807 
loan and return the full amount of payments 
made by the borrower as described in subpara-
graph (A). If the Secretary determines that full 
cancellation or repayment of the debt and re-
turn of all funds paid on the loan is not appro-
priate in a particular case, the Secretary shall 
provide the borrower with a written explanation 
as to why partial cancellation or repayment, or 
the partial return of funds is appropriate. 
‘‘(g) APPEALS.—Upon a determination by the Sec-
retary to deny a borrower defense claim under this section, 
the borrower may file an appeal with the Department. The 
Secretary shall develop and implement a standardized 
process for the treatment of appeals under this subsection. 
‘‘(h) REFILING OF CLAIMS.—A borrower whose claim 
was denied under this section may refile the claim for good 
cause, which may include— 
‘‘(1) the availability of substantial evidence that 
was not available to the Secretary at the time the 
initial claim was denied; 
‘‘(2) the emergence of facts or circumstances 
that may have substantially altered the Secretary’s 
original treatment of the initial claim; and 
‘‘(3) such other factors as may be determined 
by the Secretary. 
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808 
‘‘(i) DESIGNATION OF PERSONNEL.—The Secretary 
shall designate qualified personnel within the Department 
whose principal responsibility shall be the processing of 
borrower defense claims submitted under his section. 
‘‘(j) AVAILABILITY
OF
INFORMATION
TO
BOR-
ROWERS.— 
‘‘(1) BORROWER
REQUESTS
FOR
INFORMA-
TION.—At the request of a borrower, the Secretary 
shall identify and provide to the borrower or the 
legal representative of the borrower any records the 
Secretary is considering as part of the borrower’s 
claim. 
‘‘(2) STATUS OF CLAIM.—The Secretary shall 
establish a process under which each borrower with 
a claim pending under this section shall be notified 
of the status of the pending claim not fewer than 
once every 90 days. 
‘‘(3) INFORMATION FROM INSTITUTIONS.—The 
Secretary may request documents and other infor-
mation relating to a borrower defense claim from an 
institution of higher education. An institution that 
receives a request for information from the Sec-
retary under this subsection shall provide the infor-
mation to the Secretary at such time, in such form, 
and in such manner as the Secretary may direct. 
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809 
‘‘(k) QUARTERLY REPORTS.— 
‘‘(1) IN GENERAL.—Not less than once every 
fiscal quarter, the Secretary shall submit to the au-
thorizing committees a report that includes the fol-
lowing: 
‘‘(A) The total number of claims submitted 
to the Secretary pursuant to this subsection in 
the fiscal quarter covered by the report and in 
all previous fiscal quarters. 
‘‘(B) Of the claims described in subpara-
graph (A)— 
‘‘(i) the number of claims that remain 
pending; 
‘‘(ii) the number of claims that were 
denied by the Secretary, and the total dol-
lar amount of such claims; and 
‘‘(iii) the number of claims that were 
approved by the Secretary, and the total 
dollar amount of such claims. 
‘‘(2) DISAGGREGATION.—The information de-
scribed in subparagraphs (A) and (B) of paragraph 
(1) shall be disaggregated by State and institution 
of higher education (except that such disaggregation 
shall not be required in a case in which the results 
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810 
would reveal personally identifiable information 
about an individual borrower). 
‘‘(3) PUBLIC AVAILABILITY.—The information 
included in each report submitted under paragraph 
(A) shall be made available on a publicly accessible 
website of the Department. 
‘‘(l) DEFINITIONS.—In this section: 
‘‘(1) The term ‘legal representative’ means a li-
censed attorney working on behalf of a borrower or 
a group of borrowers, including— 
‘‘(A) a State attorney general; and 
‘‘(B) an attorney employed by a State 
agency, a Federal agency, or a nonprofit orga-
nization that is qualified to provide legal rep-
resentation to borrowers. 
‘‘(2) The term ‘substantial misrepresentation’ 
has the meaning given that term in section 
487(c)(3)(C).’’. 
(b) CONFORMING AMENDMENT.—Subsection (h) of 
section 455 of the Higher Education Act of 1965 (20 
U.S.C. 1087e) is repealed. 
