Affordable Loans for Any Student Act
Bill: S.3953 | Sponsor: Sen. Merkley, Jeff (D-OR)
Policy area: Education

Summary:
Affordable Loans for Any Student Act
This bill addresses repayment options, loan disclosures, and loan counseling for student loans.
The bill revises requirements concerning repayment options for student loan borrowers. For instance, the bill terminates interest capitalization and origination fees for Federal Direct Loans, provides assistance to low-income borrowers or borrowers who are delinquent on loan payments, and replaces the existing income-based repayment plans with two new plans. Under the new plans, borrowers may choose (1) a fixed repayment plan with equal monthly payments paid over a period of 10 years, or (2) an income-based repayment plan with monthly payments equal to 10% percent of their income above the poverty level. The income-based plan is capped at 20 years of payments.
The bill also revises requirements concerning student loan disclosures and student loan counseling for borrowers. For instance, the bill requires the Department of Education to maintain online counseling tools that provide borrowers with entrance and exit student loan counseling.

To amend the Higher Education Act of 1965 in order to increase usage of 
   the Federal student loan income-based repayment plan and improve 
        repayment options for borrowers, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Affordable Loans 
for Any Student Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. References in Act.
                  TITLE I--SIMPLIFYING REPAYMENT PLANS

Sec. 101. Income-based repayment plan.
Sec. 102. Fixed repayment plan.
Sec. 103. Termination of certain repayment plan options.
Sec. 104. Providing incentives to switch into simplified repayment 
                            plans.
Sec. 105. Study and procedures on determining family size.
     TITLE II--ENDING INTEREST CAPITALIZATION AND ORIGINATION FEES

Sec. 201. Ending interest capitalization for Federal Direct Loans.
Sec. 202. Elimination of origination fees for Federal Direct Loans.
   TITLE III--PROVIDING ASSISTANCE IN SITUATIONS OF BORROWER DISTRESS

Sec. 301. Limits on seizing income for debt.
Sec. 302. Allowing for multiple loan rehabilitations.
Sec. 303. Pause payment process.
Sec. 304. Automatic enrollment into income-based repayment for 
                            borrowers who are delinquent on loans and 
                            for borrowers who rehabilitate defaulted 
                            loans.
Sec. 305. Separating joint consolidation loans.
Sec. 306. Removing the collection cost requirement.
          TITLE IV--IMPROVING LOAN INFORMATION AND COUNSELING

Sec. 401. Student loan contract; simplifying loan disclosures.
Sec. 402. Pre-loan information and counseling requirements.
Sec. 403. Exit counseling.
Sec. 404. Online counseling tools.
Sec. 405. Private education loan certification and information.
          TITLE V--EFFECTIVE DATE; TRANSITION; IMPLEMENTATION

Sec. 501. Effective date; rulemaking regarding termination of certain 
                            repayment termination of certain repayment 
                            plans; implementation.

SEC. 2. REFERENCES IN ACT.

    Except as otherwise expressly provided in this Act, wherever an 
amendment or repeal is expressed in terms of an amendment to or repeal 
of a section or other provision, the reference shall be considered to 
be made to that section or other provision of the Higher Education Act 
of 1965 (20 U.S.C. 1001 et seq.).

                  TITLE I--SIMPLIFYING REPAYMENT PLANS

SEC. 101. INCOME-BASED REPAYMENT PLAN.

    Section 493C (20 U.S.C. 1098e) is amended to read as follows:

``SEC. 493C. INCOME-BASED REPAYMENT.

