I 117th CONGRESS 2d Session H. R. 6424 IN THE HOUSE OF REPRESENTATIVES January 19, 2022 Mr. DeFazio introduced the following bill; which was referred to the Committee on Education and Labor , and in addition to the Committee on the Judiciary , for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend the Higher Education Act of 1965 to improve loans, and for other purposes.

1. Short title; table of contents (a) Short title This Act may be cited as the Helping Individuals Get a Higher Education while Reducing Education Debt Act or the HIGHER ED Act . (b) Table of contents The table of contents of this Act is as follows: Sec. 1. Short title; table of contents. Title I—Reinstatement of authority to make Federal Direct Stafford Loans to graduate and professional students; Discharging student loans in bankruptcy Sec. 101. Reinstatement of authority to make Federal Direct Stafford Loans to graduate and professional students. Sec. 102. Discharge student loans in bankruptcy. Title II—Refinancing programs Sec. 201. Program authority. Sec. 202. Refinancing program. Sec. 203. Income-based repayment. Title III—Loan forgiveness Sec. 301. Loan forgiveness for adjunct faculty. Sec. 302. Amendments to the public service loan forgiveness program. Sec. 303. Transition to improved public service loan forgiveness program. Title IV—Income-driven repayment plans Sec. 401. Income-based repayment plan. Sec. 402. Termination of certain repayment plan options. Sec. 403. Notification and automatic enrollment procedures for borrowers who are delinquent on loans. Sec. 404. Automatic recertification for income-driven repayment plans. I Reinstatement of authority to make Federal Direct Stafford Loans to graduate and professional students; Discharging student loans in bankruptcy 101. Reinstatement of authority to make Federal Direct Stafford Loans to graduate and professional students (a) Amendments Section 455(a)(3) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(a)(3) ) is amended— (1) in the paragraph heading, by inserting Temporary before Termination ; and (2) in subparagraph (A), in the matter preceding clause (i), by inserting , and ending on or before June 30, 2021 after 2012 . (b) Inapplicability of rulemaking requirements Sections 482(c) and 492 of the Higher Education Act of 1965 ( 20 U.S.C. 1089(c) ; 1098a) shall not apply to the regulations under this section. 102. Discharge student loans in bankruptcy (a) Exception To discharge Section 523(a) of title 11, United States Code, is amended— (1) by striking paragraph (8); and (2) by redesignating paragraphs (9) through (14B) as paragraphs (8) through (14A), respectively. (b) Conforming amendments Title 11, United States Code, is amended— (1) in section 704(c)(1)(C)(iv)(I) by striking (14A) and inserting (14) ; (2) in section 1106(c)(1)(C)(iv)(I) by striking (14A) and inserting (14) ; (3) in section 1202(c)(1)(C)(iv)(I) by striking (14A) and inserting (14) ; and (4) in section 1328(a)(2) by striking (8), or (9) and inserting or (8) . (c) Effective date; application of amendments (1) Effective date Except as provided in subsection (b), this section and the amendments made by this section shall take effect on the date of the enactment of this Act. (2) Application of amendments The amendments made by this section shall apply only with respect to cases commenced under title 11 of the United States Code on or after the date of the enactment of this Act. II Refinancing programs 201. Program authority Section 451(a) of the Higher Education Act of 1965 ( 20 U.S.C. 1087a(a) ) is amended— (1) by striking and (2) and inserting (2) ; and (2) by inserting ; and (3) to make loans under section 460A and section 460B after section 459A . 202. Refinancing program Part D of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1087a et seq. ) is amended by adding at the end the following: 460A. Refinancing FFEL and Federal Direct Loans (a) In general Beginning not later than 180 days after the date of enactment of the Helping Individuals Get a Higher Education while Reducing Education Debt Act , the Secretary shall establish a program under which the Secretary, upon the receipt of an application from a qualified borrower, makes a loan under this part, in accordance with the provisions of this section, in order to permit the borrower to obtain the interest rate provided under subsection (c). (b) Refinancing Direct Loans (1) Federal Direct Loans Upon application of a qualified borrower, the Secretary shall repay a Federal Direct Stafford Loan, a Federal Direct Unsubsidized Stafford Loan, a Federal Direct PLUS Loan, or a Federal Direct Consolidation Loan of the qualified borrower, for which the first disbursement was made, or the application for the consolidation loan was received, before July 1, 2022, with the proceeds of a refinanced Federal Direct Stafford Loan, a Federal Direct Unsubsidized Stafford Loan, a Federal Direct PLUS Loan, or a Federal Direct Consolidation Loan, respectively, issued to the borrower in an amount equal to the sum of the unpaid principal, accrued unpaid interest, and late charges of the original loan. (2) Refinancing FFEL program loans as refinanced Federal Direct Loans Upon application of a qualified borrower for any loan that was made, insured, or guaranteed under part B and for which the first disbursement was made, or the application for the consolidation loan was received, before July 1, 2010, the Secretary shall make a loan under this part, in an amount equal to the sum of the unpaid principal, accrued unpaid interest, and late charges of the original loan to the borrower in accordance with the following: (A) The Secretary shall pay the proceeds of such loan to the eligible lender of the loan made, insured, or guaranteed under part B, in order to discharge the borrower from any remaining obligation to the lender with respect to the original loan. (B) A loan made under this section that was originally— (i) a loan originally made, insured, or guaranteed under section 428 shall be a Federal Direct Stafford Loan; (ii) a loan originally made, insured, or guaranteed under section 428B shall be a Federal Direct PLUS Loan; (iii) a loan originally made, insured, or guaranteed under section 428H shall be a Federal Direct Unsubsidized Stafford Loan; and (iv) a loan originally made, insured, or guaranteed under section 428C shall be a Federal Direct Consolidation Loan. (C) The interest rate for each loan made by the Secretary under this paragraph shall be the rate provided under subsection (c). (c) Interest rates (1) In general The interest rate for the refinanced Federal Direct Stafford Loans, Federal Direct Unsubsidized Stafford Loans, Federal Direct PLUS Loans, and Federal Direct Consolidation Loans, shall be a rate equal to— (A) in any case where the original loan was a loan under section 428 or 428H, a Federal Direct Stafford loan, or a Federal Direct Unsubsidized Stafford Loan, that was issued to an undergraduate student, a rate equal to the rate for Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans issued to undergraduate students for the 12-month period beginning on July 1, 2016, and ending on June 30, 2017; (B) in any case where the original loan was a loan under section 428 or 428H, a Federal Direct Stafford Loan, or a Federal Direct Unsubsidized Stafford Loan, that was issued to a graduate or professional student, a rate equal to the rate for Federal Direct Unsubsidized Stafford Loans issued to graduate or professional students for the 12-month period beginning on July 1, 2016, and ending on June 30, 2017; (C) in any case where the original loan was a loan under section 428B or a Federal Direct PLUS Loan, a rate equal to the rate for Federal Direct PLUS Loans for the 12-month period beginning on July 1, 2016, and ending on June 30, 2017; and (D) in any case where the original loan was a loan under section 428C or a Federal Direct Consolidation Loan, a rate calculated in accordance with paragraph (2). (2) Interest Rates for Consolidation Loans (A) Method of calculation In order to determine the interest rate for any refinanced Federal Direct Consolidation Loan under paragraph (1)(D), the Secretary shall— (i) determine each of the component loans that were originally