I 
115TH CONGRESS 
2D SESSION 
H. R. 5549 
To amend the Higher Education Act of 1965 to improve loans, and for 
other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 18, 2018 
Mr. DEFAZIO introduced the following bill; which was referred to the Com-
mittee on Education and the Workforce, and in addition to the Commit-
tees on the Judiciary, and Ways and Means, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such 
provisions as fall within the jurisdiction of the committee concerned 
A BILL 
To amend the Higher Education Act of 1965 to improve 
loans, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Helping Individuals Get a Higher Education while Re-
ducing Education Debt Act’’ or the ‘‘HIGHER ED Act’’. 
(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
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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 edu-
cation loan programs. 
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TITLE 
I—REINSTATEMENT 
OF 
AUTHORITY TO MAKE FED-
ERAL 
DIRECT 
STAFFORD 
LOANS TO GRADUATE AND 
PROFESSIONAL 
STUDENTS; 
DISCHARGING 
STUDENT 
LOANS IN BANKRUPTCY 
SEC. 101. REINSTATEMENT OF AUTHORITY TO MAKE FED-
ERAL DIRECT STAFFORD LOANS TO GRAD-
UATE AND PROFESSIONAL STUDENTS. 
(a) AMENDMENTS.—Section 455(a)(3) of the Higher 
Education Act of 1965 (20 U.S.C. 1087e(a)(3)) is amend-
ed— 
(1) in the paragraph heading, by inserting 
‘‘TEMPORARY’’ before ‘‘TERMINATION’’; and 
(2) in subparagraph (A), in the matter pre-
ceding clause (i), by inserting ‘‘, and ending on or 
before June 30, 2018’’ after ‘‘2012’’. 
(b) INAPPLICABILITY
OF RULEMAKING REQUIRE-
MENTS.—Sections 482(c) and 492 of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1089(c); 1098a) shall not 
apply to the regulations under this section. 
SEC. 102. DISCHARGE STUDENT LOANS IN BANKRUPTCY. 
(a) EXCEPTION TO DISCHARGE.—Section 523(a) of 
title 11, United States Code, is amended— 
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(1) by striking paragraph (8); and 
(2) by redesignating paragraphs (9) through 
(14B) as paragraphs (8) through (14A), respec-
tively. 
(b) CONFORMING AMENDMENTS.—Title 11, United 
States Code, is amended— 
(1) in section 704(c)(1)(C)(iv)(I) by striking 
‘‘(14A)’’ and inserting ‘‘(14)’’; 
(2) in section 1106(c)(1)(C)(iv)(I) by striking 
‘‘(14A)’’ and inserting ‘‘(14)’’; 
(3) in section 1202(c)(1)(C)(iv)(I) by striking 
‘‘(14A)’’ and inserting ‘‘(14)’’; and 
(4) in section 1328(a)(2) by striking ‘‘(8), or 
(9)’’ and inserting ‘‘or (8)’’. 
(c) EFFECTIVE DATE; APPLICATION
OF AMEND-
MENTS.— 
(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. 
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TITLE II—REFINANCING 
PROGRAMS 
SEC. 201. PROGRAM AUTHORITY. 
Section 451(a) of the Higher Education Act of 1965 
(20 U.S.C. 1087a(a)) is amended— 
(1) by striking ‘‘and (2)’’ and inserting ‘‘(2)’’; 
and 
(2) by inserting ‘‘; and (3) to make loans under 
section 460A and section 460B’’ after ‘‘section 
459A’’. 
SEC. 202. REFINANCING PROGRAM. 
Part D of title IV of the Higher Education Act of 
1965 (20 U.S.C. 1087a et seq.) is amended by adding at 
the end the following: 
‘‘SEC. 460A. REFINANCING FFEL AND FEDERAL DIRECT 
LOANS. 
‘‘(a) IN GENERAL.—Beginning not later than 180 
days after the date of enactment of the Helping Individ-
uals Get a Higher Education while Reducing Education 
Debt Act, the Secretary shall establish a program under 
which the Secretary, upon the receipt of an application 
from a qualified borrower, makes a loan under this part, 
in accordance with the provisions of this section, in order 
to permit the borrower to obtain the interest rate provided 
under subsection (c). 
