,,ii #aacth ,,congress #b;d ,session ,s4 #bfab ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,july #af1 #bjad ,mr4 ,warner 7for himself and ,mr4 ,rubio7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to simplify and improve the ,federal student loan program through income-contingent repayment to provide stronger protections for borrowers1 encourage responsible borrowing1 and save money for taxpayers4 #a4 ,short title ,this ,act may be cited as the ,dynamic ,repayment ,act of #bjad4 #b4 ,termination of authority to make ,federal ,direct ,stafford ,loans1 ,federal ,direct ,unsubsidized ,stafford ,loans1 and ,federal ,direct ,,plus ,loans to students under the ,william ,d4 ,ford ,federal ,direct ,loan ,program ,section #dee7;a7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;e7a77 is amended by adding at the end the following3 7#d7 ,termination of authority to make federal direct stafford loans1 federal direct unsubsidized stafford loans1 and federal direct plus loans to students under this part 7,a7 ,in general ,notwithstanding any provision of this part or part ,b1 for any period of instruction beginning on or after ,july #a1 #bjae-- 7i7 a student shall not be eligible to receive a ,federal ,direct ,stafford ,loan under this part2 and 7ii7 a student shall not be eligible to receive a ,federal ,direct ,unsubsidized ,stafford ,loan or ,federal ,direct ,,plus ,loan under this part1 except as provided in subparagraph 7,b74 7,b7 ,exceptions ,subparagraph 7,a77ii7 shall not be applicable with respect to the following3 7i7 ,existing student borrowers ,a student who1 as of ,july #a1 #bjae1 has an outstanding balance of principal or interest owing on any loan made1 insured1 or guaranteed under part ,b or this part may continue to be eligible to borrow a loan under this part1 except for a ,federal ,direct ,stafford ,loan1 in accordance with subparagraph 7,c7 until ,june #cj1 #bjai4 7ii7 ,parent plus loans ,an excepted ,,plus loan or excepted consolidation loan 7as such terms are defined in section #dic;,c7a77 under this part that is made to a parent on behalf of an undergraduate dependent student4 7iii7 ,federal direct consolidation loans ,a ,federal ,direct ,consolidation ,loan under this part4 7,c7 ,maximum annual amounts of federal direct unsubsidized stafford loans ,the maximum annual amount of ,federal ,direct ,unsubsidized ,stafford ,loans a student described in subparagraph 7,b77i7 may borrow in an academic year 7as defined in section #dha7;a77#b77 or its equivalent shall be the maximum annual amount for such student determined under section #dbh;,h1 plus an amount equal to the amount of ,federal ,direct ,stafford ,loans the student would have received in the absence of subparagraph 7,a77i74 4 #c4 ,establishment of the income dependent education assistance loan program and the ,,idea loan repayment program ,title ,,iv of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajgj et seq47 is amended by adding at the end the following3 ,j ,income dependent education assistance loans #a ,,idea loans #dii;,a4 ,program authority and agreements 7a7 ,program authority 7#a7 ,in general ,there are authorized to be appropriated1 in accordance with the provisions of this part1 such sums as may be necessary to make loans to all eligible students in attendance at participating institutions of higher education selected by the ,secretary1 to enable such students to pursue their courses of study at such institutions beginning ,july #a1 #bjae4 ,loans made under this part shall be made by participating institutions1 or consortia thereof1 that have agreements with the ,secretary to originate loans1 or by alternative originators designated by the ,secretary to make loans for students in attendance at participating institutions4 7#b7 ,designation ,the program established under this subpart shall be referred to as the ,income ,dependent ,education ,assistance ,loan ,program1 or the ,,idea ,loan ,program4 7b7 ,funds for the origination of ,,idea loans ,the ,secretary shall provide funds for student loans under this part in the same manner as the ,secretary provided funds for the origination of ,federal ,direct ,student ,loans under part ,d in accordance with section #deb on the day before the date of enactment of the ,dynamic ,repayment ,act of #bjad4 ,the requirements1 rights1 and limitations with respect to the ,secretary and institutions for funds provided for loans under part ,d on the day before the date of enactment of the ,dynamic ,repayment ,act of #bjad shall apply with respect to the ,secretary and institutions for funds provided for loans under this part1 except that funds under this part shall not be provided for parent loans4 7c7 ,selection of institutions for participation and origination1 and agreements with institutions 7#a7 ,selection of institutions for participation and origination ,the ,secretary shall enter into agreements with institutions of higher education to participate in the ,,idea ,loan ,program under this part and agreements with institutions of higher education1 or consortia thereof1 to originate loans in such program for academic years beginning on or after ,july #a1 #bjae4 ,the provisions of section #dec as in effect on the day before the date of enactment of the ,dynamic ,repayment ,act of #bjad shall apply with respect to agreements under this section4 ,the ,secretary shall provide alternative origination services for loans under this part1 as appropriate1 in a manner consistent with the provisions of sections #dec and #def as in effect on the day before the date of enactment of the ,dynamic ,repayment ,act of #bjad related to alternative origination services for loans under part ,d4 7#b7 ,participation and origination agreements with institutions ,an agreement with any institution of higher education for participation in the ,,idea ,loan ,program under this part1 and an agreement with any institution of higher education1 or consortia thereof1 to originate loans in such program1 shall have the same terms as the terms required under section #ded as in effect on the day before the date of enactment of the ,dynamic ,repayment ,act of #bjad for agreements with an institution for participation or origination1 respectively1 in the student loan program under part ,d1 except that agreements for participation or origination under this part shall not apply to parent loans4 7#c7 ,withdrawal and termination procedures ,the ,secretary shall establish procedures by which institutions or consortia may withdraw or be terminated from the program under this part4 #dii;,b4 ,terms and conditions of ,,idea loans 7a7 ,parallel terms1 conditions1 benefits1 and amounts ,unless otherwise specified in this part1 ,income ,dependent ,education ,assistance ,loans 7referred to in this part as ,,idea ,loans7 made to borrowers under this part shall have the