    ``(a) Definitions.--In this section:
            ``(1) Excepted plus loan.--The term `excepted PLUS loan' 
        means a loan under section 428B, or a Federal Direct PLUS Loan, 
        that is made, insured, or guaranteed on behalf of a dependent 
        student.
            ``(2) Excepted consolidation loan.--The term `excepted 
        consolidation loan' means a consolidation loan under section 
        428C, or a Federal Direct Consolidation Loan, if the proceeds 
        of such loan were used to the discharge the liability on an 
        excepted PLUS loan.
            ``(3) Partial financial hardship.--The term `partial 
        financial hardship', when used with respect to a borrower, 
        means that for such borrower--
                    ``(A) the annual amount due on the total amount of 
                loans made, insured, or guaranteed under part B or D 
                (other than an excepted PLUS loan or excepted 
                consolidation loan) to a borrower as calculated under 
                the standard repayment plan under section 
                428(b)(9)(A)(i) or 455(d)(1)(A), based on a 10-year 
                repayment period; exceeds
                    ``(B) 15 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) 150 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) Income-Based Repayment Program for Borrowers Who Enter 
Income-Based Repayment Before July 1, 2022.--Notwithstanding any other 
provision of this Act, the Secretary shall carry out a program under 
which--
            ``(1) a borrower of any loan made, insured, or guaranteed 
        under part B or D (other than an excepted PLUS loan or excepted 
        consolidation loan) who has a partial financial hardship 
        (whether or not the borrower's loan has been submitted to a 
        guaranty agency for default aversion or had been in default) 
        may elect, during any period the borrower has the partial 
        financial hardship, to have the borrower's aggregate monthly 
        payment for all such loans not exceed the result described in 
        subsection (a)(3)(B) divided by 12;
            ``(2) the holder of such a loan shall apply the borrower's 
        monthly payment under this subsection first toward interest due 
        on the loan, next toward any fees due on the loan, and then 
        toward the principal of the loan;
            ``(3) any interest due and not paid under paragraph (2)--
                    ``(A) shall, on subsidized loans, be paid by the 
                Secretary for a period of not more than 3 years after 
                the date of the borrower's election under paragraph 
                (1); and
                    ``(B) beginning on the effective date of the 
                Affordable Loans for Any Student Act, for an eligible 
                loan made, insured, or guaranteed under this title, 
                shall not be capitalized and shall be added to the 
                balance of interest due for the loan;
            ``(4) any principal due and not paid under paragraph (2) 
        shall be deferred;
            ``(5) the amount of time the borrower makes monthly 
        payments under paragraph (1) may exceed 10 years;
            ``(6) if the borrower no longer has a partial financial 
        hardship or no longer wishes to continue the election under 
        this subsection, then--
                    ``(A) the maximum monthly payment required to be 
                paid for all loans made to the borrower under part B or 
                D (other than an excepted PLUS loan or excepted 
                consolidation loan) shall not exceed the monthly amount 
                calculated under section 428(b)(9)(A)(i) or 
                455(d)(1)(A), based on a 10-year repayment period, when 
                the borrower first made the election described in this 
                subsection; and
                    ``(B) the amount of time the borrower is permitted 
                to repay such loans may exceed 10 years;
            ``(7) the Secretary shall repay or cancel any outstanding 
        balance of principal and interest due on all loans made under 
        part B or D (other than a loan under section 428B or a Federal 
        Direct PLUS Loan) to a borrower who--
                    ``(A) at any time, elected to participate in 
                income-based repayment under paragraph (1); and
                    ``(B) for a period of time prescribed by the 
                Secretary, not to exceed 25 years, meets 1 or more of 
                the following requirements--
                            ``(i) has made reduced monthly payments 
                        under paragraph (1) or paragraph (6);
                            ``(ii) has made monthly payments of not 
                        less than the monthly amount calculated under 
                        section 428(b)(9)(A)(i) or 455(d)(1)(A), based 
                        on a 10-year repayment period, when the 
                        borrower first made the election described in 
                        this subsection;
                            ``(iii) has made payments of not less than 
                        the payments required under a standard 
                        repayment plan under section 428(b)(9)(A)(i) or 
                        455(d)(1)(A) with a repayment period of 10 
                        years;
                            ``(iv) has made payments under an income-
                        contingent repayment plan under section 
                        455(d)(1)(D); or
                            ``(v) has been in deferment due to an 
                        economic hardship described in section 435(o);
            ``(8) a borrower who is repaying a loan made under part B 
        or D pursuant to income-based repayment may elect, at any time, 
        to terminate repayment pursuant to income-based repayment and 
        repay such loan under the fixed repayment plan under section 
        493E; and
            ``(9) the special allowance payment to a lender calculated 
        under section 438(b)(2)(I), when calculated for a loan in 
        repayment under this section, shall be calculated on the 
        principal balance of the loan and on any accrued interest 
        unpaid by the borrower in accordance with this section.
    ``(c) Income-Based Repayment Program for Borrowers Who Enter 
Income-Based Repayment on or After July 1, 2022.--
            ``(1) In general.--Notwithstanding any other provision of 
        this section, the provisions of this subsection shall apply--
                    ``(A) with respect to any loan made, insured, or 
                guaranteed under this title for which the borrower 
                enters repayment on or after July 1, 2022, and for 
                which the borrower elects the income-based repayment 
                plan under this section; and
                    ``(B) with respect to any loan made, insured, or 
                guaranteed under this title for which the borrower 
                enrolled in an income-based repayment plan before July 
                1, 2022, if such borrower elects to enter the income-
                based repayment plan under this subsection, in 
                accordance with paragraph (3).
            ``(2) Special terms.--With respect to a loan described in 
        paragraph (1), the following terms shall apply to the income-
        based repayment plan carried out under this section:
                    ``(A)(i) Notwithstanding subsection (a)(3)(B), (b), 
                or (e)--
                            ``(I) the annual repayment amount under 
                        this subsection--
                                    ``(aa) with respect to a borrower 
                                whose (and whose spouse's, if 
                                applicable) adjusted gross income 
                                equals or exceeds 1,300 percent of the 
                                poverty line that is 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)) shall be an amount equal to 10 
                                percent of such adjusted gross income;
                                    ``(bb) with respect to a borrower 
                                whose (and whose spouse's, if 
                                applicable) adjusted gross income 
                                equals or exceeds 800 percent of the 
                                poverty line but is less than 1,300 
                                percent of the poverty line that is 
                                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)) shall be equal 
                                to the amount determined under clause 
                                (ii)(I);
                                    ``(cc) with respect to a borrower 
                                whose (and whose spouse's, if 
                                applicable) adjusted gross income 
                                exceeds 250 percent of the poverty line 
                                but is less than 800 percent of the 
                                poverty line that is 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)) shall be equal to the amount 
                                determined under clause (ii)(II); and
                                    ``(dd) with respect to a borrower 
                                whose (and whose spouse's, if 
                                applicable) adjusted gross income 
                                equals or is less than 250 percent of 
                                the poverty line that is 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)) shall be an amount 
                                equal to 0 percent of such adjusted 
                                gross income; and
                            ``(II) a borrower's monthly payment shall 
                        be determined in accordance with subclause (I) 
                        divided by 12, which amount may exceed the 
                        monthly repayment amount under a standard 10-
                        year repayment plan or a fixed repayment plan 
                        described in section 493E.
                    ``(ii)(I)(aa) For purposes of clause (i)(I)(bb), 
                the annual repayment amount for borrowers described in 
                such clause shall be an amount equal to 10 percent of 
                the result obtained by calculating, on at least an 
                annual basis, the amount by which--
                            ``(AA) the borrower's, and the borrower's 
                        spouse's (if applicable), adjusted gross 
                        income; exceeds
                            ``(BB) the percent determined under item 
                        (bb) of the poverty line that is 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)).
                    ``(bb) The percent shall be determined under this 
                item as follows:
                            ``(AA) If the borrower's, and the 
                        borrower's spouse's (if applicable), adjusted 
                        gross income equals 800 percent of the poverty 
                        line that is 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)), the percent shall be equal to 
                        250 percent.
                            ``(BB) If the borrower's, and the 
                        borrower's spouse's (if applicable), adjusted 
                        gross income exceeds 800 percent of the poverty 
                        line but is less than 1,300 percent of the 
                        poverty line that is 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)), the percent 
                        shall be equal to 250 percent reduced by 0.5 
                        percentage points for every 1 percentage point 
                        increase in the borrower's, and the borrower's 
                        spouse's (if applicable), adjusted gross income 
                        that is more than 800 percent.
            ``(II) For purposes of clause (i)(I)(cc), the annual 
        repayment amount for borrowers described in such clause shall 
        be an amount equal to 10 percent of the result obtained by 
        calculating, on at least an annual basis, the amount by which--
                    ``(aa) the borrower's, and the borrower's spouse's 
                (if applicable), adjusted gross income; exceeds
                    ``(bb) 250 percent of the poverty line that is 
                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) Notwithstanding subsection (e)(2), subsection 
        (b)(7)(B) shall be applied by substituting `20 years' for `25 
        years'.
            ``(C) Notwithstanding subparagraph (A) of subsection 
        (b)(6), a borrower of such a loan shall not be required to have 
        a partial financial hardship and may elect, and remain enrolled 
        in, the income-based repayment plan under this section 
        regardless of income level, with the repayment amount 
        calculated under subparagraph (A).
            ``(D) Notwithstanding subsection (b), a borrower of an 
        excepted PLUS loan or excepted consolidation loan may elect the 
        income-based repayment plan under this subsection for the 
        excepted PLUS loan or excepted consolidation loan, and the 
        Secretary shall treat such loan, only for the purposes of the 
        repayment terms, as a Federal Direct PLUS Loan issued to a 
        student borrower. The Secretary may issue rules and 
        regulations, as the Secretary determines necessary, regarding 
        the treatment of excepted PLUS loans or excepted consolidation 
        loans that are to be repaid under an income-based repayment 
        plan under this subsection.
            ``(3) Rule for borrowers in income-based repayment before 
        july 1, 2022.--A borrower of a loan made, insured, or 
        guaranteed under this title who enrolled in an income-based 
        repayment plan before July 1, 2022, may choose to retain such 
        repayment plan or elect to enter an income-based repayment plan 
        under this subsection or a fixed repayment plan described in 
        section 493E, as provided in section 428(b)(1)(D)(ii) or 
        section 455(d)(7) (as applicable).
            ``(4) Interest accrual.--Notwithstanding any other 
        provision of this Act, if a borrower's monthly payment for a 
        loan under an income-based repayment plan under this subsection 
        is insufficient to pay the accrued interest on the borrower's 
        loan for such month, any interest due and not paid on the loan 
        for that month shall be paid or forgiven by the Secretary.
            ``(5) Written, electronic, or verbal enrollment in income-
        based repayment.--
                    ``(A) In general.--A borrower of a loan made under 
                this part may elect to repay such loan under the 
                income-based repayment plan under this subsection by 
                providing written, electronic, or verbal notice to the 
                Secretary of the borrower's desire to make such 
                election, subject to subparagraph (C).
                    ``(B) Use of information.--
                            ``(i) In general.--The estimated monthly 
                        payment amount under this section for a loan 
                        for a borrower who makes an election described 
                        in subparagraph (A) shall be immediately 
                        calculated using the income and family size 
                        information provided through the borrower's 
                        written, electronic, or verbal statement.
                            ``(ii) Verification.--The information 
                        described in clause (i) shall be verified by 
                        the Secretary not later than 90 days after the 
                        date the borrower states such income and family 
                        size information. If the Secretary is unable to 
                        verify the information by the end of the 90-day 
                        period, the borrower's payment after such 90-
                        day period will be the amount applicable under 
                        the fixed repayment plan under section 493E.
                            ``(iii) Adjustment if necessary.--Upon 
                        verification by the Secretary under clause 
                        (ii), the Secretary shall adjust the estimated 
                        monthly payment described in clause (i) based 
                        on the verified income and family size 
                        information of the borrower, if necessary. Any 
                        adjusted monthly payment shall take effect 
                        beginning with the payment due not less than 60 
                        days after the Secretary notifies the borrower 
                        of the adjusted amount. The Secretary shall 
                        consider any payments made prior to the 
                        adjusted monthly payment as having satisfied 
                        the amount due to qualify toward loan 
                        cancellation or forgiveness options under this 
                        title.
                    ``(C) Limitation.--The Secretary shall permit a 
                borrower to make an election of income-based repayment 
                in the written, electronic, or verbal manner described 
                in subparagraph (A) only in connection with the first 
                instance of each of the following:
                            ``(i) The borrower's selection of a 
                        repayment plan during the grace period for such 
                        loan.
                            ``(ii) The borrower changing from the fixed 
                        repayment plan under section 493E to income-
                        based repayment.
                            ``(iii) The borrower's failure to complete 
                        the verification process described in 
                        subparagraph (B)(ii).
                            ``(iv) The borrower's failure to recertify 
                        enrollment in income-based repayment under this 
                        subsection.
    ``(d) Calculation of Adjusted Gross Income for Married Borrowers.--
The Secretary shall calculate the adjusted gross income of a married 
borrower under this section--
            ``(1) in the case of a married borrower and spouse who 
        jointly file a Federal income tax return, based on the adjusted 
        gross income of the borrower and spouse as reported on the 
        Federal income tax return; and
            ``(2) in the case of a married borrower who files a Federal 
        income tax return separately from the borrower's spouse, based 
        on the sum of the adjusted gross income of the borrower and the 
        spouse, as reported on the applicable Federal income tax 
        returns, unless the borrower certifies, on a form approved by 
        the Secretary, that the borrower is--
                    ``(A) separated from the borrower's spouse; or
                    ``(B) unable to reasonably access the income 
                information of the borrower's spouse.
    ``(e) Special Terms for New Borrowers on and After July 1, 2014.--
With respect to any loan made to a new borrower on or after July 1, 
2014--
            ``(1) subsection (a)(3)(B) shall be applied by substituting 
        `10 percent' for `15 percent'; and
            ``(2) subsection (b)(7)(B) shall be applied by substituting 
        `20 years' for `25 years'.
    ``(f) Eligibility Determinations and Automatic Recertification.--
            ``(1) In general.--Beginning as soon as the Secretary 
        determines practicable after the Secretary finalizes the 
        procedures under section 105 of the Affordable Loans for Any 
        Student Act, the Secretary shall establish and implement, with 
        respect to any borrower described in paragraph (2), procedures 
        to--
                    ``(A) obtain (for each year of repayment and 
                without further action by the borrower) such 
                information as is reasonably necessary regarding the 
                income of such borrower (and the borrower's spouse, if 
                applicable), for the purpose of determining the 
                repayment obligation of the borrower for such year, 
                including information with respect to the borrower's 
                family size in accordance with the procedures under 
                such section 105, subject to subparagraph (B);
                    ``(B) allow the borrower, at any time, to opt out 
                of subparagraph (A) and prevent the Secretary from 
                obtaining information under such subparagraph without 
                further action by the borrower;
                    ``(C) provide the borrower with an opportunity to 
                update the information obtained under subparagraph (A) 
                before the determination of the annual repayment 
                obligation of the borrower; and
                    ``(D) in the case of a borrower for whom adjusted 
                gross income can be obtained under this subsection and 
                meets the qualifications of a payment amount of $0, 
                ensure that the borrower will not be required to 
                provide the Secretary with other documentation of 
                income and provide the borrower with a calculated 
                monthly payment of $0.
            ``(2) Applicability.--
                    ``(A) In general.--Paragraph (1) shall apply to 
                each borrower of a loan made under this part who, on or 
                after the date on which the Secretary establishes 
                procedures under such paragraph--
                            ``(i) selects, or for whom the Secretary 
                        selected under subparagraph (C) or (D) of 
                        paragraph (8), or paragraph (9), of subsection 
                        (d), or section 428(m)(1), an income-based 
                        repayment plan; or
                            ``(ii) recertifies income and family size 
                        under such plan.
                    ``(B) Eligibility exception.--A borrower for whom 
                adjusted gross income is unavailable because the 
                borrower has been granted an extension on filing the 
                borrower's income taxes or is undergoing an audit or 
                examination by the Internal Revenue Service shall not 
                automatically be eligible for the calculated monthly 
                payment of $0 in accordance with paragraph (1)(D) 
                during such period. When the extension, audit, or 
                examination is completed, the Secretary shall resume 
                consideration of the borrower for automatic 
                recertification under the procedures described in 
                paragraph (1), including subparagraph (D) of such 
                paragraph (if applicable).
            ``(3) Availability of returns and return information.--
        Returns and return information (as defined in section 6103 of 
        the Internal Revenue Code of 1986) may be obtained under 
        paragraph (1)(A) only to the extent authorized by section 
        6103(l)(13) of such Code.''.

SEC. 102. FIXED REPAYMENT PLAN.

    Part G of title IV (20 U.S.C. 1088 et seq.) is amended by adding at 
the end the following:

``SEC. 493E. FIXED REPAYMENT PLAN.

    ``(a) In General.--A borrower of a loan made under part D on or 
after July 1, 2022, and a borrower who is in repayment on a loan made, 
insured, or guaranteed under part B or D before July 1, 2022, may elect 
to repay such loan under the fixed repayment plan described in this 
section.
    ``(b) Fixed Repayment Plan.--Under the fixed repayment plan, a 
borrower shall repay each loan described in subsection (a) with a fixed 
monthly repayment amount paid over a period of 10 years, subject to 
subsection (c).
    ``(c) Special Rules.--
            ``(1) Minimum.--If a borrower's monthly payment under this 
        section (except for the final payment on the loan) is less than 
        $25, the Secretary shall establish the borrower's monthly 
        payment as $25.
            ``(2) Alternative minimum payments.--Notwithstanding 
        paragraph (1), the Secretary may accept an alternative minimum 
        payment amount, which may include an amount of less than $25, 
        to account for a borrower's exceptional circumstances.''.

SEC. 103. TERMINATION OF CERTAIN REPAYMENT PLAN OPTIONS.

