program to assist eligible borrowers in refinancing all or 
a portion of their private education debt as Federal Direct 
Consolidation Loans. 
SEC. 2. CONSOLIDATION OF PRIVATE EDUCATION LOANS. 
Section 455(g) of the Higher Education Act of 1965 
(20 U.S.C. 1087e(g)) is amended— 
(1) by striking ‘‘A borrower’’ and inserting the 
following: 
‘‘(1) IN GENERAL.—A borrower’’; 
(2) by inserting ‘‘, and any loan described in 
paragraph (2),’’ after ‘‘July 1, 2010’’; and 
(3) by adding at the end the following new 
paragraph: 
‘‘(2) CONSOLIDATION OF PRIVATE EDUCATION 
LOANS
AS
A
FEDERAL
DIRECT
CONSOLIDATION 
LOAN.— 
‘‘(A) IN GENERAL.—Notwithstanding any 
other provision of law, a borrower who meets 
the eligibility criteria described in paragraph 
(1) and subparagraph (B) of this paragraph 
shall be eligible to obtain a Federal Direct Con-
solidation loan under this paragraph that— 
‘‘(i) shall include an eligible private 
education loan; and 
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‘‘(ii) may include a loan described in 
section 428C(a)(4). 
‘‘(B) ELIGIBLE
BORROWER.—A borrower 
of an eligible private education loan is eligible 
to obtain a Federal Direct Consolidation Loan 
under this paragraph if the borrower— 
‘‘(i) is not in default on a loan made, 
insured, or guaranteed under this title or 
in default (as such term is defined in sec-
tion 435(l)) on any eligible private edu-
cation loan that the borrower is seeking to 
consolidate under this paragraph, except 
that a borrower who entered such default 
at any time during the period beginning on 
December 1, 2007, through December 31, 
2009, due to an economic hardship (as 
such term is defined in section 435(o)), as 
determined by the Secretary, shall not be 
ineligible under this clause; 
‘‘(ii) was— 
‘‘(I) at any time on or after July 
1, 1994, and before July 1, 2010, en-
rolled as an undergraduate, graduate, 
or professional student who was eligi-
ble to borrow a loan under section 
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428H or a Federal Direct Unsub-
sidized Stafford Loan; or 
‘‘(II) at any time on or after July 
1, 2006, and July 1, 2010, enrolled as 
a graduate or professional student 
who was eligible to borrow a loan 
under section 428B or a Federal Di-
rect PLUS loan; 
‘‘(iii) borrowed at least one eligible 
private education loan for a period of en-
rollment described in clause (ii); 
‘‘(iv) is in— 
‘‘(I) repayment status on the eli-
gible private education loan that the 
borrower is seeking to consolidate 
under this paragraph; or 
‘‘(II) a grace period preceding re-
payment on such loan; 
‘‘(v) with respect to Federal Direct 
PLUS loans, does not have an adverse 
credit history, as such term is defined by 
the Secretary by regulation; and 
‘‘(vi) has not previously obtained a 
Federal Direct Consolidation Loan under 
this paragraph. 
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‘‘(C) DEFINITION
OF
ELIGIBLE
PRIVATE 
EDUCATION LOAN.—For purposes of this para-
graph, the term ‘eligible private education loan’ 
means a private education loan (as such term 
is defined in section 140 of the Truth in Lend-
ing Act (15 U.S.C. 1650)) that was disbursed 
to a borrower on or after July 1, 1994, and be-
fore July 1, 2010. 
‘‘(D) AMOUNT
THAT
MAY
BE
CONSOLI-
DATED.—The aggregate maximum amount of 
eligible private education loans that may be 
consolidated by a borrower under this para-
graph is— 
‘‘(i) for loans made to a borrower for 
a period of enrollment described in sub-
paragraph (B)(ii)(I), an amount equal to 
the amount of outstanding principal, ac-
crued interest, and related fees and costs 
(as determined by the Secretary) owed by 
the borrower on eligible private education 
loans, except that the outstanding principal 
on the eligible private education loans shall 
not exceed— 
‘‘(I) the maximum aggregate 
amount of loans under section 428H, 
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as of the date of the enactment of the 
College Debt Swap Act of 2011— 
‘‘(aa) for an undergraduate 
dependent student, if the bor-
rower was enrolled as an under-
graduate dependent student dur-
ing the period of enrollment; 
‘‘(bb) for an undergraduate 
independent student, if the bor-
rower was enrolled as an under-
graduate 
independent 
student 
during the period of enrollment; 
or 
‘‘(cc) for a graduate or pro-
fessional student, if the borrower 
was enrolled as a graduate or 
professional student during the 
period of enrollment; 
minus 
‘‘(II) the aggregate amount of 
loans under section 428H and Federal 
Direct Unsubsidized Stafford Loans 
borrowed by the borrower for such pe-
riod of enrollment; plus 
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‘‘(ii) for loans made to a borrower for 
a period of enrollment described in sub-
paragraph (B)(ii)(II), an amount equal 
to— 
‘‘(I) the total outstanding prin-
cipal, accrued interest, and related 
fees and costs (as determined by the 
Secretary) owed by the borrower on 
eligible private education loans; minus 
‘‘(II) the aggregate amount of 
loans under section 428B and Federal 
Direct PLUS loans borrowed by the 
borrower for such period of enroll-
ment. 
