TITLE II—COLLECTION OF IN-
COME-DEPENDENT 
EDU-
CATION ASSISTANCE LOANS 
SEC. 201. REPAYMENTS USING INCOME TAX COLLECTION 
SYSTEM. 
(a) IN GENERAL.—Subchapter A of chapter 64 of the 
Internal Revenue Code of 1986 (relating to collection) is 
amended by adding at the end the following new section: 
‘‘SEC. 6307. COLLECTION OF DIRECT INCOME-DEPENDENT 
EDUCATION ASSISTANCE LOANS. 
‘‘(a) REPAYMENT OBLIGATION.— 
‘‘(1) IN
GENERAL.—If an individual is fur-
nished a notice under paragraph (2) for a calendar 
year that such individual is in repayment status for 
such year with respect to any direct IDEA loan, 
such individual shall make a payment under this sec-
tion for the taxable year beginning in such calendar 
year. 
‘‘(2) NOTICE TO BORROWER.— 
‘‘(A) IN
GENERAL.—During January of 
each calendar year, the Secretary of Education 
shall furnish to each borrower of a direct IDEA 
loan a notice as to— 
‘‘(i) whether the records of the Sec-
retary indicate that such borrower is in re-
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payment status for the taxable year begin-
ning in the preceding calendar year, 
‘‘(ii) the maximum account balance of 
such borrower, 
‘‘(iii) the current account balance of 
such borrower as of the close of the pre-
ceding calendar year, and 
‘‘(iv) the procedure for computing the 
amount of repayment owing for the taxable 
year beginning in the preceding calendar 
year. 
‘‘(B) FORM, ETC.—The notice under sub-
paragraph (A)— 
‘‘(i) shall be in such form as the Sec-
retary may by regulations prescribe, and 
‘‘(ii) shall be treated as furnished if 
sent by mail to the individual’s last known 
address or left at the dwelling or usual 
place of business of such individual. 
‘‘(b) 
COMPUTATION
OF
ANNUAL
REPAYMENT 
AMOUNT.— 
‘‘(1) IN GENERAL.—The annual amount pay-
able under this section by the taxpayer for any tax-
able year shall be the lesser of— 
‘‘(A) the product of— 
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‘‘(i) the base amortization amount, 
and 
‘‘(ii) the progressivity factor for the 
taxpayer for such taxable year, or 
‘‘(B) 15 percent of the excess of— 
‘‘(i) the modified adjusted gross in-
come of the taxpayer for such taxable year, 
over 
‘‘(ii) the base income amount. 
‘‘(2) BASE AMORTIZATION AMOUNT.— 
‘‘(A) IN GENERAL.—For purposes of this 
section, the term ‘base amortization amount’ 
means the amount which, if paid at the close of 
each year for a period of 12 consecutive years, 
would fully repay (with interest) at the close of 
such period the maximum account balance of 
the borrower. 
‘‘(B) INTEREST.—For purposes of sub-
paragraph (A)— 
‘‘(i) ANNUAL RATE.—With respect to 
a direct IDEA loan that was made on any 
date by conversion of a Federal student 
loan (at the election of the borrower or at 
the direction of the Secretary of Edu-
cation) under title I of the Income-Depend-
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ent Education Assistance Act of 2007, the 
interest rate on such direct IDEA loan 
shall be assumed to be equal to the inter-
est rate applicable to a consolidation loan 
made under section 428C of the Higher 
Education Act of 1965 (20 U.S.C. 1078– 
3) on that same date. 
‘‘(ii) 
LIMITATION.—The 
aggregate 
amount of interest shall not exceed 110 
percent of the amount determined under 
subparagraph (A) without regard to inter-
est. 
‘‘(C) JOINT RETURNS.—In the case of a 
joint return where each spouse has an account 
balance and is in repayment status, the amount 
determined under subparagraph (A) shall be 
the sum of the base amortization amounts of 
each spouse. 
‘‘(3) PROGRESSIVITY FACTOR.— 
‘‘(A) IN GENERAL.—For purposes of this 
section, the progressivity factor with respect to 
a calendar year shall be determined under the 
following table on the basis of the ratio of the 
taxpayer’s modified adjusted gross income bears 
to the median State income of the State in 
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