SEC. 4633. ON-TIME REPAYMENT RATES. 
Part G of title IV of the Higher Education Act of 
1965 (20 U.S.C. 1088 et seq.), as amended by the pre-
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811 
ceding sections, is further amended by adding at the end 
the following: 
‘‘SEC. 493I. ON-TIME REPAYMENT RATES. 
‘‘(a) 
CALCULATION
OF
ON-TIME
REPAYMENT 
RATES.— 
‘‘(1) ON-TIME REPAYMENT RATE DEFINED.— 
‘‘(A) IN GENERAL.—The term ‘on-time re-
payment rate’ means for any fiscal year in 
which 30 or more current and former students 
at an institution have been in repayment for 3 
years on any covered loan received for attend-
ance at the institution, the percentage of such 
current and former students who have paid at 
least 90 percent of the monthly payments on 
such loan during such 3-year repayment period. 
‘‘(B) SMALL
COHORTS.—For any fiscal 
year in which fewer than 30 of an institution’s 
current and former students have been in re-
payment for 3 years, the term ‘on-time repay-
ment rate’ means the percentage of such cur-
rent and former students who entered their 3rd 
year of repayment on any covered loan received 
for attendance at the institution in any of the 
3 most recent fiscal years and who have paid at 
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812 
least 90 percent of the monthly payments on 
such loan during such 3-year repayment period. 
‘‘(2) ADDITIONAL
REQUIREMENTS
FOR
RATE 
DETERMINATION.— 
‘‘(A) MULTIPLE
INSTITUTIONS.—In the 
case of a student who has attended and bor-
rowed a covered loan for attendance at more 
than one institution, the student (and such stu-
dent’s subsequent repayment or monthly pay-
ment on such loan) is attributed to each institu-
tion for attendance at which the student re-
ceived such loan for which the student entered 
the 3rd year of repayment in the fiscal year for 
which the on-time repayment rate is being de-
termined. 
‘‘(B) TREATMENT
OF
CONSOLIDATION 
LOANS.—For purposes of determining whether 
a student is in repayment (or has paid a 
monthly payment) on a loan under section 
428C or a Federal Direct Consolidation Loan, 
only the portion of such loan that is used to 
repay a covered loan received for attendance at 
the institution whose on-time repayment rate is 
being determined shall be considered for pur-
poses of such rate. 
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813 
‘‘(3) DETERMINATION OF WHEN MONTHLY PAY-
MENT IS PAID.—For purposes of determining the 
on-time repayment rate of an institution, a student 
shall be considered to have paid a monthly payment 
on a covered loan if one of the following applies: 
‘‘(A) The amount of such monthly pay-
ment has been paid not later than 30 days after 
the date on which such monthly payment is 
due, except that a monthly payment by the in-
stitution, such institution’s owner, agent, con-
tractor, employee, or any other entity or indi-
vidual affiliated with such institution made on 
behalf of a student who is not employed by the 
institution shall not be considered a paid 
monthly payment on such loan. 
‘‘(B) The monthly payment amount due on 
such loan is equal to zero. 
‘‘(C) The full amount due on the loan has 
been repaid or the liability on the loan has been 
otherwise discharged under this Act. 
‘‘(D) The student is in a period of 
deferment, other than— 
‘‘(i) a deferment due to an economic 
hardship 
described 
section 
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814 
427(a)(2)(C)(iii), 
428(b)(1)(M)(iv), 
or 
455(f)(2)(D); or 
‘‘(ii) a deferment due to unemploy-
ment described in section 427(a)(2)(C)(ii), 
428(b)(1)(M)(ii), or 455(f)(2)(B). 
‘‘(E) The student is in one of the following 
periods of forbearance (as applicable to loans 
made, insured, or guaranteed under part B or 
this title): 
‘‘(i) Medical or dental internship or 
residency forbearance under subclause (I) 
of section 428(c)(3)(A)(i). 
‘‘(ii) National service forbearance 
under 
subclause 
(III) 
of 
section 
428(c)(3)(A)(i). 
