To provide funds for Pell Grants by amending title IV of the Higher Education Act of 1965.

SECTION 1. SHORT TITLE; PURPOSE.

    (a) Short Title.--This Act may be cited as the ``College Debt Swap 
Act of 2010''.
    (b) Purpose.--The purposes of this Act are to provide additional 
funds for Pell Grants, and to establish a temporary private education 
loan debt consolidation program to assist eligible borrowers in 
refinancing all or a portion of their private education debt as Federal 
Direct Consolidation Loans.

           TITLE I--CONSOLIDATION OF PRIVATE EDUCATION LOANS

SEC. 101. CONSOLIDATION OF PRIVATE EDUCATION LOANS.

    Section 455(g) of the Higher Education Act of 1965 (20 U.S.C. 
1087e(g)) is amended--
            (1) by striking ``A borrower''; and inserting the 
        following:
            ``(1) In general.--A borrower'';
            (2) by inserting ``, including any loan made under part B 
        and first disbursed before July 1, 2010, and any loan described 
        in paragraph (2),'' after ``section 428C(a)(4)'';
            (3) by striking the third sentence; and
            (4) by adding at the end the following new paragraph:
            ``(2) Consolidation of private education loans as a federal 
        direct consolidation loan.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, a borrower who meets the eligibility 
                criteria described in paragraph (1) and subparagraph 
                (B) of this paragraph may be eligible to obtain a 
                Federal Direct Consolidation loan under this paragraph 
                that--
                            ``(i) shall include an eligible private 
                        education loan; and
                            ``(ii) may include a loan described in 
                        section 428C(a)(4).
                    ``(B) Eligible borrower.--A borrower of an eligible 
                private education loan is eligible to obtain a Federal 
                Direct Consolidation Loan under this paragraph if the 
                borrower--
                            ``(i) is not in default on a loan made, 
                        insured, or guaranteed under this title or in 
                        default (as such term is defined in section 
                        435(l)) on any eligible private education loan 
                        that the borrower is seeking to consolidate 
                        under this paragraph, except that a borrower 
                        who entered such default at any time during the 
                        period beginning on December 1, 2007, through 
                        December 31, 2009, due to an economic hardship 
                        (as such term is defined in section 435(o)), as 
                        determined by the Secretary, shall not be 
                        ineligible under this clause;
                            ``(ii) was--
                                    ``(I) at any time on or after July 
                                1, 1994, and before July 1, 2010, 
                                enrolled as an undergraduate, graduate, 
                                or professional student who was 
                                eligible to borrow a loan under section 
                                428H or a Federal Direct Unsubsidized 
                                Stafford Loan; or
                                    ``(II) at any time on or after July 
                                1, 2006, and July 1, 2010, enrolled as 
                                a graduate or professional student who 
                                was eligible to borrow a loan under 
                                section 428B or a Federal Direct PLUS 
                                loan;
                            ``(iii) borrowed at least one eligible 
                        private education loan for a period of 
                        enrollment described in clause (ii);
                            ``(iv) is in--
                                    ``(I) repayment status on the 
                                eligible private education loan that 
                                the borrower is seeking to consolidate 
                                under this paragraph; or
                                    ``(II) a grace period preceding 
                                repayment on such loan;
                            ``(v) does not have an adverse credit 
                        history, as such term is defined by the 
                        Secretary, by regulation, with respect to 
                        Federal Direct PLUS loans; and
                            ``(vi) has not previously obtained a 
                        Federal Direct Consolidation Loan under this 
                        paragraph.
                    ``(C) Definition of eligible private education 
                loan.--For purposes of this paragraph, the term 
                `eligible private education loan' means a private 
                education loan (as such term is defined in section 140 
                of the Truth in Lending Act (15 U.S.C. 1650)) that was 
                disbursed to a borrower on or after July 1, 1994, and 
                before July 1, 2010.
                    ``(D) Amount that may be consolidated.--The 
                aggregate maximum amount of eligible private education 
                loans that may be consolidated by a borrower under this 
                paragraph is--
                            ``(i) for loans made to a borrower for a 
                        period of enrollment described in subparagraph 
                        (B)(ii)(I), an amount equal to the amount of 
                        outstanding principal, accrued interest, and 
                        related fees and costs (as determined by the 
                        Secretary) owed by the borrower on eligible 
                        private education loans, except that the 
                        outstanding principal on the eligible private 
                        education loans shall not exceed--
                                    ``(I) the maximum aggregate amount 
                                of loans under section 428H, as of the 
                                date of the enactment of the College 
                                Debt Swap Act of 2010--
                                            ``(aa) for an undergraduate 
                                        dependent student, if the 
                                        borrower was enrolled as an 
                                        undergraduate dependent student 
                                        during the period of 
                                        enrollment;
                                            ``(bb) for an undergraduate 
                                        independent student, if the 
