I 
114TH CONGRESS 
2D SESSION 
H. R. 5487 
To increase purchasing power, strengthen economic recovery, and restore 
fairness in financing higher education in the United States through 
student loan forgiveness, caps on interest rates on Federal student loans, 
and refinancing opportunities for private borrowers, and for other pur-
poses. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 15, 2016 
Ms. BASS introduced the following bill; which was referred to the Committee 
on Education and the Workforce, and in addition to the Committees on 
Financial Services and Ways and Means, for a period to be subsequently 
determined by the Speaker, in each case for consideration of such provi-
sions as fall within the jurisdiction of the committee concerned 
A BILL 
To increase purchasing power, strengthen economic recovery, 
and restore fairness in financing higher education in 
the United States through student loan forgiveness, caps 
on interest rates on Federal student loans, and refi-
nancing opportunities for private borrowers, and for 
other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Student Loan Fairness 
Act’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
(1) A well-educated citizenry is critical to our 
Nation’s ability to compete in the global economy. 
(2) The Federal Government has a vested inter-
est in ensuring access to higher education. 
(3) Higher education should be viewed as a 
public good benefiting our country rather than as a 
commodity solely benefiting individual students. 
(4) Recently, total outstanding student loan 
debt officially surpassed total credit card debt in the 
United States in 2015, and is on track to exceed 
$1,230,000,000,000. 
(5) Excessive student loan debt is impeding eco-
nomic growth in the United States. Faced with ex-
cessive repayment burdens, many individuals are un-
able to start businesses, invest, or buy homes. Re-
lieving student loan debt would give these individuals 
greater control over their earnings and would in-
crease entrepreneurship and demand for goods and 
services. 
(6) Because of soaring tuition costs, students 
often have no choice but to amass significant debt 
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to obtain an education that is widely considered a 
prerequisite for earning a living wage. 
(7) Amidst rising tuition rates and stagnant 
grant funding, many students are forced to supple-
ment Federal loans with private loans, which fre-
quently feature higher interest rates with fewer con-
sumer protections. 
(8) A borrower who experiences an extended 
hardship for whatever reason, or a borrower who ex-
periences a series of separate hardships over a 
longer period of time, will often have no choice but 
to default on his or her private student loans. Op-
portunities to put such private loans into forbear-
ance are limited. 
(9) During the period of forbearance on private 
student loans, interest continues to accrue and is 
capitalized, and once the borrower comes out of for-
bearance, he or she owes significantly more on the 
principal of the loan than before the hardship period 
began. 
SEC. 3. 10/10 LOAN REPAYMENT AND FORGIVENESS. 
Part G of title IV of the Higher Education Act of 
1965 is amended by adding at the end the following: 
‘‘SEC. 493E. 10/10 LOAN REPAYMENT AND FORGIVENESS. 
‘‘(a) 10/10 LOAN REPAYMENT PLAN.— 
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‘‘(1) 10/10 LOAN REPAYMENT PLAN AUTHOR-
IZED.—Notwithstanding any other provision of this 
Act, the Secretary shall carry out a program (to be 
known as the ‘10/10 Loan Repayment Plan’) under 
which— 
‘‘(A) a borrower of an eligible loan who is 
eligible under paragraph (3) may elect to have 
the borrower’s aggregate monthly payment for 
all such loans not exceed the monthly payment 
amount described in paragraph (2); 
‘‘(B) any interest due and not paid under 
a monthly payment under this subsection— 
‘‘(i) shall continue to accrue; and 
‘‘(ii) shall be capitalized up to an 
amount equal to 10 percent of the original 
principal amount of all the eligible loans 
that the borrower is repaying under this 
subsection; 
‘‘(C) any principal due and not paid under 
a monthly payment under this subsection shall 
be deferred, and shall be forgiven in accordance 
with subsection (b) if the borrower meets the 
requirements for forgiveness under such sub-
section; 
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‘‘(D) the amount of time the borrower 
makes monthly payments under this subsection 
may exceed 10 years; 
‘‘(E) a borrower who is repaying an eligi-
ble loan pursuant to 10/10 Loan Repayment 
under this subsection may elect, at any time, to 
terminate repayment pursuant to 10/10 Loan 
Repayment and repay such loan under the 
standard repayment plan, in which case the 
amount of time the borrower is permitted to 
repay such loans may exceed 10 years; and 
‘‘(F) the special allowance payment to a 
lender calculated under section 438(b)(2)(I), 
when calculated for a loan in repayment under 
this section, shall be calculated on the principal 
balance of the loan and on any accrued interest 
unpaid by the borrower in accordance with this 
section. 
