435 
‘‘(C) meets any other requirements estab-
lished by the institution. 
‘‘(4) FULL-TIME
ACADEMIC
WORKLOAD.—The 
term ‘full-time academic workload’, when used with 
respect to a semester or equivalent term, means at 
least 12 credits (or the equivalent). 
‘‘(5) INSTITUTION OF HIGHER EDUCATION.— 
The term ‘institution of higher education’ has the 
meaning given the term under section 101. 
‘‘(6) TRANSFER
RATE.—The term ‘transfer 
rate’, when used with respect to students enrolled in 
a program of study at an eligible institution, means 
the rate at which such students transfer to a 4-year 
institution of higher education. 
‘‘SEC. 420BB. AUTHORIZATION OF APPROPRIATIONS. 
‘‘There are authorized to be appropriated to carry out 
this subpart $1,000,000,000, to be available until ex-
pended for fiscal year 2021 and each of the 5 succeeding 
fiscal years.’’. 
SEC. 4093. FEDERAL PELL BONUS PROGRAM. 
Part A of title IV of the Higher Education Act of 
1965 (20 U.S.C. 1070 et seq.) is amended by adding at 
the end the following: 
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436 
‘‘Subpart 12—Federal Pell Grant Bonus Program 
‘‘SEC. 420CC. FEDERAL PELL GRANT BONUS PROGRAM. 
‘‘(a) IN GENERAL.—The Secretary shall allot funds 
in an amount determined under subsection (b) to each eli-
gible institution to support the attainment of bachelor’s 
degrees among low-income students, which may include 
providing financial aid and student support services to 
such students. 
‘‘(b) ALLOTMENT FORMULA.—For each fiscal year, 
each eligible institution shall be allotted an amount under 
subsection (a) that bears the same proportion to the 
amount appropriated under subsection (c) for such fiscal 
year as the number of bachelor’s degrees awarded by the 
institution for the award year ending prior to the begin-
ning of the preceding fiscal year to students who, during 
such award year, received a Federal Pell Grant and grad-
uated from the program in which such students were en-
rolled in the normal time for completion of such program 
(within the meaning of section 132(i)(1)(J)(i)) bears to 
the total number of bachelor’s degrees awarded to such 
students by all eligible institutions for such award year. 
‘‘(c) DATA.—In determining the allotments under 
subsection (b), the Secretary may request from eligible in-
stitutions any data that may be necessary. 
‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated, and there are appro-
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437 
priated, to carry out this section $500,000,000 for fiscal 
year 2021 and each succeeding fiscal year. Any amounts 
appropriated under this subsection shall be available until 
expended. 
‘‘(e) DEFINITIONS.—In this section: 
‘‘(1) ELIGIBLE INSTITUTION.—The term ‘eligi-
ble institution’ means an institution of higher edu-
cation (as defined in section 101)— 
‘‘(A) in which, for the 3 most recent award 
years, the average percentage of undergraduate 
students enrolled at the institution who received 
Federal Pell Grants is not less than 25 percent 
of the total number of undergraduate students 
enrolled at such institution; and 
‘‘(B) that has not opted out of receiving an 
allotment under this section. 
‘‘(2) LOW-INCOME STUDENT.—The term ‘low- 
income student’ has the meaning given such term in 
section 499R(3).’’. 
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438 
PART B—FEDERAL FAMILY EDUCATION LOAN 
PROGRAM 
SEC. 4101. TERMINATION OF CERTAIN REPAYMENT PLAN 
OPTIONS AND OPPORTUNITY TO CHANGE RE-
PAYMENT PLANS. 
(a) SELECTION
OF REPAYMENT PLANS.—Section 
428(b) of the Higher Education Act of 1965 (20 U.S.C. 
1078(b)) is amended— 
(1) in paragraph (1)— 
(A) in subparagraph (D)— 
(i) in clause (ii), by striking ‘‘may an-
nually change the selection of a repayment 
plan under this part,’’ and inserting ‘‘may 
at any time after July 1, 2021, change the 
selection of a repayment plan under this 
part to one of the 2 repayment plans de-
scribed in paragraph (9)(C),’’; and 
(ii) in clause (iii), by striking ‘‘be sub-
ject to income contingent repayment in ac-
cordance with subsection (m);’’ and insert-
ing ‘‘be subject to income-based repayment 
in accordance with section 493C(f);’’; and 
(B) in subparagraph (E)(i), by striking 
‘‘the option of repaying the loan in accordance 
with a standard, graduated, income-sensitive, or 
extended repayment schedule (as described in 
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439 
paragraph (9)) established by the lender in ac-
cordance with regulations of the Secretary; 
and’’ and inserting ‘‘the option of repaying the 
loan in accordance with a repayment plan de-
scribed in paragraph (9)(C) established by the 
lender in accordance with regulations of the 
Secretary; and’’; and 
(2) in paragraph (9), by adding at the end the 
following: 
‘‘(C) SELECTION
OF
REPAYMENT
PLANS 
ON AND AFTER JULY 1, 2021.— 
‘‘(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, 
2021, the lender shall offer a borrower of 
a loan made, insured, or guaranteed under 
this part the opportunity to change repay-
ment plans, and to enroll in one of the fol-
lowing repayment plans: 
‘‘(I) A fixed repayment plan de-
scribed in section 493E. 
‘‘(II) The income-based repay-
ment plan under section 493C(f).’’. 
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440 
(b) ASSIGNMENT
BY
THE
SECRETARY.—Section 
428(m) of the Higher Education Act of 1965 (20 U.S.C. 
1078(m)) is amended— 
(1) in the subsection heading, by striking ‘‘In-
come-contingent and’’; 
(2) by amending paragraph (1) to read as fol-
lows: 
‘‘(1) AUTHORITY
OF
SECRETARY
TO
RE-
QUIRE.—The Secretary may require borrowers who 
have defaulted on loans made under this part that 
are assigned to the Secretary under subsection 
(c)(8) to repay those loans under the income-based 
repayment plan under section 493C(f).’’; and 
(3) in the heading for paragraph (2), by strik-
ing ‘‘income contingent or’’. 
SEC. 4102. TERMINATION OF INTEREST CAPITALIZATION 
FOR SUBSIDIZED LOANS AFTER CERTAIN PE-
RIODS. 
Section 428(c)(3)(C) of the Higher Education Act of 
1965 (20 U.S.C. 1078(c)(3)(C)) is amended— 
(1) in clause (iii), by inserting before the semi-
colon the following: ‘‘, and with respect to a forbear-
ance granted to a borrower on or after the date of 
enactment of the College Affordability Act on a loan 
made, insured or guaranteed under this section or 
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441 
on a Federal Direct Stafford Loan, provide informa-
tion to the borrower to assist the borrower in under-
standing that interest shall accrue on the loan but 
not be capitalized at the expiration of such period of 
forbearance’’; and 
(2) in clause (iv)— 
(A) in subclause (III), by inserting before 
the semicolon at the end the following: ‘‘, except 
that this subclause shall not apply with respect 
to any period of forbearance beginning on or 
after the date of enactment of the College Af-
fordability Act’’; and 
(B) in subclause (IV), by inserting before 
the semicolon at the end the following: ‘‘except 
that this subclause shall not apply with respect 
to any period of forbearance beginning on or 
after the date of enactment of the College Af-
fordability Act’’. 
SEC. 4103. TERMINATION OF INTEREST CAPITALIZATION 
FOR PLUS LOANS AFTER CERTAIN PERIODS. 
Section 428B(d)(2) of the Higher Education Act of 
1965 (20 U.S.C. 1078–2(d)(2)) is amended— 
(1) in subparagraph (A), by striking ‘‘Interest 
on’’ and inserting ‘‘Subject to subparagraph (C), in-
terest on’’; and 
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442 
(2) by adding at the end the following: 
‘‘(C) INTEREST
CAPITALIZATION.—With 
respect to a deferment during any period de-
scribed in clause (i)(II), (ii), (ii), or (iv) of sec-
tion 427(a)(2)(C) or clause (i)(II), (ii), (iii), 
(iv), or (v) of section 428(b)(1)(M), or any pe-
riod of forbearance, beginning on or after the 
date of enactment of the College Affordability 
Act on a loan made under this section, interest 
shall not be added to the principal amount of 
the loan at the expiration of such deferment or 
forbearance period.’’. 
SEC. 4104. SUBSEQUENT CONSOLIDATION LOANS. 
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 
(3) by adding at the end the following: 
‘‘(dd) for the purpose of sep-
arating a joint consolidation loan 
into 2 separate Federal Direct 
Consolidation Loans under sec-
tion 455(g)(2); or 
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443 
‘‘(ee) for the purpose of sec-
tion 
455(m)(9)(A)(ii), 
493C(f)(2)(G), or 493E(c).’’. 
SEC. 4105. DEFAULT REDUCTION PROGRAM. 
Section 428F(a)(1)(C) of the Higher Education Act 
of 1965 (20 U.S.C. 1078–6(a)(1)(C)) is amended by strik-
ing ‘‘to remove the record of the default from the bor-
rower’s credit history’’ and inserting ‘‘to remove any ad-
verse item of information relating to such loan from the 
borrower’s credit history’’. 
SEC. 4106. TERMINATION OF INTEREST CAPITALIZATION 
FOR UNSUBSIDIZED LOANS AFTER CERTAIN 
PERIODS. 
Section 428H(e)(2)(A)(ii)(III) of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1078–8(e)(2)(A)(ii)(III)) 
is amended by inserting before the semicolon the following: 
‘‘, except that with respect to a deferment during any pe-
riod described in clause (i)(II), (ii), (iii), or (iv) of section 
427(a)(2)(C) or clause (i)(II), (ii), (iii), (iv), or (v) of sec-
tion 428(b)(1)(M), or any period of forbearance, beginning 
on or after the date of enactment of the College Afford-
ability Act on a loan made, insured, or guaranteed under 
this section or on a Federal Direct Unsubsidized Stafford 
Loan, interest shall not be added to the principal amount 
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444 
of the loan at the expiration of such deferment or forbear-
ance period’’. 
SEC. 4107. DISBURSEMENT OF STUDENT LOANS. 
Section 428G of the Higher Education Act of 1965 
(20 U.S.C. 1078–7(a)) is amended— 
(1) in subsection (a) by adding at the end the 
following: 
‘‘(5) ADJUSTED COHORT DEFAULT RATE.—Be-
ginning on the date on which the final adjusted co-
hort default rates are published by the Secretary for 
not less than 3 fiscal years under section 435(m), an 
institution whose adjusted cohort default rate (as de-
termined under section 435(m)) for each of the 3 
most recent fiscal years for which data are available 
is less than 5 percent may disburse any loan made, 
insured, or guaranteed under this part in a single in-
stallment for any period of enrollment that is not 
more than 1 semester, 1 trimester, 1 quarter, or 4 
months.’’; and 
(2) in subsection (e), by inserting before the pe-
riod the following: ‘‘, or beginning on the date on 
which the final adjusted cohort default rates are 
published by the Secretary for fiscal year 2018 
under section 435(m), an adjusted cohort default 
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445 
rate (as determined under section 435(m)) of less 
than 2 percent’’. 
SEC. 4108. STUDENT LOAN CONTRACT AND LOAN DISCLO-
SURES. 
(a) 
STUDENT
LOAN
CONTRACT.—Section 
432(m)(1)(D) of the Higher Education Act of 1965 (20 
U.S.C. 1082(m)(1)(D)) is amended by adding at the end 
the following: 
‘‘(iv) STUDENT LOAN CONTRACT.— 
‘‘(I) IN GENERAL.—Any master 
promissory note form described in this 
subparagraph that is developed or 
used for loans made under part D for 
periods of enrollment beginning on or 
after the date of enactment of the 
College Affordability Act shall be re-
ferred to as a ‘student loan contract’. 
‘‘(II) CLARIFICATION ON USE.— 
Notwithstanding clause (i), each stu-
dent loan contract for a part D loan 
made for periods of enrollment begin-
ning on or after the date of enactment 
of 
the 
College 
Affordability 
Act 
shall— 
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446 
‘‘(aa) not be entered into by 
a student unless the student has 
completed all required counseling 
related to such loan, including 
counseling required under section 
485(l); 
‘‘(bb) be signed by the stu-
dent entering such student loan 
contract after completion of such 
counseling; and 
‘‘(cc) be used only for the 
academic year for which the ini-
tial loans are made under the 
contract, and shall not be valid 
for additional loans for the same 
or subsequent periods of enroll-
ment.’’. 