    (a) FFEL Program Repayment Plan Options.--Section 428(b) (20 U.S.C. 
1078(b)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (D)--
                            (i) in clause (ii), by striking ``may 
                        annually change the selection of a repayment 
                        plan under this part,'' and inserting ``may at 
                        any time on or after July 1, 2022, change the 
                        selection of a repayment plan under this part 
                        or part G to one of the 2 repayment plans 
                        described in paragraph (9)(C),''; and
                            (ii) in clause (iii), by inserting ``or, in 
                        the case of a default that occurs on or after 
                        July 1, 2022, be subject to income-based 
                        repayment in accordance with section 493C(c)'' 
                        before the semicolon at the end;
                    (B) in subparagraph (E)(i), by striking ``the 
                option of repaying the loan in accordance with a 
                standard, graduated, income-sensitive, or extended 
                repayment schedule (as described in paragraph (9)) 
                established by the lender in accordance with 
                regulations of the Secretary; and'' and inserting ``the 
                option of repaying the loan in accordance with an 
                applicable repayment plan described in paragraph 
                (9)(C)''; and
                    (C) by striking subparagraph (L); and
            (2) in paragraph (9)--
                    (A) in subparagraph (A)--
                            (i) in the subparagraph heading, by 
                        inserting ``before july 1, 2022'' after 
                        ``Selection''; and
                            (ii) in the matter preceding clause (i)--
                                    (I) by inserting ``or subparagraph 
                                (C), as applicable,'' after ``this 
                                subparagraph''; and
                                    (II) by striking ``The borrower'' 
                                and inserting ``Before July 1, 2022, 
                                the borrower'';
                    (B) in subparagraph (B), by inserting before the 
                period at the end ``or, for a borrower entering 
                repayment on or after July 1, 2022, the lender shall 
                provide the borrower with the fixed repayment plan 
                described in section 493E''; and
                    (C) by adding at the end the following:
                    ``(C) Selection of repayment plans on and after 
                july 1, 2022.--Notwithstanding any other provision of 
                law, and in accordance with regulations promulgated, 
                beginning on July 1, 2022, a lender shall offer a 
                borrower of a loan made, insured, or guaranteed under 
                this part the opportunity to change repayment plans at 
                any time on or after July 1, 2022, and then not more 
                than once per calendar year thereafter. The borrower 
                may choose between the following repayment plans:
                            ``(i) A fixed repayment plan described in 
                        section 493E.
                            ``(ii) The income-based repayment plan 
                        under section 493C(c).''.
    (b) Federal Direct Loan Program Repayment Plan Options.--Section 
455(d) (20 U.S.C. 1087e(d)) is amended--
            (1) by redesignating paragraphs (2) through (5) as 
        paragraphs (3) through (6), respectively;
            (2) in paragraph (1)--
                    (A) in the paragraph heading, by inserting ``before 
                july 1, 2022'' after ``Selection''; and
                    (B) in the matter preceding subparagraph (A), by 
                inserting ``that enters repayment before July 1, 
                2022,'' before ``a variety'';
            (3) by inserting after paragraph (1) the following:
            ``(2) Design and selection beginning july 1, 2022.--
                    ``(A) In general.--Notwithstanding paragraph (1), 
                for any borrower of a loan made under this part that 
                enters repayment on or after July 1, 2022, and for any 
                borrower subject to paragraph (7), the Secretary shall 
                offer the borrower a choice between the following 2 
                plans for repayment of such loan, including principal 
                and interest on the loan. The borrower may choose--
                            ``(i) a fixed repayment plan described in 
                        section 493E; or
                            ``(ii) an income-based repayment plan under 
                        section 493C(c).
                    ``(B) Acceleration.--A borrower in repayment shall 
                be entitled to accelerate, without penalty, repayment 
                on the borrower's loans under this part.
                    ``(C) Selection by the secretary.--If a borrower of 
                a loan made under this part that enters repayment on or 
                after July 1, 2022, does not select a repayment plan 
                described in subparagraph (A) before the first payment 
                on such loan is due, the Secretary shall provide the 
                borrower with a fixed repayment plan described in 
                section 493E.
                    ``(D) Changes in selections.--A borrower of a loan 
                made under this part that enters repayment or on after 
                July 1, 2022, may change the borrower's selection of a 
                repayment plan in accordance with subparagraphs (B) and 
                (C) of paragraph (7).
                    ``(E) Borrower in default.--Beginning on July 1, 
                2022, in lieu of the requirements of paragraph (6), the 
                Secretary may require any borrower who has defaulted on 
                a loan made under this part on or after July 1, 2022, 
                to repay the loan pursuant to an income-based repayment 
                plan under section 493C(c).''; and
            (4) by adding at the end the following:
            ``(7) Borrowers of loans made before july 1, 2022.--A 
        borrower who is in repayment on a loan made under this part 
        before July 1, 2022--
                    ``(A) may choose to retain the repayment plan that 
                the borrower was enrolled in on the day before such 
                date;
                    ``(B) may elect to--
                            ``(i) enter an income-based repayment plan 
                        under section 493C(c);
                            ``(ii) enter a fixed repayment plan 
                        described in section 493E; or
                            ``(iii) switch between the repayment plans 
                        described in clauses (i) and (ii);
                    ``(C) after switching to a repayment plan described 
                in clause (i) or (ii) of subparagraph (B), shall not be 
                permitted to select a repayment plan not described in 
                subparagraph (B) for the loan; and
                    ``(D) shall retain, for purposes of repayment or 
                cancellation of any outstanding balance of principal 
                and interest due on a loan (as described in section 
                493C(b)(7)), any payments on such loan under another 
                income-based or income contingent repayment plan under 
                this title that would otherwise be qualifying.''.
    (c) Conforming Amendment.--Section 433(b)(7)(B) (20 U.S.C. 
1083(b)(7)(B)) is amended by striking ``on a standard repayment plan'' 
and inserting ``, in the case of a borrower who has not selected a 
repayment plan, on the repayment plan designated under subparagraph (B) 
of section 428(b)(9)''.

SEC. 104. PROVIDING INCENTIVES TO SWITCH INTO SIMPLIFIED REPAYMENT 
              PLANS.

    (a) Enabling Consolidation in Order To Simplify Repayment.--Section 
455(g) (20 U.S.C. 1087e(g)) is amended--
            (1) by striking ``A borrower of'' and inserting the 
        following:
            ``(1) In general.--A borrower of'';
            (2) by striking the second sentence; and
            (3) by adding at the end the following:
            ``(2) Eligibility.--To be eligible for a Federal Direct 
        Consolidation Loan under this part, a borrower shall meet the 
        eligibility criteria set forth in section 428C(a)(3), except 
        that, notwithstanding section 428C(a)(3)(B), a borrower may 
        obtain a Federal Direct Consolidation Loan if the borrower--
                    ``(A) obtains the Federal Direct Consolidation Loan 
                for the purpose of--
                            ``(i) selecting the income-based repayment 
                        plan under section 493C(c) or fixed- income 
                        repayment plan under section 495E; or
                            ``(ii) participating in the pause payment 
                        process under section 460B; and
                    ``(B) meets the requirements of section 
                428C(a)(3)(A).''.
    (b) Incentives for Simplified Repayment Plans.--Part G of title IV 
(20 U.S.C. 1088 et seq.), as amended by section 102, is further amended 
by adding at the end the following:

``SEC. 493F. INCENTIVES FOR SIMPLIFIED REPAYMENT PLANS.

    ``(a) In General.--To facilitate the transition of borrowers to 
simplified repayment plan options, the Secretary shall reduce the 
interest rate applicable under section 455(b) or 427A to a loan under 
part B or D held by a borrower as of July 1, 2022, by 100 basis points 
(or the equivalent), if the borrower of the loan, after the effective 
date of the Affordable Loans for Any Student Act--
            ``(1) changes from a repayment plan described in 
        subparagraphs (A) through (E) of section 455(d)(1) for such 
        loan to an income-based repayment plan under section 493C(c) or 
        a fixed repayment plan under section 493E; or
            ``(2) consolidates 1 or more loans under this title, or 
        described in section 428C(a)(4), that were under a repayment 
        plan described in subparagraphs (A) through (E) of section 
        455(d)(1), or clauses (i) through (v) of section 428(b)(9), 
        into a Federal Direct Consolidation Loan and selects an income-
        based repayment plan under section 493C(c) or a fixed repayment 
        plan under section 493E for the loan.
    ``(b) Limitation.--The interest rate for a loan eligible for the 
incentive under subsection (a) may be reduced only once under this 
section.
    ``(c) Rules and Waivers.--The Secretary shall promulgate rules 
carrying out the incentive program established under this section. In 
promulgating such rules, the Secretary may waive the application of--
            ``(1) subchapter I of chapter 35 of title 44, United States 
        Code (commonly known as the `Paperwork Reduction Act');
            ``(2) the master calendar requirements under section 482;
            ``(3) negotiated rulemaking under section 492; and
            ``(4) the requirement to publish the notices related to the 
        system of records of the agency before implementation required 
        under paragraphs (4) and (11) of section 552a(e) of title 5, 
        United States Code (commonly known as the `Privacy Act of 
        1974'), except that the notices shall be published not later 
        than 180 days after the date of implementation of this Act.''.

SEC. 105. STUDY AND PROCEDURES ON DETERMINING FAMILY SIZE.

    (a) In General.--The Secretary of Education, acting jointly with 
the Secretary of the Treasury, shall--
            (1) not later than 1 year after the date of enactment of 
        this Act, publish, in the Federal Register, notice of the 
        Secretary's intent to conduct a study on the effect of using 
        data from the Internal Revenue Service such as personal 
        exemptions, filing status, or child tax credits, as proxies for 
        family size in an income-driven repayment plan, and invite 
        public comment regarding the study;
            (2) after reviewing any public comments provided under 
        paragraph (1), conduct the study and publish the results of the 
        study in the Federal Register;
            (3) use the results of the study conducted under paragraph 
        (1) to develop procedures for determining family size for the 
        automatic recertification of income for an income-driven 
        repayment plan in a manner that minimizes burdens and 
        unintended harm to borrowers;
            (4) publish the procedures developed under paragraph (3) in 
        the Federal Register; and
            (5) after a notice and comment period on such procedures, 
        use such comments to finalize the procedures.
    (b) Specifications.--The study conducted under subsection (a) 
shall--
            (1) be completed, with the results published pursuant to 
        subsection (a)(2), not later than 3 years after the date of 
        enactment of this Act;
            (2) determine how closely personal exemptions, filing 
        status, or child tax credits match the family size that 
        borrowers report on their income-driven repayment plan request 
        form;
            (3) compare the borrower's actual monthly payment amount 
        with the monthly payment amount borrowers would have using 
        family size information derived from tax returns;
            (4) include data from tax year 2018 or later tax years; and
            (5) use data from more than one year, where possible, to 
        analyze how much family size changes over time.
    (c) Definition.--The term ``income-driven repayment plan'' means 
any of the following authorized under the Higher Education Act of 1965 
(20 U.S.C. 1001 et seq.):
            (1) The income-contingent repayment plan.
            (2) The income-based repayment plan.
            (3) The PAYE repayment plan.
            (4) The REPAYE repayment plan.

     TITLE II--ENDING INTEREST CAPITALIZATION AND ORIGINATION FEES

SEC. 201. ENDING INTEREST CAPITALIZATION FOR FEDERAL DIRECT LOANS.

