I 
112TH CONGRESS 
1ST SESSION H. R. 2732 
To amend the Higher Education Act of 1965 to provide for temporary 
student loan debt conversion authority. 
IN THE HOUSE OF REPRESENTATIVES 
AUGUST 1, 2011 
Mr. BISHOP of New York introduced the following bill; which was referred to 
the Committee on Education and the Workforce 
A BILL 
To amend the Higher Education Act of 1965 to provide 
for temporary student loan debt conversion authority. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Student Loan Sim-
plification and Opportunity Act of 2011’’. 
SEC. 2. TEMPORARY STUDENT LOAN DEBT CONVERSION 
AUTHORITY. 
(a) REPEAL.— 
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(1) IN GENERAL.—Section 459A of the Higher 
Education Act of 1965 (20 U.S.C. 1087i–1) is re-
pealed. 
(2) CONFORMING
AMENDMENTS.—Part D of 
the Higher Education Act of 1965 (20 U.S.C. 1087a 
et seq.) is amended— 
(A) in section 451(a) (20 U.S.C. 1087a), 
by striking ‘‘(1) to make loans to all eligible 
students (and the eligible parents of such stu-
dents) in attendance at participating institu-
tions of higher education selected by the Sec-
retary, to enable such students to pursue their 
courses of study at such institutions during the 
period beginning July 1, 1994; and (2) for pur-
chasing loans under section 459A.’’ and insert-
ing ‘‘to make loans to all eligible students (and 
the eligible parents of such students) in attend-
ance at participating institutions of higher edu-
cation selected by the Secretary, to enable such 
students to pursue their courses of study at 
such institutions during the period beginning 
July 1, 1994.’’; and 
(B) in section 459B(a)(2)(B) (20 U.S.C. 
1087i–2(a)(2)(B)), by striking ‘‘purchased by 
the Secretary pursuant to section 459A’’ and 
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inserting ‘‘purchased by the Secretary pursuant 
to section 459A under the terms of that provi-
sion in effect on or before June 30, 2010, or 
converted by the Secretary pursuant to section 
459A’’. 
(b) STUDENT LOAN DEBT CONVERSION.—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 459 
the following: 
‘‘SEC. 459A. TEMPORARY AUTHORITY TO CONVERT STU-
DENT LOAN DEBT. 
‘‘(a) IN GENERAL.— 
‘‘(1) AUTHORITY.—The Secretary shall, at the 
request of an eligible borrower (as described in sub-
section (b)), convert an eligible student loan debt (as 
described in subsection (c)) into a Federal debt by 
paying the holder of the eligible student loan the 
outstanding balance of principal and interest on that 
loan, and the borrower shall enter into an agreement 
to repay to the Secretary the amount advanced to 
convert the debt to a Federal debt. 
‘‘(2) DURATION
OF
AUTHORITY.—The Sec-
retary shall convert eligible student loan debt under 
this section for those eligible borrowers whose appli-
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cations for conversion are received on or after Janu-
ary 1, 2012, and before October 1, 2012. 
‘‘(3) DESIGNATION OF LOAN.—The repayment 
obligation of the borrower whose eligible student 
loan debt was repaid by the Secretary and converted 
to a Federal debt under this section shall be referred 
to as a ‘FFEL Debt Conversion Loan’. 
‘‘(b) ELIGIBLE BORROWER.—A borrower is eligible 
for a FFEL Debt Conversion Loan if the borrower, in ad-
dition to the loans described in subsection (c), has an out-
standing loan that was made under this part, or an out-
standing loan that was purchased by the Secretary pursu-
ant to section 459A under the terms of that provision in 
effect on or before June 30, 2010. 
‘‘(c) ELIGIBLE STUDENT LOAN DEBT.—A student 
loan of an eligible borrower is eligible for payment by a 
FFEL Debt Conversion Loan if— 
‘‘(1) the loan was made, insured, or guaranteed 
under part B, and not previously purchased by the 
Secretary pursuant to section 459A under the terms 
of that provision in effect on or before June 30, 
2010; 
‘‘(2) the loan is not in default; and 
‘‘(3) the loan is not delinquent for 270 days or 
more. 
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‘‘(d) TERMS AND CONDITIONS OF DEBT CONVER-
SION LOANS.— 
‘‘(1) CONTINUATION
OF
TERMS.—A FFEL 
Debt Conversion Loan shall be repayable by the bor-
rower under the same terms and conditions as were 
applicable under the promissory note signed by the 
borrower for the eligible student loan debt being re-
paid by the Secretary under this section, including 
such terms as applied when the borrower entered re-
payment, and the availability of grace periods and 
deferments. 
‘‘(2) 
AGGREGATE
LOAN
LIMITS.—Notwith-
standing any other provision of this title, a FFEL 
Debt Conversion Loan shall be included in the cal-
culation of the aggregate loan limit that was applica-
ble to the borrower’s eligible student loan for which 
the FFEL Debt Conversion Loan was obtained. 
