practicable— (i) in a case in which any of the borrower's covered loans are eligible for an income-driven repayment plan— (I) (aa) provide the borrower with the income-driven repayment plan that requires the lowest monthly payment amount for each covered loan of the borrower, compared to any other such plan for which the borrower is eligible; or (bb) if more than one income-driven repayment plan would offer the borrower the same lowest monthly payment amount, provide the borrower with the income-driven repayment plan that has the most favorable terms for the borrower; (II) if the plan selected under subclause (I) is not the income-driven repayment plan that would have the lowest monthly payment amount if the borrower were eligible for such plan for the borrower’s covered loans and noncovered loans, notify the borrower of the actions, if any, the borrower may take to become eligible for such income-driven repayment plan; and (III) authorize the borrower to change the Secretary’s selection of a plan under this clause to any plan described in paragraph (1) for which the borrower is eligible; and (ii) in a case in which none of the borrower’s covered loans are eligible for an income-driven repayment plan, notify the borrower of the actions, if any, the borrower may take for such loans to become eligible for such a plan. (D) Secretary's additional selection of plan (i) In general With respect to each borrower of a covered loan who selects a new repayment plan in accordance with the notice received under subparagraph (B) and who continues to be delinquent on such loan for a period described in clause (ii), the Secretary shall, as soon as practicable after such period, carry out the procedures described in clauses (i) and (ii) of subparagraph (C) for the covered loans of the borrower, if such procedures would result in lower monthly repayment amounts on such loan. (ii) Description of period The duration of the period described in clause (i) shall be the amount of time that the Secretary determines is sufficient to indicate that the borrower may benefit from repaying such loan under a new repayment plan, but in no case shall such period be less than 60 days. (E) Opt-out A borrower of a covered loan shall have the right to opt-out of the procedures under this paragraph. (9) Definitions In this subsection: (A) Covered loan The term covered loan (i) a loan made under this part; (ii) a loan purchased under section 459A; or (iii) a loan that has been assigned to the Secretary under section 428(c)(8) or part E. (B) Income-driven repayment plan The term income-driven repayment plan (i) in the case of a covered loan made under this part, purchased under section 459A, or assigned to the Secretary before July 1, 2018, a plan described in subparagraph (D) or (E) of paragraph (1); and (ii) in the case of a covered loan made under this part, purchased under section 459A, or assigned to the Secretary before July 1, 2018, the income-based repayment plan under section 493C(f). (C) Noncovered loan The term noncovered loan . (b) Changing plans Section 493C(b)(8) of the Higher Education Act of 1965 ( 20 U.S.C. 1098e(b)(8) (8) a borrower who is repaying a loan made, insured, or guaranteed under part B or D pursuant to income-based repayment may elect, at any time, to terminate repayment pursuant to income-based repayment and repay such loan under any repayment plan for which the loan is eligible in accordance with the requirements of part B or part D, respectively; and . (c) Effective date; Application (1) Automatic enrollment The amendments made by subsection (a) shall— (A) take effect as soon as the Secretary of Education determines practicable after the Secretary finalizes the procedures under section 405, but not later than 2 years after the date of enactment of this Act; and (B) apply to all borrowers of covered loans (as defined in section 455(d)(9) of the Higher Education Act of 1965, as added by subsection (a)). (2) Changing plans The amendment made by subsection (b) shall take effect on the date of enactment of this Act. 404. Automatic recertification of income (a) Income-Contingent repayment Section 455(e) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(e) (1) in paragraph (3)— (A) by striking does not reasonably reflect the borrower's current income whose income has decreased relative to the adjusted gross income available to the Secretary (B) by inserting , consistent with the procedures established under paragraph (8)(B)(iv) (2) by adding at the end the following: (8) Automatic recertification (A) Definition In this paragraph, the term covered loan (B) In general Beginning as soon as the Secretary determines practicable after the Secretary finalizes the procedures under section 405 of the Helping Individuals Get a Higher Education while Reducing Education Debt Act (i) obtain (for each year of repayment and without further action by the borrower) such information as is reasonably necessary regarding the income of such borrower (and the borrower’s spouse, if applicable), for the purpose of determining the repayment obligation of the borrower for such year, including information with respect to the borrower’s family size in accordance with the procedures under section 405 of the Helping Individuals Get a Higher Education while Reducing Education Debt Act (ii) allow the borrower, at any time, to opt-out of clause (i) and prevent the Secretary from obtaining information under such clause without further action by the borrower; (iii) provide the borrower with an opportunity to update the information obtained under clause (i) before the determination of the annual repayment obligation of the borrower; and (iv) in the case of a borrower for whom adjusted gross income is unavailable— (I) if the borrower has selected to repay the covered loans of such borrower pursuant to an income-contingent repayment plan that defines discretionary income in such a manner that an individual not required under section 6012(a)(1) (II) if the borrower has selected to repay such loans pursuant to an income-contingent repayment that is not described in subclause (I), the borrower will not be required to provide the Secretary with