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‘‘(b) REFINANCING DIRECT LOANS.— 
‘‘(1) FEDERAL DIRECT LOANS.—Upon applica-
tion of a qualified borrower, the Secretary shall 
repay a Federal Direct Stafford Loan, a Federal Di-
rect 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 Staf-
ford Loan, a Federal Direct PLUS Loan, or a Fed-
eral 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 ap-
plication 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 
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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 re-
maining 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. 
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‘‘(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 Fed-
eral 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 Fed-
eral 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 
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Stafford Loans issued to graduate or profes-
sional students for the 12-month period begin-
ning 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 Di-
rect 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 Di-
rect Consolidation Loan, a rate calculated in ac-
cordance with paragraph (2). 
‘‘(2) INTEREST
RATES
FOR
CONSOLIDATION 
LOANS.— 
‘‘(A) 
METHOD
OF
CALCULATION.—In 
order to determine the interest rate for any re-
financed 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 bal-
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ance 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 inter-
est 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 cal-
culated under clause (ii) as the interest 
rate for the refinanced Federal Direct Con-
solidation 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 Unsub-
sidized Stafford Loan issued to an under-
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graduate 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 Unsub-
sidized 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. 
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‘‘(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 end-
ing on June 30, 2017; or 
‘‘(II) the original interest rate of 
the component loan. 
‘‘(iv) The interest rate for any compo-
nent 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 inter-
est rate on the original component loan. 
‘‘(3) FIXED RATE.—The applicable rate of in-
terest determined under paragraph (1) for a refi-
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nanced 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
REPAY-
MENT PERIOD.—Refinancing a loan under this sec-
tion shall not result in the extension of the duration 
of the repayment period of the loan, and the bor-
rower 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 sec-
tion, the term ‘qualified borrower’ means a bor-
rower— 
‘‘(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 re-
ceived, before July 1, 2016; and 
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‘‘(B) who meets the eligibility requirements 
based on income or debt-to-income ratio estab-
lished 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, the Secretary shall establish 
eligibility requirements based on income or debt-to- 
income ratio that take into consideration providing 
access to refinancing under this section for bor-
rowers with the greatest financial need. 
‘‘(f) NOTIFICATION TO BORROWERS.—The Secretary, 
in coordination with the Director of the Bureau of Con-
sumer 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 fol-
lowing activities: 
‘‘(1) Developing consumer information mate-
rials 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 
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the Secretary, in consultation with the Director of 
the Bureau of Consumer Financial Protection. 
‘‘SEC. 460B. FEDERAL DIRECT REFINANCED PRIVATE LOAN 
PROGRAM. 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) ELIGIBLE PRIVATE EDUCATION LOAN.— 
The term ‘eligible private education loan’ means a 
private education loan, as defined in section 140(a) 
of the Truth in Lending Act (15 U.S.C. 1650(a)), 
that— 
‘‘(A) was disbursed to the borrower before 
July 1, 2018; and 
‘‘(B) was for the borrower’s own postsec-
ondary educational expenses for an eligible pro-
gram at an institution of higher education par-
ticipating 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 Pri-
vate Loan’ means a loan issued under subsection 
(b)(1). 
‘‘(3) PRIVATE
EDUCATIONAL
LENDER.—The 
term ‘private educational lender’ has the meaning 
given the term in section 140(a) of the Truth in 
Lending Act (15 U.S.C. 1650(a)). 
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‘‘(4) QUALIFIED BORROWER.—The term ‘quali-
fied borrower’ means an individual who— 
‘‘(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 ap-
plication 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 pri-
vate education loan or on any loan made, in-
sured, or guaranteed under this part or part B 
or E; and 
‘‘(D) meets the eligibility requirements de-
scribed in subsection (b)(2). 