same terms1 conditions1 and benefits1 and be available in the same amounts1 as ,federal ,direct ,unsubsidized ,stafford ,loans made to borrowers under part ,d1 and first disbursed on the day before the date of enactment of the ,dynamic ,repayment ,act of #bjad4 7b7 ,eligible borrowers 7#a7 ,in general ,in addition to the requirements of section #dhd1 to be eligible to receive a loan 7other than an ,,idea ,consolidation ,loan7 under this part1 a borrower-- 7,a7 shall be an individual who1 on the date of application for such loan1 has no outstanding balance of principal or interest owing on any loan made1 insured1 or guaranteed under part ,b or ,d 7other than an excepted ,,plus loan or an excepted consolidation loan 7as such terms are defined in section #dic;,c7a7772 or 7,b7 in the case of an individual with an outstanding balance of principal or interest owing on any loan described in subparagraph 7,a71 shall consolidate all such existing loans into an ,,idea ,consolidation ,loan under section #dii;,c4 7#b7 ,only student borrowers eligible ,for purposes of this part1 the term borrower shall not include a parent borrower4 7c7 ,annual and aggregate limits 7#a7 ,in general ,subject to paragraph 7#b71 the maximum annual amount of ,,idea ,loans in any academic year 7as defined in section #dha7;a77#b77 or its equivalent1 and the maximum aggregate amount of ,,idea ,loans that a student may borrow1 shall be the maximum annual amounts and maximum aggregate amounts1 respectively1 of ,federal ,direct ,unsubsidized ,stafford ,loans under part ,d that such student would have been eligible to borrow in the absence of section #dee7;a77#d71 as added by the ,dynamic ,repayment ,act of #bjad4 7#b7 ,graduate and professional students eligible for ,,plus loans ,in the case of a graduate or professional student who would have been eligible to borrow a ,federal ,direct ,,plus ,loan under part ,d in the absence of section #dee7;a77#d71 as added by the ,dynamic ,repayment ,act of #bjad1 the maximum annual amounts and maximum aggregate amounts1 respectively1 of ,,idea ,loans that such a student may borrow as determined under paragraph 7#a7 for any academic year 7as defined in section #dha7;a77#b77 or its equivalent1 may be increased to an amount equal to the maximum annual amounts and maximum aggregate amounts1 respectively1 of ,federal ,direct ,,plus ,loans that such student would have been eligible to borrow in the absence of such section #dee7;a77#d74 7d7 ,loan fee ,the ,secretary shall charge the borrower of a loan 7other than an ,,idea ,consolidation ,loan7 made under this part an origination fee4 ,such fee shall be the sum of-- 7#a7 for the portion of the principal amount of the loan that is equal to 7or less than7 the maximum annual amount a student may borrow under subsection 7c77#a71 #a4j percent of such portion of the principal amount of the loan2 plus 7#b7 for the portion of the principal amount of the loan that exceeds the maximum annual amount a student may borrow under subsection 7c77#a71 as authorized by subsection 7c77#b71 #d4j percent of such portion of the principal amount of the loan4 7e7 ,interest rates 7#a7 ,undergraduate students ,with respect to ,,idea ,loans made to undergraduate students for which the first disbursement is made on or after ,july #a1 #bjae1 the applicable rate of interest shall1 during any #ab-month period beginning on ,july #a and ending on ,june #cj1 be determined on the preceding ,june #a and be equal to the lesser of-- 7,a7 a rate equal to the high yield of the #aj-year ,treasury note auctioned at the final auction held prior to such ,june #a1 plus #b4je percent2 or 7,b7 #h4be percent4 7#b7 ,graduate and professional students ,with respect to ,,idea ,loans made to graduate or professional students for which the first disbursement is made on or after ,july #a1 #bjae1 the applicable rate of interest shall1 during any #ab-month period beginning on ,july #a and ending on ,june #cj1 be determined on the preceding ,june #a and be equal to the lesser of-- 7,a7 the rate determined under paragraph 7#a77;,a71 except that #c4f percent shall be substituted for #b4je percent in such determination2 or 7,b7 #i4be percent4 7#c7 ,consultation ,the ,secretary shall determine the applicable rate of interest under paragraphs 7#a7 and 7#b7 after consultation with the ,secretary of the ,treasury and shall publish such rate in the ,federal ,register as soon as practicable after the date of determination4 7#d7 ,application of interest rate during the life of the loan 7,a7 ,in-school deferment period ,interest shall accrue and be capitalized or paid by the borrower 7but periodic installments of principal need not be paid7 during the in-school deferment period with respect to an ,,idea ,loan4 ,for the purposes of this part1 the in-school deferment period with respect to an ,,idea ,loan is the first period during which the borrower is pursuing at least one-half the normal full-time academic workload 7as determined by the institution7 in the course of study for which the borrower received such loan and ending on the first day of the first month that begins after the borrower ceases to carry at least one-half the normal full-time academic workload 7as determined by the institution7 in the course of study4 7,b7 ,grace and repayment periods ,interest that accrues during the borrower's grace period 7for the purposes of this title1 defined as the period between the borrower's in-school deferment period and the borrower's repayment period7 and during the borrower's repayment period shall not be capitalized4 7f7 ,armed forces student loan interest payment program ,using funds received by transfer to the ,secretary under section #bagd7;f77#b7 of title #aj1 ,united ,states ,code1 the ,secretary shall pay the interest on a loan made under this part to a member of the ,armed ,forces as due for a period not in excess of #cf consecutive months4 ,the ,secretary may not pay interest on such a loan out of any funds other than funds that have been so transferred4 7g7 ,no accrual of interest for active duty service members 7#a7 ,in general ,notwithstanding any other provision of this part and in accordance with paragraphs 7#b7 and 7#d71 interest shall not accrue for an eligible military borrower on a loan made under this part for which the first disbursement is made on or after ,july #a1 #bjae4 7#b7 ,,idea consolidation loans ,in the case of any ,,idea ,consolidation loan made under this part that is disbursed on or after ,july #a1 #bjae1 interest shall not accrue pursuant to this subsection only on such portion of such loan as was used to repay a loan made under part ,d for which the first disbursement is made on or after ,october #a1 #bjjh4 7#c7 ,eligible military borrower ,in this subsection1 the term eligible military borrower means an individual who-- 7,a7 7i7 is serving on