‘‘(iii) Forbearance for active duty 
service in the Armed Forces under sub-
clause (IV) of section 428(c)(3)(A)(i). 
‘‘(iv) Forbearance for National Guard 
Duty under section 428(c)(3)(B). 
‘‘(v) Forbearance due to military mo-
bilization or other local or national emer-
gency as authorized by the Secretary under 
section 685.205(b)(8) of title 34, Code of 
Federal Regulations (as in effect on the 
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815 
date of enactment of the College Afford-
ability Act). 
‘‘(vi) Teacher loan forgiveness for-
bearance under section 682.213(e) or 
685.205(a)(5) of title 34, Code of Federal 
Regulations (as in effect on the date of en-
actment of the College Affordability Act). 
‘‘(4) PARTICIPATION RATE.— 
‘‘(A) IN
GENERAL.—An institution that 
demonstrates to the Secretary that the institu-
tion’s participation rate is equal to or less than 
20 percent for any of the 3 most recent fiscal 
years for which data is available shall not be 
subject to subsection (b). 
‘‘(B) DETERMINATION.—For purposes of 
this paragraph, the term ‘participation rate’ 
means the percentage of the institution’s reg-
ular students, enrolled on at least a half-time 
basis, who received a covered loan for a 12- 
month period ending during the 6 months im-
mediately preceding the fiscal year for which 
the cohort of borrowers used to calculate the in-
stitution’s on-time loan repayment rate is deter-
mined. 
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816 
‘‘(C) DATA.—An institution shall provide 
the Secretary with sufficient data to determine 
the institution’s participation rate within 30 
days after receiving an initial notification of the 
institution’s draft on-time repayment rate. 
‘‘(D) NOTIFICATION.—Prior to publication 
of a final on-time repayment rate for an institu-
tion that provides the data described in sub-
paragraph (C), the Secretary shall notify the in-
stitution of the institution’s compliance or non-
compliance with subparagraph (A). 
‘‘(b) DETERMINATION OF ELIGIBILITY BASED ON 
REPAYMENT
RATES
AND
INSTRUCTIONAL
SPENDING 
AMOUNTS.— 
‘‘(1) INELIGIBILITY.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraphs (C) and (D), beginning on the 
date that is one year after the date on which 
the final on-time repayment rates are published 
by the Secretary for not less than 3 fiscal years, 
an institution shall not be eligible to participate 
in a program under this title for the fiscal year 
for which the determination under this subpara-
graph is made and for the two succeeding fiscal 
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817 
years, if the Secretary determines the following 
with respect to such institution— 
‘‘(i) the on-time repayment rate of 
such institution is less than any threshold 
on-time repayment rate specified under 
subparagraph (B) for period determined 
appropriate by the Secretary for such 
threshold rate; and 
‘‘(ii) with respect to any of the 3 most 
recent institutional fiscal years for which 
the institution submits to the Secretary 
disclosures on the expenditures of the in-
stitution on instruction for purposes of sec-
tion 132(i)(1)(AA), the amount expended 
by such institution on instruction for such 
fiscal year is less than 1⁄3 of the institu-
tion’s revenues derived from tuition and 
fees. 
‘‘(B) THRESHOLD RATES.—For purposes 
of determinations under subparagraph (A)(i), 
the Secretary shall specify 1 or more threshold 
on-time repayment rates, which rates— 
‘‘(i) shall require that a significant 
percentage of students who have been in 
repayment for 3 years on a covered loan 
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818 
received for attendance at an institution of 
higher education have paid at least 90 per-
cent of the monthly payments on such cov-
ered loan during such 3-year repayment 
period; and 
‘‘(ii) may be applicable with respect to 
a period of 1 or more fiscal years, as deter-
mined appropriate for such a rate. 
‘‘(C) EXCEPTIONS
FOR
CERTAIN
CAT-
EGORIES OF EDUCATIONAL PROGRAMS.— 
‘‘(i) 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 accordance with para-
graph (1), such institution may request 
and be granted an exception to such loss of 
eligibility for a category of educational pro-
grams at such institution by demonstrating 
to the Secretary that the on-time loan re-
payment rate for such category of edu-
cational programs is greater than the 
threshold percentage specified under para-
graph (1)(B) for each fiscal year of the pe-
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819 
riod on which such loss of eligibility for the 
institution is based. 