‘‘(b) PROGRAM AUTHORIZED.— 
‘‘(1) IN GENERAL.—The Secretary, in consulta-
tion with the Secretary of the Treasury, shall carry 
out a program under which the Secretary, upon ap-
plication by a qualified borrower who has an eligible 
private education loan, shall issue such borrower a 
loan under this part in accordance with the fol-
lowing: 
‘‘(A) The loan issued under this program 
shall be in an amount equal to the sum of the 
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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 edu-
cation 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 sec-
tion 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 
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Education Debt Act, the Secretary, in consultation 
with the Secretary of the Treasury and the Director 
of the Bureau of Consumer Financial Protection, 
shall establish eligibility requirements— 
‘‘(A) based on income or debt-to-income 
ratio that take into consideration providing ac-
cess to refinancing under this section for bor-
rowers with the greatest financial need; 
‘‘(B) to ensure eligibility only for bor-
rowers in good standing; 
‘‘(C) to minimize inequities between Fed-
eral Direct Refinanced Private Loans and other 
Federal student loans; 
‘‘(D) to preclude windfall profits for pri-
vate 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 Refi-
nanced Private Loan for a private education 
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‘‘(3) FIXED RATE.—The applicable rate of in-
terest determined under this subsection for a Fed-
eral 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 Pri-
vate Loan, shall not be included in calculating a bor-
rower’s annual or aggregate loan limits under section 428 
or 428H. 
‘‘(e) NO ELIGIBILITY FOR SERVICE-RELATED RE-
PAYMENT.—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 Consoli-
dation 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 pro-
gram under section 428K, 428L, or 460 or for the repay-
ment 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 
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Individuals Get a Higher Education while Reducing 
Education Debt Act, the Secretary, in consultation 
with the Secretary of the Treasury and the Director 
of the Bureau of Consumer Financial Protection, 
shall establish a requirement that private edu-
cational lenders report the data described in para-
graph (2) to the Secretary, to Congress, to the Sec-
retary of the Treasury, and to the Director of the 
Bureau of Consumer Financial Protection, in order 
to allow for an assessment of the private education 
loan market. 
‘‘(2) CONTENTS
OF
REPORTING.—The data 
that private educational lenders shall report in ac-
cordance with paragraph (1) shall include each of 
the following about private education loans (as de-
fined 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 edu-
cation loan borrowers the lender serves. 
‘‘(C) The average interest rate on the out-
standing private education loan debt held by the 
lender. 
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‘‘(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 lend-
er that is in default. 
‘‘(F) The proportions of outstanding pri-
vate education loan borrowers who are 30, 60, 
and 90 days delinquent. 
‘‘(G) The proportions of outstanding pri-
vate education loan volume that is 30, 60, and 
90 days delinquent. 
‘‘(g) NOTIFICATION
TO
BORROWERS.—The Sec-
retary, 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.’’. 
SEC. 203. AMENDMENTS TO PUBLIC SERVICE REPAYMENT 
PLAN PROVISIONS. 
Section 455(m) of the Higher Education Act of 1965 
(20 U.S.C. 1087e(m)) is amended— 
(1) by redesignating paragraphs (3) and (4) as 
paragraphs (4) and (5), respectively; 
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(2) by inserting after paragraph (2) the fol-
lowing: 
‘‘(3) SPECIAL
RULES
FOR
SECTION
460A 
LOANS.— 
‘‘(A) 
REFINANCED
FEDERAL
DIRECT 
LOANS.—Notwithstanding paragraph (1), in de-
termining 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 refi-
nanced under section 460A that was originally 
a loan under part B, only monthly payments 
made after the date on which the loan was refi-
nanced may be included for purposes of para-
graph (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 
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Loan, or Federal Direct Consolidation Loan re-
financed under section 460A)’’ before the pe-
riod at the end; 
(B) by striking ‘‘The term’’ and inserting 
the following: 
‘‘(i) IN GENERAL.—The term’’; and 
(C) by adding at the end the following: 
‘‘(ii) TREATMENT OF CERTAIN CON-
SOLIDATION LOAN PAYMENTS.—In a case 
in which a borrower makes a monthly pay-
ment 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 consolida-
tion, the monthly payment on such Federal 
Direct Consolidation Loan shall be treated 
as a monthly payment on such eligible 
Federal Direct Loan.’’. 
