Student Loan Borrower Relief Act
Bill: H.R.7530 | Sponsor: Rep. Wilson, Frederica S. (D-FL)
Policy area: Education

Summary:
Student Loan Borrower Relief Act
This bill revises income-driven repayment plans for federal student loans, including by reducing from 25 years to 15 years the maximum repayment period under these plans. Additionally, the bill makes changes to the Public Service Loan Forgiveness program, including by cancelling a portion of a borrower's student loans after every 12 months of eligible public service employment.

To update the income-driven repayment plans and the public service loan 
  forgiveness program under the Higher Education Act of 1965, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Student Loan Borrower Relief Act''.

SEC. 2. INCOME-DRIVEN REPAYMENT REQUIREMENTS.

    (a) Income-Contingent Repayment Plans.--Section 455 of the Higher 
Education Act of 1965 (20 U.S.C. 1087e) is amended--
            (1) in subsection (d)(1)(D), by striking ``25 years'' and 
        inserting ``15 years''; and
            (2) in subsection (e)--
                    (A) in the matter preceding subparagraph (A), in 
                paragraph (7), by striking ``in effect for a 
                borrower,'' and inserting ``in effect for a borrower, 
                not to exceed 15 years,''; and
                    (B) by adding at the end the following:
            ``(1) Monthly payment requirements.--During any period a 
        borrower is repaying a loan made under this part pursuant to an 
        income contingent repayment plan under this subsection, the 
        following shall apply:
                    ``(A)(i) The borrower's aggregate monthly payment 
                for all such loans shall not exceed the result 
                described in clause (ii) divided by 12.
                    ``(ii) The result described in this clause shall be 
                10 percent of the result obtained by calculating, on at 
                least an annual basis, the amount by which--
                            ``(I) the borrower's, and the borrower's 
                        spouse's (if applicable), adjusted gross 
                        income; exceeds
                            ``(II) 250 percent of the poverty line 
                        applicable to the borrower's family size as 
                        determined under section 673(2) of the 
                        Community Services Block Grant Act (42 U.S.C. 
                        9902(2)).
                    ``(B)(i) Subject to clause (ii), in a case in which 
                the borrower's aggregate monthly payment on such loans 
                is not sufficient to pay the accrued interest on such 
                loans, any such accrued interest that is not paid shall 
                be canceled by the Secretary.
                    ``(ii)(I) Notwithstanding clause (i), any interest 
                due and not paid on such loans at a time described in 
                subclause (II) of this clause shall accrue but not be 
                capitalized.
                    ``(II) This clause shall apply at each of the 
                following times:
                            ``(aa) The borrower no longer has a partial 
                        financial hardship, as defined by the 
                        applicable income contingent repayment plan.
                            ``(bb) The borrower begins making payments 
                        of not less than the monthly amount calculated 
                        under 455(d)(1)(A), based on a 10-year 
                        repayment period, when the borrower first made 
                        the election described in this subsection.''.
    (b) Income-Based Repayment.--Section 493C of the Higher Education 
Act of 1965 (20 U.S.C. 1098e) is amended--
            (1) in subsection (a)(3)(B)--
                    (A) in the matter preceding clause (i), by striking 
                ``15 percent'' and inserting ``10 percent''; and
                    (B) in clause (ii), by striking ``150'' and 
                inserting ``250''; and
            (2) in subsection (b)--
                    (A) by striking paragraph (3) and inserting the 
                following:
            ``(3) any interest due and not paid under paragraph (2)--
                    ``(A) subject to subparagraph (B), shall be 
                canceled or paid by the Secretary during the period 
                after the date of the borrower's election under 
                paragraph (1); and
                    ``(B) shall accrue but not be capitalized, at the 
                time the borrower--
                            ``(i) ends the election to make income-
                        based repayment under this subsection; or
                            ``(ii) begins making payments of not less 
                        than the amount specified in paragraph 
                        (6)(A);''; and
                    (B) in paragraph (7)(B), by striking ``25 years'' 
                and inserting ``15 years''.
    (c) Application.--The amendments made by this section shall apply 
to each borrower who--
            (1) as of the effective date of such amendments, is 
        repaying loans under an income-contingent repayment plan under 
        section 455(e) of the Higher Education Act of 1965 (20 U.S.C. 
        1087e(e)) or an income-based repayment plan under section 493C 
        of such Act (20 U.S.C. 1098e); or
            (2) on or after such effective date, selects, or is 
        required to repay such loan pursuant to such a repayment plan.

SEC. 3. PUBLIC SERVICE LOAN FORGIVENESS.

