,i  #aadth ,,congress  #ast ,session    
,h4 ,r4 #cidg  ,,in ,,the ,,house ,,of  
,,representatives  ,november #e1 #bjae  
,mr4 ,deutch introduced the following   
bill2 which was referred to the         
,committee on ,education and the        
,workforce1 and in addition to the      
,committee on ,financial ,services1 for 
a period to be subsequently determined  
by the ,speaker1 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    
#aife and the ,truth in ,lending ,act to
 clarify the application of prepayment  
and underpayment amounts on student     
loans1 and for other purposes4  #a4     
,short title ,this ,act may be cited as 
the ,student ,loan ,payment             
,optimization ,act4  #b4 ,application of
 prepayment and underpayment amounts for
 ,,ffel and ,direct ,loans  7a7 ,in     
,general ,section #dee7;d7 of the       
,higher ,education ,act of #aife 7#bj   

,u4,s4,c4 #ajhg;e7d77 is amended by     
adding at the end the following new     
paragraph3  7#f7 ,application of        
prepayment and underpayment amounts     
7,a7 ,prepayment amounts                
,notwithstanding any other provision of 
this subsection or any other provision  
of law1 with respect to loans made to an
 eligible borrower under this part or   
part ,b which are held by the same      
holder and which have different         
applicable rates of interest1 the holder
 of such loans shall apply the          
borrower's prepayment amount 7within the
 meaning of section #fhb4bji7;b7 of     
title #cd1 ,code of ,federal            
,regulations1 or a successor regulation7
 for one or more of such loans--  7i7   
first toward any outstanding balance of 
fees1 including collection costs and    
authorized late charges1 due on such    
loans2 and  7ii7 then1 except as        
otherwise requested by the borrower in  
writing1 toward the outstanding balance 
of principal due on the loan with the   

highest applicable rate of interest     
among such loans4  7,b7 ,underpayment   
amounts ,notwithstanding any other      
provision of this subsection or any     
other provision of law1 with respect to 
loans made to an eligible borrower under
 this part or part ,b which are held by 
the same holder and which have different
 applicable rates of interest1 the      
holder of such loans shall apply any    
payment made by the borrower which is   
less than the amount due at the time of 
the payment for one or more of such     
loans--  7i7 first toward any           
outstanding balance of fees1 including  
collection costs and authorized late    
charges1 due on such loans2 and  7ii7   
then1 except as otherwise requested by  
the borrower in writing1 toward the     
balance of the loan with the smallest   
balance of principal and interest among 
such loans4  7,c7 ,special rule for     
borrowers under income-based repayment  
plan ,in the case of a loan for which   
the borrower has elected to participate 

in an income-based repayment plan under 
section #dic;,c1 subparagraphs 7,a7 and 
7,b7 shall not apply unless there is no 
interest due on the loan4  4  7b7       
,requirements for ,contracts ,with      
,servicers of ,loans ,section           
#def7;a77#b7 of such ,act 7#bj ,u4,s4,c4
 #ajhg;f7a77#b77 is amended by striking 
the period at the end of the first      
sentence and inserting the following3 1 
including the requirements with respect 
to the application of prepayment and    
underpayment amounts under section      
#dee7;d77#f744  #c4 ,application of     
prepayment and underpayment amounts for 
,perkins ,loans  7a7 ,in ,general       
,section #dfd7;c77#a77;,c7 of the       
,higher ,education ,act of #aife 7#bj   
,u4,s4,c4 #ajhg;dd7c77#a77;,c77 is      
amended-- 7#a7 by striking and at the   
end of clause 7i72 and  7#b7 by adding  
at the end the following3  7iii7 shall  
provide that the institution shall1 in  
the case of a borrower who provides the 
institution with a prepayment amount    

7within the meaning of section          
#fhb4bji7;b7 of title #cd1 ,code of     
,federal ,regulations1 or a successor   
regulation7 for one or more of the loans
 held by the institution1 apply such    
prepayment amount--  7,i7 first toward  
any outstanding balance of fees1        
including collection costs and          
authorized late charges1 due on such    
loans2 and  7,,ii7 then1 except as      
otherwise requested by the borrower in  
writing1 toward the outstanding balance 
of principal due on the loan with the   
highest applicable rate of interest     
among such loans2 and  7iv7 shall       
provide that the institution shall apply
 any payment made by the borrower which 
is less than the amount due for a       
repayment period for one or more of the 
loans held by the institution--  7,i7   
first toward any outstanding balance of 
fees1 including collection costs and    
authorized late charges1 due on such    
loans2 and  7,,ii7 then1 except as      
otherwise requested by the borrower in  

writing1 toward the balance of the loan 
with the smallest balance of principal  
and interest among such loans2  4  7b7  
,agreements ,with ,institutions ,section
 #dfc7;a7 of such ,act 7#bj ,u4,s4,c4   
#ajhg;cc7a77 is amended-- 7#a7 by       
striking and at the end of paragraph    
7#h72  7#b7 by redesignating paragraph  
7#i7 as paragraph 7#aj72 and  7#c7 by   
inserting after paragraph 7#h7 the      
following new paragraph3  7#i7 provide  
assurances that the institution will    
meet the requirements with respect to   
the application of prepayment and       
underpayment amounts under section      
#dfd7;c77#a77;,c72 and  4  #d4          
,application of prepayment and          
underpayment amounts for private        
education loans ,section #abh7;e7 of the
 ,truth in ,lending ,act 7#ae ,u4,s4,c4 
#afch7;e77 is amended by adding at the  
end the following3  7#ab7 ,application  
of prepayment and underpayment amounts  
7,a7 ,prepayment amounts                
,notwithstanding any other provision of 

law1 with respect to a borrower with one
 or more private education loans which  
are held by the same holder and which   
have different applicable rates of      
interest1 the holder of such loans shall
 apply the borrower's prepayment amount 
7within the meaning of section          
#fhb4bji7;b7 of title #cd1 ,code of     
,federal ,regulations1 or a successor   
regulation7 for one or more of such     
loans--  7i7 first toward any           
outstanding balance of fees1 including  
collection costs and authorized late    
charges1 due on any private education   
loan held by such holder2 and  7ii7     
then1 except as otherwise requested by  
the borrower in writing1 toward the     
outstanding balance of principal due on 
the loan with the highest applicable    
rate of interest among such loans4  7,b7
 ,underpayment amounts ,notwithstanding 
any other provision of law1 with respect
 to a borrower with one or more private 
education loans which are held by the   
same holder and which have different    

applicable rates of interest1 the holder
 of such loans shall apply any payment  
made by the borrower which is less than 
the amount due at the time of the       
payment for one or more of such loans-- 
7i7 first toward any outstanding balance
 of fees1 including collection costs and
 authorized late charges1 due on any    
private education loans held by such    
holder2 and  7ii7 then1 except as       
otherwise requested by the borrower in  
writing1 toward the balance of the loan 
with the smallest balance of principal  
and interest among such loans4  4