‘‘(ii) 
DETERMINATIONS.—In 
deter-
mining the on-time loan repayment rate 
for a category of educational programs, 
subsection (a)(1) shall be applied— 
‘‘(I) in subparagraph (A), by 
substituting ‘received for enrollment 
in the category of educational pro-
grams for which such rate is being de-
termined’ for ‘received for attendance 
at the institution’; and 
‘‘(II) as if the following were 
added at the end of such paragraph: 
‘‘ ‘(C) MULTIPLE
CATEGORIES
OF
EDU-
CATIONAL PROGRAMS.—In the case of a student 
who has received a covered loan for enrollment 
in more than one category of educational pro-
grams, the student (and such student’s subse-
quent repayment or monthly payment on such 
covered loan) is attributed to the last category 
of educational programs in which such student 
was enrolled.’. 
‘‘(D) APPEALS.—Not later than 60 days of 
receiving notification from the Secretary of the 
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820 
loss of eligibility under subparagraph (A), the 
institution may appeal the loss of its eligibility 
under subsection (c). 
‘‘(2) REPAYMENT
MANAGEMENT
PLAN
RE-
QUIREMENT FOR CERTAIN INSTITUTIONS.— 
‘‘(A) IN GENERAL.—Beginning on the date 
that is one year after the date on which the 
final on-time repayment rates are published by 
the Secretary for not less than 3 fiscal years, 
an institution shall be subject to the require-
ments of subparagraph (B), if the Secretary de-
termines the following with respect to such in-
stitution— 
‘‘(i) the on-time repayment rate of 
such institution is less than any threshold 
on-time repayment rate specified under 
paragraph (1)(B) for period determined 
appropriate by the Secretary for such 
threshold rate; and 
‘‘(ii) for each of the 3 most recent in-
stitutional fiscal years for which the insti-
tution submits to the Secretary disclosures 
on the expenditures of the institution on 
instruction 
for 
purposes 
of 
section 
132(i)(1)(AA), the amount expended by 
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821 
the institution for instructional spending is 
greater than or equal to an amount equal 
to 1⁄3 of the amount of revenue derived 
from tuition and fees. 
‘‘(B) REPAYMENT MANAGEMENT PLAN.— 
An institution subject to the requirements of 
this subparagraph, shall— 
‘‘(i) not later than 6 months after the 
determination under subparagraph (A), 
submit to the Secretary a repayment man-
agement plan which the Secretary, in the 
Secretary’s discretion, after consideration 
of the institution’s history, resources, ex-
penditures, and targets for improving on- 
time repayment, determines— 
‘‘(I) is acceptable and is in the 
best interests of students; and 
‘‘(II) provides reasonable assur-
ance that the institution will have an 
on-time repayment rate that exceeds 
the on-time threshold referred to in 
subparagraph (A)(i) after a reason-
able period; 
‘‘(ii) engage an independent third- 
party to provide technical assistance in im-
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822 
plementing such repayment management 
plan; and 
‘‘(iii) provide to the Secretary, on an 
annual basis or at such other intervals as 
the Secretary may require, evidence of on- 
time repayment rate improvement and suc-
cessful implementation of such repayment 
management plan. 