such other documentation of income, and the borrower will have a calculated monthly payment of $0. (C) Applicability Subparagraph (B) shall apply to each borrower of a covered loan who, on or after the date on which the Secretary establishes procedures under such subparagraph— (i) selects, or for whom the Secretary selects under subparagraph (C) or (D) of paragraph (8) of subsection (d), or section 428(m)(1), an income-contingent repayment plan; or (ii) recertifies income and family size under such plan. (D) Availability of returns and return information Returns and return information (as defined in section 6103 (E) Other requirements The procedures established by the Secretary under this paragraph shall be consistent with the requirements of paragraphs (1) through (7), except as otherwise provided in this paragraph. . (b) Income-Based repayment Section 493C(c) of the Higher Education Act of 1965 ( 20 U.S.C. 1098e(c) (1) by striking The Secretary shall establish (1) In general The Secretary shall establish ; (2) by striking The Secretary shall consider (2) Procedures for eligibility The Secretary shall— (A) consider ; and (3) by striking 428C(b)(1)(E). 428C(b)(1)(E); and (B) beginning as soon as the Secretary determines practicable after the Secretary finalizes the procedures under section 405 of the Helping Individuals Get a Higher Education while Reducing Education Debt Act . 405. Study and procedures on determining family size (a) In general Not later than 1 year after the date of enactment of this Act, the Secretary of Education shall— (1) jointly with the Secretary of the Treasury, conduct a study, which meets the specifications described in subsection (b), on the effect of using data from the Internal Revenue Service on the deduction for personal exemptions provided by section 151 (2) use the results of the study conducted under paragraph (1) to develop procedures for determining family size for the automatic recertification of income for an income-driven repayment plan in a manner that minimizes burdens and unintended harm to borrowers; (3) publish the procedures developed under paragraph (2) in the Federal Register; and (4) after a notice and comment period on such procedures, use such comments to finalize the procedures. (b) Specifications The study conducted under subsection (a)(1) shall— (1) determine how closely such personal exemptions match the family size that borrowers report on their income-driven repayment plan request form; (2) compare the borrower’s actual monthly payment amount with the monthly payment amount borrowers would have using family size information derived from tax returns; and (3) use data from more than one year, where possible, to analyze how much family size changes over time. (c) Definition The term income-driven repayment plan 406. Disclosure of tax return information to carry out certain higher education loan programs (a) In general Paragraph (13) of section 6103(l) (13) Disclosure of returns and return information for purposes of student loan administration (A) In general The Secretary, subject to such requirements and conditions as the Secretary may prescribe, shall upon written request from the Secretary of Education disclose to officers and employees of the Department of Education returns and return information with respect to a taxpayer who has received an applicable student loan. (B) Restriction on use of disclosed information Return information disclosed under subparagraph (A) may be used by officers and employees of the Department of Education only for the purposes of, and to the extent necessary for purposes of— (i) establishing the appropriate income-contingent repayment amount in connection with an applicable student loan, (ii) establishing the appropriate repayment amount under an applicable income-driven repayment plan (as defined in section 455(d)(9) of such Act ( 20 U.S.C. 1087e(d) (I) borrowers who have selected such a plan, and (II) in the case of any recertification under section 455(e)(8) or 493C(c)(2)(B) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(e) (iii) in the case of borrowers who are at least 60 days delinquent on an applicable student loan— (I) providing notice of eligibility for an income-driven repayment plan (as so defined) pursuant to section 455(d)(8)(B) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(d) (II) automatic enrollment in such an income-driven repayment plan after such borrowers are at least 120 days delinquent on such a loan pursuant to section 455(d)(8)(C) of such Act ( 20 U.S.C. 1087e(d) (C) Disclosure to certain contractors Officers and employees of the Department of Education may disclose the information described in subparagraph (A) to persons awarded contracts by the Secretary of Education under section 456 of the Higher Education Act of 1965 ( 20 U.S.C. 1087f (D) Spousal information for married individuals filing separate returns For purposes of this paragraph, in the case of a married individual filing a separate return, the term taxpayer (E) Applicable student loan For purposes of this paragraph, the term applicable student loan (i) any loan which is made, insured, or guaranteed under a program authorized under part B or D of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1071 (ii) any loan which is made under part E of such title IV ( 20 U.S.C. 1087aa . (b) Conforming amendments (1) Section 6103(a)(3) of such Code is amended by inserting (13), (12), (2) Section 6103(p)(4) of such Code is amended by inserting (13), (l)(10), (c) Effective date The amendments made by this section shall apply to disclosures made after the date of enactment of this Act.

Summary: Helping Individuals Get a Higher Education while Reducing Education Debt Act or the HIGHER ED Act This bill assists certain student borrowers with reducing their debt for higher education. Among other things, the bill allows existing public and private students loans to be refinanced into federal loans, broadly changes loan terms, such as repayment and interest for student loans, authorizes graduate and professional students to receive subsidized Stafford Loans, and makes federal student loans dischargeable in bankruptcy proceedings.