                                        borrower was enrolled as an 
                                        undergraduate independent 
                                        student during the period of 
                                        enrollment; or
                                            ``(cc) for a graduate or 
                                        professional student, if the 
                                        borrower was enrolled as a 
                                        graduate or professional 
                                        student during the period of 
                                        enrollment;
                                minus
                                    ``(II) the aggregate amount of 
                                loans under section 428H and Federal 
                                Direct Unsubsidized Stafford Loans 
                                borrowed by the borrower for such 
                                period of enrollment; plus
                            ``(ii) for loans made to a borrower for a 
                        period of enrollment described in subparagraph 
                        (B)(ii)(II), an amount equal to--
                                    ``(I) the total outstanding 
                                principal, accrued interest, and 
                                related fees and costs (as determined 
                                by the Secretary) owed by the borrower 
                                on eligible private education loans; 
                                minus
                                    ``(II) the aggregate amount of 
                                loans under section 428B and Federal 
                                Direct PLUS loans borrowed by the 
                                borrower for such period of enrollment.
                    ``(E) Interest rate.--Notwithstanding subsection 
                (b), a Federal Direct Consolidation loan made under 
                this paragraph shall bear interest at an annual rate on 
                the unpaid principal balance of the loan that is the 
                weighted average, rounded to the nearest higher one-
                eighth of 1 percent, of--
                            ``(i) for loans consolidated under this 
                        paragraph that were made to a borrower for a 
                        period described in subparagraph (B)(ii)(I), 
                        the interest rate for a Federal Direct 
                        Unsubsidized Stafford Loan for which the first 
                        disbursement is made on the date of enactment 
                        of the College Debt Swap Act of 2010; and
                            ``(ii) for loans consolidated under this 
                        paragraph that were made to a borrower for a 
                        period described in subparagraph (B)(ii)(II), 
                        the interest rate for a Federal Direct PLUS 
                        loan for which the first disbursement is made 
                        on the date of enactment of the College Debt 
                        Swap Act of 2010.
                    ``(F) Payment to the holder.--
                            ``(i) Secretary.--For each eligible private 
                        education loan that a borrower is consolidating 
                        under this paragraph, the Secretary shall make 
                        a payment to the holder of such loan that is 
                        equal to the amount of such loan, in whole or 
                        in part, based on the amount (all or a portion) 
                        of such loan the borrower consolidated under 
                        this paragraph.
                            ``(ii) Holder.--Upon receipt of a payment 
                        described in clause (i), a holder shall 
                        discharge the liability on the loan (in whole 
                        or in part, based on the amount of the payment) 
                        for which such payment was made.
                    ``(G) Outreach activities required.--
                            ``(i) In general.--The Secretary shall 
                        conduct outreach activities described in clause 
                        (ii) to inform and educate students and their 
                        families about the temporary private education 
                        loan consolidation program under this 
                        paragraph.
                            ``(ii) Required components of outreach.--
                        The Secretary shall provide for the broad 
                        dissemination of information on the program 
                        under this paragraph by--
                                    ``(I) operating and maintaining an 
                                Internet website through which 
                                individuals may obtain information on 
                                changes made to the program;
                                    ``(II) developing and disseminating 
                                information to alumni of undergraduate, 
                                graduate, and professional schools who 
                                may be eligible for the program;
                                    ``(III) providing assistance to 
                                institutions of higher education to 
                                educate graduates on the availability 
                                of the program; and
                                    ``(IV) ensuring that all outreach 
                                efforts are developed using plain 
                                language and are culturally- and 
                                language-appropriate.
                            ``(iii) Use of other entities.--In carrying 
                        out this subparagraph, the Secretary may work 
                        with other appropriate entities to facilitate 
                        the dissemination of information under this 
                        subparagraph and provide assistance as 
                        described in this subparagraph.
                    ``(H) Authorization and appropriation.--There are 
                authorized to be appropriated, and there are 
                appropriated, such sums as may be necessary to carry 
                out this paragraph. The amounts made available under 
                this subparagraph shall remain available until June 30, 
                2012.
                    ``(I) Period of authority.--The authority to make 
                Federal Direct Consolidation loans under this paragraph 
                shall begin 30 days after the date of the enactment of 
                the College Debt Swap Act of 2010 and shall expire on 
                June 30, 2012.''.

