Topic: Education — Higher
Subject: Education
Date: 2015-02-26 00:00:00

Fairness in Student Loan Lending Act

Amends title IV (Student Assistance) of the Higher Education Act of 1965 to direct the Secretary of Education to establish a program to refinance the unpaid principal, accrued unpaid interest, and late charges on: (1) the William D. Ford Federal Direct Loans (DLs) of qualified borrowers if the DLs were first disbursed, or the application for their reissuance was received, before July 1, 2015, and (2) the Federal Family Education Loans (FFEL) of qualified borrowers as DLs. (FFELs were not disbursed after June 30, 2010.)

Refinances the FFELs as Federal Direct Stafford, Unsubsidized Stafford, PLUS, or Consolidated Loans depending on the categorization of the FFEL as a Stafford, Unsubsidized Stafford, PLUS, or Consolidated Loan.

Sets the interest rate on the refinanced loans at the rate on high-yield 10-year Treasury notes plus 1%.

Fixes the interest rate on such loans for the period of such loans.

Directs the Secretary to establish eligibility requirements based on a borrower's income or debt-to-income ratio that take into consideration providing access to refinancing for borrowers with the greatest financial need.

Imposes an administrative fee on the borrowers of such reissued loans that is based on the unpaid principal, and accrued unpaid interest and late charges, of their original loan.

Requires the Secretary to establish a program to refinance the unpaid principal, accrued unpaid interest, and late charges on private education loans as Federal Direct Refinanced Private Loans if the private education loans were first disbursed to qualified borrowers before July 1, 2015, and were for their own postsecondary educational expenses.

Sets the interest rate on Federal Direct Refinanced Private Loans at the rate on high-yield 10-year Treasury notes plus 1%.

Fixes the interest rate on such loans for the period of such loans.

Directs the Secretary to establish eligibility requirements based on a borrower's income or debt-to-income ratio that take into consideration providing access to refinancing for borrowers with the greatest financial need.

Requires qualified borrowers of such loans to undergo loan counseling before their private education loan is refinanced.

Imposes an origination fee on the borrowers of Federal Direct Refinanced Private Loans.

Amends the Internal Revenue Code to require an individual taxpayer whose adjusted gross income exceeds $1 million to pay a minimum tax rate of 30% of the excess of the taxpayer's adjusted gross income over the taxpayer's modified charitable contribution deduction for the taxable year (tentative fair share tax). Establishes the amount of such tax as the excess (if any) of the tentative fair share tax over the excess of: (1) the sum of the taxpayer's regular tax liability, the alternative minimum tax (AMT) amount, and the payroll tax for the taxable year; over (2) certain tax credits. Provides for a phase-in of such tax. Requires an inflation adjustment to the $1 million income threshold for taxable years beginning after 2016.

Requires the Secretary to terminate this Act's refinancing programs when the net cost of carrying out the programs is equal to the Secretary's estimate of the amount of additional revenue generated during the 10-year period beginning on the date of this Act's enactment due to the fair share tax.

Revises federal bankruptcy law to limit the hardship exception to the exemption of educational debts from discharge in bankruptcy to: (1) an educational benefit overpayment or loan made, insured, or guaranteed by a governmental unit or made under any program funded in whole or in part by a governmental unit; or (2) an obligation to repay funds received from a governmental unit as an educational benefit, scholarship, or stipend.