consolidated in the loan under section 428C or the Federal Direct Consolidation Loan, and calculate the proportion of the unpaid principal balance of the loan under section 428C or the Federal Direct Consolidation Loan that each component loan represents; (ii) use the proportions determined in accordance with clause (i) and the interest rate applicable for each component loan, as determined under subparagraph (B), to calculate the weighted average of the interest rates on the loans consolidated into the loan under section 428C or the Federal Direct Consolidation Loan; and (iii) apply the weighted average calculated under clause (ii) as the interest rate for the refinanced Federal Direct Consolidation Loan. (B) Interest rates for component loans The interest rates for the component loans of a loan made under section 428C or a Federal Direct Consolidation Loan shall be the following: (i) The interest rate for any loan under section 428 or 428H, Federal Direct Stafford Loan, or Federal Direct Unsubsidized Stafford Loan issued to an undergraduate student shall be a rate equal to the lesser of— (I) the rate for Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans issued to undergraduate students for the 12-month period beginning on July 1, 2016, and ending on June 30, 2017; or (II) the original interest rate of the component loan. (ii) The interest rate for any loan under section 428 or 428H, Federal Direct Stafford Loan, or Federal Direct Unsubsidized Stafford Loan issued to a graduate or professional student shall be a rate equal to the lesser of— (I) the rate for Federal Direct Unsubsidized Stafford Loans issued to graduate or professional students for the 12-month period beginning on July 1, 2016, and ending on June 30, 2017; or (II) the original interest rate of the component loan. (iii) The interest rate for any loan under section 428B or Federal Direct PLUS Loan shall be a rate equal to the lesser of— (I) the rate for Federal Direct PLUS Loans for the 12-month period beginning on July 1, 2016, and ending on June 30, 2017; or (II) the original interest rate of the component loan. (iv) The interest rate for any component loan that is a loan under section 428C or a Federal Direct Consolidation Loan shall be the weighted average of the interest rates that would apply under this subparagraph for each loan comprising the component consolidation loan. (v) The interest rate for any eligible loan that is a component of a loan made under section 428C or a Federal Direct Consolidation Loan and is not described in clauses (i) through (iv) shall be the interest rate on the original component loan. (3) Fixed Rate The applicable rate of interest determined under paragraph (1) for a refinanced loan under this section shall be fixed for the period of the loan. (d) Terms and conditions of loans (1) In general A loan that is refinanced under this section shall have the same terms and conditions as the original loan, except as otherwise provided in this section. (2) No automatic extension of repayment period Refinancing a loan under this section shall not result in the extension of the duration of the repayment period of the loan, and the borrower shall retain the same repayment term that was in effect on the original loan. Nothing in this paragraph shall be construed to prevent a borrower from electing a different repayment plan at any time in accordance with section 455(d)(3). (e) Definition of qualified borrower (1) In General For purposes of this section, the term qualified borrower means a borrower— (A) of a loan under this part or part B for which the first disbursement was made, or the application for a consolidation loan was received, before July 1, 2021; and (B) who meets the eligibility requirements based on income or debt-to-income ratio established by the Secretary. (2) Income requirements Not later than 180 days after the date of enactment of the Helping Individuals Get a Higher Education while Reducing Education Debt Act , the Secretary shall establish eligibility requirements based on income or debt-to-income ratio that take into consideration providing access to refinancing under this section for borrowers with the greatest financial need. (f) Notification to borrowers The Secretary, in coordination with the Director of the Bureau of Consumer Financial Protection, shall undertake a campaign to alert borrowers of loans that are eligible for refinancing under this section that the borrowers are eligible to apply for such refinancing. The campaign shall include the following activities: (1) Developing consumer information materials about the availability of Federal student loan refinancing. (2) Requiring servicers of loans under this part or part B to provide such consumer information to borrowers in a manner determined appropriate by the Secretary, in consultation with the Director of the Bureau of Consumer Financial Protection. 460B. Federal Direct Refinanced Private Loan program (a) Definitions In this section: (1) Eligible private education loan The term eligible private education loan means a private education loan, as defined in section 140(a) of the Truth in Lending Act ( 15 U.S.C. 1650(a) ), that— (A) was disbursed to the borrower before July 1, 2022; and (B) was for the borrower’s own postsecondary educational expenses for an eligible program at an institution of higher education participating in the loan program under this part, as of the date that the loan was disbursed. (2) Federal Direct Refinanced Private Loan The term Federal Direct Refinanced Private Loan means a loan issued under subsection (b)(1). (3) Private educational lender The term private educational lender has the meaning given the term in section 140(a) of the Truth in Lending Act ( 15 U.S.C. 1650(a) ). (4) Qualified borrower The term qualified borrower means an individual who— (A) has an eligible private education loan; (B) has been current on payments on the eligible private education loan for the 6 months prior to the date of the qualified borrower's application for refinancing under this section, and is in good standing on the loan at the time of such application; (C) is not in default on the eligible private education loan or on any loan made, insured, or guaranteed under this part or part B or E; and (D) meets the eligibility requirements described in subsection (b)(2). (b) Program authorized (1) In general The Secretary, in consultation with the Secretary of the Treasury, shall carry out a program under which the Secretary, upon application by a qualified borrower who has an eligible private education loan, shall issue such borrower a loan under this part in accordance with the following: (A) The loan issued under this program shall be in an amount equal to the sum of the unpaid principal, accrued unpaid interest, and late charges of the private education loan. (B) The Secretary shall pay the proceeds of the loan issued under this program to the private educational lender of the private education loan, in order to discharge the qualified borrower from any remaining obligation to the lender with respect to the original loan. (C) The Secretary shall require that the qualified borrower undergo loan counseling that provides all of the information and counseling required under clauses (i) through (viii) of section 485(b)(1)(A) before the loan is refinanced in accordance with this section, and before the proceeds of such loan are paid to the private educational lender. (D) The Secretary shall issue the loan as a Federal Direct Refinanced Private Loan, which shall have the same terms, conditions, and benefits as a Federal Direct Unsubsidized Stafford Loan, except as otherwise provided in this section. (2) Borrower eligibility Not later than 180 days after the date of enactment of the Helping Individuals Get a Higher Education while Reducing Education Debt Act , the Secretary, in consultation with the Secretary of the Treasury and the Director of the Bureau of Consumer Financial Protection, shall establish eligibility requirements— (A) based on income or debt-to-income ratio that take into consideration providing access to refinancing under this section for borrowers with the greatest financial need; (B) to ensure eligibility only for