(b) LOAN DISCLOSURES.—Section 432(m)(1)(D) of 
the Higher Education Act of 1965 (20 U.S.C. 
1082(m)(1)(D)) is further amended by adding after clause 
(iv) (as amended) the following: 
‘‘(v) LOAN DISCLOSURES.—For loans 
made for periods of enrollment beginning 
on or after the date of enactment of the 
College Affordability Act, the Secretary 
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447 
shall take such steps as are necessary to 
streamline the student loan disclosure re-
quirements under this Act. The Secretary 
shall ensure that information required to 
be disclosed to a student who is applying 
for, receiving, or preparing to repay a loan 
under part D of this Act shall be stream-
lined in a manner that— 
‘‘(I) based upon consumer test-
ing, reduces and simplifies the paper-
work students are required to com-
plete; and 
‘‘(II) limits the number of times 
students are presented with disclo-
sures by incorporating the streamlined 
disclosures into required student loan 
counseling under section 485(l), the 
student loan contract under this sub-
paragraph, or both.’’. 
SEC. 4109. BORROWER ADVOCATE CONFORMING AMEND-
MENTS. 
Section 433 of the Higher Education Act of 1965 (20 
U.S.C. 1083) is amended— 
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448 
(1) in subsection (b)(13), by striking ‘‘Student 
Loan Ombudsman’’ and inserting ‘‘Borrower Advo-
cate’’; and 
(2) in subsection (e)(3)(E), by striking ‘‘Stu-
dent Loan Ombudsman’’ and inserting ‘‘Borrower 
Advocate’’. 
SEC. 4110. COHORT DEFAULT RATES. 
(a) INELIGIBILITY
BASED
ON
HIGH
DEFAULT 
RATES.— 
(1) IN GENERAL.—Section 435(a) of the High-
er Education Act of 1965 (20 U.S.C. 1085(a)) is 
amended— 
(A) in paragraph (7)(A), by adding at the 
end the following: 
‘‘(iii) 
DEFAULT
MANAGEMENT 
PLAN.—The default management plan re-
quired under clause (i) may not include 
placing students in forbearance as a means 
of reducing the cohort default rate or the 
adjusted cohort default rate of the institu-
tion.’’; and 
(B) by adding at the end the following: 
‘‘(9) INELIGIBILITY BASED ON HIGH ADJUSTED 
COHORT DEFAULT RATES.— 
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449 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraphs (B) and (D), beginning on the 
date that is one year after the date on which 
the final adjusted cohort default rates are pub-
lished by the Secretary for not less than 3 fiscal 
years, in a case in which one of the following 
determinations is made with respect to an insti-
tution, such institution shall be ineligible to 
participate in a program under this title for the 
fiscal year for which the determination is made 
and for the two succeeding fiscal years: 
‘‘(i) The institution’s adjusted cohort 
default rate is greater than 20 percent for 
each of the 3 most recent fiscal years for 
which the final adjusted cohort default 
rates are published. 
‘‘(ii) With respect to the 6 most re-
cent fiscal years for which the final ad-
justed cohort default rates are published— 
‘‘(I) the institution’s adjusted co-
hort default rate is greater than 15 
percent for each such fiscal year; and 
‘‘(II) the Secretary determines 
that, during such 6-year period, the 
institution has not made adequate 
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450 
progress in meeting standards for stu-
dent achievement established by the 
relevant accrediting agency or associa-
tion pursuant to section 496(a)(5)(A). 
‘‘(iii) With respect to the 8 most re-
cent fiscal years for which the final ad-
justed cohort default rates are published— 
‘‘(I) the institution’s adjusted co-
hort default rate is greater than 10 
percent for each such fiscal year; and 
‘‘(II) the Secretary determines 
that, during such 8-year period, the 
institution has not made adequate 
progress in meeting standards for stu-
dent achievement established by the 
relevant accrediting agency or associa-
tion pursuant to section 496(a)(5)(A). 
‘‘(B) EXCEPTIONS
FOR
CERTAIN
CAT-
EGORIES
OF
EDUCATIONAL
PROGRAMS.—With 
respect to an institution that loses eligibility to 
participate in a program under this title in ac-
cordance with subparagraph (A)(ii), such insti-
tution may request and be granted an exception 
to such loss of eligibility for a category of edu-
cational programs at such institution by dem-
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451 
onstrating to the Secretary that the adjusted 
cohort default rate for the category of edu-
cational programs is 15 percent or less for each 
fiscal year of the 6-year period on which such 
loss of eligibility for the institution is based. 
‘‘(C) DETERMINATION OF THE ADJUSTED 
COHORT
RATE
FOR
A
CATEGORY
OF
EDU-
CATIONAL PROGRAMS.—In determining the ad-
justed cohort default rate for a category of edu-
cational programs for purposes of this para-
graph— 
‘‘(i) subsection (m) shall be applied— 
‘‘(I) in paragraph (1)— 
‘‘(aa) in subparagraph (A), 
by substituting ‘received for en-
rollment in the category of edu-
cational programs for which such 
rate is being determined’ for ‘re-
ceived for attendance at the insti-
tution’; and 
‘‘(bb) 
in 
subparagraph 
(E)(i)(II), by substituting, ‘per-
centage of students enrolled in 
the category of educational pro-
grams for which such rate is 
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452 
being determined’ for ‘percentage 
of students enrolled at the insti-
tution’; and 
‘‘(II) as if the following were 
added at the end of paragraph (2): 
‘‘ ‘(E) In the case of a student who has re-
ceived a loan for enrollment in more than one 
category of educational programs, the student 
(and such student’s subsequent repayment or 
default) is attributed to the last category of 
educational programs in which such student 
was enrolled.’. 
‘‘(D) TRANSITION EXCEPTION.— 
‘‘(i) IN GENERAL.—A covered institu-
tion with an adjusted cohort default rate 
that is greater than 20 percent for the 
first fiscal year for which such rates are 
published by the Secretary may request 
that any determination of such institu-
tion’s ineligibility under paragraph (9)(A) 
not be based on the adjusted cohort default 
rate of such institution for any or all of 
the first 3 fiscal years for which such rates 
are published by the Secretary. 
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453 
‘‘(ii) REQUIREMENT.—To be granted 
a request under clause (i), an institution 
shall submit to the Secretary a default 
management plan as specified in para-
graph (7). 
‘‘(iii) DEFINITION OF COVERED INSTI-
TUTION.—In this subparagraph, the term 
‘covered institution’ means— 
‘‘(I) a public institution of higher 
education; 
‘‘(II) a part B institution (as de-
fined in section 322); or 
‘‘(III) a private, nonprofit insti-
tution of higher education at which 
not less than 45 percent of the total 
student enrollment consists of low-in-
come students (as such term is de-
fined in section 419N(b)(7)). 
‘‘(E) CATEGORY
OF
EDUCATIONAL
PRO-
GRAMS DEFINED.—The term ‘category of edu-
cational programs’, when used with respect to 
an institution, means one of the following: 
‘‘(i) The educational programs at the 
institution leading to an undergraduate, 
non-degree credential. 
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454 
‘‘(ii) The educational programs at the 
institution leading to an associate’s degree. 
‘‘(iii) The educational programs at the 
institution leading to a bachelor’s degree. 
‘‘(iv) The educational programs at the 
institution leading to a graduate, non-de-
gree credential. 
‘‘(v) The educational program at the 
institution leading to a graduate degree. 
‘‘(10) APPLICATION OF ADJUSTED COHORT DE-
FAULT RATE.—Beginning on the date on which the 
final adjusted cohort default rates are published by 
the Secretary for not less than 3 fiscal years— 
‘‘(A) paragraph (1) shall be applied by 
substituting ‘paragraph (9)’ for ‘paragraph (2)’; 
‘‘(B) paragraph (3) shall be applied by 
substituting ‘adjusted cohort default rate, cal-
culated 
in 
accordance 
with 
subsection 
(m)(1)(D), is greater than 20 percent for any 
3 consecutive fiscal years’ for ‘cohort default 
rate, calculated in accordance with subsection 
(m), is equal to or greater than the threshold 
percentage specified in paragraph (2)(B)(iv) for 
any two consecutive fiscal years’; 
‘‘(C) paragraph (4) shall be applied— 
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455 
‘‘(i) in subparagraph (C), by sub-
stituting ‘adjusted cohort default rate is 
greater than 15 percent’ for ‘cohort default 
rate equals or exceeds 20 percent’; and 
‘‘(ii) in the matter following subpara-
graph (C), by substituting ‘adjusted cohort 
default rate to reflect the percentage of de-
faulted loans in the representative sample 
that are required to be excluded pursuant 
to subsection (m)(1)(B)’ for ‘cohort default 
rate to reflect the percentage of defaulted 
loans in the representative sample that are 
required to be excluded pursuant to sub-
section (m)(1)(B)’; 
‘‘(D) paragraph (5)(A) shall be applied by 
substituting ‘paragraph (9)’ for ‘paragraph (2)’; 
and 
‘‘(E) paragraph (7) shall be applied— 
‘‘(i) in subparagraph (A)(i)— 
‘‘(I) in the matter preceding sub-
clause (I), by substituting ‘adjusted 
cohort default rate is greater than 20 
percent’ for ‘cohort default rate is 
equal to or greater than the threshold 
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456 
percentage specified in paragraph 
(2)(B)(iv)’; and 
‘‘(II) in subclauses (I) and (II), 
by substituting ‘adjusted cohort de-
fault rate’ for ‘cohort default rate’; 
and 
‘‘(ii) in subparagraph (B)(i), by sub-
stituting ‘adjusted cohort default rate is 
greater than 20 percent’ for ‘cohort default 
rate is equal to or greater than the thresh-
old percentage specified in paragraph 
(2)(B)(iv)’.’’. 
(2) 
CONFORMING
AMENDMENTS.—Section 
435(a)(2) of the Higher Education Act of 1965 (20 
U.S.C. 1085(a)) is amended— 
(A) in the paragraph heading, by adding at 
the end the following: ‘‘BEFORE FISCAL YEAR 
2018’’; and 
(B) in subparagraph (B)(iv), by striking 
‘‘and any succeeding fiscal year’’ and inserting 
‘‘through fiscal year 2017’’. 
(b) ADJUSTED COHORT DEFAULT RATE DEFINED.— 
Section 435(m)(1) of the Higher Education Act of 1965 
(20 U.S.C. 1085(m)(1)) is amended by adding at the end 
the following: 
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‘‘(D)(i) With respect to a cohort default 
rate calculated for an institution under this 
paragraph for fiscal year 2018 and for each 
succeeding fiscal year, such cohort default rate 
shall be adjusted as follows: 
‘‘(I) In determining the number of 
current and former students at an institu-
tion who enter repayment for such fiscal 
year— 
‘‘(aa) any such student who is in 
nonmandatory forbearance for such 
fiscal year for a period of greater than 
18 months but less than 36 months 
shall not be counted as entering re-
payment for such fiscal year; 
‘‘(bb) such a student shall be 
counted as entering repayment for the 
first fiscal year for which the student 
ceases to be in a period of forbearance 
and otherwise meets the requirements 
for being in repayment; and 
‘‘(cc) any such student who is in 
a period of forbearance for 3 or more 
years shall be counted as in default 
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458 
and included in the institution’s total 
number of students in default. 
‘‘(II) Such rate shall be multiplied by 
the percentage of students enrolled at the 
institution for such fiscal year who are 
borrowing a loan under part D of this title. 
‘‘(ii) The result obtained under this sub-
paragraph for an institution shall be referred to 
in this Act as the ‘adjusted cohort default 
rate’.’’. 
(c) PUBLICATION OF ADJUSTED COHORT DEFAULT 
RATE.—Section 435(m) of the Higher Education Act of 
1965 (20 U.S.C. 1085(m)) is amended by adding at the 
end the following: 
‘‘(5) Beginning on the date on which the final 
adjusted cohort default rates for fiscal year 2018 are 
made available for publication by the Secretary, 
paragraph (4) shall be applied by substituting ‘ad-
justed cohort default’ for ‘cohort default’ each place 
it appears.’’. 
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SEC. 4111. AUTOMATIC INCOME MONITORING PROCEDURES 
AFTER 
A 
TOTAL 
AND 
PERMANENT 
DIS-
ABILITY DISCHARGE. 
