Fair Student Loan Debt Collection Practices Act

To amend the Fair Debt Collection Practices Act to prohibit debt collectors from collecting on certain Federal student loan debt when the borrower would not be required to make payments under an income-driven repayment plan, and for other purposes. 1. Short title This Act may be cited as the Fair Student Loan Debt Collection Practices Act 2. Collection restrictions with respect to Federal student loans (a) In general The Fair Debt Collection Practices Act ( 15 U.S.C. 1692 (1) by inserting after section 811 the following: 811A. Collection restrictions with respect to Federal student loans (a) Prohibition on collecting from borrowers below certain income guidelines A debt collector may not attempt to collect a Federal student loan debt from a borrower during any period of time when a similarly situated borrower would not be required to make a payment under an income-driven repayment plan. (b) Limitation on amounts collected based on certain income guidelines During any 1-month period, a debt collector may not attempt to collect from a borrower an amount with respect to a Federal student loan debt that exceeds the amount that a similarly situated borrower would be required to make for such month under an income-driven repayment plan. (c) Certification before accepting payment A debt collector may not accept any payment with respect to a Federal student loan debt unless the debt collector first certifies to the borrower that the borrower is not eligible for any administrative discharge of such debt. (d) Definitions In this section: (1) Debt collector The term debt collector (A) has the meaning given the term under section 803; and (B) means any other person that enters into a contract with the Secretary of Education pursuant to section 456 of the Higher Education Act of 1965 ( 20 U.S.C. 1087f 20 U.S.C. 1070 (2) Federal student loan The term Federal student loan (3) Federal student loan debt The term Federal student loan debt (4) Income-driven repayment plan The term income-driven repayment plans 20 U.S.C. 1098e (5) Similarly situated borrower With respect to a borrower, the term similarly situated borrower ; and (2) in the table of contents for such Act, by inserting after the item relating to section 811 the following: 811A. Collection restrictions with respect to Federal student loans. . (b) Debt waiver requirements Section 3711(g) of the title 31, United States Code, is amended by adding at the end the following: (11) The Secretary of the Treasury shall, before making a determination at the request of the Secretary of Education under paragraph (2)(B), require the Secretary of Education to establish regulations or procedures approved by the Secretary of the Treasury— (A) to ensure that any entity awarded a contract pursuant to section 456 of the Higher Education Act of 1965 ( 20 U.S.C. 1087f (B) to ensure that any use by the Secretary of Education of the wage garnishment authority pursuant to section 488A of the Higher Education Act of 1965 ( 20 U.S.C. 1095a (i) the collection of debts from borrowers who would not otherwise be entitled to loan cancellation, discharge, or forgiveness under any applicable provision of the Higher Education Act of 1965; and (ii) the collection of debts from borrowers for amounts less than or equal to the payment that would be required under an income-driven repayment plan for a similarly situated borrower (as such terms are defined, respectively, under section 811A(d) of the Fair Debt Collection Practices Act). . (c) Waiver review and evaluation Not later than 180 days after the date of the enactment of this Act, the Secretary of the Treasury shall— (1) review and evaluate any determination made at the request of the Secretary of Education under section 3711(g)(2)(B) of title 31, United States Code; and (2) rescind or reissue such a determination to comply with the requirements established by paragraph (11) of such section, as added by subsection (b) of this Act.

Summary: Fair Student Loan Debt Collection Practices Act This bill prohibits a debt collector from collecting on federal student loan debt owed by a borrower earning under a certain income. Specifically, a federal student loan debt collector may not attempt to collect if a borrower would qualify for a zero-dollar payment under an income-driven repayment plan. Additionally, a debt collector may not attempt to collect an amount greater than the payment the borrower would owe under such a plan.