borrowers in good standing; (C) to minimize inequities between Federal Direct Refinanced Private Loans and other Federal student loans; (D) to preclude windfall profits for private educational lenders; and (E) to ensure full access to the program authorized in this subsection for borrowers with private loans who otherwise meet the criteria established in accordance with subparagraphs (A) and (B). (c) Interest rate (1) In general The interest rate for a Federal Direct Refinanced Private Loan is— (A) in the case of a Federal Direct Refinanced Private Loan for a private education loan originally issued for undergraduate postsecondary educational expenses, a rate equal to the rate for Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans issued to undergraduate students for the 12-month period beginning on July 1, 2016, and ending on June 30, 2017; and (B) in the case of a Federal Direct Refinanced Private Loan for a private education loan originally issued for graduate or professional degree postsecondary educational expenses, a rate equal to the rate for Federal Direct Unsubsidized Stafford Loans issued to graduate or professional students for the 12-month period beginning on July 1, 2016, and ending on June 30, 2017. (2) Combined undergraduate and graduate study loans If a Federal Direct Refinanced Private Loan is for a private education loan originally issued for both undergraduate and graduate or professional postsecondary educational expenses, the interest rate shall be a rate equal to the rate for Federal Direct PLUS Loans for the 12-month period beginning on July 1, 2016, and ending on June 30, 2017. (3) Fixed Rate The applicable rate of interest determined under this subsection for a Federal Direct Refinanced Private Loan shall be fixed for the period of the loan. (d) No inclusion in aggregate limits The amount of a Federal Direct Refinanced Private Loan, or a Federal Direct Consolidated Loan to the extent such loan was used to repay a Federal Direct Refinanced Private Loan, shall not be included in calculating a borrower's annual or aggregate loan limits under section 428 or 428H. (e) No eligibility for service-Related repayment Notwithstanding sections 428K(a)(2)(A), 428L(b)(2), 455(m)(3)(A), and 460(b), a Federal Direct Refinanced Private Loan, or any Federal Direct Consolidation Loan to the extent such loan was used to repay a Federal Direct Refinanced Private Loan, shall not be eligible for any loan repayment or loan forgiveness program under section 428K, 428L, or 460 or for the repayment plan for public service employees under section 455(m). (f) Private educational lender reporting requirement (1) Reporting required Not later than 180 days after the date of enactment of the Helping Individuals Get a Higher Education while Reducing Education Debt Act , the Secretary, in consultation with the Secretary of the Treasury and the Director of the Bureau of Consumer Financial Protection, shall establish a requirement that private educational lenders report the data described in paragraph (2) to the Secretary, to Congress, to the Secretary of the Treasury, and to the Director of the Bureau of Consumer Financial Protection, in order to allow for an assessment of the private education loan market. (2) Contents of reporting The data that private educational lenders shall report in accordance with paragraph (1) shall include each of the following about private education loans (as defined in section 140(a) of the Truth in Lending Act ( 15 U.S.C. 1650(a) )): (A) The total amount of private education loan debt the lender holds. (B) The total number of private education loan borrowers the lender serves. (C) The average interest rate on the outstanding private education loan debt held by the lender. (D) The proportion of private education loan borrowers who are in default on a loan held by the lender. (E) The proportion of the outstanding private education loan volume held by the lender that is in default. (F) The proportions of outstanding private education loan borrowers who are 30, 60, and 90 days delinquent. (G) The proportions of outstanding private education loan volume that is 30, 60, and 90 days delinquent. (g) Notification to borrowers The Secretary, in coordination with the Secretary of the Treasury and the Director of the Bureau of Consumer Financial Protection, shall undertake a campaign to alert borrowers about the availability of private student loan refinancing under this section. . 203. Income-based repayment Section 493C of the Higher Education Act of 1965 ( 20 U.S.C. 1098e ) is amended by adding at the end the following: (f) Special rule for refinanced loans (1) Refinanced Federal Direct and FFEL loans In calculating the period of time during which a borrower of a loan that is refinanced under section 460A has made monthly payments for purposes of subsection (b)(7), the Secretary shall deem the period to include all monthly payments made for the original loan, and all monthly payments made for the refinanced loan, that otherwise meet the requirements of this section. (2) Federal Direct Refinanced Private Loans In calculating the period of time during which a borrower of a Federal Direct Refinanced Private Loan under section 460B has made monthly payments for purposes of subsection (b)(7), the Secretary shall include only payments— (A) that are made after the date of the issuance of the Federal Direct Refinanced Private Loan; and (B) that otherwise meet the requirements of this section. . III Loan forgiveness 301. Loan forgiveness for adjunct faculty Section 455(m)(3)(B)(ii) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(m)(3)(B)(ii) ) is amended— (1) by striking teaching as and inserting the following: teaching— (I) as ; (2) by striking , foreign language faculty, and part-time faculty at community colleges), as determined by the Secretary. and inserting and foreign language faculty), as determined by the Secretary; or ; and (3) by adding at the end the following: (II) as a part-time faculty member or instructor who— (aa) teaches not less than 1 course at an institution of higher education (as defined in section 101(a)), a postsecondary vocational institution (as defined in section 102(c)), or a Tribal College or University (as defined in section 316(b)); and (bb) is not employed on a full-time basis by any other employer. . 302. Amendments to the public service loan forgiveness program (a) Public service loan forgiveness (1) In general Section 455(m) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(m) ) is amended to read as follows: (m) Loan forgiveness for Federal student loan borrowers employed in public service (1) Definitions In this subsection: (A) Certification of employment The term certification of employment means a certification of employment under paragraph (4). (B) Full-time The term full-time , when used with respect to employment, means employment— (i) with a qualifying employer for not less than 30 hours per week; or (ii) with 2 or more qualifying employers for a total of not less than 30 hours per week. (C) Qualifying employer The term qualifying employer means— (i) a Federal, State, local, or Tribal government organization or instrumentality, including any organization established in law as a body politic; (ii) an organization that is described in section 501(c)(3) of the Internal Revenue Code of 1986, and exempt from taxation under section 501(a) of such Code; (iii) an organization— (I) not described in clause (ii) that is a not-for-profit organization under other Federal or State law; (II) that is not a labor organization or partisan political organization; and (III) whose purpose is to directly provide any of the following services, as defined in regulations promulgated by the Secretary: (aa) Emergency management and disaster response. (bb) Military service. (cc) Public safety services, including fire prevention and suppression, rescue services, hazardous materials response, ambulance services, and emergency medical services. (dd) Law enforcement. (ee) Public health, including service through organizations that employ nurses, nurse practitioners, nurses in a clinical setting, or professionals engaged in health care practitioner occupations and health care support