    Section 455(m) of the Higher Education Act of 1965 (20 U.S.C. 
1087e(m)) is amended--
            (1) in paragraph (1)--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``cancel the balance'' and inserting ``cancel, 
                on an annual a basis for not more than 10 years, a 
                portion of the balance'';
                    (B) in subparagraph (A), by striking ``120'' and 
                inserting ``12''; and
                    (C) in subparagraph (B)(ii), by striking ``120'' 
                and inserting ``12''; and
            (2) by amending paragraph (2) to read as follows:
            ``(2) Loan cancellation amount.--
                    ``(A) In general.--A borrower may submit an 
                application for loan cancellation under this subsection 
                after any employment period listed in subparagraph (B), 
                and upon a determination that the borrower is eligible 
                for such loan cancellation, the Secretary shall cancel 
                the portion of the balance due on the principal and 
                interest on the eligible Federal Direct Loans made to 
                the borrower under this part for which the borrower is 
                eligible under subparagraph (B).
                    ``(B) Employment periods.--The employment periods 
                listed in this subparagraph are as follows:
                            ``(i) First 12-month employment period.--
                        After the conclusion of the first 12-month 
                        employment period described in paragraph (1), 
                        the Secretary shall cancel 5 percent of the 
                        obligation to repay the balance of principal 
                        and interest due as of the time of such 
                        cancellation, on the eligible Federal Direct 
                        Loans made to the borrower under this part.
                            ``(ii) Second 12-month employment period.--
                        After the conclusion of the second 12-month 
                        employment period described in paragraph (1), 
                        the Secretary shall cancel 5 percent of the 
                        obligation to repay the balance of principal 
                        and interest due as of the time of such 
                        cancellation, on the eligible Federal Direct 
                        Loans made to the borrower under this part.
                            ``(iii) Third 12-month employment period.--
                        After the conclusion of the third 12-month 
                        employment period described in paragraph (1), 
                        the Secretary shall cancel 10 percent of the 
                        obligation to repay the balance of principal 
                        and interest due as of the time of such 
                        cancellation, on the eligible Federal Direct 
                        Loans made to the borrower under this part.
                            ``(iv) Fourth 12-month employment period.--
                        After the conclusion of the fourth 12-month 
                        employment period described in paragraph (1), 
                        the Secretary shall cancel 10 percent of the 
                        obligation to repay the balance of principal 
                        and interest due as of the time of such 
                        cancellation, on the eligible Federal Direct 
                        Loans made to the borrower under this part.
                            ``(v) Fifth 12-month employment period.--
                        After the conclusion of the fifth 12-month 
                        employment period described in paragraph (1), 
                        the Secretary shall cancel 15 percent of the 
                        obligation to repay the balance of principal 
                        and interest due as of the time of such 
                        cancellation, on the eligible Federal Direct 
                        Loans made to the borrower under this part.
                            ``(vi) Sixth 12-month employment period.--
                        After the conclusion of the sixth 12-month 
                        employment period described in paragraph (1), 
                        the Secretary shall cancel 15 percent of the 
                        obligation to repay the balance of principal 
                        and interest due as of the time of such 
                        cancellation, on the eligible Federal Direct 
                        Loans made to the borrower under this part.
                            ``(vii) Seventh 12-month employment 
                        period.--After the conclusion of the seventh 
                        12-month employment period described in 
                        paragraph (1), the Secretary shall cancel 20 
                        percent of the obligation to repay the balance 
                        of principal and interest due as of the time of 
                        such cancellation, on the eligible Federal 
                        Direct Loans made to the borrower under this 
                        part.
                            ``(viii) Eighth 12-month employment 
                        period.--After the conclusion of the eighth 12-
                        month employment period described in paragraph 
                        (1), the Secretary shall cancel 20 percent of 
                        the obligation to repay the balance of 
                        principal and interest due as of the time of 
                        such cancellation, on the eligible Federal 
                        Direct Loans made to the borrower under this 
                        part.
                            ``(ix) Ninth 12-month employment period.--
                        After the conclusion of the ninth 12-month 
                        employment period described in paragraph (1), 
                        the Secretary shall cancel 30 percent of the 
                        obligation to repay the balance of principal 
                        and interest due as of the time of such 
                        cancellation, on the eligible Federal Direct 
                        Loans made to the borrower under this part.
                            ``(x) Tenth 12-month employment period.--
                        After the conclusion of the tenth 12-month 
                        employment period described in paragraph (1), 
                        the Secretary shall cancel the remaining 
                        obligation to repay the balance of principal 
                        and interest due as of the time of such 
                        cancellation.''.

SEC. 4. EFFECTIVE DATE.

    (a) In General.--The amendments made by this Act shall take effect 
on a date that is 2 years after the date of enactment of this Act.
    (b) Early Effective Date Permitted.--The Secretary of Education may 
implement the amendments made by this Act before (but not later than) 
the date that is 2 years after the date of enactment of this Act. The 
Secretary shall specify in a designation on what date, and under what 
conditions the Secretary will implement such amendments prior to a date 
that is 2 years after the date of enactment of this Act. The Secretary 
shall publish any designation under this paragraph in the Federal 
Register at least 60 days before implementation.
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