active duty during a war or other military operation or national emergency2 or 7ii7 is performing qualifying ,national ,guard duty during a war or other military operation or national emergency2 and 7,b7 is serving in an area of hostilities in which service qualifies for special pay under section #caj of title #cg1 ,united ,states ,code4 7#d7 ,limitation ,an individual who qualifies as an eligible military borrower under this subsection may receive the benefit of this subsection for not more than #fj months4 7h7 ,loan cancellation and discharge ,the ,secretary shall discharge a borrower's liability on a loan made under this part in accordance with subsections 7a7 and 7c7 of section #dcg4 7i7 ,loan forgiveness ,a loan made under this part shall be eligible for loan forgiveness under the following conditions3 7#a7 ,after #bj years of payments pursuant to section #dii;,f for borrowers who begin repayment with an outstanding balance of principal and interest that is less than the maximum aggregate amount of ,,idea ,loans that an undergraduate student may borrow as provided under subsection 7c74 7#b7 ,after #cj years of payments pursuant to section #dii;,f for borrowers who begin repayment with an outstanding balance of principal and interest that is equal to or greater than the maximum aggregate amount of ,,idea ,loans that an undergraduate student may borrow as provided under subsection 7c74 #dii;,c4 ,,idea consolidation loans 7a7 ,,idea consolidation loans 7#a7 ,in general ,except as otherwise provided in this section1 an ,,idea ,consolidation ,loan under this section shall have the same terms1 conditions1 and benefits as ,,idea ,loans made under this part4 7#b7 ,borrower and loan eligibility ,to be eligible to receive an ,,idea ,consolidation ,loan under this section1 a borrower-- 7,a7 shall-- 7i7 meet the criteria described in section #dbh;,c7a77#c77;,a72 and 7ii7 in the case of a borrower described in section #dii;,b7b77#a77;,b71 agree to consolidate into an ,,idea ,consolidation ,loan all loans made to the borrower that are described in subparagraphs 7,a7 and 7,c7 of section #dbh;,c7a77#d7 7other than an excepted ,,plus loan or an excepted consolidation loan 7as such terms are defined in section #dic;,c7a7772 7,b7 may consolidate the loans described in subparagraphs 7,b71 7,d71 and 7,e7 of section #dbh;,c7a77#d7 into such ,,idea ,consolidation ,loan2 and 7,c7 may not consolidate an ,,idea ,loan made under section #dii;,b into such ,,idea ,consolidation ,loan4 7#c7 ,requirements for the secretary ,in making ,,idea ,consolidation ,loans under this section1 the ,secretary-- 7,a7 shall ensure that-- 7i7 each ,,idea ,consolidation ,loan will be made1 notwithstanding any other provision of this title limiting the annual or aggregate principal amount for all loans made to the borrower1 in an amount that is equal to the sum of the unpaid principal1 interest1 penalties1 and fees of all loans received by the borrower which are selected by the borrower for consolidation under this section2 and 7ii7 the proceeds of each ,,idea ,consolidation ,loan will be paid by the ,secretary to the holder or holders of the loans being consolidated to discharge the liability on such loans2 7,b7 shall not discriminate against any borrower seeking such an ,,idea ,consolidation ,loan-- 7i7 based on the number or type of loans the borrower seeks to consolidate2 7ii7 based on the interest rate to be charged to the borrower with respect to the consolidation loan2 or 7iii7 based on the type or category of institution of higher education that the borrower attends or attended2 and 7,c7 shall disclose to a prospective borrower1 in simple and understandable terms1 at the time the ,secretary provides an application for an ,,idea ,consolidation ,loan-- 7i7 whether consolidation would result in a loss of loan benefits under part ,b or part ,d1 including loan forgiveness1 cancellation1 and deferment2 7ii7 with respect to ,federal ,perkins ,loans under part ,e-- 7,i7 that if a borrower includes a ,federal ,perkins ,loan under part ,e in the consolidation loan1 the borrower will lose all interest-free periods that would have been available for the ,federal ,perkins ,loan1 including-- 7aa7 the periods during which no interest accrues on such loan while the borrower is enrolled in school at least half-time2 7bb7 the grace period under section #dfd7;c77#a77;,a72 and 7cc7 the periods during which the borrower's student loan repayments are deferred under section #dfd7;c77#b72 7,,ii7 that if a borrower includes a ,federal ,perkins ,loan in the consolidation loan1 the borrower will no longer be eligible for cancellation of part or all of the ,federal ,perkins ,loan under section #dfe7;a72 and 7,,iii7 the occupations listed in section #dfe that qualify for ,federal ,perkins ,loan cancellation under section #dfe7;a72 7iii7 the options of the borrower to prepay the ,,idea ,consolidation ,loan2 7iv7 the consequences of default on the ,,idea ,consolidation ,loan2 and 7v7 that by applying for an ,,idea ,consolidation ,loan1 the borrower is not obligated to agree to take the consolidation loan4 7b7 ,interest rate ,notwithstanding section #dii;,b7e71 an ,,idea ,consolidation ,loan for which the application is received on or after ,july #a1 #bjae1 shall bear interest at an annual rate on the unpaid principal balance of the loan that is equal to the weighted average of the interest rates on the loans consolidated1 rounded to the nearest higher one-eighth of one percent4 ,interest that accrues on such an ,,idea ,consolidation ,loan shall not be capitalized4 #b ,,idea ,loan ,repayment ,program #a ,establishment of the ,,idea ,loan ,repayment ,program #dii;,d4 ,duties of the ,secretary of the ,treasury 7a7 ,in general ,as part of the ,,idea ,loan ,repayment ,program established under this subpart1 the ,secretary of the ,treasury shall1 with respect to each individual for whom a loan made under this part is in repayment status during a taxable year1 transmit to the ,secretary of ,education-- 7#a7 in the case of such an individual who files an income tax return for such taxable year1 such tax information as is necessary to determine the individual's income-based repayment obligation under section #dii;,e2 and 7#b7 in the case of any such individual who does not file a return for such taxable year1 any available tax information of the individual as may be necessary to determine such obligation and whether such individual is in default under the terms of such loan for not so filing4 7b7 ,additional program requirements ,the ,secretary of the ,treasury shall establish such other policies1 procedures1 and guidance as may be necessary to carry out the purposes of this subpart1 including measures to prevent underreporting and evasion of repayment or filing4 #dii;,e4 ,duties of the ,secretary of ,education 7a7 ,in general ,the ,secretary shall carry out1 as part of the ,,idea ,loan ,repayment ,program established under this subpart1 the following activities3 7#a7 ,calculation of annual repayment amounts ,the ,secretary shall calculate the annual repayment amount under this subpart for borrowers with #a or more loans made under this part in repayment status1 including the income-based repayment obligations of such borrowers in accordance with section #dii;,f7i74 7#b7 ,communication with the secretary of the treasury ,the ,secretary shall transmit to the ,secretary of the ,treasury such information as is necessary for the ,secretary of the ,treasury to carry out section #dii;,f7i74 7#c7 ,annual statements ,upon calculating the annual repayment amounts under paragraph 7#a7 for a taxable year1 the ,secretary shall provide a statement1 on an annual basis1 to each borrower with a loan made under this part1 which lists the following3 7,a7 ,total payments made on the borrower's annual repayment amount for such taxable year4 7,b7 ,the borrower's annual repayment amount for such taxable year4 7,c7 ,in the case of a borrower who1 according to section #dii;,f7f71 has underpaid such annual repayment amount1 the amount of such underpayment and the process for paying such underpayment under section #dii;,f7f77#b74 7,d7 ,in the case of a borrower with an overpayment on such annual repayment amount1 the amount of such overpayment and the process for requesting a refund of such amount under section #dii;,f7g71 if applicable4 7,e7 ,the outstanding balances on all the loans made to the borrower under this part4 7,f7 ,a description of how the borrower's annual repayment amount was calculated under paragraph 7#a7 or 7#b7 of section #dii;,f7b74 7#d7 ,direct payment ,the ,secretary shall enable a borrower to make direct payments on the borrower's annual repayment amount for the taxable year to the ,secretary throughout the year4 7#e7 ,payments on a borrower's behalf ,the ,secretary shall-- 7,a7 provide a mechanism for other individuals or entities to make payments on the annual repayment amount of a borrower for a taxable year2 and 7,b7 notify the borrower that any payments made under subparagraph 7,a7 for the taxable year that exceed the annual repayment amount for the year shall not be refunded to the borrower4 7#f7 ,calculating interest accrued ,the ,secretary shall calculate the interest accrued for the taxable year as if the borrower's payments under wage withholding under paragraph 7#aj7 for the taxable year were made in #ab equal increments throughout the year4 7#g7 ,appeals process ,the ,secretary shall make available a process through which a borrower can appeal the calculation of the borrower's annual repayment amount1 including a worksheet that enables a borrower to calculate the borrower's annual repayment amount4 7#h7 ,default for failure to file a return ,in a case in which the ,secretary receives information from the ,secretary of the ,treasury under section #dii;,d that a borrower with a loan made under this part in repayment status has failed to file a return under section #fjab7;a77#a7 of the ,internal ,revenue ,code of #aihf and such borrower was required to file such a return1 the ,secretary shall-- 7,a7 notify the borrower of the borrower's failure to file such a return2 and 7,b7 if the borrower fails to file such a return within #ij days of receipt of the notice described in subparagraph 7,a71 consider the borrower's loans made under this part in repayment status to be in default4 7#i7 ,withholding opt-out ,the ,secretary shall establish a process through which a borrower can indicate that the borrower would like to opt-out of the withholding process under subsection 7b7 and1 in lieu of such process1 make payments on a monthly basis1 as described in subsection 7c74 7#aj7 ,employer withholding ,the ,secretary shall establish a process that meets the requirements of subsection 7b7 under which employers making payment of wages deduct and withhold upon such wages amounts determined in accordance with subsection 7b77#c7 with respect to an employee-- 7,a7 who has a loan made under this part that is in repayment status2 7,b7 who has not opted out of the withholding process under this paragraph2 and 7,c7 who is not in a forbearance period under section #dii;,f7a77#b77;,c74 7#aa7 ,monthly payments process ,the ,secretary shall establish a monthly payments process described in subsection 7c74 7b7 ,requirements for employer withholding 7#a7 ,withholding orders ,in carrying out the employer withholding process under subsection 7a77#aj71 the ,secretary shall carry out the following3 7,a7 ,new employment ,upon determining1 using the information provided under section #dec7;j77#ab7 of the ,social ,security ,act 7#db ,u4,s4,c4 #fec7;j77#ab771 that a borrower who meets the requirements of subparagraphs 7,a7 through 7,c7 of subsection 7a77#aj7 obtains new employment1 issue a withholding order to the borrower's employer directing the employer to withhold and transmit the amounts described in paragraph 7#c7 to the ,secretary4 7,b7 ,other purposes ,upon notification by a borrower that the borrower no longer wishes to opt out of the withholding process under subsection 7a77#aj7 or that a borrower who has been in forbearance under section #dii;,f7a77#b77;,c71 voluntarily ends or no longer qualifies for such forbearance1 or upon determining that a borrower has entered repayment status on #a or more loans made under this part 7and the borrower had no loans made under this part already in repayment status71 using the information provided under section #dec7;j77#ab7 of the ,social ,security ,act 7#db ,u4,s4,c4 #fec7;j77#ab771 issue a withholding order to all of the borrower's employers directing such employers to withhold and transmit the amounts described in paragraph 7#c7 to the ,secretary4 7,c7 ,stop withholding order ,upon determining that a borrower is eligible for a forbearance under section #dii;,f7a77#b77;,c71 that the borrower has opted out of the withholding process under subsection 7a77#aj71 or that a borrower has repaid the borrower's loans made under this part1 using the information provided under paragraph #ab of section #dec7;j77#ab7 of the ,social ,security ,act 7#db ,u4,s4,c4 #fec7;j77#ab771 issue a withholding order to the borrower's employers directing such employers to cease withholding under this paragraph4 7,d7 ,transfer of payments ,outline clearly the process through which employers shall transfer money withheld under this subsection to the ,secretary4 7,e7 ,electronic transmission 7i7 ,in general ,make available electronic means of transmitting and processing both withholding orders and payments from employers1 including a means to correct under- and overpayments to the extent feasible1 with the goal of streamlining the processing of such orders and payments and minimizing