occupations, as such terms are defined by the Bureau of Labor Statistics, or organizations at which individuals engaged in such occupations provide service, but who are prohibited from being employed directly by such an organization or other health care facility by State law. (ff) Public education, including the provision of educational enrichment or support directly to students or their families, employment with a Tribal College or University (as defined in section 316(b)), and employment as an adjunct faculty member or instructor for an educational institution. (gg) Public interest law services, including prosecution or public defense or legal advocacy on behalf of low-income communities at a not-for-profit organization. (hh) Early childhood education, including licensed or regulated childcare, Head Start programs, and State funded prekindergarten. (ii) Public service for individuals with disabilities. (jj) Public service for the elderly. (kk) Public and school-based library sciences. (ll) School-based services, including the provision of noneducational enrichment or support directly to students or their families. (mm) Social work, including child or family services. (nn) Veteran or military services organization; or (iv) a farm or ranch that, with respect to a fiscal year, has earnings of gross revenue during such year from the sale of agricultural products equal to or greater than— (I) in the case of 2022, $35,000; or (II) in the case of any succeeding year, the amount applicable under this subparagraph for the previous year, increased by the estimated percentage change in the Consumer Price Index for the most recent year preceding such year. (D) Qualifying monthly payment obligation The term qualifying monthly payment obligation means a monthly payment obligation due on a loan under the repayment plan of the borrower— (i) that was satisfied by the borrower through a payment made after October 1, 2007; and (ii) attributable to a period during which the borrower was employed full-time by a qualifying employer. (E) Loan made under this part The term loan made under this part includes a Federal Direct Stafford Loan, Federal Direct PLUS Loan, Federal Direct Unsubsidized Stafford Loan, or Federal Direct Consolidation Loan refinanced under section 460A. (2) Cancellation authorized (A) In general Beginning on July 1, 2022, the Secretary shall, on an annual basis, cancel an amount of interest and principal due, in accordance with subparagraph (B), on any loan made under this part that is not in default for a borrower who— (i) has satisfied 12 qualifying monthly payment obligations on such loan; and (ii) submits a certification of employment that meets the requirements of paragraph (3) for the period in which the borrower makes each of the 12 payment obligations described in subparagraph (A). (B) Cancellation amount The Secretary shall cancel— (i) after the conclusion of each of the first 9, 12-month periods described in subparagraph (A), an amount equal to 10 percent of the balance of interest and principal due, on the loans made to the borrower under this part, as of the date on which the borrower satisfies the first qualifying monthly payment obligation under this subsection on such loans; and (ii) after the conclusion of the tenth, 12-month period described in subparagraph (A), the obligation to repay any remaining balance of principal and interest due as of the time of such cancellation, on the loans made to the borrower under this part. (3) Certification of employment requirements (A) In general In order to receive loan cancellation under this subsection, a borrower of a loan made under this part shall submit to the Secretary a certification of employment. (B) Content of certification The Secretary shall— (i) develop, and make easily accessible, the certification of employment; and (ii) ensure that the method of certification— (I) allows for the employer to indicate and certify the dates of the borrower’s employment; and (II) provides electronic signature options for the employer and for the borrower. (C) Borrower access The Secretary shall ensure that a borrower may submit a certification of employment to the Secretary electronically through any information system through which the Secretary permits borrowers to take self-service actions with respect to their loans. (D) Exception for self-certification The Secretary shall provide a self-certification option for the certification of employment for borrowers who have extenuating circumstances preventing the borrowers from obtaining the qualifying employer signature and certification required under subparagraph (B)(ii), as determined by the Secretary pursuant to rulemaking and including situations where an employer is no longer in existence or refuses to cooperate. (E) Periodic review of certification of employment For each borrower of a loan made under this part who has submitted a certification of employment, the Secretary shall— (i) by not later than 30 days after receipt of the certification of employment— (I) review the certification of employment and determine the number of qualifying monthly payment obligations satisfied on the loan during the period of employment covered by the certification of employment; and (II) inform the borrower of the number of qualifying monthly payment obligations satisfied; and (ii) periodically, but not less than twice annually, notify the borrower, using the most recent calculation of qualifying monthly payment obligations, of— (I) the number of qualifying monthly payment obligations satisfied, as of the date of the notice; (II) any steps the borrower can take to convert non-qualifying monthly payment obligations into qualifying monthly payment obligations, including the options to provide payments to satisfy monthly payment obligations for past public service under paragraph (4)(C); and (III) the dispute resolution process for the Secretary’s determination of qualifying monthly payment obligations, as described in paragraph (7). (4) Qualifying monthly payment obligations (A) In general For purposes of this subsection, the number of qualifying monthly payment obligations satisfied on a loan is the number of monthly payments, during the period of employment and based on the repayment plan selected by the borrower for such period, that would be satisfied based on applying the total amount of payments made by the borrower on the loan at any time during such period. (B) Adjustment of payment obligation status (i) Hold harmless against retroactive determinations If the Secretary has classified a payment obligation satisfied by a borrower of a loan made under this part as a qualifying monthly payment obligation and later determines that the payment obligation does not qualify, the Secretary shall deem the payment obligation to be a qualifying monthly payment obligation to be counted for purposes of paragraph (2). (ii) Explanation of non-qualifying payment obligation determinations If the Secretary determines that payments made by a borrower of a loan made under this part for a period of full-time employment with a qualifying employer cannot be applied toward the total number of qualifying monthly payment obligations for purposes of paragraph (2), the Secretary shall provide a borrower with an explanation and allow the borrower to correct the reason for such determination, to the extent possible. Such borrower remediation shall include, at a minimum, providing a borrower with the opportunity to reimburse the Secretary for any underpayment. (C) Satisfying previously non-qualifying monthly payment obligations (i) In general A borrower of a loan made under this part who has a period during which the borrower was employed full-time with a qualifying employer but did not satisfy one or more qualifying monthly payment obligations during such period, such as a borrower who was in deferment or forbearance, may satisfy one or more monthly payment obligations of that period at a later date by paying the additional amount needed to satisfy the qualifying monthly payment obligation, in accordance with a process established by the Secretary. (ii) Determination process The amount of past monthly payment obligations satisfied by a payment under