I 
114TH CONGRESS 
2D SESSION 
H. R. 5106 
To make college more affordable, reduce student debt, and provide greater 
access to higher education for all students of the United States. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 28, 2016 
Ms. DUCKWORTH (for herself, Mr. SCOTT of Virginia, Mr. HINOJOSA, and Mr. 
COURTNEY) introduced the following bill; which was referred to the Com-
mittee on Education and the Workforce, and in addition to the Commit-
tees on Ways and Means and Natural Resources, for a period to be sub-
sequently determined by the Speaker, in each case for consideration of 
such provisions as fall within the jurisdiction of the committee concerned 
A BILL 
To make college more affordable, reduce student debt, and 
provide greater access to higher education for all stu-
dents of the United States. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the ‘‘In 
the Red Act of 2016’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
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TITLE I—AMERICA’S COLLEGE PROMISE 
Sec. 101. State and Indian tribe grants for community college. 
Sec. 102. Pathways to student success. 
TITLE II—STUDENT LOAN REFINANCING 
Sec. 201. Refinancing programs. 
TITLE III—FEDERAL PELL GRANT PROTECTION 
Sec. 301. Federal Pell Grant protection. 
Sec. 302. Point of order against cutting Federal Pell Grants. 
Sec. 303. Affirming that Federal Pell Grants are a foundational investment in 
affordable higher education. 
TITLE IV—ACCOUNTABILITY 
Sec. 401. Supporting efforts to ensure that institutions of higher education are 
accountable for ensuring the high value of degrees and creden-
tials. 
TITLE V—OFFSETS 
Sec. 501. Amendment of 1986 Code. 
Sec. 502. Fair share tax on high-income taxpayers. 
Sec. 503. Expansion of denial of deduction for certain excessive employee remu-
neration. 
Sec. 504. Partnership interests transferred in connection with performance of 
services. 
Sec. 505. Special rules for partners providing investment management services 
to partnerships. 
Sec. 506. Consistent treatment of stock options by corporations. 
Sec. 507. Application of executive pay deduction limit. 
Sec. 508. Modifications to rules relating to inverted corporations. 
Sec. 509. Modifications of foreign tax credit rules applicable to major inte-
grated oil companies which are dual capacity taxpayers. 
Sec. 510. Limitation on section 199 deduction attributable to oil, natural gas, 
or primary products thereof. 
Sec. 511. Limitation on deduction for intangible drilling and development costs; 
amortization of disallowed amounts. 
Sec. 512. Limitation on percentage depletion allowance for oil and gas wells. 
Sec. 513. Limitation on deduction for tertiary injectants. 
Sec. 514. Modification of definition of major integrated oil company. 
Sec. 515. Repeal of outer Continental Shelf deep water and deep gas royalty 
relief. 
Sec. 516. Coordination of American Opportunity Credit and Lifetime Learning 
Credit with Pell Grants not used for qualified tuition and re-
lated expenses. 
Sec. 517. Expansion of Pell Grant exclusion from gross income. 
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TITLE I—AMERICA’S COLLEGE 
PROMISE 
SEC. 101. STATE AND INDIAN TRIBE GRANTS FOR COMMU-
NITY COLLEGE. 
(a) IN
GENERAL.—From amounts appropriated 
under subsection (g)(1) for any fiscal year, the Secretary 
shall award grants to eligible States and Indian tribes to 
pay the Federal share of expenditures needed to carry out 
the activities and services described in subsection (e). 
(b) FEDERAL SHARE; NON-FEDERAL SHARE.— 
(1) FEDERAL SHARE.— 
(A) FORMULA.—Subject to subparagraph 
(B), the Federal share of a grant under this 
section shall be based on a formula, determined 
by the Secretary, that— 
(i) accounts for the State or Indian 
tribe’s share of eligible students; and 
(ii) provides, for each eligible student 
in the State or Indian tribe, a per-student 
amount that is— 
(I) not less than 300 percent of 
the per-student amount of the State 
or Indian tribe share, determined 
under paragraph (2), subject to sub-
clause (II); and 
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(II) not greater than 75 percent 
of— 
(aa) 
for 
the 
2016–2017 
award year, the average resident 
community college tuition and 
fees per student in all States for 
the most recent year for which 
data are available; and 
(bb) for each subsequent 
award year, the average resident 
community college tuition and 
fees per student in all States cal-
culated under this subclause for 
the preceding year, increased by 
the lesser of— 
(AA) the percentage by 
which the average resident 
community college tuition 
and fees per student in all 
States for the most recent 
year for which data are 
available increased as com-
pared to such average for 
the preceding year; or 
(BB) 3 percent. 
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(A) in the case of a State, the Governor, 
the State agency with jurisdiction over higher 
education, or another agency designated by the 
Governor to administer the program under this 
section; or 
(B) in the case of an Indian tribe, the gov-
erning body of such tribe. 