‘‘(2) 10/10 LOAN REPAYMENT MONTHLY PAY-
MENT FORMULA.—A borrower who has elected to 
participate in the 10/10 Loan Repayment Plan 
under this subsection shall, during each month the 
borrower is participating in such Plan, make a 
monthly payment in an amount equal to— 
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‘‘(A) one-twelfth of the amount that is 10 
percent of the result obtained by calculating, on 
at least an annual basis, the amount by 
which— 
‘‘(i) the borrower’s, and the bor-
rower’s spouse’s (if applicable), adjusted 
gross income; exceeds 
‘‘(ii) 150 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)); or 
‘‘(B) in the case of a borrower who is in 
deferment due to an economic hardship de-
scribed in section 435(o), $0. 
‘‘(3) ELIGIBILITY.—The Secretary shall estab-
lish procedures for annually determining the bor-
rower’s eligibility for 10/10 Loan Repayment, includ-
ing verification of a borrower’s annual adjusted 
gross income and the annual amount due on the 
total amount of eligible loans, and such other proce-
dures as are necessary to effectively implement 10/ 
10 Loan Repayment under this subsection. 
‘‘(4) SPECIAL RULE FOR MARRIED BORROWERS 
FILING SEPARATELY.—In the case of a married bor-
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rower who files a separate Federal income tax re-
turn, the Secretary shall calculate the amount of the 
borrower’s 10/10 Loan Repayment under this sub-
section solely on the basis of the borrower’s student 
loan debt and adjusted gross income. 
‘‘(b) 10/10 LOAN FORGIVENESS.— 
‘‘(1) IN GENERAL.—The Secretary shall carry 
out a program (to be known as the ‘10/10 Loan 
Forgiveness Program’) to forgive a qualified loan 
amount, in accordance with paragraph (3), on an eli-
gible loan for a borrower who, after the date that is 
10 years prior to the date of enactment of the Stu-
dent Loan Fairness Act, has made 120 monthly pay-
ments on the eligible loan pursuant to any one or a 
combination of the following: 
‘‘(A) Monthly payment under the 10/10 
Loan Repayment Plan under subsection (a). 
‘‘(B) Monthly payment under any other re-
payment plan authorized under part B or D of 
an amount that, for a given month, is not less 
than the monthly payment amount calculated 
under subsection (a) that the borrower would 
have owed in the year in which such payment 
was made, based on the borrower’s adjusted 
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gross income and eligible loan balance for such 
year. 
‘‘(C) For any month after such date dur-
ing which the borrower is in deferment due to 
an economic hardship described in section 
435(o), monthly payment of $0. 
‘‘(2) METHOD
OF
LOAN
FORGIVENESS.—To 
provide loan forgiveness under paragraph (1), the 
Secretary is authorized to carry out a program— 
‘‘(A) through the holder of the loan, to as-
sume the obligation to repay a qualified loan 
amount for a loan made, insured, or guaranteed 
under part B of this title; and 
‘‘(B) to cancel a qualified loan amount for 
a loan made under part D of this title. 
‘‘(3) QUALIFIED
LOAN
AMOUNT.—After the 
borrower has made 120 monthly payments described 
in paragraph (1), the Secretary shall forgive— 
‘‘(A) with respect to new borrowers on or 
after the date of enactment of the Student 
Loan Fairness Act, the sum of— 
‘‘(i) the balance of principal and fees 
due on the borrower’s eligible loans as of 
the time of such forgiveness, not to exceed 
$45,520; and 
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‘‘(ii) the amount of interest that has 
accrued on the balance described in clause 
(i) as of the time of such forgiveness; or 
‘‘(B) with respect to any other eligible bor-
rower, the balance of principal, interest, and 
fees due on the borrower’s eligible loans as of 
the time of such forgiveness. 
‘‘(4) EXCLUSION
FROM
TAXABLE
INCOME.— 
The amount of a borrower’s eligible loans forgiven 
under this section shall not be included in the gross 
income of the borrower for purposes of the Internal 
Revenue Code of 1986. 
‘‘(c) SUPPORTING DOCUMENTATION REQUIRED.—A 
borrower who has elected to participate in the 10/10 Loan 
Repayment Plan under subsection (a), or who is request-
ing forgiveness under the 10/10 Loan Forgiveness Pro-
gram under subsection (b), shall provide to the Secretary 
such information and documentation as the Secretary de-
termines, by regulation, to be necessary to verify the bor-
rower’s adjusted gross income and payment amounts 
made on eligible loans of the borrower for the purposes 
of such Plan or Program. 
‘‘(d) DEFINITION OF ELIGIBLE LOAN.—In this sec-
tion the term ‘eligible loan’ means any loan made, insured, 
or guaranteed under part B or D.’’. 
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SEC. 4. CAPPING INTEREST RATES FOR ALL FEDERAL DI-
RECT LOANS. 