Section 437(a) of the Higher Education Act of 1965 
(20 U.S.C. 1087(a)) is amended by adding at the end the 
following: 
‘‘(3) AUTOMATIC INCOME MONITORING.— 
‘‘(A) IN GENERAL.—Not later than 2 years 
after the date of enactment of the College Af-
fordability Act, the Secretary shall establish 
and implement, with respect to any borrower 
described in subparagraph (B), procedures to— 
‘‘(i) obtain (for each year of the in-
come-monitoring period described in sub-
paragraph (B) and without further action 
by the borrower) such information as is 
reasonably necessary regarding the income 
of such borrower for the purpose of deter-
mining the borrower’s continued eligibility 
for the loan discharge described in sub-
paragraph (B) for such year, and any 
other information necessary to determine 
such continued eligibility of the borrower 
for such year, except that in the case of a 
borrower whose returns and return infor-
mation indicate that the borrower has no 
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earned income for any year of such in-
come-monitoring period, such borrower 
shall be treated as not having earned in-
come in excess of the poverty line for such 
year 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; and 
‘‘(iii) provide the borrower with an op-
portunity to update the information ob-
tained under clause (i) before the deter-
mination of the borrower’s continued eligi-
bility for such loan discharge for such 
year. 
‘‘(B) APPLICABILITY.—Subparagraph (A) 
shall apply— 
‘‘(i) to each borrower of a covered 
loan (defined in section 455(d)(10)) that is 
discharged under this subsection or section 
464(c)(1)(F) due to the permanent and 
total disability of the borrower; and 
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‘‘(ii) during the income-monitoring pe-
riod under this subsection, defined in this 
paragraph as the period— 
‘‘(I) beginning on the date on 
which such loan is so discharged; and 
‘‘(II) during which the Secretary 
determines whether a reinstatement of 
the obligation of, and resumption of 
collection on, such loan may be nec-
essary.’’. 
SEC. 4112. REPAYMENT OF PARENT LOANS DUE TO STU-
DENT DISABILITY. 
Section 437(d) of the Higher Education Act of 1965 
(20 U.S.C. 1087(d)) is amended— 
(1) by striking ‘‘If a student’’ and inserting the 
following: 
‘‘(1) DEATH.—If a student’’; and 
(2) by adding at the end the following: 
‘‘(2) DISABILITY.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
discharge a parent’s liability on a loan de-
scribed in section 428B by repaying the amount 
owed on the loan if the student on whose behalf 
the parent has received the loan— 
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‘‘(i) becomes permanently and totally 
disabled (as determined in accordance with 
regulations of the Secretary); or 
‘‘(ii) is unable to engage in any sub-
stantial gainful activity by reason of any 
medically determinable physical or mental 
impairment that can be expected to result 
in death, has lasted for a continuous pe-
riod of not less than 60 months, or can be 
expected to last for a continuous period of 
not less than 60 months. 
‘‘(B) DISABILITY DETERMINATIONS.—Sub-
section (a)(2) shall apply to a disability deter-
mination under this paragraph in the same 
manner as such subsection applies to a deter-
mination under subsection (a)(1). 
‘‘(C) SAFEGUARDS.—The safeguards to 
prevent fraud and abuse developed under sub-
section (a)(1) shall apply under this paragraph. 
‘‘(D) REINSTATEMENT
OF
LOANS.—The 
Secretary may promulgate regulations to rein-
state the obligation of, and resume collection 
on, loans discharged under this paragraph in 
cases in which the Secretary determines that 
the reinstatement and resumption is necessary 
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and appropriate based upon the regulations de-
veloped under subsection (a)(1).’’. 
PART C—FEDERAL WORK-STUDY PROGRAMS 
SEC. 4201. PURPOSE; AUTHORIZATION OF APPROPRIA-
TIONS. 
Section 441 of the Higher Education Act of 1965 (20 
U.S.C. 1087–51) is amended— 
(1) in subsection (b), by striking ‘‘part, such 
sums as may be necessary for fiscal year 2009 and 
each of the five succeeding fiscal years.’’ and insert-
ing ‘‘part— 
‘‘(1) $1,500,000,000 for fiscal year 2021; 
‘‘(2) $1,750,000,000 for fiscal year 2022; 
‘‘(3) $2,000,000,000 for fiscal year 2023; 
‘‘(4) $2,250,000,000 for fiscal year 2024; and 
‘‘(5) $2,500,000,000 for fiscal year 2025 and 
each succeeding fiscal year.’’; 
(2) in subsection (c)— 
(A) in paragraph (1), by inserting ‘‘child 
development and early learning (including Head 
Start and Early Head Start programs carried 
out under the Head Start Act (42 U.S.C. 9831 
et seq.)),’’, before ‘‘literacy training,’’; 
(B) in paragraph (3), by striking ‘‘and’’; 
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464 
(C) in paragraph (4)(C), by striking the 
period at the end and inserting ‘‘; and’’; and 
(D) by adding at the end the following: 
‘‘(5) work-based learning designed to give stu-
dents experience in any activity described in para-
graph (1), (2), (3), or (4), without regard to whether 
credit is awarded.’’; and 
(3) by adding at the end the following: 
‘‘(d) WORK-BASED LEARNING DEFINED.—For pur-
poses of this part, the term ‘work-based learning’ means 
sustained interactions with industry, community, or aca-
demic professionals in real workplace settings that shall— 
‘‘(1) include on campus opportunities; 
‘‘(2) foster in-depth, first-hand engagement 
with the tasks required of a given career field that 
are aligned to a student’s field of study; and 
‘‘(3) may include internships, fellowships, re-
search assistant positions, teacher residencies, and 
apprenticeships registered under the Act of August 
16, 1937 (commonly known as the ‘‘National Ap-
prenticeship Act’’; 50 Stat. 664, chapter 663; 29 
U.S.C. 50 et seq.).’’. 
SEC. 4202. ALLOCATION FORMULA. 
Section 442 of the Higher Education Act of 1965 (20 
U.S.C. 1087–52) is amended to read as follows: 
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‘‘SEC. 4202. ALLOCATION OF FUNDS. 
‘‘(a) RESERVATIONS.— 
‘‘(1) RESERVATION
FOR
IMPROVED
INSTITU-
TIONS.— 
‘‘(A) AMOUNT OF RESERVATION FOR IM-
PROVED
INSTITUTIONS.—Beginning with the 
first fiscal year that is 2 years after the date 
of the enactment of the College Affordability 
Act, for a fiscal year in which the amount ap-
propriated 
under 
section 
441(b) 
exceeds 
$700,000,000, the Secretary shall— 
‘‘(i) reserve the lesser of— 
‘‘(I) an amount equal to 20 per-
cent of the amount by which the 
amount appropriated under section 
441(b) exceeds $700,000,000; or 
‘‘(II) $150,000,000; and 
‘‘(ii) allocate the amount reserved 
under clause (i) to each improved institu-
tion in an amount equal to the greater of 
the following: 
‘‘(I) The amount that bears the 
same proportion to the amount re-
served under clause (i) as the total 
amount of all Federal Pell Grant 
funds awarded at the improved insti-
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tution for the second preceding fiscal 
year bears to the total amount of Fed-
eral Pell Grant funds awarded at im-
proved institutions participating under 
this part for the second preceding fis-
cal year. 
‘‘(II) $5,000. 
‘‘(B) 
IMPROVED
INSTITUTION
DE-
SCRIBED.—For purposes of this paragraph, an 
improved institution is an institution that, on 
the date the Secretary makes an allocation 
under subparagraph (A)(ii)— 
‘‘(i) is an institution of higher edu-
cation (as defined under section 101) par-
ticipating under this part; 
‘‘(ii) is with respect to— 
‘‘(I) the completion rate or grad-
uation rate of Federal Pell Grant re-
cipients at the institution, in the top 
75 percent of all institutions partici-
pating under this part for the pre-
ceding fiscal year; 
‘‘(II) the percentage of Federal 
Pell Grant recipients at the institu-
tion, in the top 50 percent of the in-
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stitutions described in subclause (I); 
and 
‘‘(III) the annual increase in the 
completion rate or graduation rate of 
Federal Pell Grant recipients at the 
institution, in the top 50 percent of 
the institutions described in sub-
clauses (I) and (II). 
‘‘(C) COMPLETION RATE OR GRADUATION 
RATE.—For purposes of determining the com-
pletion rate or graduation rate under this sec-
tion, a Federal Pell Grant recipient who is ei-
ther a full-time student or a part-time student 
shall be counted as a completer or graduate if, 
within 150 percent of the normal time for com-
pletion of or graduation from the program, the 
student has completed or graduated from the 
program, or enrolled in any program of an in-
stitution participating in any program under 
this title for which the prior program provides 
substantial preparation. 
‘‘(2) RESERVATION
FOR
GRANT
PROGRAM.— 
From the amount appropriated under section 441(b) 
for a fiscal year and remaining after the Secretary 
reserves funds under subparagraph (A), the Sec-
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retary shall reserve $30,000,000 to carry out grants 
under section 449. 
‘‘(3) REALLOCATION OF AMOUNT RETURNED BY 
IMPROVED INSTITUTIONS.—If an institution returns 
to the Secretary any portion of the sums allocated 
to such institution under this subsection for any fis-
cal year, the Secretary shall reallot such excess to 
improved institutions on the same basis as under 
paragraph (1)(A). 
‘‘(4) PUBLICATION.—Beginning 1 year after 
the first allocations are made to improved institu-
tions under paragraph (1)(A) and annually there-
after, the Secretary shall make publicly available— 
‘‘(A) a list of the improved institutions 
that received funding under such paragraph in 
the prior fiscal year; 
‘‘(B) the percentage of students at each 
such improved institution that are Federal Pell 
Grant recipients; 
‘‘(C) the completion rate or graduation 
rate for the students described in subparagraph 
(B) with respect to each such improved institu-
tion; and 
‘‘(D) a comparison between the informa-
tion described in subparagraphs (A), (B), and 
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469 
(C) for the prior fiscal year for such improved 
institution, and such information for the year 
prior to such year. 
‘‘(c) ALLOCATION FORMULA
FOR FISCAL YEARS 
2021 THROUGH 2025.— 
‘‘(1) IN GENERAL.—From the amount appro-
priated under section 441(b) for a fiscal year and re-
maining after the Secretary reserves funds under 
subsection (a), the Secretary shall allocate to each 
institution— 
‘‘(A) for fiscal year 2021, an amount equal 
to the greater of— 
‘‘(i) 90 percent of the amount the in-
stitution received under this subsection 
and subsection (a) for fiscal year 2020, as 
such subsections were in effect with re-
spect to such fiscal year (in this subpara-
graph referred to as ‘the 2020 amount for 
the institution’); or 
‘‘(ii) the fair share amount for the in-
stitution determined under subsection (d); 
‘‘(B) for fiscal year 2022, an amount equal 
to the greater of— 
‘‘(i) 80 percent of the 2020 amount 
for the institution; or 
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‘‘(ii) the fair share amount for the in-
stitution determined under subsection (d); 
‘‘(C) for fiscal year 2023, an amount equal 
to the greater of— 
‘‘(i) 60 percent of the 2020 amount 
for the institution; or 
‘‘(ii) the fair share amount for the in-
stitution determined under subsection (d); 
‘‘(D) for fiscal year 2024, an amount equal 
to the greater of— 
‘‘(i) 40 percent of the 2020 amount 
for the institution; or 
‘‘(ii) the fair share amount for the in-
stitution determined under subsection (d); 
and 
‘‘(E) for fiscal year 2025, an amount equal 
to the greater of— 
‘‘(i) 20 percent of the 2020 amount 
for the institution; or 
‘‘(ii) the fair share amount for the in-
stitution determined under subsection (d). 
‘‘(2) RATABLE REDUCTION.— 
‘‘(A) IN GENERAL.—If the amount appro-
priated under section 441(b) for a fiscal year 
and remaining after the Secretary reserves 
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471 
funds under subsection (a) is less than the 
amount required to be allocated to the institu-
tions under this subsection, then the amount of 
the allocation to each institution shall be rat-
ably reduced. 
‘‘(B) ADDITIONAL
APPROPRIATIONS.—If 
the amounts allocated to each institution are 
ratably reduced under subparagraph (A) for a 
fiscal year and additional amounts are appro-
priated for such fiscal year, the amount allo-
cated to each institution from the additional 
amounts shall be increased on the same basis as 
the amounts under subparagraph (A) were re-
duced (until each institution receives the 
amount required to be allocated under this sub-
section). 