(2) CONTENTS.—Each State or Indian tribe ap-
plication shall include, at a minimum— 
(A) an estimate of the number of eligible 
students in the State or Indian tribe and the 
cost of waiving community college resident tui-
tion and fees for all eligible students for each 
fiscal year covered by the grant, with annual in-
creases of an amount that shall not exceed 3 
percent of the prior year’s average resident 
community college tuition and fees; 
(B) an assurance that all community col-
leges in the State or under the jurisdiction of 
the Indian tribe, respectively, will waive resident 
tuition and fees for eligible students in pro-
grams that are— 
(i) academic programs with credits 
that can fully transfer via articulation 
agreement toward a baccalaureate degree 
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or postbaccalaureate degree at any public 
institution of higher education in the 
State; or 
(ii) occupational skills training pro-
grams that lead to a recognized postsec-
ondary credential that is in an in-demand 
industry sector or occupation in the State; 
(C) a description of the promising and evi-
dence-based institutional reforms and innovative 
practices to improve student outcomes, includ-
ing completion or transfer rates, that have been 
or will be adopted by the participating commu-
nity colleges, such as— 
(i) providing comprehensive academic 
and student support services, including 
mentoring and advising, especially for 
first-generation and minority students; 
(ii) providing accelerated learning op-
portunities, such as dual or concurrent en-
rollment programs; 
(iii) advancing competency-based edu-
cation; 
(iv) strengthening remedial education, 
especially for low-income students, first 
generation students, adult students, and 
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students 
from 
other 
underrepresented 
groups in postsecondary education; 
(v) implementing course redesigns of 
high-enrollment courses to improve student 
outcomes and reduce cost; or 
(vi) utilizing career pathways or de-
gree pathways; 
(D) a description of how the State or In-
dian tribe will promote alignment between its 
public secondary school and postsecondary edu-
cation systems, including between 2-year and 4- 
year public institutions of higher education and 
with minority-serving institutions described in 
section 371 of the Higher Education Act of 
1965 (20 U.S.C. 1067q), to expand awareness 
of and access to postsecondary education, re-
duce the need for remediation and repeated 
coursework, and improve student outcomes; 
(E) a description of how the State or In-
dian tribe will ensure that programs leading to 
a recognized postsecondary credential meet the 
quality criteria established by the State under 
section 123(a) of the Workforce Innovation and 
Opportunity Act (29 U.S.C. 3153(a)) or other 
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quality criteria determined appropriate by the 
State or Indian tribe; 
(F) an assurance that all participating 
community colleges in the State or under the 
authority of the Indian tribe have entered into 
program participation agreements under section 
487 of the Higher Education Act of 1965 (20 
U.S.C. 1094); 
(G) an assurance that, for each year of the 
grant, the State or Indian tribe will notify each 
eligible student of the student’s remaining eligi-
bility for assistance under this section; and 
(H) a description of how the State or In-
dian tribe will promote the improved perform-
ance of public institutions of higher education 
through funding reform, including through the 
use of a performance-based model that allocates 
a portion of the State or Indian tribe’s public 
higher education expenditures based on the per-
formance of those institutions on State-specified 
metrics, including successful student outcomes. 
(e) ALLOWABLE USES OF FUNDS.— 
(1) IN GENERAL.—A State or Indian tribe shall 
use a grant under this section only to provide funds 
to participating community colleges to waive resident 
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tuition and fees for eligible students who are en-
rolled in— 
(A) academic programs with credits that 
can fully transfer via articulation agreement to-
ward a baccalaureate degree or postbaccalaure-
ate degree at any public institution of higher 
education in the State; or 
(B) occupational skills training programs 
that lead to a recognized postsecondary creden-
tial that is in an in-demand industry sector or 
occupation in the State. 
(2) ADDITIONAL USES.—If a State or Indian 
tribe demonstrates to the Secretary that it has grant 
funds remaining after meeting the demand for ac-
tivities described in paragraph (1), the State or In-
dian tribe may use those funds to carry out one or 
more of the following: 
(A) Expanding the waiver of resident tui-
tion and fees at community college to students 
who are returning students or otherwise not en-
rolling in postsecondary education for the first 
time, and who meet the student eligibility re-
quirements of clauses (ii) through (v) of sub-
section (f)(4)(A). 
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(B) Expanding the scope and capacity of 
high-quality academic and occupational skills 
training programs at community colleges. 
(C) Improving postsecondary education 
readiness in the State or Indian tribe, through 
outreach and early intervention. 
(D) Expanding access to dual or concur-
rent enrollment programs. 
(E) Improving affordability at 4-year pub-
lic institutions of higher education. 
(3) USE OF FUNDS FOR ADMINISTRATIVE PUR-
POSES.—A State or Indian tribe that receives a 
grant under this section may not use any funds pro-
vided under this section for administrative purposes 
relating to such grant. 
(4) MAINTENANCE OF EFFORT.—A State or In-
dian tribe receiving a grant under this section is en-
titled to receive its full allotment of funds under this 
section for a fiscal year only if, for each year of the 
grant, the State or Indian tribe provides financial 
support for public higher education at a level equal 
to or exceeding the average amount provided per 
full-time equivalent student for public institutions of 
higher education for the 3 consecutive preceding 
State or Indian tribe fiscal years. In making the cal-
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culation under this paragraph, the State or Indian 
tribe shall exclude capital expenses and research and 
development costs and include need-based financial 
aid for students who attend public institutions of 
higher education. 
(5) ANNUAL REPORT.—A State or Indian tribe 
receiving a grant under this section shall submit an 
annual report to the Secretary— 
(A) describing the uses of grant funds 
under this section, the progress made in ful-
filling the requirements of the grant, and the 
rates of graduation, transfer, and attainment of 
a recognized postsecondary credential for the 
students at participating community colleges; 
and 
(B) including any other information as the 
Secretary may require. 
(6) REPORTING
BY
SECRETARY.—The Sec-
retary annually shall— 
(A) compile and analyze the information 
described in paragraph (5); and 
(B) prepare and submit a report to the 
Committee on Health, Education, Labor, and 
Pensions of the Senate and the Committee on 
Education and the Workforce of the House of 
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Representatives containing the analysis de-
scribed in subparagraph (A) and an identifica-
tion of State and Indian tribe best practices for 
achieving the purpose of this section. 
(7) TECHNICAL
ASSISTANCE.—The Secretary 
shall provide technical assistance to eligible States 
and Indian tribes concerning best practices regard-
ing the promising and evidence-based institutional 
reforms and innovative practices to improve student 
outcomes as described in subsection (d)(2)(C) and 
shall disseminate such best practices among the 
States and Indian tribes. 
(8) CONTINUATION OF FUNDING.— 
(A) IN GENERAL.—A State or Indian tribe 
receiving a grant under this section for a fiscal 
year may continue to receive funding under this 
section for future fiscal years conditioned on 
the availability of budget authority and on 
meeting the requirements of the grant, as de-
termined by the Secretary. 
(B) DISCONTINUATION.—The Secretary 
may discontinue funding of the Federal share of 
a grant under this section if the State or Indian 
tribe has violated the terms of the grant or is 
not making adequate progress in implementing 
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the reforms described in the application sub-
mitted under subsection (d). 
(f) DEFINITIONS.—In this section: 
(1) CAREER
PATHWAY.—The term ‘‘career 
pathway’’ has the meaning given the term in section 
3 of the Workforce Innovation and Opportunity Act 
(29 U.S.C. 3102). 