    Section 455 (20 U.S.C. 1087e) is amended--
            (1) in subsection (b)--
                    (A) in the subsection heading, by inserting ``and 
                Practices'' after ``Rate''; and
                    (B) by adding at the end the following:
            ``(11) Interest practices.--
                    ``(A) In general.--Beginning on the effective date 
                of the Affordable Loans for Any Student Act, interest 
                on a loan made under this part shall accrue and only be 
                added to the balance of interest due on the loan, and 
                shall not ever be capitalized.
                    ``(B) No capitalization of interest during in-
                school or grace periods.--
                            ``(i) In general.--Beginning on the 
                        effective date of the Affordable Loans for Any 
                        Student Act, interest on loans made under this 
                        part for which payments of principal are not 
                        required during the in-school and grace periods 
                        or for which payments are deferred in 
                        accordance with sections 427(a)(2)(C) and 
                        428(b)(1)(M) shall accrue and be added to the 
                        balance of interest due from the borrower when 
                        the loan enters repayment, but shall not ever 
                        be capitalized.
                            ``(ii) Notice requirement.--The Secretary 
                        shall adjust any forbearance notice required in 
                        accordance with section 428(a)(3)(A)(iii) to 
                        reflect the availability of the pause payment 
                        process pursuant to section 460B and the 
                        treatment of interest under such section.
                    ``(C) Limited retroactivity.--For a borrower of a 
                loan made under this part on or before the effective 
                date of the Affordable Loans for Any Student Act that 
                is in a status, on the day before such effective date, 
                that involves interest capitalization, such loan shall 
                have capitalization pro-rated to the effective date of 
                such Act, but shall not be subject to further 
                capitalization after the effective date of such Act.''; 
                and
            (2) in subsection (e)(5)--
                    (A) by inserting ``(which, beginning after the 
                effective date of the Affordable Loans for Any Student 
                Act, shall not be capitalized)'' after ``accrued 
                interest''; and
                    (B) by striking the second sentence.

SEC. 202. ELIMINATION OF ORIGINATION FEES FOR FEDERAL DIRECT LOANS.

    (a) Repeal of Origination Fees.--Subsection (c) of section 455 (20 
U.S.C. 1087e(c)) is repealed.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to loans made under part D of title IV of the Higher 
Education Act of 1965 (20 U.S.C. 1087a et seq.) for which the first 
disbursement of principal is made on or after July 1, 2022.

   TITLE III--PROVIDING ASSISTANCE IN SITUATIONS OF BORROWER DISTRESS

SEC. 301. LIMITS ON SEIZING INCOME FOR DEBT.

    Part D of title IV (20 U.S.C. 1087a et seq.) is amended by adding 
at the end the following:

``SEC. 460A. LIMITS ON SEIZING INCOME FOR DEBT RELATING TO FEDERAL 
              STUDENT LOANS.

    ``(a) Definitions.--In this section--
            ``(1) the term `adjusted gross income' has the meaning 
        given the term in section 62 of the Internal Revenue Code of 
        1986; and
            ``(2) the term `poverty line' means the poverty line (as 
        defined by the Office of Management and Budget and revised 
        annually in accordance with section 673(2) of the Community 
        Services Block Grant Act (42 U.S.C. 9902(2))) applicable to a 
        family of the size involved.
    ``(b) Limitation on Collection.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, any entity engaged in the collection of debts relating to 
        loans made under this title may not take any action to cause, 
        or seek to cause, the collection of such a debt that is taken 
        from the wages, Federal benefits, or other amounts due to a 
        borrower through garnishment, deduction, offset, or seizure in 
        an amount on a monthly basis that is more than the amount 
        described in paragraph (2).
            ``(2) Calculation.--The amount described in this paragraph 
        is the amount obtained by calculating what the monthly 
        repayment amount would be for loans made under this title, with 
        respect to the borrower, under the income-based repayment plan 
        under section 493C(c).
            ``(3) Presumption.--For purposes of this section, if an 
        entity described in paragraph (1) is unable to determine the 
        family size of a borrower after taking reasonable steps to 
        collect the information necessary to do so, that person shall 
        presume that the family size of the borrower is 1 individual.
    ``(c) Communications.--Any communication by an entity described in 
subsection (b)(1) that is for the purpose of seizing income of a 
consumer for debt that relates to a loan made under this title shall--
            ``(1) be considered--
                    ``(A) an attempt to collect a debt; and
                    ``(B) conduct in connection with the collection of 
                a debt for the purposes of this title; and
            ``(2) contain a notice to the borrower that, consistent 
        with the procedures for rehabilitating a loan pursuant to 
        section 428F(a) or consolidating loans out of default as 
        described in section 428C(a)(3)(B)(i)(V), the borrower may exit 
        default and reenter current repayment status (as defined in 
        section 428(l)(2)(C)) with a similar monthly payment amount on 
        an income-based repayment plan under section 493C(c) and 
        thereby obtain the full flexibility and benefits of such 
        status, including the ability to adjust family size and make 
        qualifying payments for purposes of repayment or cancellation 
        of any outstanding balance of principal and interest due on a 
        loan (as described in section 493C(b)(7)).
    ``(d) Remedies.--
            ``(1) First tier.--The Secretary may impose a civil penalty 
        on an entity for a violation of this section not to exceed 
        $5,000 for each day during which such violation continues.
            ``(2) Second tier.--Notwithstanding paragraph (1), the 
        Secretary may impose a civil penalty on an entity that 
        recklessly engages in a violation of this section not to exceed 
        $25,000 for each day during which such violation continues.
            ``(3) Third tier.--Notwithstanding paragraphs (1) and (2), 
        the Secretary may impose a civil penalty on an entity that 
        knowingly violates this section not to exceed $1,000,000 for 
        each day during which such violation continues.
            ``(4) No exemplary or punitive damages.--Nothing in this 
        subsection shall be construed as authorizing the imposition of 
        exemplary or punitive damages.
            ``(5) Entities subject to penalty.--An entity subject to a 
        penalty under this subsection may include a contractor or agent 
        of the Department.''.

SEC. 302. ALLOWING FOR MULTIPLE LOAN REHABILITATIONS.

    (a) FFEL Loans.--Section 428F(a)(5) (20 U.S.C. 1078-6(a)(5)) is 
amended by striking ``one time per loan'' and inserting ``2 times per 
loan''.
    (b) Direct Loans.--Section 455(d) (20 U.S.C. 1087e(d)), as amended 
by section 103, is further amended by adding at the end the following:
            ``(8) Loan rehabilitation.--In carrying out the process for 
        loan rehabilitation described in section 428F(a)(5) with 
        respect to loans made under this part and in accordance with 
        subsection (a), the Secretary shall allow a borrower to obtain 
        the benefits available under such section not more than 2 times 
        per loan.''.

SEC. 303. PAUSE PAYMENT PROCESS.

    (a) Establishment of Pause Payment Process.--Part D of title IV (20 
U.S.C. 1087a et seq.), as amended by section 301, is further amended by 
adding at the end the following:

``SEC. 460B. PAUSE PAYMENT PROCESS.

    ``(a) In General.--The Secretary shall establish a single, 
streamlined pause payment process available in a single application 
with respect to loans made under this part that replaces the deferment 
and forbearance options and their respective applications that are 
available to borrowers before the effective date of the Affordable 
Loans for Any Student Act and provides temporary relief from repayment 
of such loans in accordance with this section.
    ``(b) Application for Relief.--Notwithstanding any other provision 
of this Act, a borrower of a loan made under this part that desires to 
receive temporary relief from repayment with respect to such loan shall 
request relief in accordance with the pause payment process established 
by the Secretary under subsection (a), which shall include the options 
to select a temporary cessation of payments and to make smaller 
payments than the monthly payments required under the borrower's 
repayment plan.
    ``(c) Pause Payment.--
            ``(1) In general.--A borrower of a loan made under this 
        part who meets the requirements described in paragraph (2) 
        shall be eligible for a pause payment, during which periodic 
        installments of principal need not be paid, and interest--
                    ``(A) shall not accrue, in the case of a--
                            ``(i) Federal Direct Stafford Loan; or
                            ``(ii) a Federal Direct Consolidation Loan 
                        that consolidated only Federal Direct Stafford 
                        Loans, or a combination of such loans and 
                        Federal Stafford Loans for which the student 
                        borrower received an interest subsidy under 
                        section 428; or
                    ``(B) shall accrue and be added to the balance of 
                interest due but not be capitalized, or be paid by the 
                borrower, in the case of a Federal Direct PLUS Loan, a 
                Federal Direct Unsubsidized Stafford Loan, or a Federal 
                Direct Consolidation Loan not described in subparagraph 
                (A)(ii).
            ``(2) Eligibility.--A borrower of a loan made under this 
        part shall be eligible for a pause payment during any period--
                    ``(A) during which--
                            ``(i) the borrower is carrying at least 
                        one-half the normal full-time work load for the 
                        course of study that the borrower is pursuing, 
                        as determined by the eligible institution (as 
                        such term is defined in section 435(a)) the 
                        student is attending; or
                            ``(ii) in the case of a parent borrower, 
                        the borrower or the student on whose behalf the 
                        loan was borrowed is carrying at least one-half 
                        the normal full-time work load, in accordance 
                        with clause (i);
                    ``(B) during which the borrower is pursuing a 
                course of study pursuant to a graduate fellowship 
                program approved by the Secretary;
                    ``(C) during which the borrower is serving in a 
                medical or dental internship or residency program;
                    ``(D) during which the borrower is in a 
                rehabilitation training program for individuals with 
                disabilities approved by the Secretary;
                    ``(E) during which the borrower--
                            ``(i) is serving on active duty during a 
                        war or other military operation or national 
                        emergency and for the 180-day period following 
                        the demobilization date for the service; or
                            ``(ii) qualifies for partial repayment of 
                        the borrower's loans under a provision of 
                        chapter 109 or 1609 of title 10, United States 
                        Code;
                    ``(F) during which the borrower is performing 
                qualifying National Guard duty during a war or other 
                military operation or national emergency and for the 
                180-day period following the demobilization date for 
                the service;
                    ``(G) during which the borrower is serving in--
                            ``(i) an approved national service position 
                        (as defined in section 101 of the National and 
                        Community Service Act of 1990 (42 U.S.C. 
                        12511)) in an Americorps program (defined for 
                        purposes of this subparagraph as a program 
                        carried out under subtitle C or E of title I of 
                        the National and Community Service Act of 1990 
                        (42 U.S.C. 12571 et seq., 12611 et seq.) or 
                        title I of the Domestic Volunteer Service Act 
                        of 1973 (42 U.S.C. 4951 et seq.));
                            ``(ii) in the Peace Corps; or
                            ``(iii) in a teaching position that would 
                        qualify for teacher loan forgiveness under 
                        section 428J or 460;
                    ``(H) not in excess of a total period of 3 years of 
                repayment of a loan during which the Secretary 
                determines, in accordance with regulations prescribed 
                under section 435(o), that the borrower has experienced 
                or will experience an economic hardship, such as 
                experiencing financial difficulties, having unexpected 
                or significant medical expenses, or being unable to 
                find full-time employment;
                    ``(I) during which a borrower's ability to make 
                payments, as determined by the Secretary, has been 
                adversely affected by--
                            ``(i) any major disaster or emergency 
                        declared by the President under section 401 or 
                        501, respectively, of the Robert T. Stafford 
                        Disaster Relief and Emergency 34 Assistance Act 
                        (42 U.S.C. 5170, 5191);
                            ``(ii) a local emergency, as declared by 
                        the appropriate government agency; or
                            ``(iii) a military mobilization;
                    ``(J) during which the borrower is awaiting a 
                determination by the Secretary of the borrower's 
                request for a pause payment, change in repayment plan, 
                loan forgiveness or cancellation, or consolidation 
                loan; or
                    ``(K) during which the borrower is experiencing 
                other exceptional circumstances for which pause payment 
                under this section is in the best interest of the 
                borrower, as determined by the Secretary through 
                regulation.''.
    (b) Conforming Amendments.--Section 455 (20 U.S.C. 1087e) is 
amended--
            (1) in subsection (e)(7)(B)(i), by striking ``is in 
        deferment'' and inserting ``is under pause payment pursuant to 
        section 460B'';
            (2) by striking subsection (f) and inserting the following:
    ``(f) [reserved]''; and
            (3) in subsection (l)--
                    (A) by striking ``program.--'' and all that follows 
                through ``Using funds'' and inserting the following: 
                ``program.--using funds''; and
                    (B) by striking paragraph (2).