SEC. 102. CONFORMING AMENDMENT.

    Section 428C(a)(3)(B)(i)(V) of the Higher Education Act of 1965 (20 
U.S.C. 1078-3(a)(3)(B)(i)(V)) is amended--
            (1) by striking ``or'' at the end of item (bb);
            (2) by striking the period at the end of item (cc) and 
        inserting ``; or''; and
            (3) by adding at the end the following:
                                            ``(dd) for the purpose of 
                                        consolidating an eligible 
                                        private education loan under 
                                        section 455(g)(2), whether such 
                                        loan is consolidated only with 
                                        other eligible private 
                                        education loans or consolidated 
                                        with loans described in 
                                        paragraph (4).''.

                    TITLE II--INVESTING IN STUDENTS

SEC. 201. FEDERAL PELL GRANTS.

    Section 401(b)(8) of the Higher Education Act of 1965 (20 U.S.C. 
1070a(b)(8)) is amended by adding at the end the following:
                    ``(G) Additional funds for fiscal years 2011 and 
                2012.--In addition to any amounts appropriated under 
                subparagraph (A) and any other amounts appropriated to 
                carry out this section, there are authorized to be 
                appropriated, and there are appropriated, out of any 
                funds in the Treasury not otherwise appropriated, to 
                carry out subparagraph (B) of this paragraph, 
                $4,000,000,000 for fiscal year 2011 and 2012.''.

Summary: College Debt Swap Act of 2010 - Amends title IV (Student Assistance) of the Higher Education Act of 1965 to allow certain borrowers to consolidate their private education loans as Direct Consolidation Loans.

Limits such borrowers to those who: (1) are not in default on a loan made, insured, or guaranteed under title IV, except in certain instances of economic hardship; (2) were enrolled, between July 1, 1994, and July 1, 2010, as students eligible for unsubsidized Stafford loans or PLUS loans under the Federal Family Education Loan or Direct Loan programs; (3) borrowed at least one private education loan during such enrollment period; (4) are repaying their private education loan or are in a grace period preceding such repayment; (5) do not have an adverse credit history; and (6) have not previously obtained a Direct Consolidated Loan under title IV.

Makes the program applicable only to private education loans disbursed to borrowers between July 1, 1994, and July 1, 2010.

Directs the Secretary of Education to inform and educate students and their families about this loan consolidation program.

Terminates the authority to make Consolidation loans under such program on June 30, 2012.

Authorizes and appropriates additional funds for Pell Grant increases for FY2011-FY2012.