(2) COMMUNITY COLLEGE.—The term ‘‘commu-
nity college’’ means a public institution of higher 
education at which the highest degree that is pre-
dominantly awarded to students is an associate’s de-
gree, including 2-year tribally controlled colleges 
under section 316 of the Higher Education Act of 
1965 (20 U.S.C. 1059c) and public 2-year State in-
stitutions of higher education. 
(3) DUAL OR CONCURRENT ENROLLMENT PRO-
GRAM.—The term ‘‘dual or concurrent enrollment 
program’’ means an academic program through 
which a secondary school student is able simulta-
neously to earn credit toward a secondary school di-
ploma and a postsecondary degree or other recog-
nized postsecondary credential, including an early 
college high school program. 
(4) ELIGIBLE STUDENT.— 
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(A) DEFINITION.—The term ‘‘eligible stu-
dent’’ means a student who— 
(i)(I) enrolls in a community college 
for the first time, regardless of age, after 
the date of enactment of this Act; or 
(II) is enrolled in a community col-
lege, for the first time, as of the date of 
enactment of this Act; 
(ii) attends the community college on 
not less than a half-time basis; 
(iii) 
is 
maintaining 
satisfactory 
progress, as defined in section 484(c) of 
the Higher Education Act of 1965 (20 
U.S.C. 1091(c)), in the student’s course of 
study; 
(iv) qualifies for resident tuition, as 
determined by the State or Indian tribe; 
and 
(v) is enrolled in an eligible program 
described in subsection (d)(2)(B). 
(B) SPECIAL RULE.—An otherwise eligible 
student shall lose eligibility 3 calendar years 
after first receiving benefits under this section. 
(5) IN-DEMAND INDUSTRY SECTOR OR OCCUPA-
TION.—The term ‘‘in-demand industry sector or oc-
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cupation’’ has the meaning given the term in section 
3 of the Workforce Innovation and Opportunity Act 
(29 U.S.C. 3102). 
(6) INDIAN TRIBE.—The term ‘‘Indian tribe’’ 
has the meaning given the term in section 102 of the 
Federally Recognized Indian Tribe List Act of 1994 
(25 U.S.C. 479a). 
(7) INSTITUTION OF HIGHER EDUCATION.—The 
term ‘‘institution of higher education’’ has the 
meaning given the term in section 101 of the Higher 
Education Act of 1965 (20 U.S.C. 1001). 
(8) RECOGNIZED
POSTSECONDARY
CREDEN-
TIAL.—The term ‘‘recognized postsecondary creden-
tial’’ has the meaning as described in section 3 of 
the Workforce Innovation and Opportunity Act (29 
U.S.C. 3102). 
(9) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Education. 
(10) STATE.—The term ‘‘State’’ has the mean-
ing given the term in section 103 of the Higher 
Education Act of 1965 (20 U.S.C. 1003). 
(g) APPROPRIATIONS.— 
(1) AUTHORIZATION
AND
APPROPRIATIONS.— 
For the purpose of making grants under this sec-
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tion, there are authorized to be appropriated, and 
there are appropriated— 
(A) $1,365,000,000 for fiscal year 2016; 
(B) $3,020,000,000 for fiscal year 2017; 
(C) $3,854,000,000 for fiscal year 2018; 
(D) $5,395,000,000 for fiscal year 2019; 
(E) $7,061,000,000 for fiscal year 2020; 
(F) $8,085,000,000 for fiscal year 2021; 
(G) $10,182,000,000 for fiscal year 2022; 
(H) $13,019,000,000 for fiscal year 2023; 
(I) $13,583,000,000 for fiscal year 2024; 
and 
(J) $14,171,000,000 for fiscal year 2025 
and each succeeding fiscal year. 
(2) AVAILABILITY.—Funds appropriated under 
paragraph (1) shall remain available to the Sec-
retary until expended. 
(3) INSUFFICIENT FUNDS.—If the amount ap-
propriated under paragraph (1) for a fiscal year is 
not sufficient to award each participating State and 
Indian tribe a grant under this section that is equal 
to the minimum amount of the Federal share de-
scribed in subsection (b)(1), the Secretary may rat-
ably reduce the amount of each such grant or take 
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other actions necessary to ensure an equitable dis-
tribution of such amount. 
SEC. 102. PATHWAYS TO STUDENT SUCCESS. 
(a) PATHWAYS TO STUDENT SUCCESS FOR HISTORI-
CALLY BLACK COLLEGES AND UNIVERSITIES.— 
(1) IN GENERAL.—From amounts appropriated 
under subsection (d)(1) for any fiscal year, the Sec-
retary shall award grants to participating 4-year his-
torically black colleges or universities that meet the 
requirements of paragraph (2) to— 
(A) encourage students to enroll as first- 
time students and successfully complete a bach-
elor’s degree at participating institutions; 
(B) provide incentives to community col-
lege students to transfer to participating insti-
tutions through strong transfer pathways to 
complete a bachelor’s degree program; and 
(C) support participating institutions to 
better serve new and existing students by en-
gaging in reforms and innovations designed to 
improve completion rates and other student out-
comes. 
(2) ELIGIBILITY.—To be eligible to receive a 
grant under the program under this subsection, an 
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institution shall be a historically black college or uni-
versity that— 
(A) has a student body of which not less 
than 35 percent are low-income students; 
(B) commits to maintaining or adopting 
and implementing promising and evidence-based 
institutional reforms and innovative practices to 
improve the completion rates and other student 
outcomes, such as— 
(i) providing comprehensive academic 
and student support services, including 
mentoring and advising; 
(ii) providing accelerated learning op-
portunities and degree pathways, such as 
dual enrollment and pathways to graduate 
and professional degree programs; 
(iii) advancing distance and com-
petency-based education; 
(iv) partnering with employers, indus-
try, not-for-profit associations, and other 
groups to provide opportunities to advance 
learning outside the classroom, including 
work-based learning opportunities such as 
internships or apprenticeships or programs 
designed to improve intercultural develop-
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ment and personal growth, such as foreign 
exchange and study abroad programs; 
(v) reforming remedial education, es-
pecially for low-income students, first gen-
eration college students, adult students, 
and other underrepresented students; or 
(vi) implementing course redesigns of 
high-enrollment courses to improve student 
outcomes and reduce cost; 
(C) sets performance goals for improving 
student outcomes for the duration of the grant; 
and 
(D) if receiving a grant for transfer stu-
dents, has articulation agreements with commu-
nity colleges at the national, State, or local level 
to ensure that community college credits can 
fully transfer to the participating institution. 