SEC. 304. AUTOMATIC ENROLLMENT INTO INCOME-BASED REPAYMENT FOR 
              BORROWERS WHO ARE DELINQUENT ON LOANS AND FOR BORROWERS 
              WHO REHABILITATE DEFAULTED LOANS.

    (a) Notification and Automatic Enrollment Procedures.--Section 
455(d) (20 U.S.C. 1087e(d)), as amended by sections 103 and 302, is 
further amended by adding at the end the following:
            ``(9) Notification and automatic enrollment procedures for 
        borrowers who are delinquent on loans.--
                    ``(A) Authority to obtain income information.--
                            ``(i) In general.--In the case of any 
                        borrower who is at least 60 days delinquent on 
                        a loan made under this part, the Secretary may 
                        obtain such information as is reasonably 
                        necessary regarding the income and family size 
                        of the borrower (and the borrower's spouse, if 
                        applicable).
                            ``(ii) Availability of returns and return 
                        information.--Returns and return information 
                        (as defined in section 6103 of the Internal 
                        Revenue Code of may be obtained under this 
                        subparagraph only to the extent authorized by 
                        section 6103(l)(13) of such Code).
                    ``(B) Borrower notification.--With respect to each 
                borrower of a loan made under this part who is at least 
                60 days delinquent on such loan and who has not been 
                subject to the procedures under this paragraph for such 
                loan in the preceding 120 days, the Secretary shall, as 
                soon as practicable after such 60-day delinquency, 
                provide to the borrower the following:
                            ``(i) Notification that the borrower is at 
                        least 60 days delinquent on at least 1 loan 
                        under this part, and a description of all 
                        delinquent loans under this part, and 
                        nondelinquent loans under this part, of the 
                        borrower.
                            ``(ii) A brief description of the repayment 
                        plans for which the borrower is eligible and 
                        the borrower's loans made under this part, and 
                        loans made, insured, or guaranteed under part B 
                        or E, that may be eligible for such plans, 
                        based on information available to the 
                        Secretary.
                            ``(iii) Clear and simple instructions on 
                        how to select the repayment plans.
                            ``(iv) The amount of monthly payments for 
                        the loans made under this part, and any loans 
                        made, insured, or guaranteed under part B or E, 
                        under the repayment plans for which the 
                        borrower is eligible, based on information 
                        available to the Secretary, including, if the 
                        income information of the borrower is available 
                        to the Secretary under subparagraph (A)--
                                    ``(I) the amount of the monthly 
                                payment under the income-based 
                                repayment plan under section 493C(c) 
                                for which the borrower is eligible for 
                                the borrower's loans made under this 
                                part, based on such income information; 
                                and
                                    ``(II) the income, family size, tax 
                                filing status, and tax year information 
                                on which each the monthly payment is 
                                based.
                            ``(v) An explanation that the Secretary 
                        shall take the actions under subparagraph (C) 
                        with respect to such borrower, if--
                                    ``(I) the borrower is 120 days 
                                delinquent on one or more loans under 
                                this part and has not selected a new 
                                repayment plan for the borrower's loans 
                                under this part; and
                                    ``(II) in the case of such a 
                                borrower whose repayment plan for any 
                                loans made under this part is not an 
                                income-based repayment plan under 
                                section 493C(c), the monthly payments 
                                under such repayment plan are higher 
                                than such monthly payments would be 
                                under an income-based repayment plan 
                                for such loans.
                            ``(vi) Instructions on updating the 
                        information of the borrower obtained under 
                        subparagraph (A).
                    ``(C) Secretary's initial selection of plan.--With 
                respect to each borrower described in subparagraph (B) 
                who has a repayment plan for loans made under this part 
                that meets the requirements of clause (v)(II) of 
                subparagraph (B), who has not selected a new repayment 
                plan for such loans in accordance with the notice 
                received under such subparagraph, and who is at least 
                120 days delinquent on such a loan, the Secretary 
                shall, as soon as practicable--
                            ``(i) in a case in which any of the 
                        borrower's loans made under part B or E are 
                        eligible for an income-based repayment plan 
                        under section 493C(c), provide the borrower 
                        with the income-based repayment plan; and
                            ``(ii) in a case in which none of the 
                        borrower's loans made under part B or E are 
                        eligible for an income-based repayment plan 
                        under section 493C(c), notify the borrower of 
                        the actions, if any, the borrower may take for 
                        such loans to become eligible for such a plan.
                    ``(D) Secretary's additional selection of plan.--
                            ``(i) In general.--With respect to each 
                        borrower of a loan made under this part who 
                        selects a new repayment plan in accordance with 
                        the notice received under subparagraph (B) and 
                        who continues to be delinquent on such loan for 
                        a period described in clause (ii), the 
                        Secretary shall, as soon as practicable after 
                        such period, carry out the procedures described 
                        in subparagraph (C) for the borrower's loans 
                        made under this part, if such procedures would 
                        result in lower monthly repayment amounts on 
                        such loan.
                            ``(ii) Description of period.--The duration 
                        of the period described in clause shall be the 
                        amount of time that the Secretary determines is 
                        sufficient to indicate that the borrower may 
                        benefit from repaying such loan under a new 
                        repayment plan, but in no case shall such 
                        period be less than 60 days.
                    ``(E) Opt-out.--A borrower of a loan made under 
                this part shall have the right to opt out of the 
                procedures under this paragraph.
                    ``(F) Procedures.--The Secretary shall establish 
                procedures as are necessary to effectively implement 
                this paragraph.
            ``(10) Notification and automatic enrollment procedures for 
        borrowers who are rehabilitating defaulted loans.--
                    ``(A) Authority to obtain income information.--
                            ``(i) In general.--In the case of any 
                        borrower who is rehabilitating a loan made 
                        under this part pursuant to section 428F(a), 
                        the Secretary may obtain such information as is 
                        reasonably necessary regarding the income and 
                        family size of the borrower (and the borrower's 
                        spouse, if applicable).
                            ``(ii) Availability of returns and return 
                        information.--Returns and return information 
                        (as defined in section 6103 of the Internal 
                        Revenue Code of may be obtained under this 
                        subparagraph only to the extent authorized by 
                        section 6103(l)(13) of such Code).
                    ``(B) Borrower notification.--Not later than 30 
                days after a borrower makes the 6th payment required 
                for the loan rehabilitation described in subparagraph 
                (A), the Secretary shall notify the borrower of the 
                process under subparagraph (C) with respect to such 
                loan.
                    ``(C) Secretary's automatic enrollment.--With 
                respect to each borrower who has made the 9th payment 
                required for the loan rehabilitation described in 
                subparagraph (A) and is eligible for the income-based 
                repayment plan under section 493C(c), the Secretary 
                shall, as soon as practicable after such payment, 
                provide the borrower with the income-based repayment 
                plan.
                    ``(D) Opt-out.--A borrower of a loan made under 
                this part shall have the right to opt out of the 
                procedures for enrollment in an income-based repayment 
                plan under this paragraph.
                    ``(E) Procedures.--The Secretary shall establish 
                procedures as are necessary to effectively implement 
                this paragraph.''.
    (b) Effective Date.--The amendments made by subsection (a) shall--
            (1) take effect as soon as the Secretary of Education 
        determines practicable after the Secretary finalizes the 
        procedures under section 105; and
            (2) apply to all borrowers of loans made under part D of 
        title IV of the Higher Education Act of 1965 (20 U.S.C. 1087a 
        et seq.).

SEC. 305. SEPARATING JOINT CONSOLIDATION LOANS.

    (a) In General.--Section 455(g) (20 U.S.C. 1087e(g)), as amended by 
section 104, is further amended by adding at the end the following:
            ``(3) Separating joint consolidation loans.--
                    ``(A) In general.--A married couple, or 2 
                individuals who were previously a married couple, and 
                who received a joint consolidation loan as such married 
                couple under subparagraph (C) of section 428C(a)(3) (as 
                such subparagraph was in effect on or before June 30, 
                2006), may apply to the Secretary for each individual 
                borrower in the married couple (or previously married 
                couple) to receive a separate Federal Direct 
                Consolidation Loan under this part--
                            ``(i) that shall--
                                    ``(I) unless the Secretary receives 
                                notice of an agreement described in 
                                subclause (II)(aa), be equal to the sum 
                                of--
                                            ``(aa) the unpaid principal 
                                        and accrued unpaid interest of 
                                        the percentage of the joint 
                                        consolidation loan that, as of 
                                        the day before such joint 
                                        consolidation loan was made, 
                                        was attributable to the loans 
                                        of the individual borrower for 
                                        whom such separate 
                                        consolidation loan is being 
                                        made; and
                                            ``(bb) any other loans 
                                        described in section 428C(a)(4) 
                                        that such individual borrower 
                                        selects for consolidation under 
                                        this part; or
                                    ``(II) be equal to the sum of--
                                            ``(aa) the unpaid principal 
                                        and accrued unpaid interest of 
                                        the percentage of the joint 
                                        consolidation loan that, as of 
                                        the date of application under 
                                        this paragraph, the married 
                                        couple (or previously married 
                                        couple) agrees shall be 
                                        considered attributable to the 
                                        loans of the individual 
                                        borrower for whom such separate 
                                        consolidation loan is being 
                                        made; and
                                            ``(bb) any other loans 
                                        described in section 428C(a)(4) 
                                        that such individual borrower 
                                        selects for consolidation under 
                                        this part;
                            ``(ii) the proceeds of which shall be paid 
                        by the Secretary to the holder or holders--
                                    ``(I) of the joint consolidation 
                                loan for the purpose of discharging the 
                                liability on the percentage of such 
                                joint consolidation loan described in 
                                subclause (I)(aa) or (II)(aa) of clause 
                                (i); and
                                    ``(II) of the loans selected for 
                                consolidation under subclause (I)(bb) 
                                or of clause (i) for the purpose of 
                                discharging the liability on such 
                                loans;
                            ``(iii) except as otherwise provided in 
                        this paragraph, that has the same terms and 
                        conditions, and rate of interest as the joint 
                        consolidation loan, except if other loans are 
                        included in such Federal Direct Consolidation 
                        Loan after the date the Federal Direct 
                        Consolidation Loan is first made under this 
                        paragraph;
                            ``(iv) for which any payment made under 
                        subsection (m)(1)(A) on the joint consolidation 
                        loan during a period in which the individual 
                        borrower for whom such separate consolidation 
                        loan is being made was employed in a public 
                        service job described in subsection (m)(1)(B) 
                        shall be treated as if such payment were made 
                        on such separate consolidation loan; and
                            ``(v) for which any payment made under an 
                        income contingent repayment plan under 
                        subsection (d)(1)(D), or an income-based 
                        repayment plan under paragraph (1)(E) or 
                        (2)(A)(ii) of subsection (d), on the joint 
                        consolidation loan shall be treated as if such 
                        payment were made on such separate 
                        consolidation loan.
                    ``(B) Application for separate direct consolidation 
                loans.--
                            ``(i) Joint application.--Except as 
                        provided in clause (ii), to receive separate 
                        consolidation loans under subparagraph (A), 
                        both individual borrowers in a married couple 
                        (or previously married couple) shall jointly 
                        apply under such subparagraph.
                            ``(ii) Separate application.--An individual 
                        borrower in a married couple (or previously 
                        married couple) may apply for a separate 
                        consolidation loan under subparagraph (A) 
                        separately and without regard to whether or 
                        when the other individual borrower in the 
                        married couple (or previously married couple) 
                        applies under such subparagraph, and shall be 
                        relieved of any remaining liability for the 
                        joint consolidation loan, in a case in which--
                                    ``(I) the individual borrower has 
                                experienced from the other individual 
                                borrower--
                                            ``(aa) domestic violence 
                                        (as defined in section 40002(a) 
                                        of the Violence Against Women 
                                        Act of 1994 (34 U.S.C. 
                                        12291(a)));
                                            ``(bb) economic abuse 
                                        (including behaviors that 
                                        control such borrower's ability 
                                        to acquire, use, and maintain 
                                        access to money, credit, or the 
                                        joint financial obligations of 
                                        both borrowers); or
                                            ``(cc) other exceptional 
                                        circumstances, as determined by 
                                        the Secretary; and
                                    ``(II) the Secretary determines 
                                that authorizing each individual 
                                borrower to apply separately under 
                                subparagraph (A) would be in the best 
                                fiscal interests of the Federal 
                                Government, including by reducing the 
                                risk of delinquency or default.
                    ``(C) Borrower eligibility.--Notwithstanding 
                section 428C(a)(3)(A), the Secretary shall provide a 
                consolidation loan under this part to each borrower 
                who--
                            ``(i) applies for such loan under 
                        subparagraph (A); and
                            ``(ii) meets the requirements of 
                        subparagraphs (A) and (B).''.
    (b) Conforming Amendment.--Section 428C(a)(3)(B)(i)(V) (20 U.S.C. 
1078-3(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 
                                        separating a joint 
                                        consolidation loan into 2 
                                        separate Federal Direct 
                                        Consolidation Loans under 
                                        section 455(g)(3).''.