impacts on employers4 7ii7 ,no requirement to use electronic transmission ,nothing in this part shall be construed to require an employer1 in carrying out a withholding order under this section1 to use the electronic process described in clause 7i74 7#b7 ,employer remittance 7,a7 ,in general ,in the case where an employer has received a withholding order under subparagraph 7,a7 or 7,b7 of paragraph 7#a7 or the employee has indicated under paragraph 7#d77;,a7 that the employee has a loan that meets the requirements of subparagraphs 7,a7 through 7,c7 of subsection 7a77#aj71 and the employer has not subsequently received an order to stop withholding under paragraph 7#a77;,c7 for such employee1 the employer shall withhold and transmit the amounts described in paragraph 7#c7 to the ,secretary as directed under paragraph 7#a77;,d7 and shall be liable for1 and the ,secretary1 as appropriate1 may sue the employer in a ,state or ,federal court of competent jurisdiction to recover any amount that such employer fails to withhold from wages with respect to an employee after being directed to do so for such employee1 plus attorneys' fees1 costs1 and1 in the court's discretion1 punitive damages4 ,such employer shall not be required to vary the normal pay and disbursement cycles in order to comply with this subparagraph4 7,b7 ,timing ,an employer transmitting to the ,secretary withholding payments under this subsection shall transmit such payments on a periodic basis1 as determined by the employer but not less frequently than quarterly4 7#c7 ,withholding amount ,the amount withheld by an employer for each pay period with respect to any employee for whom the employer is withholding under this subsection shall be an amount equal to the sum of-- 7,a7 the amount that results from the employer withholding-- 7i7 #aj percent of the employee's wages for such pay period that will count towards the employee's annual repayment amount under section #dii;,f7b7 that is in excess of the employee's exemption amount for such pay period 7as determined by dividing the employee's exemption amount under section #dii;,f7i77#c7 by the number of pay periods for the taxable year72 or 7ii7 in a case in which an employee requests that such exemption amount not be taken into account1 #aj percent of the employee's wages for such pay period that will count towards the employee's annual repayment amount under section #dii;,f7b72 and 7,b7 any additional amounts the employee wishes to have withheld in accordance with paragraph 7#d77;,c74 7#d7 ,withholding preferences ,the ,secretary shall provide forms and procedures to allow an employee to indicate to the employee's employer-- 7,a7 that the employee has a loan that meets the requirements of subparagraphs 7,a7 through 7,c7 of subsection 7a77#aj7 and therefore the employer shall withhold payments under this subsection2 7,b7 that the employer shall not take into account the exemption amount to which the employee is eligible under this part in determining the employee's withholding amount because the exemption amount has already been taken into account with respect to such employee2 and 7,c7 an election by the employee to have amounts withheld in addition to the employee's withholding amount as calculated under paragraph 7#c74 7#e7 ,employee protection ,an employer may not discharge from employment1 refuse to employ1 or take disciplinary action against an individual subject to wage withholding in accordance with this section by reason of the fact that the individual's wages have been subject to withholding under this section1 nor may an employer require that an individual opt-out under subsection 7a77#i7 and such individual may sue in a ,state or ,federal court of competent jurisdiction any employer who takes such action4 ,the court shall award attorneys' fees to a prevailing employee and1 in its discretion1 may order reinstatement of the individual1 award punitive damages and back pay to the employee1 or order such other remedy as may be reasonably necessary4 7#f7 ,garnishment ,for purposes of title ,,iii of the ,consumer ,credit ,protection ,act 7#ae ,u4,s4,c4 #afga et seq471 amounts withheld under this subsection shall-- 7,a7 not be considered a garnishment2 and 7,b7 be considered to be amounts required by law to be withheld4 7c7 ,monthly payments process 7#a7 ,in general ,the ,secretary shall establish a process under which a borrower may make monthly payments towards the borrower's annual repayment amount1 at any time in the taxable year1 because the borrower-- 7,a7 has opted-out of withholding under subsection 7a77#aj72 or 7,b7 expects to have income that is not subject to the withholding process described in subsection 7b74 7#b7 ,information required ,the procedure for initiating the monthly payments process under paragraph 7#a7 shall include the following3 7,a7 ,income estimate ,a requirement for a borrower to provide an estimate of the borrower's income for the taxable year that will count towards the borrower's income-based repayment obligation1 excluding1 in the case of a borrower subject to the withholding process1 any income subject to the withholding process4 7,b7 ,amortization schedule ,in the case of a borrower who has opted out of the withholding process1 the ability for the borrower to indicate that the borrower would like the borrower's monthly payments set such that the borrower's outstanding loans made under this part would be repaid within a specified number of years4 7#c7 ,monthly payments amounts ,the ,secretary shall set the borrower's monthly payment amount to the greater of-- 7,a7 the difference between the borrower's annual repayment amount that would result given the income estimate provided by the borrower under paragraph 7#b77;,a7 and the payments the borrower has already made in the year towards such amount 7excluding1 for borrowers who have not opted-out of withholding1 payments through the withholding process71 divided by the remaining months in the taxable year2 or 7,b7 for a borrower who indicates a time frame under paragraph 7#b77;,b71 the monthly payment amount that would result in the borrower's currently outstanding loans made under this part being repaid within the number of years specified by the borrower4 7#d7 ,automatic continuation ,the monthly payments process shall continue until-- 7,a7 the borrower elects to stop such payments2 or 7,b7 the borrower's loans made under this part are repaid4 7#e7 ,updating payment amounts 7,a7 ,secretary ,the ,secretary shall automatically recalculate a borrower's monthly payment amount at the beginning of a new taxable year using the most recent income estimate provided under paragraph 7#b77;,a7 by the borrower4 7,b7 ,borrower ,the borrower may update the borrower's income estimate under paragraph 7#b77;,a7 at any time4 #b ,borrower repayment of ,,idea loans and ,,idea