(3) GRANT AMOUNT.— 
(A) INITIAL AMOUNT.—For the first year 
that an eligible institution participates in the 
grant program under this subsection and sub-
ject to subparagraph (C), such eligible institu-
tion shall receive a grant in an amount based 
on the product of— 
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(i) the actual cost of tuition and fees 
at the eligible institution in such year (re-
ferred to in this subsection as the ‘‘per-stu-
dent rebate’’); multiplied by 
(ii) the number of eligible students en-
rolled in the eligible institution for the pre-
ceding year. 
(B) SUBSEQUENT INCREASES.—For each 
succeeding year after the first year of the grant 
program under this subsection, each partici-
pating eligible institution shall receive a grant 
in the amount determined under subparagraph 
(A) for such year, except that in no case shall 
the amount of the per-student rebate for an eli-
gible institution increase by more than 3 per-
cent as compared to the amount of such rebate 
for the preceding year. 
(C) LIMITATIONS.— 
(i) 
MAXIMUM
PER-STUDENT
RE-
BATE.—No eligible institution participating 
in the grant program under this subsection 
shall receive a per-student rebate amount 
for any year that is greater than the na-
tional average of annual tuition and fees at 
public 4-year institutions of higher edu-
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cation for such year, as determined by the 
Secretary. 
(ii) 
FIRST
YEAR
TUITION
AND 
FEES.—During the first year of participa-
tion in the grant program under this sub-
section, no eligible institution may increase 
tuition and fees at a rate greater than any 
annual increase at the eligible institution 
in the previous 5 years. 
(4) APPLICATION.—An eligible institution that 
desires a grant under this subsection shall submit an 
application to the Secretary at such time, in such 
manner, and containing such information as the Sec-
retary may require. 
(5) USE
OF
FUNDS.—Funds awarded under 
this subsection to a participating eligible institution 
shall be— 
(A) applied in their entirety to student ac-
counts; and 
(B) used to waive or significantly reduce 
tuition and fees for eligible students in an 
amount of not more than up to the annual per- 
student rebate amount for each student, for not 
more than the first 60 credits an eligible stu-
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dent enrolls in the participating eligible institu-
tion. 
(b) PATHWAYS
TO STUDENT SUCCESS
FOR HIS-
PANIC-SERVING INSTITUTIONS, ASIAN AMERICAN
AND 
NATIVE AMERICAN PACIFIC ISLANDER-SERVING INSTITU-
TIONS, TRIBAL COLLEGES AND UNIVERSITIES, ALASKA 
NATIVE-SERVING
INSTITUTIONS, NATIVE
HAWAIIAN- 
SERVING INSTITUTIONS, PREDOMINANTLY BLACK INSTI-
TUTIONS, AND NATIVE AMERICAN-SERVING NONTRIBAL 
INSTITUTIONS.— 
(1) IN GENERAL.—From amounts appropriated 
under subsection (d)(1) for any fiscal year, the Sec-
retary shall award grants to participating 4-year mi-
nority-serving institutions to— 
(A) encourage students to enroll as first- 
time students and successfully complete a bach-
elor’s degree at participating institutions; 
(B) provide incentives to community col-
lege students to transfer to participating insti-
tutions through strong transfer pathways to 
complete a bachelor’s degree program; and 
(C) support participating institutions to 
better serve new and existing students by en-
gaging in reforms and innovations designed to 
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improve completion rates and other student out-
comes. 
(2) INSTITUTIONAL ELIGIBILITY.—To be eligi-
ble to participate and receive a grant under this sub-
section, an institution shall be a minority-serving in-
stitution that— 
(A) has a student body of which not less 
than 35 percent are low-income students; 
(B) commits to maintaining or adopting 
and implementing promising and evidence-based 
institutional reforms and innovative practices to 
improve the completion rates and other student 
outcomes, such as— 
(i) providing comprehensive academic 
and student support services, including 
mentoring and advising; 
(ii) providing accelerated learning op-
portunities and degree pathways, such as 
dual enrollment and pathways to graduate 
and professional degree programs; 
(iii) advancing distance and com-
petency-based education; 
(iv) partnering with employers, indus-
try, not-for-profit associations, and other 
groups to provide opportunities to advance 
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learning outside the classroom, including 
work-based learning opportunities such as 
internships or apprenticeships or programs 
designed to improve intercultural develop-
ment and personal growth, such as foreign 
exchange and study abroad programs; 
(v) reforming remedial education, es-
pecially for low-income students, first gen-
eration college students, adult students, 
and other underrepresented students; and 
(vi) implementing course redesigns of 
high-enrollment courses to improve student 
outcomes and reduce cost; 
(C) sets performance goals for improving 
student outcomes for the duration of the grant; 
and 
(D) if receiving a grant for transfer stu-
dents, has articulation agreements with commu-
nity colleges at the national, State, or local lev-
els to ensure that community college credits can 
fully transfer to the participating institution. 
(3) GRANT AMOUNT.— 
(A) INITIAL AMOUNT.—For the first year 
that an eligible institution participates in the 
grant program under this subsection and sub-
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ject to subparagraph (C), such participating eli-
gible institution shall receive a grant in an 
amount based on the product of— 
(i) the actual cost of tuition and fees 
at the eligible institution in such year (re-
ferred to in this subsection as the ‘‘per-stu-
dent rebate’’); multiplied by 
(ii) the number of eligible students en-
rolled in the eligible institution for the pre-
ceding year. 
(B) SUBSEQUENT INCREASES.—For each 
succeeding year after the first year of the grant 
program under this subsection, each partici-
pating eligible institution shall receive a grant 
in the amount determined under subparagraph 
(A) for such year, except that in no case shall 
the amount of the per-student rebate increase 
by more than 3 percent as compared to the 
amount of such rebate for the preceding year. 
(C) LIMITATIONS.— 
(i) 
MAXIMUM
PER-STUDENT
RE-
BATE.—No eligible institution participating 
in the grant program under this subsection 
shall receive a per-student rebate amount 
for a grant year greater than the national 
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average of public 4-year institutional tui-
tion and fees, as determined by the Sec-
retary. 