SEC. 204. INCOME-BASED REPAYMENT. 
Section 493C of the Higher Education Act of 1965 
(20 U.S.C. 1098e) is amended by adding at the end the 
following: 
‘‘(f) SPECIAL RULE FOR REFINANCED LOANS.— 
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‘‘(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 pur-
poses 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 re-
quirements 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 Sec-
retary shall include only payments— 
‘‘(A) that are made after the date of the 
issuance of the Federal Direct Refinanced Pri-
vate Loan; and 
‘‘(B) that otherwise meet the requirements 
of this section.’’. 
TITLE III—LOAN FORGIVENESS 
SEC. 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)) is amended— 
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(1) by striking ‘‘teaching as’’ and inserting the 
following: ‘‘teaching— 
‘‘(I) as’’; 
(2) by striking ‘‘, foreign language faculty, and 
part-time faculty at community colleges), as deter-
mined by the Secretary.’’ and inserting ‘‘and foreign 
language faculty), as determined by the Secretary; 
or’’; and 
(3) by adding at the end the following: 
‘‘(II) as a part-time faculty mem-
ber 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 em-
ployer.’’. 
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TITLE IV—INCOME-DRIVEN 
REPAYMENT PLANS 
SEC. 401. INCOME-BASED REPAYMENT PLAN. 
Section 493C of the Higher Education Act of 1965 
(20 U.S.C. 1098e) is amended— 
(1) in subsection (b)— 
(A) in paragraph (8), by striking ‘‘and’’ 
after the semicolon; 
(B) in paragraph (9), by striking the pe-
riod at the end and inserting ‘‘; and’’; 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 pen-
alty.’’; 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 repay-
ment plan shall be carried out in accordance with 
this section, except as otherwise specified in this 
subsection (including through the special terms de-
scribed in paragraph (2))— 
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‘‘(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 repay-
ment 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 per-
cent 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) 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 
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the Community Services Block Grant Act 
(42 U.S.C. 9902(2)). 
‘‘(ii) For purposes of clause (i), the term 
‘applicable percentage’ means 150 percent re-
duced by 1 percentage point for each $1,000 by 
which the borrower’s adjusted gross income ex-
ceeds $100,000. 
‘‘(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)), to have 
the borrower’s aggregate monthly payment 
for all such loans equal to $0; and 
‘‘(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— 
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‘‘(I) the result described in sub-
paragraph (A) divided by 12; or 
‘‘(II) the monthly amount cal-
culated under section 455(d)(1)(A), 
based on a 10-year repayment period, 
when the borrower first made the elec-
tion 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 sub-
paragraph (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 edu-
cation, as determined by the institution, 
and during which the borrower is not earn-
ing any income. 
‘‘(D) Subsection (b)(7)(B) shall be applied 
by substituting ‘20 years’ for ‘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 in-
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come-based repayment plan under this sub-
section 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 ex-
ceed 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
CER-
TAIN BORROWERS.—A borrower described in para-
graph (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 de-
scribed in subparagraph (A) and enter the 
income-based repayment plan under this 
subsection; 
‘‘(ii) leave the repayment plan de-
scribed in subparagraph (A) and enter a 
standard 10-year repayment plan under 
section 455(d)(A)(A); or 
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‘‘(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 stand-
ard 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 repay-
ment or cancellation of any outstanding balance 
of principal and interest due on a loan (as de-
scribed in subsection (b)(7)) any years of repay-
ment under another income-based or income- 
contingent repayment plan under this title. 
‘‘(4) CAP
ON
INTEREST
ACCRUAL.—Notwith-
standing 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 re-
payment under this subsection shall not exceed 50 
percent of the original principal amount of the 
loan.’’. 