consolidation loans #dii;,f4 ,borrower repayment 7a7 ,repayment period ,the repayment period of a loan made under this part shall-- 7#a7 begin on the first day of the first taxable year that begins after the borrower's in-school deferment period1 or in the case of an ,,idea ,consolidation ,loan1 on the first day of the first taxable year that begins after such ,consolidation ,loan is disbursed2 and 7#b7 continue until the loan is paid in full1 except that the ,secretary may grant a borrower forbearance of the borrower's annual repayment amount-- 7,a7 for a period not to exceed #fj days1 due to administrative or technical reasons2 7,b7 for a period not to exceed #c months1 due to unusual circumstances that disrupt the borrower's ability to make timely payments on the loan2 or 7,c7 renewable at #ab-month intervals for a period not to exceed #c years1 due to documented extreme economic hardship on the part of a borrower4 7b7 ,annual repayment amount ,the annual repayment amount under this part for a taxable year for a borrower with #a or more loans made under this part in repayment status shall be equal to the lesser of-- 7#a7 the income-based repayment obligation for such borrower for such year1 as calculated under section #dii;,e7a77#a72 or 7#b7 an amount equal to the sum of the outstanding balances 7equal to the sum of the unpaid principal1 interest1 penalties1 and fees7 that the borrower owes on such loans4 7c7 ,methods of repayment ,a borrower who expects to have an annual repayment amount for the taxable year that is greater than the amount specified in subsection 7f77#a77;,d7 shall make payments through the following methods3 7#a7 ,with respect to any wages earned by the borrower that are subject to ,federal income tax withholding1 the withholding process described in section #dii;,e7a77#aj74 7#b7 ,the monthly payments process described in section #dii;,e7c71 to meet the portion of the borrower's obligation that is not paid through withholding1 or1 in the case of a borrower who opts out of the withholding process1 to meet the borrower's entire obligation4 7#c7 ,the direct payments process under section #dii;,e7a77#d74 7#d7 ,the process described in section #dii;,e7a77#e7 that allows other individuals or entities to make payments on the borrower's annual repayment amount for the year4 7d7 ,order of crediting ,payments on loans made under this part shall be applied1 without regard to the method of such payments1 first toward penalties due on the loans1 next toward any fees due on the loans1 then toward any interest due on the loans1 and finally toward the principal due on the loan with the highest applicable rate of interest among such loans4 7e7 ,prepayment authorized ,a borrower shall have the right to prepay all or part of such loan1 at any time and without penalty4 ,any such prepayment amount will be applied to loans made under this part in the same order as described in subsection 7d74 7f7 ,underpayments 7#a7 ,penalties for underpayments 7,a7 ,in general ,subject to subparagraph 7,c71 if1 as of the last day of a taxable year1 a borrower has not paid at least #ij percent of the borrower's annual repayment amount for such year1 the borrower shall be charged a penalty in an amount equal to #aj percent of the difference between-- 7i7 an amount equal to #ij percent of the borrower's annual repayment amount for such year2 and 7ii7 the amount paid on such annual repayment amount as of such day4 7,b7 ,increase of annual repayment amount ,a borrower's annual repayment amount calculated under subsection 7b7 for such year shall be increased by the amount of such penalty1 but such penalty shall not be treated as a principal or interest amount for a loan made under this part4 7,c7 ,exception for meeting the obligation for the previous year ,a borrower who has paid #ajj percent of the borrower's annual repayment amount for the taxable year preceding the taxable year described in subparagraph 7,a7 shall not be subject to the penalty under this paragraph for the taxable year described in subparagraph 7,a74 7,d7 ,de minimus exception ,a borrower whose annual repayment amount is less than #cjj shall not be subject to the penalty under this paragraph for the taxable year described in subparagraph 7,a74 7#b7 ,reconciling underpayments 7,a7 ,in general ,if1 as of the last day of a taxable year1 the sum of the payments made on a borrower's annual repayment amount for such year is less than the total amount of the borrower's annual repayment amount for such year1 the borrower-- 7i7 in the case of the first year that the borrower has a difference between such amounts-- 7,i7 may request1 in such manner as the ,secretary shall require1 that the ,secretary reduce the borrower's annual repayment amount for such year to the sum of-- 7aa7 the payments made1 as of such day1 on the borrower's annual repayment amount for such year2 and 7bb7 any penalties calculated under paragraph 7#a7 resulting from such underpayment2 and 7,,ii7 if the borrower qualifies for the reduction requested under subclause 7,i71 shall pay the sum calculated under such subclause at such time and in such manner as required by the ,secretary2 7ii7 if the borrower does not qualify for a reduction under clause 7i7 or does not request such a reduction1 shall pay to the ,secretary an amount equal to the difference between such amounts within the #cj-;day period beginning on the date of receipt by the borrower of the borrower's annual statement described in section #dii;,e7a77#c7 for such year2 or 7iii7 if the borrower fails to pay the amount owed by the borrower as calculated under clause 7ii7 within the #cj-;day period1 shall be charged a penalty equal to #b percent of such amount for each month 7prorated based on the percentage of a month such penalty is charged7 that such amount is owed or until the borrower defaults on the loan for which such amount is owed1 whichever occurs first4 7,b7 ,default ,a loan for which an amount is owed under subparagraph 7,a7 and that is not paid within #bgj days after the date of receipt by the borrower of the borrower's annual statement described in section #dii;,e7a77#c7 shall be considered to be in default4 7g7 ,overpayments ,if1 as of the last day of a taxable year1 the sum of the payments made on a borrower's annual repayment amount for such year is greater than the total amount of the borrower's annual repayment amount for such year1 the ,secretary shall-- 7#a7 refund the overpayment amount1 if the borrower notifies the ,secretary1 within the #ij-;day period beginning on the date of receipt of the borrower's annual statement described in section #dii;,e7a77#c7 for such year and in a manner prescribed by the ,secretary1 that the borrower desires to have the overpayment amount refunded2 or 7#b7 if a borrower fails to notify the ,secretary of the borrower's desire for a