(ii) 
FIRST
YEAR
TUITION
AND 
FEES.—During the first year of participa-
tion in the grant program under this sub-
section, no eligible institution may increase 
tuition and fees at a rate greater than any 
annual increase made by the institution in 
the previous 5 years. 
(4) APPLICATION.—An eligible institution shall 
submit an application to the Secretary at such time, 
in such a manner, and containing such information 
as determined by the Secretary. 
(5) USE
OF
FUNDS.—Funds awarded under 
this subsection to a participating eligible institution 
shall be— 
(A) applied in their entirety to student ac-
counts; and 
(B) used to waive or significantly reduce 
tuition and fees for eligible students in an 
amount of not more than up to the annual per- 
student rebate amount for each student, for not 
more than the first 60 credits an eligible stu-
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dent enrolls in the participating eligible institu-
tion. 
(c) DEFINITIONS.—In this section: 
(1) ELIGIBLE STUDENT.— 
(A) DEFINITION.—The term ‘‘eligible stu-
dent’’ means a student, regardless of age, 
who— 
(i)(I) enrolls in a historically black 
college or university, or minority-serving 
institution, for the first time; or 
(II) transfers from a community col-
lege into a historically black college or uni-
versity, or minority-serving institution, for 
the first time; 
(ii) attends the historically black col-
lege or university, or minority serving in-
stitution, on at least a half-time basis; 
(iii) maintains satisfactory academic 
progress; and 
(iv) is a low-income student. 
(B) SPECIAL RULES.— 
(i) FIRST 3 YEARS.—An otherwise eli-
gible student shall lose eligibility 3 cal-
endar years after first receiving benefits 
under this section. 
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(ii) SPECIAL RULE FOR CERTAIN STU-
DENTS.—Notwithstanding 
subparagraph 
(A)(i), an otherwise eligible student whose 
parent or guardian was denied a PLUS 
loan after November 2011 and before 
March 29, 2015, and who subsequently 
withdrew from a historically black college 
or university, or minority-serving institu-
tion, and has not yet completed a program 
of study at such historically black college 
or university or minority-serving institu-
tion, shall be eligible to participate under 
subsection (a) or (b) in order to complete 
such program of study, subject to all other 
requirements of subsection (a) or (b) (as 
the case may be). 
(2) HISTORICALLY
BLACK
COLLEGE
OR
UNI-
VERSITY.—The term ‘‘historically black college or 
university’’ means a part B institution described in 
section 322(2) of the Higher Education Act of 1965 
(20 U.S.C. 1061(2)). 
(3) LOW-INCOME STUDENT.—The term ‘‘low-in-
come student’’ has the meaning given such term by 
the Secretary, except that such term shall not ex-
clude any student eligible for a Federal Pell Grant 
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under section 401 of the Higher Education Act of 
1965 (20 U.S.C. 1070a). 
(4) 
MINORITY-SERVING
INSTITUTION.—The 
term ‘‘minority-serving institution’’ means any pub-
lic or not-for-profit institution of higher education— 
(A) described in paragraphs (2) through 
(7) of section 371(a) of the Higher Education 
Act of 1965 (20 U.S.C. 1067q(a)); and 
(B) designated as a minority-serving insti-
tution by the Secretary. 
(d) APPROPRIATIONS.— 
(1) AUTHORIZATION AND APPROPRIATIONS FOR 
HBCU AND MSI GRANTS.—For the purpose of car-
rying out subsections (a) and (b), there are author-
ized to be appropriated, and there are appro-
priated— 
(A) $55,000,000 for fiscal year 2016; 
(B) $180,000,000 for fiscal year 2017; 
(C) $1,072,000,000 for fiscal year 2018; 
(D) $1,115,000,000 for fiscal year 2019; 
(E) $1,160,000,000 for fiscal year 2020; 
(F) $1,206,000,000 for fiscal year 2021; 
(G) $1,225,000,000 for fiscal year 2022; 
(H) $1,306,000,000 for fiscal year 2023; 
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(I) $1,359,000,000 for fiscal year 2024; 
and 
(J) $1,414,000,000 for fiscal year 2025 
and each succeeding fiscal year. 
(2) AVAILABILITY.—Funds appropriated under 
paragraph (1) are to remain available to the Sec-
retary until expended. 
(3) INSUFFICIENT FUNDS.—If the amount ap-
propriated under paragraph (1) for a fiscal year is 
not sufficient to award, to each participating institu-
tion in the grant programs under subsections (a) 
and (b), a grant under this section equal to 100 per-
cent of the grant amount determined under sub-
section (a)(3) or (b)(3) (as the case may be), the 
Secretary may ratably reduce the amount of each 
such grant or take other actions necessary to ensure 
an equitable distribution of such amount. 
TITLE II—STUDENT LOAN 
REFINANCING 
SEC. 201. REFINANCING PROGRAMS. 
(a) 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 
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(2) by inserting ‘‘; and (3) to make loans under 
section 460A and section 460B’’ after ‘‘section 
459A’’. 
(b) REFINANCING PROGRAM.—Part D of title IV of 
the Higher Education Act of 1965 (20 U.S.C. 1087a et 
seq.) is amended by adding at the end the following: 
‘‘SEC. 460A. REFINANCING FFEL AND FEDERAL DIRECT 
LOANS. 
‘‘(a) IN GENERAL.—Beginning not later than 180 
days after the date of enactment of the In the Red Act 
of 2016, the Secretary shall establish a program under 
which the Secretary, upon the receipt of an application 
from a qualified borrower, makes a loan under this part, 
in accordance with the provisions of this section, in order 
to permit the borrower to obtain the interest rate provided 
under subsection (c). 
‘‘(b) REFINANCING DIRECT LOANS.— 
‘‘(1) FEDERAL DIRECT LOANS.—Upon applica-
tion of a qualified borrower, the Secretary shall 
repay a Federal Direct Stafford Loan, a Federal Di-
rect Unsubsidized Stafford Loan, a Federal Direct 
PLUS Loan, or a Federal Direct Consolidation 
Loan of the qualified borrower, for which the first 
disbursement was made, or the application for the 
consolidation loan was received, before July 1, 2016, 
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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-
maining obligation to the lender with respect to 
the original loan. 