Section 455(b) of the Higher Education Act of 1965 
(20 U.S.C. 1087e(b)) is amended— 
(1) by redesignating paragraphs (8) and (9) as 
paragraphs (9) and (10), respectively; and 
(2) by inserting after paragraph (7) the fol-
lowing: 
‘‘(8) RATE OF INTEREST FOR ALL NEW FED-
ERAL DIRECT LOANS.—Notwithstanding any other 
provision of this Act, with respect to a loan under 
this part for which the first disbursement of prin-
cipal is made (or in the case of a Federal Direct 
Consolidation Loan, for which the application is re-
ceived) on or after October 1, 2016, or the date of 
enactment of the Student Loan Fairness Act, which-
ever is later, the applicable rate of interest shall not 
exceed 3.4 percent.’’. 
SEC. 5. 10/10 LOAN REPAYMENT PLAN AS PLAN SELECTED 
BY THE SECRETARY. 
(a) FFEL LOANS.— 
(1) IN GENERAL.—Section 428(b) of the High-
er Education Act of 1965 (20 U.S.C. 1078(b)(9)) is 
amended— 
(A) in subparagraph (A)— 
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(i) by striking ‘‘and’’ at the end of 
clause (iv); 
(ii) in clause (v), by striking the pe-
riod at the end and inserting ‘‘; and’’; and 
(iii) by adding at the end the fol-
lowing new clause: 
‘‘(vi) beginning October 1, 2016, a 
10/10 Loan Repayment Plan, with varying 
annual repayment amounts based on the 
discretionary income of the borrower, in 
accordance with section 493E.’’; and 
(B) in subparagraph (B), by striking 
‘‘(A)(i)’’ and inserting ‘‘(A)(vi)’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1)(B) shall be effective beginning Oc-
tober 1, 2016. 
(b) DIRECT LOANS.— 
(1) IN GENERAL.—Section 455(d) of the High-
er Education Act of 1965 (20 U.S.C. 1087e(d)) is 
amended— 
(A) in paragraph (1)— 
(i) by striking ‘‘and’’ at the end of 
subparagraph (D); 
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(ii) in subparagraph (E), by striking 
the period at the end and inserting a semi-
colon; and 
(iii) by adding at the end the fol-
lowing new subparagraph: 
‘‘(F) beginning on October 1, 2016, a 10/ 
10 Loan Repayment Plan, with varying annual 
repayment amounts based on the discretionary 
income of the borrower, in accordance with sec-
tion 493E.’’; and 
(B) in paragraph (2)— 
(i) by striking ‘‘may’’ and inserting 
‘‘shall’’; and 
(ii) by striking ‘‘(A), (B), or (C)’’ and 
inserting ‘‘(F)’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1)(B) shall be effective beginning Oc-
tober 1, 2016. 
SEC. 6. IMPROVING AND EXPANDING PUBLIC SERVICE 
LOAN FORGIVENESS. 
Section 455(m) of the Higher Education Act of 1965 
(20 U.S.C. 1087e(m)) is amended— 
(1) in paragraph (1), by striking ‘‘120’’ and in-
serting ‘‘60’’ each place it appears; and 
(2) in paragraph (3)(B)— 
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(A) in clause (i), by striking ‘‘or’’ after the 
semicolon; 
(B) in clause (ii), by striking the period 
and inserting ‘‘; or’’; and 
(C) by adding at the end the following: 
‘‘(iii) a full-time job as a primary care 
physician in an area or population des-
ignated as a Medically Underserved Area 
or Population by the Health Resources and 
Services Administration.’’. 
SEC. 7. REFINANCING PRIVATE EDUCATION LOANS FOR 
CERTAIN BORROWERS. 
(a) CONSOLIDATION FOR CERTAIN BORROWERS.— 
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 
FOR CERTAIN BORROWERS.— 
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‘‘(A) IN GENERAL.—Notwithstanding any 
other provision of law, a borrower who meets 
the eligibility criteria described in subparagraph 
(B) shall be eligible to obtain a Federal Direct 
Consolidation loan under this paragraph that— 
‘‘(i) shall include an eligible private 
education loan; and 
‘‘(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) was eligible to borrow a loan 
under section 428H, a Federal Direct Un-
subsidized Stafford Loan, a loan under 
section 428B, or a Federal Direct PLUS 
loan for a period of enrollment at an insti-
tution of higher education, or, with respect 
to a borrower who was enrolled at an insti-
tution of higher education on less than a 
half-time basis, would have been eligible to 
borrow such a loan for such period of en-
rollment if the borrower had been enrolled 
on at least a half-time basis; 
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‘‘(ii) borrowed at least one eligible pri-
vate education loan for a period of enroll-
ment described in clause (i); and 
‘‘(iii) has an average adjusted gross 
income (based on the borrower’s adjusted 
gross income from the 3 most recent cal-
endar years before application for consoli-
dation under this section) that is equal to 
or less than the borrower’s total education 
debt (determined by calculating the sum of 
the borrower’s loans described in section 
428C(a)(4) and eligible private education 
loans) at the time of such application. 
‘‘(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)) made on or before 
the date of enactment of the Student Loan 
Fairness Act, including the amount of out-
standing principal, accrued interest, and related 
fees and costs (as determined by the Secretary) 
owed by a borrower on such a loan. 
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