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SEC. 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 Edu-
cation 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 be-
fore 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)) is amended— 
(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,’’ 
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and inserting ‘‘may at any time after 
July 1, 2018, and not more frequently 
than once per calendar year there-
after, change the selection of a repay-
ment plan under this part to one of 
the 2 repayment plans described in 
paragraph (9)(C),’’; and 
(II) in clause (iii), by striking 
‘‘be subject to income-contingent re-
payment in accordance with sub-
section (m);’’ and inserting ‘‘be sub-
ject to income-based repayment in ac-
cordance with section 493C(f);’’; and 
(ii) in subparagraph (E)(i), by strik-
ing ‘‘the option of repaying the loan in ac-
cordance with a standard, graduated, in-
come-sensitive, or extended repayment 
schedule (as described in paragraph (9)) 
established by the lender in accordance 
with regulations of the Secretary; and’’ 
and inserting ‘‘the option of repaying the 
loan in accordance with a repayment plan 
described in paragraph (9)(C) established 
by the lender in accordance with regula-
tions of the Secretary; and’’; and 
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(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
RE-
PAYMENT
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 repay-
ment plans not more than once per cal-
endar year, and to enroll in one of the fol-
lowing 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 repay-
ment plan under section 493C(f).’’; 
and 
(2) in section 455(d)— 
(A) 
by 
redesignating 
paragraphs 
(2) 
through (5) as paragraphs (3) through (6), re-
spectively; and 
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(B) by inserting after paragraph (1), the 
following: 
‘‘(2) DESIGN AND SELECTION ON AND AFTER 
JULY 1, 2018.— 
‘‘(A) IN GENERAL.—Notwithstanding para-
graph (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 pe-
riod 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 repay-
ment plan described in subparagraph (A), the 
Secretary may provide the borrower with a 
standard 
repayment 
plan 
under 
section 
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455(d)(1)(A) with a repayment period of 10 
years. 
‘‘(C) CHANGES
IN
SELECTIONS.—Begin-
ning on July 1, 2018, a borrower of a loan 
made under this part may change the bor-
rower’s selection of a repayment plan in accord-
ance 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 in-
come-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— 
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‘‘(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 repay-
ment 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 stand-
ard 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 repay-
ment plan under section 455(d)(1)(A); and 
‘‘(D) shall retain, for purposes of repay-
ment or cancellation of any outstanding balance 
of principal and interest due on a loan (as de-
scribed in section 493C(b)(7)) any years of re-
payment under another income-based or in-
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come-contingent repayment plan under this 
title.’’. 
SEC. 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)) is further amended by adding at the end the 
following: 
‘‘(8) NOTIFICATION AND AUTOMATIC ENROLL-
MENT PROCEDURES FOR BORROWERS WHO ARE DE-
LINQUENT ON LOANS.— 
‘‘(A) AUTHORITY TO OBTAIN INCOME IN-
FORMATION.— 
‘‘(i) IN GENERAL.—In the case of any 
borrower who is at least 60 days delin-
quent 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 re-
turn information (as defined in section 
6103 of the Internal Revenue Code of 
1986) may be obtained under this subpara-
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graph only to the extent authorized by sec-
tion 6103(l)(13) of such Code. 
‘‘(B) BORROWER NOTIFICATION.—With re-
spect 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 pre-
ceding 120 days, the Secretary shall, as soon as 
practicable after such 60-day delinquency, pro-
vide 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 delin-
quent covered loans, nondelinquent covered 
loans, and noncovered loans of the bor-
rower. 
‘‘(ii) A brief description of the repay-
ment plans for which the borrower is eligi-
ble and the covered loans and noncovered 
loans of the borrower that may be eligible 
for such plans, based on information avail-
able to the Secretary. 
‘‘(iii) Clear and simple instructions on 
how to select the repayment plans. 
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‘‘(iv) The amount of monthly pay-
ments for the covered and noncovered 
loans under the repayment plans for which 
the borrower is eligible, based on informa-
tion available to the Secretary, including, if 
the income information of the borrower is 
available to the Secretary under subpara-
graph (A)— 
‘‘(I) the amount of the monthly 
payment under each income-driven re-
payment 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 in-
come is unavailable— 
‘‘(I) if the borrower selects to 
repay the covered loans of such bor-
rower pursuant to an income-driven 
repayment plan that defines discre-
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sradovich on DSK3GMQ082PROD with BILLS
tionary income in such a manner that 
an individual not required under sec-
tion 6012(a)(1) of the Internal Rev-
enue Code of 1986 to file a return 
with respect to income taxes imposed 
by subtitle A of such Code may have 
a calculated monthly payment greater 
than $0, the borrower will be required 
to provide the Secretary with other 
documentation of income satisfactory 
to the Secretary, which documentation 
the Secretary may use to determine 
an appropriate repayment schedule; 
and 
‘‘(II) if the borrower selects to 
repay such loans pursuant to an in-
come-driven repayment plan that is 
not described in subclause (I), the 
borrower will not be required to pro-
vide the Secretary with such other 
documentation of income, and the bor-
rower will have a calculated monthly 
payment of $0. 