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‘‘(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 
PLUS Loans, and Federal Direct Consolidation 
Loans, shall be a rate equal to— 
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‘‘(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, 2013, and 
ending on June 30, 2014; 
‘‘(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, 2013, and ending on June 30, 
2014; 
‘‘(C) in any case where the original loan 
was a loan under section 428B or a Federal Di-
rect PLUS Loan, a rate equal to the rate for 
Federal Direct PLUS Loans for the 12-month 
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period beginning on July 1, 2013, and ending 
on June 30, 2014; 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 
(B), to calculate the weighted average of 
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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, 
2013, and ending on June 30, 2014; 
or 
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‘‘(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, 2013, and ending on June 30, 
2014; 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 
beginning on July 1, 2013, and end-
ing on June 30, 2014; or 
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‘‘(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 
conditions as the original loan, except as otherwise 
provided in this section. 
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‘‘(2) NO
AUTOMATIC
EXTENSION
OF
REPAY-
MENT PERIOD.—Refinancing a loan under this sec-
tion shall not result in the extension of the duration 
of the repayment period of the loan, and the bor-
rower shall retain the same repayment term that 
was in effect on the original loan. Nothing in this 
paragraph shall be construed to prevent a borrower 
from electing a different repayment plan at any time 
in accordance with section 455(d)(3). 
‘‘(e) DEFINITION OF QUALIFIED BORROWER.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘qualified borrower’ means a bor-
rower— 
‘‘(A) of a loan under this part or part B 
for which the first disbursement was made, or 
the application for a consolidation loan was re-
ceived, before July 1, 2016; and 
‘‘(B) who meets the eligibility requirements 
based on income or debt-to-income ratio estab-
lished by the Secretary. 
‘‘(2) INCOME REQUIREMENTS.—Not later than 
180 days after the date of enactment of the In the 
Red Act of 2016, the Secretary shall establish eligi-
bility requirements based on income or debt-to-in-
come ratio that take into consideration providing ac-
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cess to refinancing under this section 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. 460B. FEDERAL DIRECT REFINANCED PRIVATE LOAN 
PROGRAM. 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) ELIGIBLE PRIVATE EDUCATION LOAN.— 
The term ‘eligible private education loan’ means a 
private education loan, as defined in section 140(a) 
of the Truth in Lending Act (15 U.S.C. 1650(a)), 
that— 
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‘‘(A) was disbursed to the borrower before 
July 1, 2016; 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 
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; 
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‘‘(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-
cation loan, in order to discharge the qualified 
borrower from any remaining obligation to the 
lender with respect to the original loan. 
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‘‘(C) The Secretary shall require that the 
qualified borrower undergo loan counseling that 
provides all of the information and counseling 
required under clauses (i) through (viii) of sec-
tion 485(b)(1)(A) before the loan is refinanced 
in accordance with this section, and before the 
proceeds of such loan are paid to the private 
educational lender. 
‘‘(D) The Secretary shall issue the loan as 
a Federal Direct Refinanced Private Loan, 
which shall have the same terms, conditions, 
and benefits as a Federal Direct Unsubsidized 
Stafford Loan, except as otherwise provided in 
this section. 
‘‘(2) BORROWER ELIGIBILITY.—Not later than 
180 days after the date of enactment of the In the 
Red Act of 2016, the Secretary, in consultation with 
the Secretary of the Treasury and the Director of 
the Bureau of Consumer Financial Protection, shall 
establish eligibility requirements— 
‘‘(A) based on income or debt-to-income 
ratio that take into consideration providing ac-
cess to refinancing under this section for bor-
rowers with the greatest financial need; 
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‘‘(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- 
month period beginning on July 1, 2013, and 
ending on June 30, 2014; and 
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‘‘(B) in the case of a Federal Direct Refi-
nanced Private Loan for a private education 
loan originally issued for graduate or profes-
sional degree postsecondary educational ex-
penses, a rate equal to the rate for Federal Di-
rect Unsubsidized Stafford Loans issued to 
graduate or professional students for the 12- 
month period beginning on July 1, 2013, and 
ending on June 30, 2014. 
‘‘(2) COMBINED UNDERGRADUATE AND GRAD-
UATE
STUDY
LOANS.—If a Federal Direct Refi-
nanced Private Loan is for a private education loan 
originally issued for both undergraduate and grad-
uate or professional postsecondary educational ex-
penses, the interest rate shall be a rate equal to the 
rate for Federal Direct PLUS Loans for the 12- 
month period beginning on July 1, 2013, and ending 
on June 30, 2014. 
‘‘(3) FIXED RATE.—The applicable rate of in-
terest determined under this subsection for a Fed-
eral Direct Refinanced Private Loan shall be fixed 
for the period of the loan. 
‘‘(d) NO INCLUSION IN AGGREGATE LIMITS.—The 
amount of a Federal Direct Refinanced Private Loan, or 
a Federal Direct Consolidated Loan to the extent such 
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loan was used to repay a Federal Direct Refinanced Pri-
vate Loan, shall not be included in calculating a bor-
rower’s annual or aggregate loan limits under section 428 
or 428H. 
‘‘(e) NO ELIGIBILITY FOR SERVICE-RELATED RE-
PAYMENT.—Notwithstanding 
sections 
428K(a)(2)(A), 
428L(b)(2), 455(m)(3)(A), and 460(b), a Federal Direct 
Refinanced Private Loan, or any Federal Direct Consoli-
dation Loan to the extent such loan was used to repay 
a Federal Direct Refinanced Private Loan, shall not be 
eligible for any loan repayment or loan forgiveness pro-
gram under section 428K, 428L, or 460 or for the repay-
ment plan for public service employees under section 
455(m). 
‘‘(f) PRIVATE EDUCATIONAL LENDER REPORTING 
REQUIREMENT.— 
‘‘(1) REPORTING
REQUIRED.—Not later than 
180 days after the date of enactment of the In the 
Red Act of 2016, the Secretary, in consultation with 
the Secretary of the Treasury and the Director of 
the Bureau of Consumer Financial Protection, shall 
establish a requirement that private educational 
lenders report the data described in paragraph (2) 
to the Secretary, to Congress, to the Secretary of 
the Treasury, and to the Director of the Bureau of 
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Consumer Financial Protection, in order to allow for 
an assessment of the private education loan market. 