‘‘(d) ALLOCATION FORMULA FOR FISCAL YEAR 2026 
AND EACH SUCCEEDING FISCAL YEAR.—Except as pro-
vided in subsection (d)(5), from the amount appropriated 
under section 441(b) for fiscal year 2026 and each suc-
ceeding fiscal year and remaining after the Secretary re-
serves funds under subsection (a), the Secretary shall allo-
cate to each institution the fair share amount for the insti-
tution determined under subsection (d). 
‘‘(e) DETERMINATION OF FAIR SHARE AMOUNT.— 
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‘‘(1) IN GENERAL.—Subject to paragraph (2), 
the fair share amount for an institution for a fiscal 
year shall be equal to the sum of— 
‘‘(A) 100 percent of the institution’s un-
dergraduate student need described in para-
graph (2) for the preceding fiscal year; and 
‘‘(B) 25 percent of the institution’s grad-
uate student need described in paragraph (3) 
for the preceding fiscal year. 
‘‘(2) INSTITUTIONAL
UNDERGRADUATE
STU-
DENT
NEED
CALCULATION.—The undergraduate 
student need for an institution for a fiscal year shall 
be equal to the sum of the following: 
‘‘(A) An amount equal to 50 percent of the 
amount that bears the same proportion to the 
available appropriated amount for such fiscal 
year as the total amount of Federal Pell Grant 
funds awarded at the institution for the pre-
ceding fiscal year bears to the total amount of 
Federal Pell Grant funds awarded at all institu-
tions participating under this part for the pre-
ceding fiscal year. 
‘‘(B) An amount equal to 50 percent of the 
amount that bears the same proportion to the 
available appropriated amount for such fiscal 
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473 
year as the total amount of the undergraduate 
student need at the institution for the preceding 
fiscal year bears to the total amount of under-
graduate student need at all institutions partici-
pating under this part for the preceding fiscal 
year. 
‘‘(3) 
INSTITUTIONAL
GRADUATE
STUDENT 
NEED
CALCULATION.—The graduate student need 
for an institution for a fiscal year shall be equal to 
the amount that bears the same proportion to the 
available appropriated amount for such fiscal year as 
the total amount of the graduate student need at the 
institution for the preceding fiscal year bears to the 
total amount of graduate student need at all institu-
tions participating under this part for the preceding 
fiscal year. 
‘‘(4) ELIGIBILITY FOR FAIR SHARE AMOUNT.— 
The Secretary may not allocate funds under this 
part to any institution that, for two or more fiscal 
years during any three fiscal year period beginning 
not earlier than the first day of the first fiscal year 
that is 2 years after the date of the enactment of 
this paragraph, has— 
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474 
‘‘(A) a student population with less than 7 
percent of undergraduate students who are re-
cipients of Federal Pell Grants; or 
‘‘(B) if the institution only enrolls grad-
uate students, a student population with less 
than 5 percent of students that have an ex-
pected family contribution of zero. 
‘‘(5) DEFINITIONS.—In this subsection: 
‘‘(A) 
AVAILABLE
APPROPRIATED 
AMOUNT.—In this section, the term ‘available 
appropriated amount’ means— 
‘‘(i) the amount appropriated under 
section 441(b) for a fiscal year, minus 
‘‘(ii) the amounts reserved under sub-
section (a) for such fiscal year. 
‘‘(B) AVERAGE COST OF ATTENDANCE.— 
The term ‘average cost of attendance’ means, 
with respect to an institution, the average of 
the attendance costs for a fiscal year for stu-
dents which shall include— 
‘‘(i) tuition and fees, computed on the 
basis of information reported by the insti-
tution to the Secretary, which shall in-
clude— 
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475 
‘‘(I) total revenue received by the 
institution from undergraduate and 
graduate tuition and fees for the sec-
ond year preceding the year for which 
it is applying for an allocation; and 
‘‘(II) the institution’s enrollment 
for such second preceding year; 
‘‘(ii) standard living expenses equal to 
150 percent of the difference between the 
income protection allowance for a family of 
five with one in college and the income 
protection allowance for a family of six 
with one in college for a single independent 
student; and 
‘‘(iii) books and supplies, in an 
amount not exceeding $1,000. 
‘‘(C) GRADUATE
STUDENT
NEED.—The 
term ‘graduate student need’ means, with re-
spect to a graduate student for a fiscal year, 
the lesser of the following: 
‘‘(i) The amount equal to (except the 
amount computed by this clause shall not 
be less than zero)— 
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476 
‘‘(I) the average cost of attend-
ance for the preceding fiscal year, 
minus 
‘‘(II) such graduate student’s ex-
pected family contribution (computed 
in accordance with part F of this 
title) for the preceding fiscal year. 
‘‘(ii) The total annual loan limit for a 
Federal 
Direct 
Unsubsidized 
Stafford 
Loan. 
‘‘(D) UNDERGRADUATE STUDENT NEED.— 
The term ‘undergraduate student need’ means, 
with respect to an undergraduate student for a 
fiscal year, the lesser of the following: 
‘‘(i) The total of the amount equal to 
(except the amount computed by this 
clause shall not be less than zero)— 
‘‘(I) the average cost of attend-
ance for the fiscal year, minus 
‘‘(II) such undergraduate stu-
dent’s expected family contribution 
(computed in accordance with part F 
of this title) for the preceding fiscal 
year. 
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477 
‘‘(ii) The total annual loan limit for a 
Federal 
Direct 
Unsubsidized 
Stafford 
Loan and a Federal Direct Loan. 
‘‘(f) RETURN OF SURPLUS ALLOCATED FUNDS.— 
‘‘(1) IN
GENERAL.—Except with respect to 
funds returned under subsection (a)(3), if an institu-
tion returns to the Secretary any portion of the 
sums allocated to such institution under this section 
for any fiscal year, the Secretary shall reallot such 
excess to institutions that used at least 10 percent 
of the total amount of funds granted to such institu-
tion under this section to compensate students em-
ployed during a qualified period of nonenrollment 
(as such term is defined in section 443(f)) on the 
same basis as excess eligible amounts are allocated 
under subsection (d). 
‘‘(2) USE OF FUNDS.—Funds received by insti-
tutions pursuant to this subsection shall, to max-
imum extent practicable, be used to compensate stu-
dents employed in work-based learning positions. 
‘‘(3) RETAINED FUNDS.— 
‘‘(A) AMOUNT RETURNED.—If an institu-
tion returns more than 10 percent of its alloca-
tion under paragraph (1), the institution’s allo-
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478 
cation for the next fiscal year shall be reduced 
by the amount returned. 
‘‘(B) WAIVER.—The Secretary may waive 
this paragraph for a specific institution if the 
Secretary finds that enforcing this paragraph 
would be contrary to the interest of the pro-
gram. 
‘‘(g) FILING DEADLINES.—The Secretary may re-
quire applications under this section, at such time, in such 
manner, and containing such information as the Secretary 
may require.’’. 
SEC. 4203. GRANTS FOR FEDERAL WORK-STUDY PRO-
GRAMS. 
Section 443 of the Higher Education Act of 1965 (20 
U.S.C. 1087–53) is amended— 
(1) in subsection (b)— 
(A) by amending paragraph (2) to read as 
follows: 
‘‘(2) provide that funds granted an institution 
of higher education, pursuant to this section may 
only be used to make payments to students partici-
pating in work-study programs except that an insti-
tution— 
‘‘(A) shall, beginning fiscal year 2023— 
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‘‘(i) use at least 3 percent of the total 
amount of funds granted to such institu-
tion under this section for such fiscal year 
to compensate students who have excep-
tional 
need 
(as 
defined 
in 
section 
413C(c)(2)) and are employed in a work- 
based learning position during a qualified 
period of nonenrollment, as defined in sub-
section (f), except that the Secretary may 
waive this clause if the Secretary deter-
mines that enforcing this clause would 
cause hardship for students at the institu-
tion; and 
‘‘(ii) use at least 7 percent of the total 
amount of funds granted to such institu-
tion under this section for such fiscal year 
to compensate students employed in work- 
based learning positions, except that the 
Secretary may waive this clause if the Sec-
retary determines that enforcing this 
clause would cause hardship for students 
at the institution; 
‘‘(B) may— 
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480 
‘‘(i) use a portion of the sums granted 
to it to compensate students employed in 
community service; 
‘‘(ii) use a portion of the sums grant-
ed to it to meet administrative expenses in 
accordance with section 489; 
‘‘(iii) use a portion of the sums grant-
ed to it to meet the cost of a job location 
and development program in accordance 
with section 446 of this part; and 
‘‘(iv) transfer funds in accordance 
with the provisions of section 488;’’; 
(B) in paragraph (4)— 
(i) by striking ‘‘$300’’ and inserting 
‘‘$500’’; and 
(ii) by inserting ‘‘except as provided 
under subsection (f),’’ before ‘‘provide’’; 
(C) in paragraph (5)— 
(i) in subparagraph (A)(ii), by strik-
ing ‘‘and’’ at the end; 
(ii) in subparagraph (B), by inserting 
‘‘and’’ after the semicolon; and 
(iii) by adding at the end the fol-
lowing: 
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481 
‘‘(C) the Federal share shall equal 100 
percent if the institution is eligible for assist-
ance under title III or title V;’’. 
(D) in paragraph (6)— 
(i) by inserting ‘‘who demonstrate ex-
ceptional need (as defined in section 
413C(c)(2))’’ after ‘‘students’’; and 
(ii) by inserting ‘‘and prioritize em-
ployment for students who are currently 
homeless individuals described in section 
725 of the McKinney-Vento Homeless As-
sistance Act (42 U.S.C. 11434a) or foster 
care youth’’ after ‘‘institution’’; 
(E) in paragraph (7), by striking ‘‘voca-
tional’’ and inserting ‘‘career’’; 
(F) in paragraph (8)(A)(i), by striking ‘‘or 
vocational goals’’ and inserting ‘‘career goals’’; 
(G) in paragraph (10), by striking ‘‘; and’’ 
and inserting a semicolon; 
(H) in paragraph (11), by striking the pe-
riod at the end and inserting a semicolon; and 
(I) by adding at the end the following: 
‘‘(12) provide assurances that compensation of 
students employed in the work-study program in ac-
cordance with the agreement shall include reim-
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482 
bursement for reasonable travel (not including the 
purchase of a vehicle) directly related to such work- 
study program; 
‘‘(13) provide assurances that the institution 
will administer and use feedback from the surveys 
required under section 450, to improve the experi-
ences of students employed in the work-study pro-
gram in accordance with the agreement; 
‘‘(14) provide assurances that the institution 
will collect data from students and employers such 
that the employment made available from funds 
under this part will, to the maximum extent prac-
ticable, complement and reinforce the educational 
goals or career goals of each student receiving as-
sistance under this part; and 
‘‘(15) provide assurances that if the institution 
receives funds under section 442(a)(1)(A), such in-
stitution shall— 
‘‘(A) use such funds to compensate stu-
dents employed in the work-study program in 
accordance with the agreement; and 
‘‘(B) prioritize the awarding of such funds 
(and increasing the amount of each award) to 
students— 
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483 
‘‘(i) who demonstrate exceptional need 
(as defined in section 413C(c)(2)); and 
‘‘(ii) who are employed in work-based 
learning opportunities through the work 
study program in accordance with the 
agreement.’’; 
(2) in subsection (c)— 
(A) by amending paragraph (2) to read as 
follows: 
‘‘(2) provide that— 
‘‘(A) in the case of an institution that has 
not received a waiver from the Secretary, such 
institution will not use more than 25 percent of 
the funds made available to such institution 
under this part for any fiscal year for the oper-
ation of the program described in paragraph 
(1); and 
‘‘(B) in the case of an institution that has 
received a waiver from the Secretary, such in-
stitution will not use more than 50 percent of 
the funds made available to such institution 
under this part for any fiscal year for the oper-
ation of the program described in paragraph 
(1);’’. 