‘‘(c) APPEALS.— 
‘‘(1) SECRETARIAL REQUIREMENTS.—The Sec-
retary shall issue a decision on any appeal submitted 
by an institution under subsection (b)(1)(D) not 
later than 45 days after its submission. Such deci-
sion may permit the institution to continue to par-
ticipate in a program under this title if— 
‘‘(A) the institution demonstrates to the 
satisfaction of the Secretary that the Sec-
retary’s calculation of its on-time repayment 
rate is not accurate, and that recalculation 
would increase its on-time repayment rate above 
the applicable threshold percentage specified in 
subsection (b)(1)(B) for the period on which 
the determination of the institution’s ineligi-
bility under subsection (b)(1)(A) was based; 
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823 
‘‘(B) the institution demonstrates to the 
satisfaction of the Secretary that there has been 
improper loan servicing, which, if remedied, 
would increase its on-time repayment rate above 
the applicable threshold percentage specified in 
subsection (b)(1)(B) for the period on which 
the determination of the institution’s ineligi-
bility under subsection (b)(1)(A) was based; 
‘‘(C) there are, in the judgment of the Sec-
retary, exceptional mitigating circumstances 
that would make the application of this section 
inequitable; 
‘‘(D) for each of the 3 most recent fiscal 
years for which the institution submits to the 
Secretary disclosures on expenditures for pur-
poses of section 132(i)(1)(AA), the sum of the 
expenditures on instruction and student services 
of the institution is equal to an amount greater 
than or equal to 50 percent of the institution’s 
revenues derived from tuition and fees, and the 
institution complies with the requirements of 
subsection (b)(2)(B). 
‘‘(2) INSTITUTIONAL
REQUIREMENTS.—If an 
institution continues to participate in a program 
under this title, and the institution’s appeal of the 
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824 
loss of eligibility is unsuccessful, the institution shall 
be required to pay to the Secretary an amount equal 
to the amount of interest, special allowance, reinsur-
ance, and any related payments made by the Sec-
retary (or which the Secretary is obligated to make) 
with respect to covered loans to students attending, 
or planning to attend, that institution during the 
pendency of such appeal. During such appeal, the 
Secretary may permit the institution to continue to 
participate in a program under this title. 
‘‘(d) REGULATIONS.—The Secretary shall prescribe 
regulations designed to prevent an institution from evad-
ing the application to that institution of a on-time repay-
ment rate determination under this section through the 
use of such measures as branching, consolidation, change 
of ownership or control, or any similar device. 
‘‘(e) PUBLICATION.—The Secretary shall publish not 
less often than once every fiscal year (by September 30 
of each year) a report— 
‘‘(1) for each category of institution, and for 
each institution for which an on-time repayment rate 
is determined under this section— 
‘‘(A) with respect to the preceding fiscal 
year— 
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825 
‘‘(i) the on-time repayment rate for 
such institution; 
‘‘(ii) the on-time repayment rate for 
each category of educational programs; 
and 
‘‘(iii) the number of students on which 
the rates described in clauses (i) and (ii) 
are based; and 
‘‘(B) for each of the 3 most recent fiscal 
years for which the institution submits to the 
Secretary disclosures on expenditures for pur-
poses of section 132(i)(1)(AA)— 
‘‘(i) the amount of the institution’s 
expenditures on instruction; 
‘‘(ii) the amount of revenue derived 
from tuition and fees by the institution; 
and 
‘‘(iii) the quotient of the amount de-
scribed in clause (i) divided by the amount 
described in clause (ii), expressed as a per-
centage; and 
‘‘(2) each on-time repayment rate used for cal-
culating each of the threshold rates under subsection 
(b)(1)(B) for the period determined appropriate by 
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826 
the Secretary for such threshold rate under such 
subsection. 
‘‘(f) DEFINITIONS.—In this section: 
‘‘(1) 
CATEGORY
OF
EDUCATIONAL
PRO-
GRAMS.—The term ‘category of educational pro-
grams’ has the meaning given the term in section 
435(a)(9)(E). 
‘‘(2) CATEGORY
OF
INSTITUTION.—The term 
‘category of institution’ includes— 
‘‘(A) four-year public institutions; 
‘‘(B) four-year private nonprofit institu-
tions; 
‘‘(C) four-year proprietary institutions; 
‘‘(D) two-year public institutions; 
‘‘(E) two-year private nonprofit institu-
tions; 
‘‘(F) two-year proprietary institutions; 
‘‘(G) less-than-two year public institutions; 
‘‘(H) less-than-two year private nonprofit 
institutions; and 
‘‘(I) less-than-two year proprietary institu-
tions. 
‘‘(3) COVERED LOAN.— 
‘‘(A) IN
GENERAL.—The term ‘covered 
loan’ means a loan made, insured, or guaran-
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