this subparagraph for a period of employment shall be determined using the amount of the borrower's monthly payment, based on any repayment plan, as selected by the borrower, that could have been selected by the borrower during such period. The Secretary may require a borrower wishing to satisfy past monthly payment obligations under this subparagraph to submit any additional information necessary to calculate the amount of the past payments. (iii) Limit A borrower may not satisfy more than 36 past monthly payment obligations under this subparagraph. (D) Overpayment In a case in which the dispute resolution process under paragraph (8) delays the date on which a borrower would have received full loan forgiveness under paragraph (3)(B), the Secretary shall refund the borrower the amount of any qualifying monthly payment obligation the borrower makes in excess of 120 qualifying payment obligations during such process. (5) Special rules relating to Federal Direct consolidation loans (A) Review of any new consolidation loan application (i) Public service loan forgiveness option on consolidation application Beginning on July 1, 2022, the Secretary shall include, in any application for a Federal Direct Consolidation Loan, the option for the borrower to indicate that the borrower is consolidating for the purpose of using the public service loan forgiveness program under this subsection. (ii) Review Beginning on July 1, 2022, the Secretary shall, after issuing any Federal Direct Consolidation Loan to a borrower who indicated an interest in the public service loan forgiveness program on the loan application— (I) request that the borrower submit a certification of employment; and (II) after receiving a complete certification of employment, review the borrower’s past payments on all component loans comprising the Federal Direct Consolidation Loan and inform the borrower— (aa) of the number of monthly payment obligations satisfied by the borrower before the date of consolidation that are qualifying monthly payment obligations, in accordance with subparagraph (B); or (bb) if no payment obligations are satisfied, that the borrower will not receive any credit towards public service loan forgiveness under this subsection for the Federal Direct Consolidation Loan. (B) Qualifying payment obligations on all component loans and loan types through consolidation In the case of a borrower of one or more loans eligible for consolidation, including loans made under part B, who applies for, and receives, a Federal Direct Consolidation Loan, the Secretary shall request the borrower submit a certification of employment for any qualifying employment and, after receiving the certification of employment, shall— (i) review the borrower's payment history on each of the component loans comprising the Federal Direct Consolidation Loan, including each loan made under part B; and (ii) for each component loan— (I) calculate the weighted factor of the component loan, which shall be the factor that represents the ratio between the amount of the component loan and the amount of the Federal Direct Consolidation Loan, as determined by the Secretary; (II) determine the number of equivalent monthly payment obligations toward the Federal Direct Consolidation Loan satisfied on the component loan by multiplying the weighted factor for the component loan by the number of qualifying monthly payment obligations that the borrower satisfied on the component loan; and (III) after rounding the number determined under subclause (II) to the nearest whole number, deem that number of equivalent monthly payment obligations to be qualifying monthly payment obligations on the Federal Direct Consolidation Loan. (C) Applicability of borrower protections and rights A borrower of one or more loans eligible for consolidation, including loans made under part B, who applies for and receives a Federal Direct Consolidation Loan shall receive all the protections and rights provided under subparagraphs (B) and (C) of paragraph (4) for the loan, and for any component loan, in the same manner as provided to any other borrower of a loan made under this part. (D) Treatment of certain consolidation loan payments In a case in which a borrower makes a qualifying monthly payment obligation for purposes of paragraph (2) on a Federal Direct Consolidation Loan that was used to repay a Federal Direct Stafford Loan, Federal Direct PLUS Loan, Federal Direct Unsubsidized Stafford Loan, or Federal Direct Consolidation Loan refinanced under section 460A for which at least one qualifying monthly payment obligation for such purposes has been made prior to the consolidation, the qualifying monthly payment obligation on such Federal Direct Consolidation Loan shall be treated as a qualifying monthly payment obligation for purposes of paragraph (2) on such Federal Direct Stafford Loan, Federal Direct PLUS Loan, Federal Direct Unsubsidized Stafford Loan, or Federal Direct Consolidation Loan. (6) Notice of qualifying payment obligations (A) Initial notice Upon receiving any verbal or written contact by a borrower on or after July 1, 2022, expressing interest in the public service loan forgiveness program under this subsection, the Secretary, or an eligible lender or guaranty agency under part B, shall provide the borrower, by not later than 30 days after the contract, with a notice that— (i) explains the requirements of the program, including whether the borrower needs to consolidate some or all of the borrower's loans to receive forgiveness under this subsection; (ii) includes a copy of, or a link to, information about the certification of employment process described in paragraph (3); (iii) includes an estimate of the qualifying monthly payment obligations that would be satisfied by the borrower based on the borrower's payment history, as of the date of notice, if the borrower was a full-time employee of a qualifying employer and met the requirements of paragraph (2); and (iv) includes an estimate of the number of remaining qualifying monthly payment obligations to be satisfied in order for the borrower to receive partial loan forgiveness under paragraph (2)(A). (B) Subsequent notices After providing an initial notice under subparagraph (A), the Secretary, or an eligible lender or guaranty agency under part B, shall annually provide the borrower with a notice containing the information described in such subparagraph for each subsequent year that the borrower has an outstanding loan, unless the borrower receives notices under paragraph (3)(E)(ii) or requests that the notices be discontinued. (7) Dispute resolution process By not later than July 1, 2022, the Secretary shall establish a process on an online portal for borrowers to dispute the calculation of qualifying monthly payment obligations, or the determination of full or partial loan forgiveness under paragraph (2), following the submission of a certification of employment or application for forgiveness or any successor certification or application. (8) Special rules for section 460A loans (A) Refinanced Federal Direct loans Notwithstanding paragraph (2), in determining the number of monthly payments that meet the requirements of such paragraph for an eligible Federal Direct Loan refinanced under section 460A that was originally a loan under this part, the Secretary shall include all monthly payments made on the original loan that meet the requirements of such paragraph. (B) Refinanced FFEL loans In the case of an eligible Federal Direct Loan refinanced under section 460A that was originally a loan under part B, only monthly payments made after the date on which the loan was refinanced may be included for purposes of paragraph (2). (9) Ineligibility (A) No double benefits No borrower may, for the same service, receive a reduction of loan obligations under both this subsection and section 428J, 428K, 428L, or 460. (B) Federal elected service excluded No borrower may receive loan forgiveness under this subsection for service as a Member of Congress or President or Vice President of the United States. . (2) FFEL program amendments Part B of the Higher Education Act of 1965 ( 20 U.S.C. 1071 et seq. ) is amended— (A) in section 428 ( 20 U.S.C. 1078 ), by