(B) in paragraph (4)— 
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484 
(i) by inserting ‘‘and complement and 
reinforce the educational goals or career 
goals of each student receiving assistance 
under this part’’ after ‘‘academically rel-
evant’’; and 
(ii) by striking ‘‘and’’ at the end; 
(C) in paragraph (5), by striking the pe-
riod at the end and inserting ‘‘; and’’; and 
(D) by adding at the end the following: 
‘‘(6) provide assurances that compensation of 
students employed in the work-study program in ac-
cordance with the agreement shall include reim-
bursement for reasonable travel (not including the 
purchase of a vehicle) directly related to such work- 
study program.’’; 
(3) in subsection (d)(1)— 
(A) by striking ‘‘In any academic year to 
which subsection (b)(2)(A) applies, an institu-
tion shall ensure that’’ and inserting ‘‘An insti-
tution may use the’’; and 
(B) by striking ‘‘travel’’ and inserting 
‘‘reasonable travel (not including the purchase 
of a vehicle)’’; and 
(4) by adding at the end the following: 
‘‘(f) QUALIFIED PERIOD OF NONENROLLMENT.— 
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485 
‘‘(1) IN GENERAL.—A student may be awarded 
work-study employment during a qualified period of 
nonenrollment if— 
‘‘(A) the student demonstrates exceptional 
need (as defined in section 413C(c)(2)) in the 
award year prior to the qualified period of non-
enrollment; 
‘‘(B) the student is employed in a work- 
based learning position; and 
‘‘(C) the employment— 
‘‘(i) involves less than 25 percent ad-
ministrative work; and 
‘‘(ii) is for at least 20 hours per week, 
unless the institution waives such require-
ment— 
‘‘(I) at the request of the stu-
dent; or 
‘‘(II) based on a finding by the 
institution that such requirement pre-
sents a hardship in finding a work- 
based learning position for the stu-
dent. 
‘‘(2) FUNDS EARNED.— 
‘‘(A) IN GENERAL.—Any funds earned by 
a student (beyond standard living expenses (as 
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486 
such 
term 
is 
described 
in 
section 
413D(c)(3)(C))) during the qualified period of 
nonenrollment less than or equal to $2,500 may 
not be applied to such student’s cost of attend-
ance for the next period in which the student 
is enrolled. 
‘‘(B) EXCESS FUNDS.—Any funds earned 
by a student (beyond standard living expenses 
(as 
such 
term 
is 
described 
in 
section 
413D(c)(3)(C))) during the qualified period of 
nonenrollment in excess of $2,500 shall be ap-
plied to such student’s cost of attendance for 
the next period in which the student is enrolled. 
‘‘(3) DEFINITION
OF
QUALIFIED
PERIOD
OF 
NONENROLLMENT.—In this subsection, the term 
‘qualified period of nonenrollment’ means, with re-
spect to a student, a period of nonenrollment that— 
‘‘(A) occurs between a period of enrollment 
and a period of anticipated enrollment; and 
‘‘(B) the duration of which is no longer 
than 6 months.’’. 
SEC. 4204. FLEXIBLE USE OF FUNDS. 
Section 445 of the Higher Education Act of 1965 (20 
U.S.C. 1087–55) is amended— 
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487 
(1) in subsection (a), by adding at the end the 
following: 
‘‘(3) In addition to the carry-over sums author-
ized under paragraph (1) of this section, an institu-
tion may permit a student who completed the pre-
vious award period to continue to earn unearned 
portions of the student’s work-study award from 
that previous period if— 
‘‘(A) any reduction in the student’s need 
upon which the award was based is accounted 
for in the remaining portion; and 
‘‘(B) the student is currently employed in 
a work-based learning position.’’; and 
(2) by striking ‘‘10 percent’’ both places it ap-
pears and inserting ‘‘20 percent’’. 
SEC. 4205. JOB LOCATION AND DEVELOPMENT PROGRAMS. 
(a) AMENDMENTS.—Section 446 of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1087–56) is amended— 
(1) in subsection (a)— 
(A) in paragraph (1), by striking ‘‘10 per-
cent or $75,000’’ and inserting ‘‘20 percent or 
$150,000’’; and 
(B) in paragraph (2), by striking ‘‘voca-
tional’’ and inserting ‘‘career’’; and 
(2) in subsection (b)— 
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488 
(A) by striking paragraphs (1) and (2); 
(B) by inserting before paragraph (3) the 
following: 
‘‘(1) provide satisfactory assurance that the in-
stitution will prioritize placing students with excep-
tional need (as defined in section 413C(c)(2)) and 
Federal work-study recipients in jobs located and de-
veloped under this section; and 
‘‘(2) provide satisfactory assurances that the 
funds available under this section will be used to lo-
cate and develop work-based learning positions;’’; 
and 
(C) in paragraph (6), by striking the pe-
riod and inserting ‘‘, including— 
‘‘(A) the number of students employed in 
work-based learning positions through such pro-
gram; 
‘‘(B) 
the 
number 
of 
students 
dem-
onstrating exceptional need (as defined in sec-
tion 413C(c)(2)) and Federal work-study recipi-
ents employed through such program; and 
‘‘(C) 
the 
number 
of 
students 
dem-
onstrating exceptional need (as defined in sec-
tion 413C(c)(2)) and Federal work-study recipi-
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489 
ents employed in work-based learning positions 
through such program.’’. 
(b) CLARIFICATION ON CARRY-OVER AUTHORITY.— 
Of the sums granted to an eligible institution under part 
C of title IV of the Higher Education Act (20 U.S.C. 
1087–51) for any fiscal year, 10 percent may, at the dis-
cretion of the institution, remain available for expenditure 
during the succeeding fiscal year to carry out programs 
under such part, including the job location and develop-
ment programs under section 446 of such Act (20 U.S.C. 
1087–56). 
SEC. 4206. COMMUNITY SERVICE. 
Section 447 of the Higher Education Act of 1965 (20 
U.S.C. 1087–57) is amended to read as follows: 
‘‘SEC. 447. ADDITIONAL FUNDS TO CONDUCT COMMUNITY 
SERVICE WORK STUDY PROGRAMS. 
‘‘Each institution participating under this part may 
use up to 10 percent of the funds made available under 
section 489(a) and attributable to the amount of the insti-
tution’s expenditures under this part to conduct that insti-
tution’s program of community service-learning, includ-
ing— 
‘‘(1) development of mechanisms to assure the 
academic quality of the student experience; 
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490 
‘‘(2) assuring student access to educational re-
sources, expertise, and supervision necessary to 
achieve community service objectives; 
‘‘(3) assuring, to the maximum extent prac-
ticable, that the community service-learning program 
will support the educational goals or career goals of 
students participating in such program; 
‘‘(4) collaboration with public and private non-
profit agencies, and programs assisted under the 
National and Community Service Act of 1990 in the 
planning, development, and administration of such 
programs; and 
‘‘(5) to recruit and compensate students for 
community service-learning (including compensation 
for time spent in training and for reasonable travel 
(not including the purchase of a vehicle) directly re-
lated to such community service).’’. 
SEC. 4207. PILOT GRANT PROGRAM. 
Part C of title IV of the Higher Education Act (20 
U.S.C. 1087–51 et seq.) is amended by adding at the end 
the following: 
‘‘SEC. 449. WORK-BASED LEARNING OPPORTUNITIES PILOT 
GRANT PROGRAM. 
‘‘(a) ESTABLISHMENT.— 
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491 
‘‘(1) IN GENERAL.—The Secretary shall estab-
lish a program to provide grants to eligible institu-
tions participating under this part to establish or ex-
pand a program to develop work-based learning posi-
tions. 
‘‘(2) LIMITATIONS.— 
‘‘(A) DURATION.—A grant awarded under 
this section shall be for a period of not more 
than 4 years, but may be renewed by the Sec-
retary for a period of 2 years. 
‘‘(B) AMOUNT.—A grant under this sec-
tion may not be in an amount greater than 
$1,000,000. 
‘‘(b) APPLICATION.—To be selected to receive a grant 
under this section an eligible institution participating 
under this part shall submit an application to the Sec-
retary at such time, in such manner, and containing such 
information as the Secretary may require, including a plan 
that describes how the eligible institution will establish or 
expand a program to develop work-based learning posi-
tions that will— 
‘‘(1) benefit students who demonstrate excep-
tional need (as defined in section 413C(c)(2)); 
‘‘(2) identify high-demand occupations (as de-
termined by the Bureau of Labor and Statistics, 
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492 
State departments of labor, and local workforce in-
vestment boards) and develop partnerships with 
high-demand employers (including nonprofit organi-
zations, for-profit firms, or public agencies); 
‘‘(3) involve participating employers in evalu-
ating and improving such program; 
‘‘(4) track and report academic and employ-
ment outcomes for participating students; and 
‘‘(5) be able to continue after the end of the 
grant term. 
‘‘(c) USE OF FUNDS.—Grant funds awarded under 
this program shall be used to pay wages for students par-
ticipating under this program and develop work-based 
learning positions that— 
‘‘(1) are for a period of at least 12 weeks; 
‘‘(2) serve students who demonstrate excep-
tional need (as defined in section 413C(c)(2)); 
‘‘(3) limit administrative work to no more than 
25 percent of such position; 
‘‘(4) provide a minimum of 15 hours of work 
per week during periods of enrollment and 30 hours 
per week during periods of nonenrollment, except 
such requirement may be waived by the institution 
in consultation with a student; 
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493 
‘‘(5) include career coaching from participating 
employers (including mock interviews, resume writ-
ing assistance, and counseling on applying for and 
attaining employment); and 
‘‘(6) provide participating students with oppor-
tunities to meet with employers in fields or indus-
tries related to those of participating employers. 
‘‘(d) REPORT.—On a date that is before the date on 
which the period of the grant received by an eligible insti-
tution under this section terminates, such institution shall 
submit a report to the Secretary including— 
‘‘(1) the graduation rate or completion rate (as 
described under section 442(a)(1)(C)) with respect 
to students participating in work-based learning po-
sitions under the pilot program; and 
‘‘(2) the results of the work-based learning op-
portunities program for which such institution re-
ceived such grant, including— 
‘‘(A) participating students’ satisfaction 
with the program as reported in surveys under 
section 450, as amended by section 4208 of the 
College Affordability Act; 
‘‘(B) the types of jobs in which partici-
pating students were employed and the types of 
duties performed in such jobs; 
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494 
‘‘(C) the academic programs of the partici-
pating students; 
‘‘(D) the share of participating students 
who worked at another job, in addition to the 
one under the pilot program; 
‘‘(E) the percentage of participating stu-
dents who, during the second quarter after 
completing their academic program, are in edu-
cation or training activities or unsubsidized em-
ployment; 
‘‘(F) the percentage of participating stu-
dents employed in high-demand occupations 
within 2 quarters of completing their academic 
programs; and 
‘‘(G) other items as deemed relevant by the 
Secretary. 
‘‘(e) RESERVATION OF FUNDING FOR SUCH PRO-
GRAM.—From the amount appropriated under section 
441(b) for a fiscal year and remaining after the Secretary 
reserves funds under section 442(a)(1), the Secretary shall 
reserve $30,000,000 to carry out grants under this sec-
tion.’’. 
SEC. 4208. DEPARTMENT ACTIVITIES. 
Part C of title IV of the Higher Education Act of 
1965 (20 U.S.C. 1087–51 et seq.), as amended by section 
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495 
4207, is further amended by adding at the end the fol-
lowing: 
‘‘SEC. 450. DEPARTMENT ACTIVITIES. 