‘‘(E) INTEREST
RATE.—Notwithstanding 
subsection (b), a Federal Direct Consolidation 
loan made under this paragraph shall bear in-
terest at an annual rate on the unpaid principal 
balance of the loan that is the weighted aver-
age, rounded to the nearest higher one-eighth of 
1 percent, of— 
‘‘(i) for loans consolidated under this 
paragraph that were made to a borrower 
for a period described in subparagraph 
(B)(ii)(I), the interest rate for a Federal 
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Direct Unsubsidized Stafford Loan for 
which the first disbursement is made on 
the day before the date of enactment of the 
College Debt Swap Act of 2011; and 
‘‘(ii) for loans consolidated under this 
paragraph that were made to a borrower 
for a period described in subparagraph 
(B)(ii)(II), the interest rate for a Federal 
Direct PLUS loan for which the first dis-
bursement is made on the day before the 
date of enactment of the College Debt 
Swap Act of 2011. 
‘‘(F) PAYMENT TO THE HOLDER.— 
‘‘(i) SECRETARY.—For each eligible 
private education loan that a borrower is 
consolidating under this paragraph, the 
Secretary shall make a payment to the 
holder of such loan in an amount equal to 
the amount consolidated under this para-
graph with respect to such loan. 
‘‘(ii) HOLDER.—Upon receipt of a 
payment described in clause (i), a holder 
shall discharge the liability on the loan 
consolidated under this paragraph in the 
amount of such payment. 
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‘‘(G) OUTREACH ACTIVITIES REQUIRED.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall conduct outreach activities described 
in clause (ii) to inform and educate stu-
dents and their families about the tem-
porary private education loan consolidation 
program under this paragraph. 
‘‘(ii) 
REQUIRED
COMPONENTS
OF 
OUTREACH.—The Secretary shall provide 
for the broad dissemination of information 
on the program under this paragraph by— 
‘‘(I) operating and maintaining 
an Internet website through which in-
dividuals may obtain information on 
changes made to the program; 
‘‘(II) developing and dissemi-
nating information to alumni of un-
dergraduate, graduate, and profes-
sional schools who may be eligible for 
the program; 
‘‘(III) providing assistance to in-
stitutions of higher education to edu-
cate graduates on the availability of 
the program; and 
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‘‘(IV) ensuring that all outreach 
efforts are developed using plain lan-
guage and are culturally- and lan-
guage-appropriate. 
‘‘(iii) USE OF OTHER ENTITIES.—In 
carrying out this subparagraph, the Sec-
retary may work with other appropriate 
entities to facilitate the dissemination of 
information under this subparagraph and 
provide assistance as described in this sub-
paragraph. 
‘‘(H) AUTHORIZATION
AND
APPROPRIA-
TION.—There are authorized to be appro-
priated, and there are appropriated, such sums 
as may be necessary to carry out this para-
graph. The amounts made available under this 
subparagraph shall remain available until June 
30, 2012. 
‘‘(I) PERIOD OF AUTHORITY.—The author-
ity to make Federal Direct Consolidation loans 
under this paragraph shall begin 30 days after 
the date of the enactment of the College Debt 
Swap Act of 2011 and shall expire on June 30, 
2012.’’. 
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SEC. 3. CONFORMING AMENDMENT. 
Section 428C(a)(3)(B)(i)(V) of the Higher Education 
Act of 1965 (20 U.S.C. 1078–3(a)(3)(B)(i)(V)) is amend-
ed— 
(1) by striking ‘‘or’’ at the end of item (bb); 
(2) by striking the period at the end of item 
(cc) and inserting ‘‘; or’’; and 
(3) by adding at the end the following: 
‘‘(dd) for the purpose of 
consolidating an eligible private 
education 
loan 
under 
section 
455(g)(2), whether such loan is 
consolidated only with other eligi-
ble private education loans or 
consolidated with loans described 
in paragraph (4).’’. 
Æ 
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