adding at the end the following: (p) Repayment history information and public service loan forgiveness information A guaranty agency shall— (1) provide, in a timely manner, any necessary borrower repayment history information that the Secretary requests in order to determine the borrower's eligibility for the public service loan forgiveness program under section 455(m), or the number of qualifying monthly payment obligations satisfied for purposes of the program, including such information from all servicers involved in servicing the borrower's loan; and (2) carry out the requirements of section 455(m)(7) upon receiving any verbal or written contact by a borrower on or after July 1, 2022, expressing interest in the public service loan forgiveness program under section 455(m). ; and (B) in section 433 ( 20 U.S.C. 1083 )— (i) by redesignating subsection (f) as subsection (g); and (ii) by inserting after subsection (e) the following: (f) Repayment history information An eligible lender shall— (1) provide, in a timely manner, any necessary borrower repayment history information that the Secretary requests in order to determine the borrower's eligibility for the public service loan forgiveness program under section 455(m), or the number of qualifying monthly payment obligations satisfied for purposes of the public service loan forgiveness program under section 455(m), including such information from all servicers involved in servicing the borrower's loan; and (2) carry out the requirements of section 455(m)(7) upon receiving any verbal or written contact by a borrower on or after July 1, 2022, expressing interest in the public service loan forgiveness program under section 455(m). . (b) Notification to Direct Loan borrowers regarding all options for loan forgiveness Section 455 of the Higher Education Act of 1965 ( 20 U.S.C. 1087e ) is amended by adding at the end the following: (r) Annual notice regarding loan forgiveness options (1) In general The Secretary shall annually provide a written or electronic disclosure to each borrower of a loan under this part— (A) notifying the borrower— (i) of any loan forgiveness option available under this title that might apply to a loan under this part held by the borrower, including the public service loan forgiveness program under subsection (m); and (ii) in the case of a borrower who is a full-time employee of a Federal agency and has not expressed interest in or submitted a certification of employment for the public service loan forgiveness program— (I) that the borrower is employed by a qualifying employer; (II) the number of payment obligations satisfied by the borrower that the Secretary has determined could be qualifying monthly payment obligations on eligible Federal Direct Loan for purposes of the public service loan forgiveness program; and (III) the steps necessary for the borrower to submit a certification of employment and to obtain forgiveness under subsection (m)(2); (B) informing the borrower that the loan forgiveness options described in subparagraph (A) are provided free of charge; and (C) including, for each loan forgiveness option, information regarding how the borrower should proceed, including contact information, if the borrower wishes to pursue such loan forgiveness option. (2) Exclusions Notwithstanding paragraph (1), the Secretary shall not provide a notification under this subsection to a borrower of a loan under this part if— (A) the borrower is also receiving a notification under subsection (m)(7); or (B) the borrower has requested that the Secretary no longer provide the notifications under this subsection. . (c) Effective date The amendments made by this section shall take effect on July 1, 2022. 303. Transition to improved public service loan forgiveness program (a) Review of borrowers currently participating in public service loan forgiveness (1) Calculating the number of qualifying payment obligations for current public service loan forgiveness program participants By not later than July 1, 2022, the Secretary shall, for each borrower that has submitted a certification of employment under the public service loan forgiveness program under section 455(m) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e ) before July 1, 2022— (A) calculate the number of qualifying payment obligations under such section satisfied by the borrower, using the criteria of such section as in effect on July 1, 2022; and (B) inform the borrower of the changes in the public service loan forgiveness program and the number of qualifying payment obligations that the borrower will have satisfied for purposes of the program, beginning on July 1, 2022. (2) Retroactive partial loan forgiveness By not later than July 1, 2022, the Secretary shall take such steps as are necessary to provide partial loan forgiveness under section 455(m)(3)(A)(i) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(m)(3)(A)(i) ), as in effect on such date, to borrowers with outstanding balance of principal and interest on a loan made under this part who met the criteria for partial loan forgiveness under such section, as in effect on July 1, 2022, before such date but on or after October 1, 2007. (3) Applicability of other provisions In carrying out paragraphs (1) and (2), and in any other case where the Secretary is applying the loan forgiveness provisions of section 455(m) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(m) ), as in effect on July 1, 2022, to a borrower for whom one or more payment obligations were satisfied before July 1, 2022, the Secretary shall determine the number of payment obligations satisfied by applying all of the provisions of such section as in effect on July 1, 2022, including the calculation of payment obligations under section 455(m)(5) of such Act and the inclusion of payment obligations satisfied through the component loans of a Federal Direct Consolidation Loan under section 455(m)(6), without regard as to the date on which the payment obligation was satisfied. (b) Special PSLF program funds (1) Definition of Special PSLF program funds In this section, the term special PSLF program funds means the amounts appropriated for public service loan forgiveness under section 315 of division H of the Consolidated Appropriations Act, 2018 ( Public Law 115–141 ; March 23, 2018) or under section 313 of division B of the Department of Defense and Labor, Health and Human Services, and Education Appropriations Act, 2019 and Continuing Appropriations Act, 2019 ( Public Law 115–245 ; September 28, 2018). (2) Rescission Upon the effective date described in section 2(c), all special PSLF program funds that remain unexpended on such date shall be rescinded. (3) Transition The Secretary of Education shall establish a process through which the Secretary shall— (A) review the applications of borrowers who applied for the loan forgiveness program carried out with special PSLF program funds but had not received loan forgiveness through such program before July 1, 2022; and (B) assist such borrowers in pursuing loan forgiveness under section 455(m) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(m) ), as in effect on July 1, 2022. IV Income-driven repayment plans 401. Income-based repayment plan Section 493C of the Higher Education Act of 1965 ( 20 U.S.C. 1098e ) is amended— (1) in subsection (b)— (A) in paragraph (8), by striking and after the semicolon; (B) in paragraph (9), by striking the period at the end and inserting ; and ; and (C) by adding at the end the following: (10) a borrower who is repaying a loan made under part B or D pursuant to this section may repay such loan in full at any time without penalty. ; and (2) by adding at the end the following: (f) Income-Based repayment for new loans on and after July 1, 2022, and for borrowers who enter IBR after July 1, 2022 (1) In General The income-based repayment plan shall be carried out in accordance with this section, except as otherwise specified in this subsection (including through the special terms described in paragraph (2))— (A) with respect to any loan issued on or after July 1, 2022, if such borrower elects the income-based repayment plan for that loan; and (B) with respect to any borrower who is repaying a loan