refund of such amount within such #ij-;day period1 apply such amount as a prepayment to the borrower's loans made under this part in the same manner as a prepayment authorized under subsection 7e74 7h7 ,employer failure ,to withhold payments ,in the case of a borrower whose employer fails to withhold amounts under section #dii;,e7b7 upon any wages earned by the borrower that are subject to ,federal income tax withholding and with respect to which the borrower made an election to have amounts withheld under such section1 the ,secretary shall-- 7#a7 reduce the borrower's annual repayment to an amount equal to the borrower's annual repayment amount had wages from such employer been excluded when calculating the borrower's annual repayment amount2 and 7#b7 reduce any penalties for underpayments calculated under subsection 7f77#a7 and refund any overpayments on such annual repayment amount1 accordingly4 7i7 ,determination of income-,based repayment obligation 7#a7 ,in general ,the income-based repayment obligation with respect to an individual for any taxable year is an amount equal to #aj percent of the excess of-- 7,a7 the sum of-- 7i7 the wages1 salaries1 tips1 and other employee compensation of the individual1 but only if such amounts are includible in gross income for the taxable year 7determined without regard to sections #iaa1 #ica1 and #icc of the ,internal ,revenue ,code of #aihf7 and are readily attributable to the individual1 plus 7ii7 any other amount included in total income of the taxpayer for the taxable year but not described in clause 7i71 except that such amount shall be divided by #b in the case of an individual who is married and filing a joint tax return1 over 7,b7 the sum of-- 7i7 the exemption amount with respect to such individual1 plus 7ii7 the lesser of the amount determined with respect to the taxpayer under subparagraph 7,a77ii71 or #c1jjj4 7#b7 ,exclusion of certain amounts paid on behalf of individual ,any amount paid on the borrower's behalf under section #dii;,e7a77#e7 shall not be taken into account in determining such borrower's income-based repayment obligation4 7#c7 ,exemption amount ,for purposes of this subpart1 the exemption amount with respect to an individual shall be #aj1jjj 7adjusted each year to reflect changes in the ,consumer ,price ,index for ,all ,urban ,consumers published by the ,bureau of ,labor ,statistics of the ,department of ,labor for the most recent #ab-month period for which such data are available74 7#d7 ,individuals not filing a return ,the income-based repayment obligation with respect to an individual not required to file a return under section #fjab7;a77#a7 of the ,internal ,revenue ,code of #aihf shall be treated as zero4 4 #d4 ,conforming changes to the ,higher ,education ,act of #aife 7a7 ,loan forgiveness and cancellation for teachers 7#a7 ,loan forgiveness for teachers ,section #dbh;,j of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajgh-aj7 is amended-- 7,a7 in subsection 7b71 by inserting or for an ,,idea loan made under part ,j1 after or #dbh;,h12 and 7,b7 in subsection 7c7-- 7i7 in paragraph 7#a71 by inserting or an ,,idea loan made under part ,j after or #dbh;,h2 and 7ii7 in paragraph 7#b7-- 7,i7 by striking ,a loan and inserting the following3 7,a7 ,loans made under section #dbh;,c ,a loan 2 and 7,,ii7 by adding at the end the following3 7,b7 ,,idea consolidation loan ,a loan amount for an ,,idea ,consolidation ,loan may be a qualified loan amount for purposes of this subsection only to the extent that such loan amount was used to repay a ,federal ,direct ,stafford ,loan1 a ,federal ,direct ,consolidation ,loan1 a ,federal ,direct ,unsubsidized ,stafford ,loan1 or a loan made under section #dbh1 #dbh;,c1 or #dbh;,h4 4 7#b7 ,loan cancellation for teachers ,section #dfj of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;j7 is amended-- 7,a7 in subsection 7b71 in the matter preceding paragraph 7#a71 by inserting or for an ,,idea loan made under part ,j after under this part2 and 7,b7 in subsection 7c7-- 7i7 in paragraph 7#a71 by striking or a ,federal ,direct ,unsubsidized ,stafford ,loan and inserting 1 a ,federal ,direct ,unsubsidized ,stafford ,loan1 or an ,,idea loan made under part ,j2 and 7ii7 in paragraph 7#b7-- 7,i7 by striking ,a loan and inserting the following3 7,a7 ,federal direct consolidation loan ,a loan 2 and 7,,ii7 by adding at the end the following new subparagraph3 7,b7 ,,idea consolidation loan ,a loan amount for an ,,idea ,consolidation ,loan may be a qualified loan amount for purposes of this subsection only to the extent that such loan amount was used to repay a ,federal ,direct ,stafford ,loan1 a ,federal ,direct ,consolidation ,loan1 a ,federal ,direct ,unsubsidized ,stafford ,loan1 or a loan made under section #dbh1 #dbh;,c1 or #dbh;,h4 4 7b7 ,loan forgiveness for service in areas of national need ,section #dbh,k7a77#b7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajgh-aa7;a77#b77 is amended-- 7#a7 in subparagraph 7,a71 by striking and after the semicolon2 7#b7 in subparagraph 7,b71 by striking the period at the end and inserting 2 and2 and 7#c7 by adding at the end the following3 7,c7 to cancel a qualified loan amount for a loan made under part ,j4 4 7c7 ,loan repayment for civil legal assistance attorneys ,section #dbh,l7b77#b77;,a7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajgh-ab7;b77#b77;,a77 is amended-- 7#a7 in clause 7i71 by striking or part ,e and inserting 1 part ,e1 or part ,j2 and 7#b7 in clause 7ii7-- 7,a7 in the matter preceding subclause 7,i71 by striking or #dee7;g7 and inserting 1 #dee7;g71 or #dii;,c2 7,b7 in subclause 7,,ii71 by striking or after the semicolon2 7,c7 by redesignating subclause 7,,iii7 as subclause 7,,iv72 and 7,d7 by inserting after subclause 7,,ii7 the following3 7,,iii7 a ,federal ,direct ,consolidation loan or a loan made under section #dbh;,c1 in the case of a loan made under section #dii;,c2 or 4 7d7 ,master promissory note ,section #dcb7m77#a77;,d7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhb7m77#a77;,d77 is amended-- 7#a7 by striking this part and part ,d each place it appears and by inserting this part1 part ,d1 and part ,j2 and 7#b7 by striking this part or part ,d each place it appears and by inserting this part1 part ,d1 or part ,j4 7e7 ,contracts ,section #def of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;f7 is amended-- 7#a7 in subsection 7a7-- 7,a7 in paragraph 7#b71 by striking this part each place it appears and inserting this part or part ,j2 and 7,b7 in paragraph 7#d71 by inserting or part ,j after this part2 and 7#b7 in subsection 7b7-- 7,a7 in paragraph 7#a71 by inserting or the program under part ,j after 7or their parents72 7,b7 in paragraph 7#b71 by inserting or part ,j after this part2 7,c7 in paragraph 7#c71 by inserting or part ,j after this part2 and 