‘‘(3) OTHER TERMS.— 
‘‘(A) FFEL TERMS.—Other borrower ben-
efits offered by the originating lender or the 
holder of the eligible student loan being repaid 
that are not specified in part B or in the bor-
rower’s promissory note for that loan are not 
available with respect to a FFEL Debt Conver-
sion Loan. 
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‘‘(B) DIRECT
LOAN
TERMS.—Except as 
provided in paragraph (5), benefits offered only 
for loans made under this part are not available 
with respect to a FFEL Debt Conversion Loan. 
‘‘(4) FEES.— 
‘‘(A) NO FEES IMPOSED BY SECRETARY.— 
The Secretary shall not charge the borrower 
any origination or other fee for the making of 
a FFEL Debt Conversion Loan. 
‘‘(B) NO FEES IMPOSED BY HOLDER OF 
ELIGIBLE
STUDENT
LOAN
DEBT.—Notwith-
standing any other provision of law, the holder 
of an eligible student loan shall not charge the 
Secretary or the borrower any origination or 
other fee, including any fee for providing the in-
formation described in subsection (e), for the 
conversion of the eligible student loan debt to a 
FFEL Debt Conversion Loan. 
‘‘(5) FFEL DEBT
CONVERSION
BENEFITS.— 
The Secretary may offer benefits to a borrower of a 
FFEL Debt Conversion Loan, in an amount that 
shall not exceed 2 percent of the amount advanced 
on the FFEL Debt Conversion Loan, which may in-
clude payments to borrowers, reductions in the out-
standing principal and interest on the FFEL Debt 
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Conversion Loan, or such other benefits as the Sec-
retary may establish. 
‘‘(e) INFORMATION FROM HOLDERS OF STUDENT 
LOAN DEBT ELIGIBLE FOR CONVERSION.—A holder of an 
eligible student loan shall promptly provide the Secretary 
with the amount outstanding and such other information 
as may be needed to convert that debt under this section. 
‘‘(f) NOTIFICATION.—Not later than December 1, 
2011, the Secretary shall notify eligible borrowers— 
‘‘(1) of their eligibility to convert an eligible 
student loan debt under this section; and 
‘‘(2) of the time frame for applying for such 
conversion.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) 
COHORT
DEFAULT
RATE.—Section 
435(m)(2) of the Higher Education Act of 1965 (20 
U.S.C. 1085(m)(2)) is amended by adding at the 
end the following: 
‘‘(E) For purposes of this subsection, a 
borrower who obtains a FFEL Debt Conversion 
Loan under section 459A shall continue to be 
considered as having entered repayment on the 
date the borrower entered repayment on the eli-
gible student loan debt that was repaid by the 
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Secretary and converted to a Federal debt 
under that section.’’. 
(2) CONTRACTS.—Section 456(b) of the Higher 
Education Act of 1965 (20 U.S.C. 1087f(b)) is 
amended— 
(A) in paragraph (2), by inserting ‘‘, con-
verted,’’ after ‘‘made’’; and 
(B) in paragraph (3), by inserting ‘‘, con-
verted,’’ after ‘‘made’’. 
(3) FEDERAL CONSOLIDATION LOANS.—Section 
428C(a)(4)(C) of the Higher Education Act of 1965 
(20 U.S.C. 1078–3(a)(4)(C)) is amended by insert-
ing ‘‘or converted’’ after ‘‘made’’. 
(4) INCOME-BASED REPAYMENT.—Section 493C 
of the Higher Education Act of 1965 (20 U.S.C. 
1098e) is amended— 
(A) in subsection (a)(3)(A), by inserting 
‘‘converted,’’ after ‘‘made,’’; 
(B) in subsection (b)(1), by inserting ‘‘con-
verted,’’ after ‘‘made,’’; and 
(C) in subsection (c), by inserting ‘‘con-
verted,’’ after ‘‘made,’’. 
(d) INAPPLICABILITY
OF TITLE IV NEGOTIATED 
RULEMAKING
AND MASTER CALENDAR EXCEPTION.— 
Sections 482(c) and 492 of the Higher Education Act of 
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1965 (20 U.S.C. 1089(c), 1098a) shall not apply to the 
amendments made by this section, or to any regulations 
promulgated under those amendments. 
(e) ANNUAL COST ESTIMATE.—Notwithstanding any 
other provision of this Act or an amendment made by this 
Act, the Secretary of Education shall carry out the re-
quirement of section 459A(e)(3) of the Higher Education 
Act of 1965, as in effect on the day before the date of 
enactment of this Act, with respect to the annual cost esti-
mates required to be submitted not later than February 
15, 2012. 
(f) FUNDS FOR FEDERAL PELL GRANTS.—The pro-
ceeds to the Federal Government from the temporary au-
thority to convert student loan debt provided by the 
amendments made by this Act shall be used to carry out 
Federal Pell Grants under section 401 of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1070a). 
Æ 
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