SEC. 306. REMOVING THE COLLECTION COST REQUIREMENT.

    (a) Removal of Requirement.--Section 484A(b)(1) (20 U.S.C. 
1091a(b)(1)) is amended by striking ``shall be required to pay, in 
addition to other charges specified in this title, reasonable 
collection costs'' and inserting ``shall not be required to pay 
collection costs''.
    (b) Repayment After Default.--Section 455(d)(6) (20 U.S.C. 
1087e(d)(6)), as redesignated under section 103(b), is amended by 
striking ``to--'' and all that follows through the period at the end 
and inserting ``to repay the loan pursuant to an income-based repayment 
plan under section 493C(c).''.

          TITLE IV--IMPROVING LOAN INFORMATION AND COUNSELING

SEC. 401. STUDENT LOAN CONTRACT; SIMPLIFYING LOAN DISCLOSURES.

    (a) Student Loan Contract.--Section 455 (20 U.S.C. 1087e), as 
amended by section 202, is further amended by inserting after 
subsection (b) the following:
    ``(c) Student Loan Contract; Simplifying Loan Disclosures.--
            ``(1) Student loan contract.--
                    ``(A) In general.--Any master promissory note form 
                described in section 432(m)(1)(D) that is developed or 
                used for covered loans shall be referred to as a 
                `student loan contract'.
                    ``(B) Clarification on use.--Notwithstanding 
                section 432(m)(1)(D)(i), each student loan contract for 
                a covered loan shall--
                            ``(i) not be entered into by a student 
                        unless the student has completed all required 
                        counseling related to such loan, including 
                        counseling required under section 485(l);
                            ``(ii) be signed by the student entering 
                        such student loan contract after completion of 
                        such counseling;
                            ``(iii) be signed by the student during the 
                        first award year of such student's enrollment 
                        at an institution;
                            ``(iv) be valid for each award year after 
                        the award year described in clause (iii) in 
                        which the student remains enrolled at the same 
                        institution; and
                            ``(v) include options for the student to 
                        enter both the student's current contact 
                        information and permanent contact information 
                        that is likely to remain valid upon the 
                        student's exit from the institution.
                    ``(C) Covered loan.--
                            ``(i) In general.--In this subsection, the 
                        term `covered loan' means a loan made under 
                        this part on or after the effective date of the 
                        Affordable Loans for Any Student Act, except 
                        with respect to a borrower described in clause 
                        (ii).
                            ``(ii) Exception.--A borrower is described 
                        in this clause if the loan made under this part 
                        on or after the effective date of the 
                        Affordable Loans for Any Student Act with 
                        respect to such borrower is for the award year 
                        during which the Affordable Loans for Any 
                        Student Act is enacted and the borrower has 
                        already taken out a loan under this part (other 
                        than a Federal Direct Consolidation Loan) for 
                        such award year (including any such loan for 
                        attendance at another institution from which 
                        the student transferred or in which the student 
                        had previously enrolled).
            ``(2) Loan disclosures.--For loans made under this part for 
        periods of enrollment beginning on or after the effective date 
        of the Affordable Loans for Any Student Act, the Secretary 
        shall take such steps as are necessary to streamline the 
        student loan disclosure requirements under this Act. The 
        Secretary shall ensure that information required to be 
        disclosed to a student who is applying for, receiving, or 
        preparing to repay a loan under this part shall be consumer-
        tested and delivered in a manner that--
                    ``(A) reduces and simplifies the paperwork students 
                are required to complete;
                    ``(B) limits the number of times a student is 
                presented with disclosures by incorporating the 
                streamlined disclosures into required student loan 
                counseling under section 485(l), the student loan 
                contract under this subsection, or both; and
                    ``(C) is effective in helping the student 
                understand the student's rights and obligations as a 
                Federal student loan borrower.
            ``(3) Loan acceptance.--Prior to making the first 
        disbursement of a covered loan (other than a Federal Direct 
        Consolidation Loan) to a borrower, the eligible institution 
        shall ensure that the borrower--
                    ``(A) has completed the applicable counseling under 
                paragraph (2) or (3) of section 485(l); and
                    ``(B) after completing such counseling, accepts the 
                loan by--
                            ``(i) signing and returning to the 
                        institution the student loan contract described 
                        in section 455(c)(1) that affirmatively states 
                        that the borrower accepts the loan; or
                            ``(ii) electronically signing an electronic 
                        version of such student loan contract, which 
                        may be done through the online counseling tool 
                        in accordance with section 485(n)(1)(B).''.
    (b) Conforming Amendment.--Section 487(a)(7) (20 U.S.C. 1094(a)(7)) 
is amended by striking ``section 485'' and inserting ``sections 
455(c)(3) and 485''.

SEC. 402. PRE-LOAN INFORMATION AND COUNSELING REQUIREMENTS.

    Section 485(l) (20 U.S.C. 1092(l)) is amended to read as follows:
    ``(l) Student Loan Entrance Counseling.--
            ``(1) Student loan entrance counseling requirement for 
        institutions.--
                    ``(A) In general.--Each eligible institution shall 
                ensure that, prior to the date of the disbursement of a 
                loan for a period of enrollment at such institution, 
                each individual for whom the institution has knowledge 
                that the individual has accepted, or will accept, 1 or 
                more student loans under part D (including any such 
                loans for attendance at another institution from which 
                the student transferred or in which the student had 
                previously enrolled, other than a Federal Direct 
                Consolidation Loan) for such period of enrollment, 
                receives comprehensive information on the terms and 
                conditions of such loans and the responsibilities the 
                individual has with respect to such loans. Such 
                information shall be provided in a simple, 
                understandable, and consumer-friendly manner during a 
                counseling session conducted--
                            ``(i) in person;
                            ``(ii) online, with the individual 
                        acknowledging receipt of the information; or
                            ``(iii) through the use of the online 
                        counseling tool described in subsection 
                        (n)(1)(B).
                    ``(B) Use of interactive programs.--In the case of 
                institutions not using the online counseling tool 
                described in subsection (n)(1)(B), the Secretary shall 
                require such institutions to carry out the requirements 
                of subparagraph (A) through the use of interactive 
                programs, during a counseling session that is in-person 
                or online, that test the individual's understanding of 
                the terms and conditions of the loan awarded to the 
                individual, using simple and understandable language 
                and clear formatting.
            ``(2) Loan counseling for borrowers receiving loans made 
        under part d (other than parent plus loans).--The information 
        to be provided under paragraph (1)(A) to a borrower of a loan 
        made under part D (other than a Federal Direct PLUS Loan made 
        on behalf of a dependent student) shall include the following:
                    ``(A) A notification that some students may qualify 
                for other financial aid that does not need to be 
                repaid, and an explanation that the borrower should 
                consider accepting any such grant, scholarship, 
                military tuition assistance, veterans benefits, Federal 
                or State work-study, or other programs for which the 
                borrower is eligible, prior to accepting student loans.
                    ``(B) An explanation of the use of the student loan 
                contract referred to in section 455(c).
                    ``(C) A recommendation to the borrower to exhaust 
                the borrower's Federal student loan options prior to 
                taking out private education loans, an explanation that 
                Federal student loans typically offer better terms and 
                conditions than private education loans, an explanation 
                that Federal student loans offer consumer protections 
                typically not available in the private education loan 
                market, an explanation of treatment of loans made under 
                part D and private education loans in bankruptcy, and 
                an explanation that if a borrower decides to take out a 
                private education loan--
                            ``(i) the borrower has the ability to 
                        select a private educational lender of the 
                        borrower's choice;
                            ``(ii) the proposed private education loan 
                        may impact the borrower's potential eligibility 
                        for other financial assistance, including 
                        Federal financial assistance under this title; 
                        and
                            ``(iii) the borrower has a right--
                                    ``(I) to accept the terms of the 
                                private education loan within 30 
                                calendar days following the date on 
                                which the application for such loan is 
                                approved and the borrower receives the 
                                required disclosure documents, pursuant 
                                to section 128(e) of the Truth in 
                                Lending Act (15 U.S.C. 1638(e)); and
                                    ``(II) to cancel such loan within 3 
                                business days of the date on which the 
                                loan is consummated, pursuant to 
                                section 128(e)(7) of such Act (15 
                                U.S.C. 1638(e)(7)).
                    ``(D) An explanation of the importance of 
                contacting the appropriate offices at the institution 
                of higher education if the student withdraws prior to 
                completing a program of study so that the institution 
                can provide exit counseling, including information 
                regarding the borrower's repayment options and loan 
                consolidation.
                    ``(E) A general description of the terms and 
                conditions under which the student may obtain 
                forgiveness or cancellation of any principal and 
                interest of a loan issued under this title.
                    ``(F) Information as to how the borrower can access 
                their loan records and the contact information for 
                inquiries regarding repaying the loan.
                    ``(G) The contact information for the financial aid 
                office, or other appropriate office, at the institution 
                that the borrower may contact if the borrower has any 
                questions about the borrower's rights and 
                responsibilities or the terms and conditions of the 
                loan.
                    ``(H) An explanation that the borrower has the 
                right to annually request a copy of the credit report 
                of the borrower from a consumer reporting agency 
                pursuant to section 612(a) of the Fair Credit Reporting 
                Act (15 U.S.C. 1681j(a)).
                    ``(I) An explanation that--
                            ``(i) the borrower may be contacted during 
                        the repayment period by a third-party student 
                        debt relief company;
                            ``(ii) the borrower should use caution when 
                        dealing with such a company; and
                            ``(iii) the services that such a company 
                        typically provides are offered to borrowers 
                        free of charge through the Department or the 
                        borrower's servicer.
            ``(3) Borrowers receiving parent plus loans for dependent 
        students.--The information to be provided under paragraph 
        (1)(A) to a borrower of a Federal Direct PLUS Loan made on 
        behalf of a dependent student shall include the following:
                    ``(A) A notification that some students may qualify 
                for other financial aid and an explanation that the 
                student for whom the borrower is taking out the loan 
                should consider accepting any such grant, scholarship, 
                military tuition assistance, veterans benefits, Federal 
                or State work-study jobs, or other programs for which 
                the student for whom the borrower is taking out the 
                loan is eligible, prior to borrowing any Federal Direct 
                PLUS Loan on behalf of a dependent student.
                    ``(B) The information described in subparagraphs 
                (B) through (I) of paragraph (2), as applicable.
                    ``(C) The circumstances under which a borrower of a 
                Federal Direct PLUS Loan made on behalf of a dependent 
                student may transfer such loan to the student for whom 
                the loan was taken out.''.