made, insured, or guaranteed under part B or D, if such borrower elects to repay the loan under the income-based repayment plan on or after July 1, 2022. (2) Special terms Notwithstanding any other provision of this section, with respect to a loan described under paragraph (1), the following terms shall apply to the income-based repayment plan: (A) (i) Notwithstanding subsection (a)(3)(B), the repayment amount under this subsection shall be an amount equal to 5 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 (if applicable), adjusted gross income; exceeds (II) the applicable percentage of the poverty line in accordance with clause (ii) 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) ). (ii) For purposes of clause (i), the term applicable percentage means 150 percent reduced by 1 percentage point for each $1,000 by which the borrower’s adjusted gross income exceeds $100,000. (B) A borrower may elect— (i) during any period during which the borrower’s (and the borrower’s spouse, if applicable) adjusted gross income is equal to or less than 250 percent of the poverty line applicable to the borrower's family size as determined under section 673(2) of the Community Services Block Grant Act ( 42 U.S.C. 9902(2) ), to have the borrower’s aggregate monthly payment for all such loans equal to $0; and (ii) during any period during which the borrower’s (and the borrower’s spouse, if applicable) adjusted gross income exceeds 250 percent of such poverty line, to have the borrower’s aggregate monthly payment for all such loans not exceed, the lesser of— (I) the result described in subparagraph (A) divided by 12; or (II) the monthly amount calculated under section 455(d)(1)(A), based on a 10-year repayment period, when the borrower first made the election described in this subsection. (C) With respect to any loan for which payments may be made under subparagraph (B), be paid, or be treated as if no interest has accrued, by the Secretary— (i) for any period described in subparagraph (B)(i); and (ii) for the 6-month period after the date the borrower ceases to carry at least one-half the normal full-time academic workload at an institution of higher education, as determined by the institution, and during which the borrower is not earning any income. (D) Subsection (b)(7)(B) shall be applied by substituting 20 years for 25 years . (E) 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 subsection regardless of income level. (F) Subparagraph (A) of subsection (b)(6) shall not apply and a borrower's monthly payment shall be determined in accordance with subparagraph (A) divided by 12, which may exceed the monthly repayment amount under a standard 10-year repayment plan. (G) Subparagraph (B) of subsection (b)(3) shall not apply. (3) Additional special terms for certain borrowers A borrower described in paragraph (1)(B)— (A) may choose to retain the repayment plan in which the borrower is enrolled on June 30, 2022; (B) may elect to— (i) leave the repayment plan described in subparagraph (A) and enter the income-based repayment plan under this subsection; (ii) leave the repayment plan described in subparagraph (A) and enter a standard 10-year repayment plan under section 455(d)(A)(A); or (iii) not more than once per calendar year, switch between the repayment plans described in clauses (i) and (ii); (C) after electing to leave a repayment plan other than an income-based repayment plan described under this subsection or a standard 10-year repayment plan under section 455(d)(A)(A), shall not be permitted to re-elect a repayment plan that is not an income-based repayment plan under this subsection or such standard 10-year repayment plan; 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 subsection (b)(7)) any years of repayment under another income-based or income-contingent repayment plan under this title. (4) Cap on interest accrual Notwithstanding any other provision of this Act, the total amount of interest that accrues during a borrower's grace period and the time that a borrower is in repayment under this subsection shall not exceed 50 percent of the original principal amount of the loan. . 402. Termination of certain repayment plan options (a) Effective date; Rulemaking regarding termination of certain repayment plans (1) Effective date The amendments made by this section shall take effect on July 1, 2022. (2) Regulations Before the effective date described in paragraph (1), the Secretary of Education shall carry out a plan to end all eligibility for repayment plans other than a standard repayment plan under section 428(b)(9)(A)(i) or 455(d)(1)(A) with a repayment period of 10 years and an income-based repayment plan described under section 493C(f) for loans made under part B or D of title IV of the Higher Education Act of 1965, unless the borrower is enrolled in another repayment plan before such effective date, in accordance with the amendments made by this Act. (b) Changes to current law (1) Section 428(b) of the Higher Education Act of 1965 ( 20 U.S.C. 1078(b) ) is amended— (A) in paragraph (1)— (i) 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 after July 1, 2022, and not more frequently than once per calendar year thereafter, change the selection of a repayment plan under this part to one of the 2 repayment plans described in paragraph (9)(C), ; and (II) in clause (iii), by striking be subject to income-contingent repayment in accordance with subsection (m); and inserting be subject to income-based repayment in accordance with section 493C(f); ; and (ii) 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 a repayment plan described in paragraph (9)(C) established by the lender in accordance with regulations of the Secretary; and ; and (B) in paragraph (9), by adding at the end the following: (C) Selection of repayment plans on and after July 1, 2022 (i) Opportunity to change repayment plans Notwithstanding any other provision of this paragraph, or any other provision of law, and in accordance with regulations, beginning on July 1, 2022, the lender shall offer a borrower of a loan made, insured, or guaranteed under this part the opportunity to change repayment plans not more than once per calendar year, and to enroll in one of the following repayment plans: (I) A standard repayment plan under section 428(b)(9)(A)(i) with a repayment period of 10 years. (II) The income-based repayment plan under section 493C(f). . (2) Section 455(d) is amended— (A) by redesignating paragraphs (2) through (5) as paragraphs (3) through (6), respectively; (B) by inserting after paragraph (1), the following: (2) Design and selection on and after July 1, 2022 (A) In General Notwithstanding paragraph (1), for the borrower of a loan made on or after July 1, 2022, and for other borrowers subject to paragraph (7), the Secretary shall offer a borrower of a loan made under this part 2 plans for repayment of such loan, including principal and interest on the loan. The borrower shall be entitled to accelerate, without penalty, repayment on the borrower's loans under this part. The borrower may choose— (i) a standard repayment plan under section 455(d)(1)(A) with a repayment period of 10 years; or (ii) the income-based repayment plan under section 493C(f). (B) Selection by the Secretary If a borrower of a loan made under this part on or after July 1, 2022, does not select a repayment plan described in subparagraph (A), the Secretary may provide the borrower with a standard repayment plan under section 455(d)(1)(A) with a repayment period of 10 years. (C) Changes in selections Beginning on July 1, 2022, a borrower of a loan made under this part may change the borrower's selection of a repayment plan in accordance with paragraph (7) and under such terms and conditions as may be established by the Secretary. (D) Borrower in default Beginning on July 1, 2022, the Secretary may require any borrower who has defaulted on a loan made under this part to— (i) pay all reasonable collection costs associated with such loan; and (ii) repay the loan pursuant to an income-based repayment plan under section 493C(f). ; and (C) 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 part B or part D 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 the income-based repayment plan under section 493C(f); (ii) enter a standard repayment plan under section 455(d)(1)(A) with a repayment period of 10 years; or (iii) switch between the repayment plans described in clauses (i) and (ii) not more than once during a calendar year; (C) after electing to leave a repayment plan other than an income-based repayment plan described in this subsection or a standard repayment plan under section 455(d)(1)(A), shall not be permitted to re-elect a repayment plan that is not an income-based repayment plan described in this subsection or a standard repayment plan under section 455(d)(1)(A); 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 years of repayment under another income-based or income-contingent repayment plan under this title. . 