7,d7 in paragraph 7#d71 by inserting or the ,,idea ,loan ,program after loan program4 7f7 ,funds for administrative expenses ,section #deh7;a77#c7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;h7a77#c77 is amended-- 7#a7 by striking this part and part ,b and inserting this part1 part ,b1 and part ,j2 and 7#b7 by inserting before the period at the end the following3 and part ,j4 7g7 ,student eligibility ,section #dhd of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajia7 is amended-- 7#a7 in subsection 7b7-- 7,a7 in paragraph 7#c71 by striking or ,d and inserting 1 ,d1 or ,e2 and 7,b7 in paragraph 7#d77;,b71 by striking or ,e and inserting ,e1 or ,j2 7#b7 in subsection 7d71 by striking and ,e and inserting ,e1 and ,j2 7#c7 in subsection 7f71 by striking or part ,e both places it appears and inserting part ,e1 or part ,j2 and 7#d7 in subsection 7m71 by striking and ,e and inserting ,e1 and ,j4 7h7 ,institutional and financial assistance information for students ,section #dhe of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajib7 is amended-- 7#a7 in subsection 7a7-- 7,a7 in paragraph 7#a77,m71 by striking and ,e and inserting ,e1 and ,j2 and 7,b7 in paragraph 7#g77;,a77i71 by striking ,loan7 each place it appears and inserting ,loan7 or part ,j2 7#b7 in subsection 7b7-- 7,a7 in paragraph 7#a77;,a7-- 7i7 in the matter preceding clause 7i71 by inserting or made under part ,j after part ,e2 and 7ii7 in clause 7vii7-- 7,i7 by inserting or an ,,idea ,consolidation ,loan after ,federal ,direct ,consolidation ,loan2 and 7,,ii7 by striking and ,e and inserting ,e1 and ,j2 and 7,b7 in paragraph 7#b77;,a71 by striking or ,e and inserting ,e1 or ,j2 and 7#c7 in subsection 7l77#a7-- 7,a7 in subparagraph 7,a71 in the matter preceding clause 7i71 by inserting or made under part ,j after student72 and 7,b7 in subparagraph 7,b71 by striking or ,d and inserting 1 ,d1 or ,j4 #e4 ,national directory of new hires ,section #dec7;j7 of the ,social ,security ,act 7#db ,u4,s4,c4 #fec7;j77 is amended by adding at the end the following3 7#ab7 ,information comparisons and disclosure to assist with collection of ,,idea student loans 7,a7 ,furnishing of information by the secretary of education ,the ,secretary of ,education shall furnish to the ,secretary1 on such periodic basis as determined by the ,secretary of ,education in consultation with the ,secretary1 information in the custody of the ,secretary of ,education for comparison with information in the ,national ,directory of ,new ,hires1 in order to obtain information in such ,directory with respect to persons who have a loan made under part ,j of title ,,iv of the ,higher ,education ,act of #aife in repayment status4 7,b7 ,requirement to seek minimum information ,the ,secretary of ,education shall seek information pursuant to this section only to the extent necessary to improve collection of the debts owed on the loans described in subparagraph 7,a74 7,c7 ,duties of the secretary 7i7 ,information disclosure ,the ,secretary1 in cooperation with the ,secretary of ,education1 shall compare information in the ,national ,directory of ,new ,hires with information provided by the ,secretary of ,education with respect to persons described in subparagraph 7,a7 and shall disclose information in such ,directory regarding such persons to the ,secretary of ,education in accordance with this paragraph1 for the purposes specified in this paragraph4 7ii7 ,condition on disclosure ,the ,secretary shall make disclosures in accordance with clause 7i7 only to the extent that the ,secretary determines that such disclosures do not interfere with the effective operation of the program under this part4 7,d7 ,prohibition and unauthorized use 7i7 ,in general ,individual data collected under this paragraph shall not be used for any purpose not specifically authorized by ,federal law4 7ii7 ,penalties for unauthorized disclosure of data ,any individual who willfully discloses information provided under this paragraph1 in any manner to an entity not entitled to receive the information1 shall be fined under title #ah1 ,united ,states ,code1 imprisoned not more than #e years1 or both4 7,e7 ,use or disclosure of information by the secretary of education ,the ,secretary of ,education may use or disclose information provided under this paragraph only for purposes of collecting the debts owed on the loans described in subparagraph 7,a74 7,f7 ,reimbursement of ,,hhs costs ,the ,secretary of ,education shall reimburse the ,secretary1 in accordance with subsection 7k77#c71 for the costs incurred by the ,secretary in furnishing the information requested under this paragraph4 7,g7 ,compliance with ,,ferpa ,in carrying out this paragraph1 the ,secretary and ,secretary of ,education shall not share any personally identifiable information and shall act in accordance with section #ddd of the ,general ,education ,provisions ,act 7#bj ,u4,s4,c4 #abcb;g1 commonly known as the ,family ,educational ,rights and ,privacy ,act of #aigd74 4 #f4 ,disclosure of return information for purposes of ,,idea loan repayment program 7a7 ,in general ,subsection 7l7 of section #fajc of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new paragraph3 7#bc7 ,disclosure of return information to department of education for purposes of administering ,,idea loan repayment program 7,a7 ,in general ,the ,secretary shall1 upon written request1 disclose to the ,department of ,education such return information as is necessary for purposes of carrying out the ,,idea ,loan ,repayment ,program established under subpart #b of part ,j of the ,higher ,education ,act of #aife4 7,b7 ,restriction on disclosure ,return information disclosed under subparagraph 7,a7 may be used by officers1 employees1 and contractors of the ,department of ,education only for purposes of1 and to the extent necessary in determining income-based repayment obligations under the ,,idea ,loan ,repayment ,program4 4 7b7 ,effective date ,the amendments made by this section shall take effect on the date of enactment of this ,act4 #g4 ,exclusion for loan forgiveness of certain student loans 7a7 ,in general ,paragraph 7#a7 of section #ajh7;f7 of the ,internal ,revenue ,code of #aihf is amended by striking any student loan if and all that follows and inserting any student loan if-- 7,a7 such discharge was pursuant to a provision of such loan under which all or part of the indebtedness of the individual would be discharged if the individual worked for a certain period of time in certain professions for any of a broad class of employers1 or 7,b7 such discharge was pursuant to section #dii;,b7i7 of the ,higher ,education ,act of #aife 7relating to the cancellation of loan liability74 4 7b7 ,effective ,date ,the amendment made by subsection 7a7 shall apply to discharges of indebtedness after the date of enactment of this ,act4