SEC. 403. EXIT COUNSELING.

    Section 485(b) (20 U.S.C. 1092(b)) is amended to read as follows:
    ``(b) Student Loan Exit Counseling.--
            ``(1) In general.--
                    ``(A) Counseling included.--Each eligible 
                institution shall provide counseling to borrowers of 
                loans made under part D (including any such loans for 
                attendance at another institution from which the 
                student transferred or in which the student had 
                previously enrolled, other than a Federal Direct 
                Consolidation Loan) prior to the completion of the 
                course of study for which the borrower enrolled at the 
                institution or at the time of departure from such 
                institution. The counseling required by this subsection 
                shall be provided through the use of an interactive 
                program, during an exit counseling session that is in-
                person or online, or through the use of the online 
                counseling tool described in subsection (n)(1)(A), and 
                shall include--
                            ``(i) an explanation of the grace period 
                        preceding repayment and the expected date that 
                        the borrower will enter repayment;
                            ``(ii) an explanation that the borrower has 
                        the option to pay any interest that has accrued 
                        while the borrower was in school or that may 
                        accrue during the grace period preceding 
                        repayment or during an authorized period of 
                        pause payment;
                            ``(iii) the outstanding balance of 
                        principal and interest owed by the borrower at 
                        the time of such counseling on loans made, 
                        insured, or guaranteed to the borrower under 
                        this title;
                            ``(iv) information on the repayment plans 
                        available, including a description of the 
                        different features of each plan and sample 
                        information showing the average anticipated 
                        monthly payments, and the difference in 
                        interest paid and total payments, under each 
                        plan;
                            ``(v) a description of the borrower's 
                        options for pause payment under section 460B;
                            ``(vi) a description of the Federal tax 
                        benefits that may be available for repaying 
                        loans made under this title;
                            ``(vii) a description of the terms and 
                        conditions under which the student may obtain 
                        forgiveness or cancellation of any principal 
                        and interest of a loan made under this title;
                            ``(viii) an explanation that the borrower 
                        has the option to prepay each loan, pay each 
                        loan on a shorter schedule, and change 
                        repayment plans;
                            ``(ix) the implications of, and options to 
                        get out of, default on a loan;
                            ``(x) information as to how the student 
                        borrower can access their loan records;
                            ``(xi) an explanation that--
                                    ``(I) the borrower may be contacted 
                                during the repayment period by a third-
                                party student debt relief company;
                                    ``(II) the borrower should use 
                                caution when dealing with such a 
                                company; and
                                    ``(III) the services that such a 
                                company typically provides are offered 
                                to borrowers free of charge through the 
                                Department or the borrower's servicer; 
                                and
                            ``(xii) an explanation that the borrower 
                        has the right to annually request a copy of the 
                        credit report of the borrower from a consumer 
                        reporting agency pursuant to section 612(a) of 
                        the Fair Credit Reporting Act (15 U.S.C. 
                        1681j(a)).
                    ``(B) Students leaving without prior notice to the 
                institution.--In the case of borrower who leaves an 
                institution without the prior knowledge of the 
                institution, the institution shall attempt to provide 
                the information described in subparagraph (A) to the 
                borrower in online or in writing, except that in the 
                case of an institution using the online counseling tool 
                described in subsection (n)(1)(A), the Secretary shall 
                attempt to provide such information to the borrower in 
                the manner described in subsection (n)(3)(C).
            ``(2) Information to be submitted by borrower.--
                    ``(A) In general.--Each eligible institution shall 
                require that the borrower of a loan made under part D 
                submit to the institution, during the exit counseling 
                required by this subsection--
                            ``(i) the borrower's expected permanent 
                        address after leaving the institution;
                            ``(ii) the borrower's most recent contact 
                        information; and
                            ``(iii) any corrections in the 
                        institution's records relating the borrower's 
                        name, social security number, and driver's 
                        license number, as applicable.
                    ``(B) Information to be provided to the 
                secretary.--Each eligible institution shall, not later 
                than 60 days after the date of collection of the 
                information described in subparagraph (A), forward the 
                information received from the borrower to the 
                Secretary.
                    ``(C) Rule of construction.--Nothing in this 
                subsection shall be construed to prohibit an 
                institution of higher education from utilizing 
                electronic means to provide personalized exit 
                counseling.''.

SEC. 404. ONLINE COUNSELING TOOLS.

    Section 485 (20 U.S.C. 1092), as amended by this Act, is further 
amended by adding at the end the following:
    ``(n) Online Counseling Tools.--
            ``(1) In general.--Beginning not later than 1 year after 
        the date of enactment of the Affordable Loans for Any Student 
        Act, the Secretary shall maintain--
                    ``(A) an online counseling tool that provides the 
                exit counseling required under subsection (b) and meets 
                the applicable requirements of this subsection; and
                    ``(B) an online counseling tool that provides the 
                counseling required under subsection (l), enables a 
                borrower to electronically sign and accept the 
                borrower's student loan contract, and meets the 
                applicable requirements of this subsection.
            ``(2) Requirements of tools.--In maintaining the online 
        counseling tools described in paragraph (1), the Secretary 
        shall ensure that each such tool, and its underlying content--
                    ``(A) are consumer tested, in consultation with 
                other relevant Federal agencies, students, borrowers, 
                institutions of higher education, secondary school and 
                postsecondary counselors, and consumer advocacy 
                organizations, to ensure that the tool is effective in 
                helping individuals understand their rights and 
                obligations with respect to borrowing a loan made under 
                part D;
                    ``(B) are understandable to borrowers of loans made 
                under part D;
                    ``(C) are freely available to all eligible 
                institutions; and
                    ``(D) integrate applicable loan data from the 
                National Student Loan Data System or a successor 
                system, including data regarding loans made, insured, 
                or guaranteed under this title and data regarding 
                private education loans, pursuant to section 485B(i).
            ``(3) Record of counseling completion.--The Secretary 
        shall--
                    ``(A) use each online counseling tool described in 
                paragraph (1) to--
                            ``(i) keep a record of which individuals 
                        have received counseling using the tool; and
                            ``(ii) notify the applicable institutions 
                        of the individual's completion of such 
                        counseling;
                    ``(B) in the case of a borrower who receives 
                counseling for a loan made under part D using the tool 
                described in paragraph (1)(B)--
                            ``(i) enable the borrower to accept and 
                        electronically sign the student loan contract 
                        as required under section 455(c)(3)(B)(ii), and 
                        notify the applicable institutions that the 
                        individual completed the counseling and 
                        electronically signed the contract; and
                            ``(ii) if the borrower chooses not to sign 
                        the student loan contract through the online 
                        counseling tool--
                                    ``(I) inform the borrower, through 
                                the online counseling tool, of the date 
                                by when the borrower should accept and 
                                sign the student loan contract for 
                                which the borrower has received such 
                                counseling; and
                                    ``(II) notify the applicable 
                                institution that the borrower completed 
                                the counseling but did not sign the 
                                student loan contract; and
                    ``(C) in the case of a borrower described in 
                subsection (b)(1)(B) at an institution that uses the 
                online counseling tool described in paragraph (1)(A) of 
                this subsection, attempt to provide the information 
                described in subsection (b)(1)(A) to the borrower 
                through such tool.''.

SEC. 405. PRIVATE EDUCATION LOAN CERTIFICATION AND INFORMATION.