‘‘(a) SURVEYS.—Not later than 1 year after the date 
of the enactment of this section, the Secretary shall de-
velop, in consultation with work-study administrators from 
institutions of higher education, participating employers, 
and participating students— 
‘‘(1) a consumer-tested electronic survey for 
students awarded work-study employment under the 
Federal work-study program under this part that— 
‘‘(A) measures each such student’s satis-
faction with the Federal work-study program, 
including— 
‘‘(i) any complaints the student has 
with respect to the program; 
‘‘(ii) the amount and quality of the 
on-the-job training the student received; 
‘‘(iii) the amount and quality of on- 
the-job supervision and employer feedback 
the student received; 
‘‘(iv) the amount and quality of infor-
mation provided by the institution about 
the work-study program and job opportuni-
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496 
ties and the availability of work-study staff 
at the institution; 
‘‘(v) the quality of the assistance pro-
vided by the institution to the student in 
finding a work-study job and the avail-
ability of types of jobs; and 
‘‘(vi) the student’s overall satisfaction 
with the work-study program; 
‘‘(B) measures the applicability of work- 
study employment to the educational goals and 
career goals of each such student; 
‘‘(C) elicits an assessment by each such 
student of the capacity to manage time between 
work-study employment and coursework; 
‘‘(D) measures, with respect to the pro-
gram— 
‘‘(i) the award amounts under the 
program; 
‘‘(ii) the average number of hours stu-
dents worked per week, and the wages re-
ceived for such work; 
‘‘(iii) the number of on campus jobs 
and off campus jobs; 
‘‘(iv) how students located work-study 
positions; 
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497 
‘‘(v) the work performed at each job; 
‘‘(vi) whether students worked addi-
tional jobs while employed in a work-study 
job (and the reason for such additional 
job); 
‘‘(vii) whether the work-study employ-
ment had an impact on the student’s aca-
demic performance; and 
‘‘(viii) the voluntarily disclosed demo-
graphics of students awarded work-study 
employment; and 
‘‘(E) includes such information as the Sec-
retary may require; and 
‘‘(2) a consumer-tested electronic survey for 
employers of students described in paragraph (1) 
that— 
‘‘(A) measures each such employer’s satis-
faction with the Federal work-study program, 
including— 
‘‘(i) the extent to which the employer 
is satisfied with its ability to accommodate 
students’ schedules; 
‘‘(ii) the extent to which student-em-
ployees are prepared for the duties adver-
tised for the job; and 
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498 
‘‘(iii) the extent to which the employer 
is satisfied with opportunities to make rec-
ommendations for improving institutions’ 
academic programs; 
‘‘(B) elicits an assessment by each such 
employer of— 
‘‘(i) any complaints the employer had 
with respect to the program; 
‘‘(ii) any skills or knowledge necessary 
for the job that student-employees are 
lacking; and 
‘‘(iii) the extent of outreach from in-
stitutions to the employer; and 
‘‘(C) includes such information as the Sec-
retary may require; and 
‘‘(3) a consumer-tested electronic survey that, 
not less than once every 4 years, with respect to 
each institution of higher education participating in 
the Federal work-study program, measures— 
‘‘(A) methods used to recruit on-campus 
and off-campus employers; 
‘‘(B) if an institution operates a job loca-
tion development program— 
‘‘(i) the share of jobs filled on-campus 
and off-campus; 
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499 
‘‘(ii) the share of jobs filled by— 
‘‘(I) work-study recipients; and 
‘‘(II) students who demonstrate 
exceptional need (as defined in section 
413C(c)(2)); 
‘‘(iii) the primary factors considered 
in matching work-study students and jobs; 
‘‘(iv) the share of students employed 
in work-based learning opportunities; and 
‘‘(v) the share of students employed 
during qualified periods of nonenrollment, 
including the share of students with excep-
tional 
need 
(as 
defined 
in 
section 
413C(c)(2)) employed during qualified pe-
riods of nonenrollment; 
‘‘(C) the institution’s Federal and non- 
Federal contributions toward work-study wages; 
‘‘(D) the primary factors considered in 
awarding students work-study and in deter-
mining the amount of the award; 
‘‘(E) the acceptance rate among students 
who were offered work-study aid; and 
‘‘(F) other information the Secretary may 
require. 
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500 
‘‘(b) RESULTS.—The Secretary shall develop an on-
line portal— 
‘‘(1) for students, employers, and institutions of 
higher education to access the surveys required 
under subsection (a); and 
‘‘(2) to compile the results of such surveys. 
‘‘(c) REPORT.—Not less than once every 4 years after 
the date of the enactment of this subsection, the Secretary 
shall submit a report to Congress that includes— 
‘‘(1) the data collected under this section (re-
dacted for personal information); 
‘‘(2) with respect to students employed in work- 
study through the Federal work-study program— 
‘‘(A) the types of jobs such students par-
ticipated in; 
‘‘(B) the average hours worked per week; 
‘‘(C) the average award amount; 
‘‘(D) the average wage rates; 
‘‘(E) the extent to which students enter 
employment with skills and knowledge gained 
from work-study participation that have pre-
pared them for the job; and 
‘‘(F) the students’ satisfaction with the 
program and primary complaints; 
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501 
‘‘(3) the extent to which institutions conduct 
outreach to employers and engage them in discus-
sions on improving academic programs; 
‘‘(4) the extent to which institutions conduct 
outreach to students and make jobs readily avail-
able; 
‘‘(5) the extent to which the work-study employ-
ment aligns with students’ academic programs or ca-
reer goals; 
‘‘(6) the employers’ satisfaction with the pro-
gram and primary complaints; and 
‘‘(7) recommendations for improving the pro-
gram. 
‘‘(d) CONSULTATION.— 
‘‘(1) IN GENERAL.—In consulting with the enti-
ties described in subsection (a) to create the elec-
tronic surveys required under such subsection, the 
Secretary shall engage with— 
‘‘(A) a representative sample of institu-
tions of higher education participating in the 
Federal work-study program; 
‘‘(B) a representative sample of employers 
participating in the Federal work-study pro-
gram; and 
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502 
‘‘(C) a representative sample of students 
participating in the Federal work-study pro-
gram. 
‘‘(2) RESPONSE RATE.—The Secretary shall— 
‘‘(A) consult with a survey consultant to 
develop a target response rate with respect to 
the electronic surveys required under subsection 
(a); and 
‘‘(B) provide guidance to institution with 
respect to such developed target response rate. 
‘‘(e) 
TECHNICAL
ASSISTANCE.—The 
Secretary 
shall— 
‘‘(1) provide technical assistance to institutions 
participating under the Federal work-study program 
under this part to— 
‘‘(A) comply with the amendments made 
by part C of title IV of the College Affordability 
Act and the regulations issued pursuant to such 
part; 
‘‘(B) administer the surveys described in 
subsection (a) to students and employers par-
ticipating in the Federal work-study program; 
and 
‘‘(C) ensure that Federal work-study posi-
tions align with students’ educational goals or 
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503 
career goals to the maximum extent practicable; 
and 
‘‘(2) issue guidance and provide technical as-
sistance to institutions to support improved partner-
ships and coordination among financial aid, career 
services, and academic advisors to administer the 
Federal work-study program. 
‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There 
is authorized to be appropriated $2,000,000 to carry out 
subsection (a).’’. 
SEC. 4209. STUDY AND REPORT. 
(a) STUDY.—The Comptroller General of the United 
States shall, not later than a reasonable amount of time 
after the date of the enactment of this Act, conduct a 
study on best practices for assisting students participating 
in the Federal work-study program under part C of title 
IV of the Higher Education Act (42 U.S.C. 1087–51 et 
seq.) with— 
(1) connecting to off-campus employers; 
(2) procuring work-based learning opportunities 
through such program; 
(3) procuring employment that aligns with stu-
dents’ educational goals or career goals; 
(4) locating employment through job location 
and development programs; 
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504 
(5) procuring employment in high-demand occu-
pations; 
(6) balancing employment with academic pro-
grams to improve graduation and completion rates; 
and 
(7) with respect to students with exceptional 
need (as defined in section 413C(c)(2) of the Higher 
Education Act of 1965 (20 U.S.C. 1070b– 
2(c)(2)))— 
(A) locating and coordinating work-study 
employment during qualified periods of non-
enrollment; 
(B) increasing participation of such stu-
dents in such work-study program; and 
(C) limiting the need for additional em-
ployment outside the work-study program. 
(b) REPORT.—Not later than one year after the date 
on which the study required under subsection (a) is com-
pleted, the Comptroller General of the United States shall 
submit to Congress a report summarizing the findings of 
such study. 
(c) PUBLISH REPORT.—The Comptroller General of 
the United States shall make the report required under 
subsection (b) available to the public on the website of the 
Government Accountability Office. 
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505 
PART D—FEDERAL DIRECT LOAN PROGRAM 
SEC. 4301. 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. 4302. AMENDMENTS TO TERMS AND CONDITIONS OF 
LOANS AND REPAYMENT PLANS. 
(a) REPEAL OF ORIGINATION FEES.—Subsection (c) 
of section 455 of the Higher Education Act of 1965 (20 
U.S.C. 1087e(c)) is repealed. 
(b) RULEMAKING
REGARDING
TERMINATION
OF 
CERTAIN REPAYMENT PLANS.—Beginning on the date of 
enactment of this Act, the Secretary of Education shall 
carry out a plan to end all eligibility for repayment plans 
other than a fixed repayment plan described in section 
493E 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 before 
such effective date, in accordance with the amendments 
made by this Act. 
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506 
(c) REPAYMENT PLANS.—Section 455(d) of the 
Higher Education Act of 1965 (20 U.S.C. 1087e(d)) is 
amended— 
(1) by redesignating paragraphs (2) through 
(5) as paragraphs (3) through (6), respectively; 
(2) by inserting after paragraph (1), the fol-
lowing: 
‘‘(2) DESIGN AND SELECTION ON AND AFTER 
JULY 1, 2021.— 
‘‘(A) IN GENERAL.—Notwithstanding para-
graph (1), for the borrower of a loan made on 
or after July 1, 2021, 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 fixed repayment plan described 
in section 493E; 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 
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507 
or after July 1, 2021, does not select a repay-
ment plan described in subparagraph (A), the 
Secretary may provide the borrower with a 
fixed repayment plan described in section 493E. 
‘‘(C) CHANGES
IN
SELECTIONS.—Begin-
ning on July 1, 2021, 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.’’; 
(3) in paragraph (6)(B), as redesignated, by 
striking ‘‘an income contingent repayment plan.’’ 
and inserting ‘‘the income-based repayment plan 
under section 493C(f).’’; and 
(4) by adding at the end the following: 
‘‘(7) BORROWERS
OF
LOANS
MADE
BEFORE 
JULY 1, 2021.—A borrower who is in repayment on 
a loan made under part B or part D before July 1, 
2021— 
‘‘(A) may choose to retain the repayment 
plan that the borrower was enrolled in on the 
day before such date; 
‘‘(B) may elect to— 
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508 
‘‘(i) enter the income-based repayment 
plan under section 493C(f); or 
‘‘(ii) enter a fixed repayment plan de-
scribed in section 493E; and 
‘‘(C) after electing to leave a repayment 
plan other than an income-based repayment 
plan described under section 493C(f) or a fixed 
repayment plan described in section 493E, shall 
not be permitted to re-elect a repayment plan 
that is not an income-based repayment plan 
under section 493C(f) or a fixed repayment 
plan described in section 493E. 
‘‘(8) NOTIFICATION AND AUTOMATIC ENROLL-
MENT PROCEDURES FOR BORROWERS WHO ARE DE-
LINQUENT ON LOANS.— 
‘‘(A) AUTHORITY TO OBTAIN INCOME IN-
FORMATION.—In the case of any borrower who 
is at least 60 days delinquent 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). 
‘‘(B) BORROWER NOTIFICATION.—With re-
spect to each borrower of a covered loan who is 
at least 60 days delinquent on such loan and 
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509 
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) The amount of monthly pay-
ments for the covered and noncovered 
loans under the income-based repayment 
plan under section 493C(f) and the fixed 
repayment plan described in section 493E, 
based on information available to the Sec-
retary, including, if the income information 
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510 
of the borrower is available to the Sec-
retary under subparagraph (A)— 
‘‘(I) the amount of the monthly 
payment under the income-based re-
payment plan under section 493C(f) 
and the fixed repayment plan de-
scribed in section 493E 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. 
‘‘(iv) Clear and simple instructions on 
how to select the repayment plans. 
‘‘(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 the income-based 
repayment plan under section 493C(f) 
that defines discretionary income in 
such a manner that an individual not 
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511 
required under section 6012(a)(1) of 
the Internal Revenue 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 bor-
rower 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-
paragraph (C) with respect to such bor-
rower, if— 
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512 
‘‘(I) the borrower is 120 days de-
linquent on 1 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 de-
scribed in subparagraph (D) or (E) of 
paragraph (1), the monthly payments 
under such repayment plan are higher 
than such monthly payments would be 
under the income-based repayment 
plan under section 493C(f). 
‘‘(vii) Instructions on updating the in-
formation of the borrower obtained under 
subparagraph (A). 
‘‘(C) SECRETARY’S INITIAL SELECTION OF 
A 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 
repayment plan for such loans in accordance 
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513 
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) provide the borrower with the in-
come-based repayment plan under section 
493C(f); and 
‘‘(ii) authorize the borrower to change 
the Secretary’s selection of a plan under 
this clause to the fixed repayment plan de-
scribed in section 493E. 
‘‘(D) OPT-OUT.—A borrower of a covered 
loan shall have the right to opt out of the pro-
cedures under this paragraph. 
