borrowers of a Federal Interest Free Edu-
cation Loan.’’. 
(b) INCOME-CONTINGENT REPAYMENT PLAN
FOR 
UNDERGRADUATE LOANS.—Section 455 of the Higher 
Education Act of 1965 (20 U.S.C. 1087e) is further 
amended by adding at the end the following: 
‘‘(r) INCOME-CONTINGENT REPAYMENT PLAN FOR 
UNDERGRADUATE LOANS.—Notwithstanding any other 
provision of this Act, the Secretary shall carry out a pro-
gram under which— 
‘‘(1) a borrower of a Federal Interest Free 
Education Loan— 
‘‘(A) shall have an aggregate monthly pay-
ment for the outstanding balance of principal 
and interest due on all such loans automatically 
withheld from the pre-tax income of the bor-
rower by the employer of the borrower in a 
manner which— 
‘‘(i) prohibits employers from using 
any information about an employee’s out-
standing balance or principal and interest 
due on such loans for any purpose of use 
as an advantage against the employee; 
‘‘(ii) is determined by the Secretary, 
in coordination with the heads of other ap-
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propriate Federal agencies (including the 
Secretary of the Treasury and the Com-
missioner of the Social Security Adminis-
tration); and 
‘‘(iii) is an amount equal to— 
‘‘(I) if the borrower’s gross in-
come is less than 337 percent of the 
poverty line applicable to the bor-
rower’s family size as determined 
under section 673(2) of the Commu-
nity Services Block Grant Act (42 
U.S.C. 9902(2)), $0; 
‘‘(II) if the borrower’s gross in-
come is equal to or greater than 337 
percent, but not more than 841 per-
cent of such poverty line; 4 percent of 
the borrower’s gross income; 
‘‘(III) if the borrower’s gross in-
come is equal to or greater than 842 
percent, but not more than 925 per-
cent of such poverty line, 5 percent of 
the borrower’s gross income; 
‘‘(IV) if the borrower’s gross in-
come is equal to or greater than 926 
percent, but not more than 1,010 per-
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cent of such poverty line, 6 percent of 
the borrower’s gross income; 
‘‘(V) if the borrower’s gross in-
come is equal to or greater than 1,011 
percent, but not more than 1,094 per-
cent of such poverty line, 7 percent of 
the borrower’s gross income; 
‘‘(VI) if the borrower’s gross in-
come is equal to or greater than 1,095 
percent, but not more than 1,178 per-
cent of such poverty line, 8 percent of 
the borrower’s gross income; 
‘‘(VII) if the borrower’s gross in-
come is equal to or greater than 1,179 
percent, and 1,262 percent of such 
poverty line, 9 percent of the bor-
rower’s gross income; and 
‘‘(VIII) if the borrower’s gross 
income is equal to or greater than 
1,263 percent of such poverty line, 10 
percent of the borrower’s gross in-
come; 
‘‘(B) may elect to have any payments made 
under subparagraph (A) that exceed the 
amount owed by the borrower on such loans for 
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a calendar year be refunded to the borrower or 
applied to the amount owed by the borrower on 
such loans for the succeeding calendar year; 
‘‘(2) the Secretary will cancel any outstanding 
balance of principal or interest due on all Federal 
Interest Free Education Loans made to a borrower 
who has made 300 monthly payments under this 
subsection; and 
‘‘(3) a borrower will be taxed on the amount 
cancelled under paragraph (2), which taxes shall be 
applied to carry out the Federal Direct Loan pro-
gram under this part.’’. 
Æ 
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