403. Notification and automatic enrollment procedures for borrowers who are delinquent on loans (a) Income-Contingent repayment Section 455(d) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(d) ) is further amended by adding at the end the following: (8) 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 covered loan, 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 1986) 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 covered loan 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 covered loan, and a description of all delinquent covered loans, nondelinquent covered loans, and noncovered loans of the borrower. (ii) A brief description of the repayment plans for which the borrower is eligible and the covered loans and noncovered loans of the borrower 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 covered and noncovered loans 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 each income-driven repayment plan for which the borrower is eligible for the borrower's covered and noncovered loans, based on such income information; and (II) the income, family size, tax filing status, and tax year information on which each monthly payment is based. (v) An explanation that in the case of a borrower for whom adjusted gross income is unavailable— (I) if the borrower selects to repay the covered loans of such borrower pursuant to an income-driven repayment plan that defines discretionary income in such a manner that an individual not required under section 6012(a)(1) of the Internal Revenue Code of 1986 to file a return with respect to income taxes imposed by subtitle A of such Code may have a calculated monthly payment greater than $0, the borrower will be required to provide the Secretary with other documentation of income satisfactory to the Secretary, which documentation the Secretary may use to determine an appropriate repayment schedule; and (II) if the borrower selects to repay such loans pursuant to an income-driven repayment plan that is not described in subclause (I), the borrower will not be required to provide the Secretary with such other documentation of income, and the borrower will have a calculated monthly payment of $0. (vi) 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 covered loans and has not selected a new repayment plan for the covered loans of the borrower; and (II) in the case of such a borrower whose repayment plan for the covered loans of the borrower is not an income-driven repayment plan, the monthly payments under such repayment plan are higher than such monthly payments would be under an income-driven repayment plan for such loans. (vii) 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 the covered loans of the borrower that meets the requirements of clause (vi)(II) of subparagraph (B) and 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 covered loans are eligible for an income-driven repayment plan— (I) (aa) provide the borrower with the income-driven repayment plan that requires the lowest monthly payment amount for each covered loan of the borrower, compared to any other such plan for which the borrower is eligible; or (bb) if more than one income-driven repayment plan would offer the borrower the same lowest monthly payment amount, provide the borrower with the income-driven repayment plan that has the most favorable terms for the borrower; (II) if the plan selected under subclause (I) is not the income-driven repayment plan that would have the lowest monthly payment amount if the borrower were eligible for such plan for the borrower’s covered loans and noncovered loans, notify the borrower of the actions, if any, the borrower may take to become eligible for such income-driven repayment plan; and (III) authorize the borrower to change the Secretary’s selection of a plan under this clause to any plan described in paragraph (1) for which the borrower is eligible; and (ii) in a case in which none of the borrower’s covered loans are eligible for an income-driven repayment plan, 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 covered loan 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 clauses (i) and (ii) of subparagraph (C) for the covered loans of the borrower, 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 (i) 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 covered loan shall have the right to opt-out of the procedures under this paragraph. (9) Definitions In this subsection: (A) Covered loan The term covered loan means— (i) a loan made under this part; (ii) a loan purchased under section 459A; or (iii) a loan that has been assigned to the Secretary under section 428(c)(8) or part E. (B) Income-driven repayment plan The term income-driven repayment plan means— (i) in the case of a covered loan made under this part, purchased under section 459A, or assigned to the Secretary before July 1, 2022, a plan described in subparagraph (D) or (E) of paragraph (1); and (ii) in the case of a covered loan made under this part, purchased under section 459A, or assigned to the Secretary before July 1, 2022, the income-based repayment plan under section 493C(f). (C) Noncovered loan The term noncovered loan means a loan made, insured, or guaranteed under this title that is not a covered loan. . (b) Changing plans Section 493C(b)(8) of the Higher Education Act of 1965 ( 20 U.S.C. 1098e(b)(8) ) is amended to read as follows: (8) a borrower who is repaying a loan made, insured, or guaranteed 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 any repayment plan for which the loan is eligible in accordance with the requirements of part B or part D, respectively; and . (c) Effective date; Application (1) Automatic enrollment The amendments made by subsection (a) shall— (A) take effect as soon as the Secretary of Education determines practicable, but not later than 2 years after the date of enactment of this Act; and (B) apply to all borrowers of covered loans (as defined in section 455(d)(9) of the Higher Education Act of 1965, as added by subsection (a)). (2) Changing plans The amendment made by subsection (b) shall take effect on the date of enactment of this Act. 404. Automatic recertification for income-driven repayment plans Section 455(e)(8)(A) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(e)(8)(A) ) is amended— (1) by striking and after clause (ii); (2) in clause (iii), by striking the period at the end and inserting ; and ; and (3) by adding at the end the following: (iv) in the case of a borrower for whom adjusted gross income is unavailable— (I) if the borrower has selected to repay the covered loans of such borrower pursuant to an income-contingent repayment plan that defines discretionary income in such a manner that an individual not required under section 6012(a)(1) of the Internal Revenue Code of 1986 to file a return with respect to income taxes imposed by subtitle A of such Code may have a calculated monthly payment greater than $0, the borrower will be required to provide the Secretary with other documentation of income satisfactory to the Secretary, which documentation the Secretary may use to determine an appropriate repayment schedule; or (II) if the borrower has selected to repay such loans pursuant to an income-contingent repayment that is not described in subclause (I), the borrower will not be required to provide the Secretary with such other documentation of income, and the borrower will have a calculated monthly payment of $0. .