‘‘(E) PROCEDURES.—The Secretary shall 
establish procedures as are necessary to effec-
tively implement this paragraph. 
‘‘(9) NOTIFICATION AND AUTOMATIC ENROLL-
MENT PROCEDURES FOR BORROWERS WHO ARE RE-
HABILITATING DEFAULTED LOANS.— 
‘‘(A) AUTHORITY TO OBTAIN INCOME IN-
FORMATION.—In the case of any borrower who 
is rehabilitating a covered loan pursuant to sec-
tion 428F(a), the Secretary may obtain such in-
formation as is reasonably necessary regarding 
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514 
the income and family size of the borrower (and 
the borrower’s spouse, if applicable). 
‘‘(B) 
BORROWER
NOTIFICATION.—Not 
later than 30 days after a borrower makes the 
6th payment required for the loan rehabilitation 
described in subparagraph (A), the Secretary 
shall notify the borrower of the process under 
subparagraph (C) with respect to such loan. 
‘‘(C) SECRETARY’S SELECTION OF PLAN.— 
With respect to each borrower who has made 
the 9th payment required for the loan rehabili-
tation described in subparagraph (A), the Sec-
retary shall, as soon as practicable after such 
payment, provide the borrower with the income- 
based repayment plan under section 493C(f), 
without regard to whether the loan has been so 
rehabilitated. 
‘‘(D) OPT-OUT.—A borrower of a covered 
loan shall have the right to opt out of the pro-
cedures under this paragraph. 
‘‘(E) PROCEDURES.—The Secretary shall 
establish procedures as are necessary to effec-
tively implement this paragraph. 
‘‘(10) DEFINITIONS.—In this subsection: 
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515 
‘‘(A) COVERED LOAN.—The term ‘covered 
loan’ means— 
‘‘(i) a loan made under this part; 
‘‘(ii) a loan purchased under section 
459A; or 
‘‘(iii) a loan that has been assigned to 
the Secretary under section 428(c)(8) or 
part E. 
‘‘(B) 
NONCOVERED
LOAN.—The 
term 
‘noncovered loan’ means a loan made, insured, 
or guaranteed under this title that is not a cov-
ered loan. 
‘‘(11) 
APPLICATION
OF
PREPAYMENT 
AMOUNTS.— 
‘‘(A) 
REQUIREMENT.—Notwithstanding 
any other provision of this subsection or any 
other provision of law— 
‘‘(i) with respect to loans made to an 
eligible borrower under this part or part B, 
which are held by the same holder and 
which have different applicable rates of in-
terest, the holder of such loans shall, un-
less otherwise requested by the borrower in 
writing, apply the borrower’s prepayment 
amount (within the meaning of section 
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516 
682.209(b) of title 34, Code of Federal 
Regulations, or a successor regulation) for 
one or more of such loans, first toward the 
outstanding balance of principal due on the 
loan with the highest applicable rate of in-
terest among such loans; and 
‘‘(ii) except as provided in clause (i), 
with respect to loans made to an eligible 
borrower under this part or part B, which 
are held by the same holder and which 
have the same applicable rates of interest, 
the holder of such loans shall, unless other-
wise requested by the borrower in writing, 
apply the borrower’s prepayment amount 
(within the meaning of section 682.209(b) 
of title 34, Code of Federal Regulations, or 
a successor regulation) for one or more of 
such loans, first toward the outstanding 
balance of principal due on the loan with 
the highest principal balance among such 
loans. 
‘‘(B) ELIGIBLE BORROWER.— 
‘‘(i) IN
GENERAL.—For purposes of 
this paragraph, the term ‘eligible borrower’ 
means a borrower with no outstanding bal-
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517 
ance of fees, including collection costs and 
authorized late charges, due on any loan 
made under this part or part B. 
‘‘(ii) PREPAYMENT AMOUNTS.—A pre-
payment amount (as described in subpara-
graph (A)) made by a borrower who is not 
an eligible borrower to a holder shall be 
applied first toward the borrower’s out-
standing balance of fees, including collec-
tion costs and authorized late charges, due 
on any loan made under this part or part 
B held by such holder.’’. 
(d) APPLICATION.—The amendments made by sub-
section (c)(4) shall— 
(1) take effect as soon as the Secretary of Edu-
cation determines practicable after the Secretary fi-
nalizes the procedures under section 9004, but not 
later than 2 years after the date of enactment of 
this Act; and 
(2) apply to all borrowers of covered loans (as 
defined in section 455(d)(10) of the Higher Edu-
cation Act of 1965, as added by subsection (c)(4)). 
(e) MAXIMUM REPAYMENT PERIOD
FOR INCOME- 
CONTINGENT REPAYMENT.—Section 455(e) of the Higher 
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518 
Education Act of 1965 (20 U.S.C. 1087e(e)) is further 
amended— 
(1) in paragraph (7)(B)— 
(A) by striking ‘‘or’’ at the end of clause 
(iv); 
(B) by striking the period at the end of 
clause (v) and inserting a semicolon; and 
(C) by adding at the end the following: 
‘‘(vi) makes payments under the in-
come-based repayment plan under section 
493C(f); or 
‘‘(vii) makes payments under the fixed 
repayment 
plan 
described 
in 
section 
493E.’’; and 
‘‘(8) ADDITIONAL
QUALIFYING
REPAYMENT 
PLANS.—A borrower repaying a loan pursuant to in-
come-contingent repayment under this subsection 
may elect at any time to terminate repayment under 
such repayment plan and repay such loan under the 
income-based repayment plan under section 493C(f) 
or the fixed repayment plan described in section 
493E.’’. 
(f) AUTOMATIC RECERTIFICATION OF INCOME FOR 
INCOME-DRIVEN REPAYMENT PLANS.—Section 455(e) of 
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519 
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 
(9)(B)(iv)’’ before the period at the end; and 
(2) by adding at the end the following: 
‘‘(9) AUTOMATIC RECERTIFICATION.— 
‘‘(A) DEFINITION.—In this paragraph, the 
term ‘covered loan’ has the meaning given the 
term in subsection (d)(10). 
‘‘(B) IN GENERAL.—Beginning as soon as 
the Secretary determines practicable after the 
Secretary finalizes the procedures under section 
9004 of the College Affordability Act, but not 
later than 2 years after the date of enactment 
of such Act, the Secretary shall establish and 
implement, with respect to any borrower de-
scribed in subparagraph (C), procedures to— 
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520 
‘‘(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 9004 of the College Afford-
ability 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-
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— 
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521 
‘‘(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-
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-
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522 
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, recertifies income and family size 
under such plan. 
‘‘(D) 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.’’. 
(g) DEFERMENT.—Subparagraph (B) of section 
455(f)(1) of the Higher Education Act of 1965 (20 U.S.C. 
1087e(f)(1)) is amended to read as follows: 
‘‘(B) in the case of a Federal Direct PLUS 
Loan, a Federal Direct Unsubsidized Stafford 
Loan, or a Federal Direct Consolidation Loan 
not described in subparagraph (A)(ii), begin-
ning on or after the date of enactment of the 
College Affordability Act— 
‘‘(i) for a deferment during a period 
described in paragraph (2)(A)(i), shall ac-
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523 
crue and be capitalized or paid by the bor-
rower; and 
‘‘(ii) for a deferment during a period 
described in subparagraphs (B) through 
(D) of paragraph (2), shall accrue but not 
be capitalized.’’. 
(h) SEPARATING JOINT CONSOLIDATION 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’’; and 
(2) by adding at the end the following: 
‘‘(2) 
SEPARATING
JOINT
CONSOLIDATION 
LOANS.— 
‘‘(A) IN GENERAL.—A married couple, or 
2 individuals who were previously a married 
couple, and who received a joint consolidation 
loan as such married couple under subpara-
graph (C) of section 428C(a)(3) (as such sub-
paragraph was in effect on or before June 30, 
2006), may apply to the Secretary for each in-
dividual borrower in the married couple (or pre-
viously married couple) to receive a separate 
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524 
Federal Direct Consolidation Loan under this 
part— 
‘‘(i) that shall— 
‘‘(I) unless the Secretary receives 
notice of an agreement described in 
subclause (II)(aa), be equal to the 
sum of— 
‘‘(aa) the unpaid principal 
and accrued unpaid interest of 
the percentage of the joint con-
solidation loan that, as of the day 
before such joint consolidation 
loan was made, was attributable 
to the loans of the individual bor-
rower for whom such separate 
consolidation loan is being made; 
and 
‘‘(bb) any other loans de-
scribed in section 428C(a)(4) 
that such individual borrower se-
lects for consolidation under this 
part; or 
‘‘(II) be equal to the sum of— 
‘‘(aa) the unpaid principal 
and accrued unpaid interest of 
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the percentage of the joint con-
solidation loan that, as of the 
date of application under this 
paragraph, the married couple 
(or previously married couple) 
agrees shall be considered attrib-
utable to the loans of the indi-
vidual borrower for whom such 
separate consolidation loan is 
being made; and 
‘‘(bb) any other loans de-
scribed in section 428C(a)(4) 
that such individual borrower se-
lects for consolidation under this 
part; 
‘‘(ii) the proceeds of which shall be 
paid by the Secretary to the holder or 
holders— 
‘‘(I) of the joint consolidation 
loan for the purpose of discharging 
the liability on the percentage of such 
joint consolidation loan described in 
subclause (I)(aa) or (II)(aa) of clause 
(i); and 
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‘‘(II) of the loans selected for 
consolidation under subclause (I)(bb) 
or subclause (II)(bb) of clause (i) for 
the purpose of discharging the liability 
on such loans; 
‘‘(iii) except as otherwise provided in 
this paragraph, that has the same terms 
and conditions, and rate of interest as the 
joint consolidation loan; 
‘‘(iv) for which any payment made 
under section 455(m)(1)(A) on the joint 
consolidation loan during a period in which 
the individual borrower for whom such sep-
arate consolidation loan is being made was 
employed in a public service job described 
in section 455(m)(1)(B) shall be treated as 
if such payment were made on the portion 
of the separate consolidation loan described 
in clause (i)(I)(aa); and 
‘‘(v) for which any payment made 
under any repayment plan described in 
section 455(d)(1) on the joint consolidation 
loan shall be treated as if such payment 
were made on such portion of such sepa-
rate consolidation loan. 
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‘‘(B) APPLICATION FOR SEPARATE DIRECT 
CONSOLIDATION LOAN.— 
‘‘(i) JOINT APPLICATION.—Except as 
provided in clause (ii), to receive separate 
consolidation loans under subparagraph 
(A), both individual borrowers in a married 
couple (or previously married couple) shall 
jointly apply under subparagraph (A). 
‘‘(ii) SEPARATE
APPLICATION.—An 
individual borrower in a married couple (or 
previously married couple) may apply for a 
separate consolidation loan under subpara-
graph (A) separately and without regard to 
whether or when the other individual bor-
rower in the married couple (or previously 
married couple) applies under subpara-
graph (A), in a case in which— 
‘‘(I) the individual borrower has 
experienced from the other individual 
borrower— 
‘‘(aa) domestic violence (as 
defined in section 40002(a) of 
the Violence Against Women Act 
of 1994 (34 U.S.C. 12291(a))); 
or 
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‘‘(bb) economic abuse (in-
cluding behaviors that control 
such borrower’s ability to ac-
quire, use, and maintain access 
to money, credit, or the joint fi-
nancial obligations of both bor-
rowers); 
‘‘(II) the individual borrower cer-
tifies, on a form approved by the Sec-
retary, that such borrower is unable 
to reasonably reach or access the loan 
information of the other individual 
borrower; or 
‘‘(III) the Secretary determines 
that authorizing each individual bor-
rower to apply separately under sub-
paragraph (A) would be in the best 
fiscal interests of the Federal Govern-
ment. 
‘‘(C) BORROWER
ELIGIBILITY.—Notwith-
standing section 428C(a)(3)(A), the Secretary 
shall award a consolidation loan under this part 
to each borrower who— 
‘‘(i) applies for such loan under sub-
paragraph (A); and 
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529 
‘‘(ii) meets the requirements of sub-
paragraphs (A) and (B). 
‘‘(3) CONSUMER REPORTING AGENCIES.—Upon 
obtaining a Federal Direct Consolidation Loan that 
discharges the liability on a defaulted loan made, in-
sured, or guaranteed under this title, the Secretary, 
guaranty agency, or other holder of the loan shall 
request any consumer reporting agency to which the 
Secretary, guaranty agency or holder, as applicable, 
reported the default of the loan, to remove any ad-
verse item of information relating to a delinquent or 
defaulted loan made, insured, or guaranteed under 
this title from the borrower’s credit history.’’. 