‘‘(2) CONTENTS
OF
REPORTING.—The data 
that private educational lenders shall report in ac-
cordance with paragraph (1) shall include each of 
the following about private education loans (as de-
fined in section 140(a) of the Truth in Lending Act 
(15 U.S.C. 1650(a))): 
‘‘(A) The total amount of private education 
loan debt the lender holds. 
‘‘(B) The total number of private edu-
cation loan borrowers the lender serves. 
‘‘(C) The average interest rate on the out-
standing private education loan debt held by the 
lender. 
‘‘(D) The proportion of private education 
loan borrowers who are in default on a loan 
held by the lender. 
‘‘(E) The proportion of the outstanding 
private education loan volume held by the lend-
er that is in default. 
‘‘(F) The proportions of outstanding pri-
vate education loan borrowers who are 30, 60, 
and 90 days delinquent. 
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‘‘(G) The proportions of outstanding pri-
vate education loan volume that is 30, 60, and 
90 days delinquent. 
‘‘(g) NOTIFICATION
TO
BORROWERS.—The Sec-
retary, in coordination with the Secretary of the Treasury 
and the Director of the Bureau of Consumer Financial 
Protection, shall undertake a campaign to alert borrowers 
about the availability of private student loan refinancing 
under this section.’’. 
(c) AMENDMENTS TO PUBLIC SERVICE REPAYMENT 
PLAN PROVISIONS.—Section 455(m) of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1087e(m)) is amended— 
(1) by redesignating paragraphs (3) and (4) as 
paragraphs (4) and (5), respectively; 
(2) by inserting after paragraph (2) the fol-
lowing: 
‘‘(3) SPECIAL
RULES
FOR
SECTION
460A 
LOANS.— 
‘‘(A) 
REFINANCED
FEDERAL
DIRECT 
LOANS.—Notwithstanding paragraph (1), in de-
termining the number of monthly payments 
that meet the requirements of such paragraph 
for an eligible Federal Direct Loan refinanced 
under section 460A that was originally a loan 
under this part, the Secretary shall include all 
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monthly payments made on the original loan 
that meet the requirements of such paragraph. 
‘‘(B) REFINANCED FFEL LOANS.—In the 
case of an eligible Federal Direct Loan refi-
nanced under section 460A that was originally 
a loan under part B, only monthly payments 
made after the date on which the loan was refi-
nanced may be included for purposes of para-
graph (1).’’; and 
(3) in paragraph (4)(A) (as redesignated by 
paragraph (1)), by inserting ‘‘(including any Federal 
Direct Stafford Loan, Federal Direct PLUS Loan, 
Federal Direct Unsubsidized Stafford Loan, or Fed-
eral Direct Consolidation Loan refinanced under sec-
tion 460A)’’ before the period at the end. 
(d) INCOME-BASED REPAYMENT.—Section 493C of 
the Higher Education Act of 1965 (20 U.S.C. 1098e) is 
amended by adding at the end the following: 
‘‘(f) SPECIAL RULE FOR REFINANCED LOANS.— 
‘‘(1) REFINANCED FEDERAL DIRECT AND FFEL 
LOANS.—In calculating the period of time during 
which a borrower of a loan that is refinanced under 
section 460A has made monthly payments for pur-
poses of subsection (b)(7), the Secretary shall deem 
the period to include all monthly payments made for 
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the original loan, and all monthly payments made 
for the refinanced loan, that otherwise meet the re-
quirements of this section. 
‘‘(2) FEDERAL DIRECT REFINANCED PRIVATE 
LOANS.—In calculating the period of time during 
which a borrower of a Federal Direct Refinanced 
Private Loan under section 460B has made monthly 
payments for purposes of subsection (b)(7), the Sec-
retary shall include only payments— 
‘‘(A) that are made after the date of the 
issuance of the Federal Direct Refinanced Pri-
vate Loan; and 
‘‘(B) that otherwise meet the requirements 
of this section.’’. 
TITLE III—FEDERAL PELL 
GRANT PROTECTION 
SEC. 301. FEDERAL PELL GRANT PROTECTION. 
Section 401(b)(7) of the Higher Education Act of 
1965 (20 U.S.C. 1070a(b)(7)) is amended— 
(1) in subparagraph (A)(iii), by striking 
‘‘clauses (ii) and (iii) of subparagraph (B)’’ and in-
serting ‘‘subparagraph (B)(ii)’’; and 
(2) in subparagraph (C)— 
(A) in clause (ii)— 
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(i) in the clause heading, by striking 
‘‘AWARD YEARS 2014–2015 THROUGH 2017– 
2018’’ and inserting ‘‘AWARD YEAR 2014– 
2015 AND SUBSEQUENT AWARD YEARS’’; 
(ii) in the matter preceding subclause 
(I), by striking ‘‘each of the award years 
2014–2015 through 2017–2018’’ and in-
serting ‘‘award year 2014–2015 and each 
subsequent award year’’; and 
(iii) in subclause (I), by striking 
‘‘clause (iv)(II)’’ and inserting ‘‘clause 
(iii)(II)’’; 
(B) by striking clause (iii); and 
(C) by redesignating clause (iv) as clause 
(iii). 
SEC. 302. POINT OF ORDER AGAINST CUTTING FEDERAL 
PELL GRANTS. 
(a) POINT OF ORDER.—It shall not be in order in 
the Senate to consider any bill, joint resolution, motion, 
amendment, amendment between the Houses, or con-
ference report that would decrease the appropriations pro-
vided for Federal Pell Grants under section 401(b)(7) of 
the Higher Education Act of 1965 (20 U.S.C. 
1070a(b)(7)) or restrict eligibility for Federal Pell Grants. 
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(b) WAIVER AND APPEAL.—Subsection (a) may be 
waived or suspended in the Senate only by an affirmative 
vote of three-fifths of the Members, duly chosen and 
sworn. An affirmative vote of three-fifths of the Members 
of the Senate, duly chosen and sworn, shall be required 
to sustain an appeal of the ruling of the Chair on a point 
of order raised under subsection (a). 
SEC. 303. AFFIRMING THAT FEDERAL PELL GRANTS ARE A 
FOUNDATIONAL INVESTMENT IN AFFORD-
ABLE HIGHER EDUCATION. 