‘‘(vi) An explanation that the Sec-
retary shall take the actions under sub-
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paragraph (C) with respect to such bor-
rower, if— 
‘‘(I) the borrower is 120 days de-
linquent on one or more covered loans 
and has not selected a new repayment 
plan for the covered loans of the bor-
rower; and 
‘‘(II) in the case of such a bor-
rower whose repayment plan for the 
covered loans of the borrower is not 
an income-driven repayment plan, the 
monthly payments under such repay-
ment plan are higher than such 
monthly payments would be under an 
income-driven repayment plan for 
such loans. 
‘‘(vii) Instructions on updating the in-
formation of the borrower obtained under 
subparagraph (A). 
‘‘(C) SECRETARY’S INITIAL SELECTION OF 
PLAN.—With respect to each borrower de-
scribed in subparagraph (B) who has a repay-
ment 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 
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repayment plan for such loans in accordance 
with the notice received under such subpara-
graph, 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 bor-
rower’s covered loans are eligible for an in-
come-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 bor-
rower is eligible; or 
‘‘(bb) if more than one income- 
driven repayment plan would offer the 
borrower the same lowest monthly 
payment amount, provide the bor-
rower with the income-driven repay-
ment 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 
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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 de-
scribed 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 bor-
rower may take for such loans to become 
eligible for such a plan. 
‘‘(D) SECRETARY’S
ADDITIONAL
SELEC-
TION OF PLAN.— 
‘‘(i) IN
GENERAL.—With respect to 
each borrower of a covered loan who se-
lects a new repayment plan in accordance 
with the notice received under subpara-
graph (B) and who continues to be delin-
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quent 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 indi-
cate 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 pro-
cedures under this paragraph. 
‘‘(9) DEFINITIONS.—In this subsection: 
‘‘(A) COVERED LOAN.—The term ‘covered 
loan’ means— 
‘‘(i) a loan made under this part; 
‘‘(ii) a loan purchased under section 
459A; or 
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‘‘(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’ means— 
‘‘(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 re-
payment plan under section 493C(f). 
‘‘(C) 
NONCOVERED
LOAN.—The 
term 
‘noncovered loan’ means a loan made, insured, 
or guaranteed under this title that is not a cov-
ered loan.’’. 
(b) CHANGING PLANS.—Section 493C(b)(8) of the 
Higher Education Act of 1965 (20 U.S.C. 1098e(b)(8)) 
is amended to read as follows: 
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‘‘(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 repay-
ment plan for which the loan is eligible in accord-
ance with the requirements of part B or part D, re-
spectively; and’’. 
(c) EFFECTIVE DATE; APPLICATION.— 
(1) AUTOMATIC
ENROLLMENT.—The amend-
ments made by subsection (a) shall— 
(A) take effect as soon as the Secretary of 
Education determines practicable after the Sec-
retary 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 en-
actment of this Act. 
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SEC. 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)) is amended— 
(1) in paragraph (3)— 
(A) by striking ‘‘does not reasonably re-
flect the borrower’s current income’’ and insert-
ing ‘‘whose income has decreased relative to the 
adjusted gross income available to the Sec-
retary’’; and 
(B) by inserting ‘‘, consistent with the pro-
cedures 
established 
under 
paragraph 
(8)(B)(iv)’’ before the period at the end; and 
(2) by adding at the end the following: 
‘‘(8) AUTOMATIC RECERTIFICATION.— 
‘‘(A) DEFINITION.—In this paragraph, the 
term ‘covered loan’ has the meaning given the 
term in subsection (d)(9). 