    (a) Amendments to the Higher Education Act of 1965.--
            (1) In general.--Section 487(a) (20 U.S.C. 1094(a)) is 
        amended by striking paragraph (28) and inserting the following:
            ``(28)(A) The institution shall--
                    ``(i) upon the request of a private educational 
                lender, acting in connection with an application 
                initiated by a borrower for a private education loan in 
                accordance with section 128(e)(3) of the Truth in 
                Lending Act, provide certification to such private 
                educational lender--
                            ``(I) that the student who initiated the 
                        application for the private education loan, or 
                        on whose behalf the application was initiated, 
                        is enrolled or is scheduled to enroll at the 
                        institution;
                            ``(II) of such student's cost of attendance 
                        at the institution as determined under part F; 
                        and
                            ``(III) of the difference between--
                                    ``(aa) the cost of attendance at 
                                the institution; and
                                    ``(bb) the student's estimated 
                                financial assistance received under 
                                this title and other assistance known 
                                to the institution, as applicable; and
                    ``(ii) provide the certification described in 
                clause (i), or notify the private educational lender 
                that the institution has received the request for 
                certification and will need additional time to comply 
                with the certification request--
                            ``(I) within 15 business days of receipt of 
                        such certification request; and
                            ``(II) only after the institution has 
                        completed the activities described in 
                        subparagraph (B).
            ``(B) The institution shall, upon receipt of a 
        certification request described in subparagraph (A)(i), and 
        prior to providing such certification--
                    ``(i) determine whether the student who initiated 
                the application for the private education loan, or on 
                whose behalf the application was initiated, has applied 
                for and exhausted the Federal financial assistance 
                available to such student under this title and inform 
                the student accordingly; and
                    ``(ii) provide the borrower whose loan application 
                has prompted the certification request by a private 
                education lender, as described in subparagraph (A)(i), 
                with the following information and disclosures:
                            ``(I) If the borrower has not yet exhausted 
                        the financial assistance available to the 
                        borrower under this title, the amount of 
                        additional Federal student assistance for which 
                        the borrower is eligible and the potential 
                        advantages of Federal loans under this title, 
                        including disclosure of--
                                    ``(aa) the fixed interest rates and 
                                pause payment processes;
                                    ``(bb) the option for and terms of 
                                income-based repayment, loan 
                                forgiveness programs, and additional 
                                protections; and
                                    ``(cc) the higher student loan 
                                limits for dependent students whose 
                                parents are not eligible for a Federal 
                                Direct PLUS Loan.
                            ``(II) The borrower's ability to select a 
                        private educational lender of the borrower's 
                        choice.
                            ``(III) The impact of a proposed private 
                        education loan on the borrower's potential 
                        eligibility for other financial assistance, 
                        including Federal financial assistance under 
                        this title.
                            ``(IV) The borrower's right to accept or 
                        reject a private education loan within the 30-
                        day period following a private educational 
                        lender's approval of a borrower's application, 
                        and a borrower's 3-day right to cancel period 
                        under section 128(e)(7) of the Truth in Lending 
                        Act (15 U.S.C. 1650(e)(7)).
            ``(C) For purposes of this paragraph, the terms `private 
        educational lender' and `private education loan' have the 
        meanings given such terms in section 140 of the Truth in 
        Lending Act (15 U.S.C. 1650).''.
            (2) National student loan data system.--Section 485B (20 
        U.S.C. 1092b) is amended--
                    (A) in subsection (a), by striking ``and loans made 
                under parts D and E'' and inserting ``, loans made 
                under parts D and E, and private education loans (in 
                accordance with subsection (i))'';
                    (B) in subsection (g), in the subsection heading, 
                by inserting ``for Federal Loans'' after ``Data 
                Reporting''; and
                    (C) by adding at the end the following:
    ``(j) Private Education Loan Reporting.--The Secretary shall 
include in the National Student Loan Data System the information 
regarding private education loans that the Director of the Consumer 
Financial Protection Bureau, in coordination with the Secretary, 
determines necessary to be included pursuant to section 
128(e)(9)(B)(ii) of the Truth in Lending Act (15 U.S.C. 
1638(e)(9)(B)(ii)).''.
            (3) Effective date.--The amendments made by paragraphs (1) 
        and (2) shall take effect on the effective date of the 
        regulations described in subsection (b)(3).
    (b) Amendments to the Truth in Lending Act.--
            (1) In general.--Section 128(e) of the Truth in Lending Act 
        (15 U.S.C. 1638(e)) is amended--
                    (A) by striking paragraph (3) and inserting the 
                following:
            ``(3) Institutional certification required.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), before a private educational lender 
                may issue any funds with respect to a private education 
                loan, the private educational lender shall obtain, from 
                the relevant institution of higher education where such 
                loan is to be used for a student, a certification in 
                accordance with section 485(a)(28)(A) of the Higher 
                Education Act of 1965 (20 U.S.C. 1094(a)(28)(A))--
                            ``(i) confirming that the student is 
                        enrolled or is scheduled to be enrolled at the 
                        institution; and
                            ``(ii) stating--
                                    ``(I) the student's cost of 
                                attendance at the institution, as 
                                determined by the institution under 
                                part F of title IV of the Higher 
                                Education Act of 1965 (20 U.S.C. 1087kk 
                                et seq.); and
                                    ``(II) the difference between--
                                            ``(aa) such cost of 
                                        attendance; and
                                            ``(bb) the student's 
                                        estimated financial assistance, 
                                        including such assistance 
                                        received under title IV of the 
                                        Higher Education Act of 1965 
                                        (20 U.S.C. 1070 et seq.) and 
                                        other financial assistance 
                                        known to the institution, as 
                                        applicable.
                    ``(B) Timing.--Pursuant to section 485(a)(28)(A) of 
                the Higher Education Act of 1965 (20 U.S.C. 
                1094(a)(28)(A)), a private education lender shall 
                receive the certification described in subparagraph (A) 
                within 15 days of a request by the private education 
                lender, unless the institution of higher education 
                notifies the private educational lender pursuant to 
                section 485(a)(28)(A)(ii) of such Act that additional 
                time is needed.
                    ``(C) Additional requirements.--Upon receiving the 
                certification described in subparagraph (A) for a 
                private education loan, the private educational 
                lender--
                            ``(i) may proceed to issue funds with 
                        respect to the private education loan; and
                            ``(ii) after issuing the private education 
                        loan, shall--
                                    ``(I) notify the institution of 
                                higher education involved that the 
                                private education loan has been issued 
                                to the borrower, and the amount of such 
                                loan; and
                                    ``(II) provide the Director of the 
                                Consumer Financial Protection Bureau 
                                and the Secretary of Education with the 
                                information described in paragraph 
                                (9)(B).'';
                    (B) by redesignating paragraphs (9), (10), and 
                (11), as paragraphs (10), (11), and (12), respectively; 
                and
                    (C) by inserting after paragraph (8) the following:
            ``(9) Provision of information.--
                    ``(A) Provision of information to borrowers.--
                            ``(i) Loan statements.--A private 
                        educational lender that issues any funds with 
                        respect to a private education loan shall--
                                    ``(I) send loan statements, if the 
                                loan is to be used for a student, to 
                                borrowers of the funds not less than 
                                once every 3 months during the time 
                                that the student is enrolled at an 
                                institution of higher education; and
                                    ``(II) in the case of a private 
                                education loan that includes a 
                                cosigner, annually send a loan 
                                statement to the borrower's cosigner, 
                                notifying the cosigner of the terms, 
                                conditions, and status of such private 
                                education loan.
                            ``(ii) Contents of loan statement.--Each 
                        statement described in clause (i) shall--
                                    ``(I) report the borrower's total 
                                remaining debt to the private 
                                educational lender, including accrued 
                                but unpaid interest and capitalized 
                                interest;
                                    ``(II) report any debt increases 
                                since the last statement; and
                                    ``(III) list the current interest 
                                rate for each loan.
                    ``(B) Provision of information to federal 
                agencies.--
                            ``(i) Information from lender.--Each 
                        private educational lender shall--
                                    ``(I) submit to the Director of the 
                                Consumer Financial Protection Bureau 
                                and the Secretary of Education such 
                                information regarding a private 
                                education loan as may be determined 
                                necessary by the Director and the 
                                Secretary under clause (ii) for 
                                inclusion in the National Student Loan 
                                Data System under section 485B(i) of 
                                the Higher Education Act of 1965 (20 
                                U.S.C. 1092b(i)); and
                                    ``(II) prepare and submit an annual 
                                report to the Consumer Financial 
                                Protection Bureau regarding the private 
                                education loans issued by the private 
                                educational lender.
                            ``(ii) Promulgation of regulations.--Not 
                        later than 1 year after the date of enactment 
                        of the Affordable Loans for Any Student Act, 
                        the Director of the Consumer Financial 
                        Protection Bureau, in coordination with the 
                        Secretary of Education, shall promulgate 
                        regulations regarding the private education 
                        loan information required to be submitted under 
                        clause (i), including the content, method, and 
                        format for submission. The information required 
                        for inclusion in the National Student Loan Data 
                        System shall include--
                                    ``(I) information identifying the 
                                borrower, including the borrower's name 
                                and social security number;
                                    ``(II) the name of the institution 
                                of higher education that has certified 
                                the private education loan;
                                    ``(III) the name of the lender;
                                    ``(IV) the amount of the private 
                                education loan;
                                    ``(V) the term, or other enrollment 
                                period, for which the private education 
                                loan is issued; and
                                    ``(VI) whether a cosigner was 
                                required as a condition of the private 
                                education loan.''.
            (2) Definition of private education loan.--Section 
        140(a)(8)(A) of the Truth in Lending Act (15 U.S.C. 
        1650(a)(8)(A)) is amended--
                    (A) by redesignating clause (ii) as clause (iii);
                    (B) in clause (i), by striking ``and'' after the 
                semicolon; and
                    (C) by adding after clause (i) the following:
                            ``(ii) is not made, insured, or guaranteed 
                        under title VII or title VIII of the Public 
                        Health Service Act (42 U.S.C. 292 et seq. and 
                        296 et seq.); and''.
            (3) Regulations.--
                    (A) In general.--Not later than 1 year after the 
                date of enactment of this Act, the Director of the 
                Consumer Financial Protection Bureau, in coordination 
                with the Secretary of Education, shall promulgate 
                regulations to implement paragraphs (3) and (9) of 
                section 128(e) of the Truth in Lending Act (15 U.S.C. 
                1638(e)), as amended by paragraph (1) of this 
                subsection.
                    (B) Effective date.--The regulations promulgated 
                under subparagraph (A) shall take effect on the date 
                that is 180 days after the date on which the 
                regulations are promulgated.

          TITLE V--EFFECTIVE DATE; TRANSITION; IMPLEMENTATION

SEC. 501. EFFECTIVE DATE; RULEMAKING REGARDING TERMINATION OF CERTAIN 
              REPAYMENT PLANS; IMPLEMENTATION.

    (a) Effective Date.--Except as otherwise specifically provided, 
this Act, and the amendments made by this Act, shall take effect on 
July 1, 2022.
    (b) Applicability With Respect to Forbearance and Deferment for 
Direct Loan Borrowers.--With respect to any borrower of a loan under 
part D of title IV of the Higher Education Act of 1965 (20 U.S.C. 1087a 
et seq.) that is, or has been, in forbearance or deferment as of the 
day before the effective date described in subsection (a), the 
Secretary shall take such steps as are necessary--
            (1) to transfer a borrower with a loan in forbearance or 
        deferment as of such day automatically into relief provided 
        under the pause payment process established under section 460B 
        of such Act (as amended by this Act); and
            (2) to ensure that the period of time for which a borrower 
        is eligible for pause payment under such section 460B for a 
        loan is appropriately reduced to account for any time the loan 
        was previously in forbearance or deferment.
    (c) Regulations.--Before the effective date described in subsection 
(a), the Secretary of Education shall carry out a plan to end all 
eligibility for repayment plans other than a fixed repayment plan 
described in section 493E of the Higher Education Act of 1965, as added 
by this Act, and an income-based repayment plan under section 493C(c) 
of such Act (20 U.S.C. 1098e(f)) for loans made under part B or D of 
title IV of such Act, unless the borrower is enrolled in another 
repayment plan before such effective date, in accordance with the 
amendments made by this Act.
    (d) Implementation.--In carrying out the amendments made by this 
Act, or any regulations promulgated under this Act, the Secretary of 
Education may waive the application of--
            (1) subchapter I of chapter 35 of title 44, United States 
        Code (commonly known as the ``Paperwork Reduction Act'');
            (2) the master calendar requirements under section 482 of 
        the Higher Education Act of 1965 (20 U.S.C. 1089);
            (3) negotiated rulemaking under section 492 of the Higher 
        Education Act of 1965 (20 U.S.C. 1098a); and
            (4) the requirement to publish the notices related to the 
        system of records of the agency before implementation required 
        under paragraphs (4) and (11) of section 552a(e) of title 5, 
        United States Code (commonly known as the ``Privacy Act of 
        1974'').
                                 <all>