(a) FINDINGS.—Congress finds the following: 
(1) Research shows that with higher edu-
cational attainment, individuals are more likely to be 
employed, earn higher wages, secure health and re-
tirement benefits, make healthier life choices, and be 
more engaged citizens of their communities. 
(2) Higher education, whether at a 2- or 4-year 
institution, can help people of the United States 
from lower income backgrounds climb into the mid-
dle class. 
(3) In 2015, more than 20,000,000 students 
enrolled in colleges and universities in the United 
States—an increase of 4,900,000 since 2000. 
(4) Despite the benefits of further education be-
yond high school, many students from low-income 
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backgrounds do not attend college. According to the 
United States Census Bureau, approximately 80 
percent of high school graduates from the wealthiest 
families pursue higher education, while only a little 
more than half from the lowest income quartile at-
tend college. 
(5) Federal Pell Grants provide need-based aid 
to students who want to further their education and 
are the single largest source of grant aid for helping 
students afford college. 
(6) In award year 2013–2014, an estimated 73 
percent of all Pell Grant recipients had a total fam-
ily income equal to or less than $30,000. 
(7) In 2015, more than 8,200,000 students, or 
approximately 41 percent of all undergraduates, 
used Federal Pell Grants to finance their education. 
(b) SENSE OF THE SENATE.—It is the sense of the 
Senate that Congress should— 
(1) affirm that Federal Pell Grants are a 
foundational investment in affordable higher edu-
cation for students and families; and 
(2) commit to ensuring that Federal Pell 
Grants remain a stable source of financial support 
for students and families. 
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TITLE IV—ACCOUNTABILITY 
SEC. 401. SUPPORTING EFFORTS TO ENSURE THAT INSTI-
TUTIONS OF HIGHER EDUCATION ARE AC-
COUNTABLE 
FOR 
ENSURING 
THE 
HIGH 
VALUE OF DEGREES AND CREDENTIALS. 
(a) FINDINGS.—Congress finds the following: 
(1) The employment rate for people of the 
United States between the ages of 21 to 25 has de-
clined by 12 percent from 2000 through 2012. 
(2) The cost of attending a 4-year public insti-
tution of higher education has increased by 32 per-
cent from 2002 through 2012. 
(3) More than 1 in 4 student loan borrowers 
are now in default or delinquent on a student loan. 
(4) There are limited means through which to 
ensure that institutions of higher education are held 
accountable for the value of the degrees and creden-
tials obtained by students, or the outcomes of those 
students. 
(5) Student borrowers who obtain a high-value 
degree or credential are much more likely to be able 
to find a good paying job and repay their student 
loan debt. 
(b) SENSE OF THE SENATE.—It is the sense of the 
Senate that Congress should support efforts to ensure that 
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institutions of higher education have strong incentives to 
ensure that students graduate with degrees and creden-
tials that have a high value, and that will enable graduates 
to secure good-paying employment in their field of study 
and enjoy long-term success, by— 
(1) enhancing accountability for institutions of 
higher education for the quality and cost of degree 
programs, including student debt burden; 
(2) holding institutions of higher education and 
their leaders financially accountable when the insti-
tutions or leaders engage in fraud or misconduct 
that violates Federal and State laws; 
(3) creating incentives and tools that will allow 
State governments and institutions of higher edu-
cation to curb tuition inflation and maintain invest-
ment in higher education; 
(4) creating incentives for institutions of higher 
education to direct more resources to their academic 
programs and to provide pathways to ensure that all 
students can complete their degrees and credentials 
in a timely manner; and 
(5) guaranteeing that the servicing of student 
loans made, insured, or guaranteed under part B or 
D of title IV of the Higher Education Act of 1965 
(20 U.S.C. 1071 et seq., 1087a et seq.) provided 
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through these institutions of higher education will 
meet the highest standards of quality, customer 
service, and compliance with the law to promote bor-
rower success and minimize defaults. 
TITLE V—OFFSETS 
SEC. 501. AMENDMENT OF 1986 CODE. 
Except as otherwise expressly provided, whenever in 
this title an amendment or repeal is expressed in terms 
of an amendment to, or repeal of, a section or other provi-
sion, the reference shall be considered to be made to a 
section or other provision of the Internal Revenue Code 
of 1986. 
SEC. 502. FAIR SHARE TAX ON HIGH-INCOME TAXPAYERS. 
(a) IN GENERAL.—Subchapter A of chapter 1 is 
amended by adding at the end the following new part: 
‘‘PART VII—FAIR SHARE TAX ON HIGH-INCOME 
TAXPAYERS 
‘‘Sec. 59A. Fair share tax. 
‘‘SEC. 59A. FAIR SHARE TAX. 
‘‘(a) GENERAL RULE.— 
‘‘(1) PHASE-IN OF TAX.—In the case of any 
high-income taxpayer, there is hereby imposed for a 
taxable year (in addition to any other tax imposed 
by this subtitle) a tax equal to the product of— 
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of paragraph (4) and inserting ‘‘such indi-
vidual’’. 
(2) COVERED INDIVIDUAL.—Paragraph (3) of 
section 162(m) is amended to read as follows: 
‘‘(3) COVERED INDIVIDUAL.—For purposes of 
this subsection, the term ‘covered individual’ means 
any individual who is an officer, director, or em-
ployee of the taxpayer or a former officer, director, 
or employee of the taxpayer.’’. 
(3) CONFORMING AMENDMENTS.— 
(A) Section 48D(b)(3)(A) is amended by 
inserting ‘‘(as in effect for taxable years begin-
ning before January 1, 2016)’’ after ‘‘section 
162(m)(3)’’. 
(B) Section 409A(b)(3)(D)(ii) is amended 
by inserting ‘‘(as in effect for taxable years be-
ginning before January 1, 2016)’’ after ‘‘section 
162(m)(3)’’. 
(b) EXPANSION OF APPLICABLE EMPLOYEE REMU-
NERATION.— 
(1) ELIMINATION OF EXCEPTION FOR COMMIS-
SION-BASED PAY.— 
(A) IN GENERAL.—Paragraph (4) of sec-
tion 162(m), as amended by subsection (a), is 
amended by striking subparagraph (B) and by 
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