‘‘(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, 
but not later than 2 years after the date of en-
actment of such Act, the Secretary shall estab-
lish and implement, with respect to any bor-
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rower described in subparagraph (C), proce-
dures to— 
‘‘(i) obtain (for each year of repay-
ment and without further action by the 
borrower) such information as is reason-
ably necessary regarding the income of 
such borrower (and the borrower’s spouse, 
if applicable), for the purpose of deter-
mining the repayment obligation of the 
borrower for such year, including informa-
tion with respect to the borrower’s family 
size in accordance with the procedures 
under section 405 of the Helping Individ-
uals Get a Higher Education while Reduc-
ing Education Debt Act, subject to clause 
(ii); 
‘‘(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 op-
portunity to update the information ob-
tained under clause (i) before the deter-
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mination of the annual repayment obliga-
tion of the borrower; and 
‘‘(iv) in the case of a borrower for 
whom adjusted gross income is unavail-
able— 
‘‘(I) if the borrower has selected 
to repay the covered loans of such 
borrower pursuant to an income-con-
tingent repayment plan that defines 
discretionary income in such a man-
ner that an individual not required 
under section 6012(a)(1) of the Inter-
nal Revenue Code of 1986 to file a re-
turn with respect to income taxes im-
posed by subtitle A of such Code may 
have a calculated monthly payment 
greater than $0, the borrower will be 
required to provide the Secretary with 
other documentation of income satis-
factory to the Secretary, which docu-
mentation the Secretary may use to 
determine an appropriate repayment 
schedule; or 
‘‘(II) if the borrower has selected 
to repay such loans pursuant to an in-
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come-contingent repayment that is not 
described in subclause (I), the bor-
rower will not be required to provide 
the Secretary with such other docu-
mentation of income, and the bor-
rower 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 Sec-
retary establishes procedures under such sub-
paragraph— 
‘‘(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 repay-
ment plan; or 
‘‘(ii) recertifies income and family size 
under such plan. 
‘‘(D) AVAILABILITY OF RETURNS AND RE-
TURN INFORMATION.—Returns and return in-
formation (as defined in section 6103 of the In-
ternal Revenue Code of 1986) may be obtained 
under subparagraph (B)(i) only to the extent 
authorized by section 6103(l)(13) of such Code. 
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‘‘(E) OTHER REQUIREMENTS.—The proce-
dures established by the Secretary under this 
paragraph shall be consistent with the require-
ments 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)) 
is amended— 
(1) by striking ‘‘The Secretary shall establish’’ 
and inserting the following: 
‘‘(1) IN GENERAL.—The Secretary shall estab-
lish’’; 
(2) by striking ‘‘The Secretary shall consider’’ 
and inserting the following: 
‘‘(2) PROCEDURES FOR ELIGIBILITY.—The Sec-
retary shall— 
‘‘(A) consider’’; and 
(3) by striking ‘‘428C(b)(1)(E).’’ and inserting 
the following: ‘‘428C(b)(1)(E); and 
‘‘(B) beginning as soon as the Secretary 
determines practicable after the Secretary final-
izes the procedures under section 405 of the 
Helping Individuals Get a Higher Education 
while Reducing Education Debt Act, but not 
later than 2 years after the date of enactment 
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of such Act, carry out, with respect to bor-
rowers of any covered loan (as defined in sec-
tion 455(d)(9)), procedures for income-based 
repayment plans that are equivalent to the pro-
cedures carried out under section 455(e)(8) 
with respect to income-contingent repayment 
plans.’’. 
SEC. 405. STUDY AND PROCEDURES ON DETERMINING FAM-
ILY 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 de-
scribed in subsection (b), on the effect of using data 
from the Internal Revenue Service on the deduction 
for personal exemptions provided by section 151 of 
the Internal Revenue Code of 1986 for a proxy for 
family size in an income-driven repayment plan, and 
publish such study in the Federal Register; 
(2) use the results of the study conducted under 
paragraph (1) to develop procedures for determining 
family size for the automatic recertification of in-
come for an income-driven repayment plan in a man-
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ner 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 proce-
dures. 