(i) REPEAL OF SUBSIDIZED LOAN USAGE LIMITA-
TION.—Subsection (q) of section 455 of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1087e) is repealed. 
SEC. 4303. AMENDMENTS TO TERMS AND CONDITIONS OF 
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)— 
(A) in subparagraph (A)— 
(i) by striking ‘‘or’’ at the end of 
clause (iii); 
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(ii) in clause (iv), by striking ‘‘and’’; 
and 
(iii) by adding at the end the fol-
lowing: 
‘‘(v) payments under the income-based 
repayment plan under section 493C(f); or 
‘‘(vi) payments under the fixed repay-
ment plan described in section 493E; 
and’’; and 
(B) in subparagraph (B), by striking ‘‘(i) 
is employed’’ and all that follows through ‘‘has 
been’’ and inserting ‘‘has been’’; 
(2) in paragraph (2), by adding at the end the 
following: ‘‘In the case of a borrower who meets the 
requirements under paragraph (1) for such cancella-
tion, such cancellation shall occur without further 
action by the borrower.’’; 
(3) by redesignating paragraphs (3) and (4) as 
paragraphs (9) and (10), respectively; and 
(4) by inserting after paragraph (2) the fol-
lowing: 
‘‘(3) 
TREATMENT
OF
LOAN
REFINANCED 
UNDER SECTIONS 460A OR 460B.—In the case of an 
eligible Federal Direct Loan refinanced under sec-
tion 460A or 460B, any monthly payment pursuant 
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to any repayment plan listed in paragraph (1)(A) 
made on a loan, for which the liability has been dis-
charged by such refinanced loan and without regard 
to whether such loan is an eligible Federal Direct 
Loan, shall be treated as a monthly payment under 
paragraph (1)(A) on the portion of such refinanced 
loan that is attributable to such discharged loan. 
‘‘(4) ON-LINE PORTAL.— 
‘‘(A) BORROWERS.—The Secretary shall 
ensure that borrowers have access to an on-line 
portal that provides each borrower who signs on 
to such portal with the following: 
‘‘(i) Instructions on how to access the 
database under paragraph (5) so that the 
borrower can determine whether the bor-
rower is employed in a public service job. 
‘‘(ii) An identification of the loans of 
the borrower that are eligible Federal Di-
rect Loans. 
‘‘(iii) With respect to each such eligi-
ble Federal Direct Loan, the number of 
monthly payments on such loan that qual-
ify as a monthly payment under paragraph 
(1)(A), and the estimated number of 
monthly payments under paragraph (1)(A) 
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532 
remaining on such loan before the bor-
rower may be eligible for loan cancellation 
under this subsection. 
‘‘(iv) With respect to each loan of the 
borrower that is not eligible for loan can-
cellation under this subsection, an expla-
nation of why the loan is not so eligible 
and instructions on how what, if anything, 
the borrower may do to make the loan so 
eligible. 
‘‘(v) Instructions for the submission of 
any forms associated with such loan can-
cellation, and an ability for the borrower to 
use the portal to electronically sign and 
submit such forms. 
‘‘(vi) In the case of a borrower who 
disputes a determination of the Secretary 
relating to the entitlement of the borrower 
to loan cancellation under paragraph (2)— 
‘‘(I) an ability for the borrower 
to file a claim with the Secretary to 
dispute such determination through 
the portal; and 
‘‘(II) in the case of such a claim 
that has been filed, the status of such 
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533 
claim, for which updates shall be pro-
vided not fewer than once every 90 
days. 
‘‘(B) EMPLOYERS.—The Secretary shall 
ensure that an employer of a borrower has the 
ability to electronically sign and submit any 
forms associated with loan cancellation under 
this subsection. 
‘‘(C) INFORMATION.—The Secretary shall 
ensure that any information provided through 
the on-line portal described in this paragraph is 
up-to-date information. 
‘‘(5) DATABASE OF PUBLIC SERVICE JOBS.— 
‘‘(A) IN GENERAL.—The Secretary, in con-
sultation with the Commissioner of the Internal 
Revenue Service, shall establish and regularly 
update a database that lists public service jobs. 
‘‘(B) PUBLIC
AVAILABILITY.—The data-
base established under subparagraph (A) shall 
be made available on a publicly accessible 
website of the Department in an easily search-
able format.’’; 
(5) in paragraph (9), as so redesignated— 
(A) in subparagraph (A)— 
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534 
(i) by inserting before the period at 
the end the following: ‘‘(including any Fed-
eral Direct Stafford Loan, Federal Direct 
PLUS Loan, Federal Direct Unsubsidized 
Stafford Loan, or Federal Direct Consoli-
dation Loan refinanced under section 
460A)’’; 
(ii) by striking ‘‘The term’’ and in-
serting the following: 
‘‘(i) IN GENERAL.—The term’’; and 
(iii) by adding at the end the fol-
lowing: 
‘‘(ii) TREATMENT OF CERTAIN CON-
SOLIDATION
LOAN
PAYMENTS.—In the 
case of an eligible Federal Direct Loan 
that is a Federal Direct Consolidation 
Loan made on or after the date of enact-
ment of the College Affordability Act, any 
monthly payment pursuant to any repay-
ment plan listed in paragraph (1)(A) made 
on a loan, for which the liability has been 
discharged by the proceeds of such Federal 
Direct Consolidation Loan and without re-
gard to whether the loan is an eligible Fed-
eral Direct Loan, shall be treated as a 
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535 
monthly payment under paragraph (1)(A) 
on the portion of such Federal Direct Con-
solidation Loan that is attributable to such 
discharged loan, except that in the case of 
a subsequent consolidation loan, for pur-
poses of this clause— 
‘‘(I) any monthly payment made 
on the first consolidation loan or any 
other loan for which the liability has 
been discharged by such subsequent 
consolidation loan shall be applicable; 
and 
‘‘(II) any monthly payment made 
on a loan for which the liability has 
been discharged by such first consoli-
dation loan shall not be applicable.’’; 
(B) in subparagraph (B)— 
(i) in clause (i), by striking ‘‘or’’ at 
the end; 
(ii) in clause (ii), by striking the pe-
riod at the end and inserting a semicolon; 
and 
(iii) by adding at the end the fol-
lowing: 
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536 
‘‘(iii) a full-time job as an employee or 
manager of a farm or ranch that, with re-
spect to a fiscal year, has earnings of gross 
revenue during such year from the sale of 
agricultural products equal to or greater 
than— 
‘‘(I) 
in 
the 
case 
of 
2019, 
$35,000; or 
‘‘(II) in the case of any suc-
ceeding year, the amount applicable 
under this subparagraph for the pre-
vious year, increased by the estimated 
percentage change in the Consumer 
Price Index for the most recent year 
preceding such year; or 
‘‘(iv) a full-time job with a veterans or 
military service organization as described 
in paragraph (19) or (23) of section 501(c) 
of the Internal Revenue Code, that does 
not engage in partisan political campaign 
activity.’’; and 
(C) by adding at the end the following: 
‘‘(C) FULL-TIME
JOB
AS
HEALTH
CARE 
PRACTITIONER.—The term ‘full-time profes-
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sionals engaged in health care practitioner occu-
pations’ includes an individual who— 
‘‘(i) has a full-time job as a health 
care practitioner; 
‘‘(ii) provides medical services in such 
full-time job at a nonprofit or public hos-
pital or other nonprofit or public health 
care facility; and 
‘‘(iii) is prohibited from being em-
ployed directly by such hospital or other 
health care facility by State law.’’; and 
(6) in paragraph (10), as so redesignated, by 
striking ‘‘section 428J, 428K, 428L, or 460’’ and 
inserting ‘‘section 428K or 428L’’. 
SEC. 4304. FEDERAL DIRECT PERKINS LOANS TERMS AND 
CONDITIONS. 
Part D of title IV of the Higher Education Act of 
1965 (20 U.S.C. 1087a et seq.) is amended by inserting 
after section 455 the following new section: 
‘‘SEC. 455A. FEDERAL DIRECT PERKINS LOANS. 
‘‘(a) DESIGNATION OF LOANS.—Loans made to bor-
rowers under this section shall be known as ‘Federal Di-
rect Perkins Loans’. 
‘‘(b) IN GENERAL.—It is the purpose of this section 
to authorize loans to be awarded by institutions of higher 
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education through agreements established under section 
463(f). Unless otherwise specified in this section, all terms 
and conditions and other requirements applicable to Fed-
eral Direct Unsubsidized Stafford loans established under 
section 455(a)(2)(D) shall apply to loans made pursuant 
to this section. 
‘‘(c) ELIGIBLE BORROWERS.—Any student meeting 
the requirements for student eligibility under section 
464(b) (including graduate and professional students as 
defined in regulations promulgated by the Secretary) shall 
be eligible to borrow a Federal Direct Perkins Loan, pro-
vided the student attends an eligible institution with an 
agreement with the Secretary under section 463(f), and 
the institution uses its authority under that agreement to 
award the student a loan. 
‘‘(d) LOAN LIMITS.—The annual and aggregate lim-
its for loans under this section shall be the same as those 
established under section 464, and aggregate limits shall 
include loans made by institutions under agreements 
under section 463(a). 
‘‘(e) APPLICABLE
RATES
OF
INTEREST.—Loans 
made pursuant to this section shall bear interest, on the 
unpaid principal balance of the loan, at the rate of 5 per-
cent per year.’’. 
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539 
SEC. 4305. COMMON MANUAL FOR LOAN SERVICERS. 
Section 456(a)(2) of the Higher Education Act of 
1965 (20 U.S.C. 1087f(a)(2)) is amended in the first sen-
tence by inserting before the period at the end the fol-
lowing: ‘‘, including the applicable procedures and policies 
described in the manual developed under section 493F’’. 
SEC. 4306. REFINANCING FFEL AND FEDERAL DIRECT 
LOANS. 
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.—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 in-
terest rate provided under subsection (c). 
‘‘(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 
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disbursement was made, or the application for the 
consolidation loan was received, before July 1, 2020, 
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 
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-
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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. 
‘‘(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 
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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, 2019, and 
ending on June 30, 2020; 
‘‘(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 
Stafford Loans issued to graduate or profes-
sional students for the 12-month period begin-
ning on July 1, 2019, and ending on June 30, 
2020; 
‘‘(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 
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543 
Federal Direct PLUS Loans for the 12-month 
period beginning on July 1, 2019, and ending 
on June 30, 2020; 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-
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 
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544 
(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-
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, 
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2019, and ending on June 30, 2020; 
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, 2019, and ending on June 30, 
2020; or 
‘‘(II) the original interest rate of 
the component loan. 
‘‘(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 
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546 
beginning on July 1, 2019, and end-
ing on June 30, 2020; 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-
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 
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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)(4). 
‘‘(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, 2020; and 
‘‘(B) who meets the eligibility requirements 
based on income or debt-to-income ratio estab-
lished by the Secretary. 
‘‘(2) INCOME REQUIREMENTS.—The Secretary 
shall establish eligibility requirements based on in-
come or debt-to-income ratio that take into consider-
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ation providing access to refinancing under this sec-
tion for borrowers 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 
the Secretary, in consultation with the Director of 
the Bureau of Consumer Financial Protection.’’. 
SEC. 4307. REFINANCING PRIVATE STUDENT LOANS. 
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. 460B. FEDERAL DIRECT REFINANCED PRIVATE LOAN 
PROGRAM. 
‘‘(a) DEFINITIONS.—In this section: 
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‘‘(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, 2020; 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)). 
‘‘(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 
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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 
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-
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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 clause (i) and clauses (iv) 
through (xiv) of section 485(b)(1)(A) (as 
amended by the College Affordability Act) be-
fore 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.—The Secretary, 
in consultation with the Secretary of the Treasury 
and the Director of the Bureau of Consumer Finan-
cial Protection, shall establish eligibility require-
ments— 
‘‘(A) based on income or debt-to-income 
ratio that take into consideration providing ac-
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552 
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 
loan originally issued for undergraduate post-
secondary educational expenses, a rate equal to 
the rate for Federal Direct Stafford Loans and 
Federal Direct Unsubsidized Stafford Loans 
issued to undergraduate students for the 12- 
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