(b) SPECIFICATIONS.—The study conducted under 
subsection (a)(1) shall— 
(1) determine how closely such personal exemp-
tions match the family size that borrowers report on 
their income-driven repayment plan request form; 
(2) compare the borrower’s actual monthly pay-
ment 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 repay-
ment plan’’ has the meaning given the term in section 
455(d)(9) of the Higher Education Act of 1965, as 
amended by this Act. 
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SEC. 406. DISCLOSURE OF TAX RETURN INFORMATION TO 
CARRY OUT CERTAIN HIGHER EDUCATION 
LOAN PROGRAMS. 
(a) IN GENERAL.—Paragraph (13) of section 6103(l) 
of the Internal Revenue Code of 1986 is amended to read 
as follows: 
‘‘(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 Sec-
retary may prescribe, shall upon written request 
from the Secretary of Education disclose to offi-
cers and employees of the Department of Edu-
cation returns and return information with re-
spect to a taxpayer who has received an appli-
cable student loan. 
‘‘(B) RESTRICTION ON USE OF DISCLOSED 
INFORMATION.—Return information disclosed 
under subparagraph (A) may be used by offi-
cers and employees of the Department of Edu-
cation only for the purposes of, and to the ex-
tent necessary for purposes of— 
‘‘(i) establishing the appropriate in-
come-contingent repayment amount in con-
nection with an applicable student loan, 
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‘‘(ii) establishing the appropriate re-
payment amount under an applicable in-
come-driven repayment plan (as defined in 
section 455(d)(9) of such Act (20 U.S.C. 
1087e(d))) in connection with an applica-
ble student loan for— 
‘‘(I) borrowers who have selected 
such a plan, and 
‘‘(II) in the case of any recertifi-
cation under section 455(e)(8) or 
493C(c)(2)(B) of the Higher Edu-
cation Act of 1965 (20 U.S.C. 
1087e(e); 1098e(c)), borrowers who 
are enrolled in such a plan, and 
‘‘(iii) in the case of borrowers who are 
at least 60 days delinquent on an applica-
ble 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)), 
and 
‘‘(II) automatic enrollment in 
such an income-driven repayment plan 
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after such borrowers are at least 120 
days delinquent on such a loan pursu-
ant to section 455(d)(8)(C) of such 
Act (20 U.S.C. 1087e(d)). 
‘‘(C) DISCLOSURE TO CERTAIN CONTRAC-
TORS.—Officers and employees of the Depart-
ment of Education may disclose the information 
described in subparagraph (A) to persons 
awarded contracts by the Secretary of Edu-
cation under section 456 of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1087f) to the ex-
tent necessary for the purposes described in 
subparagraph (B). 
‘‘(D) SPOUSAL
INFORMATION
FOR
MAR-
RIED
INDIVIDUALS
FILING
SEPARATE
RE-
TURNS.—For purposes of this paragraph, in the 
case of a married individual filing a separate re-
turn, the term ‘taxpayer’ includes the spouse of 
that individual if the Secretary of Education re-
quests information from the spouse of that indi-
vidual and the individual and the spouse have 
consented in writing. 
‘‘(E) APPLICABLE
STUDENT
LOAN.—For 
purposes of this paragraph, the term ‘applicable 
student loan’ means— 
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‘‘(i) any loan which is made, insured, 
or guaranteed under a program authorized 
under part B or D of title IV of the High-
er Education Act of 1965 (20 U.S.C. 1071 
et seq.; 1087a et seq.), and 
‘‘(ii) any loan which is made under 
part E of such title IV (20 U.S.C. 1087aa 
et seq.) which is in default and has been 
assigned to the Department of Edu-
cation.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 6103(a)(3) of such Code is amended 
by inserting ‘‘(13),’’ after ‘‘(12),’’. 
(2) Section 6103(p)(4) of such Code is amend-
ed by inserting ‘‘(13),’’ after ‘‘(l)(10),’’ each place it 
occurs. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to disclosures made after the date 
of enactment of this Act. 
Æ 
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