,,ii  #aad? ,,congress  #a/ ,session    
,s4 #bahf  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,octob] #bj1 #bjae,mr4 
,rubio introduc$ ! foll[+ bill2 :i* 0   
read twice & ref]r$ to ! ,committee on  
,f9ance  ,a ,,bill  ,to provide ! legal 
framework necess>y = ! gr[? ( innovative
 private f9anc+ options = /ud5ts to fund
 po/second>y education1 & = o!r         
purposes4  #a4 ,%ort title ,?is ,act may
 be cit$ z ! ,inve/+ 9 ,/ud5t ,success  
,act ( #bjae4  ,i ,au?orization (       
,income ,%>e ,agreem5ts  #aja4 ,purpose2
 lawfulness ( in/rum5ts2 preemption (   
,/ate law  7a7 ,purpose ,x is ! purpose 
( ?is title to au?orize individuals to  
ent] into income %>e agreem5ts = !      
purposes ( obta9+ funds = po/second>y   
education 9 ex*ange = agree+ to pay to !
 hold] ( ! contract a specifi$ p]c5tage 
( ! individual's future income4  7b7    
,lawfulness ( contracts2 preemption ,any
 income %>e agreem5t t complies ) !     
requirem5ts ( section #ajb %all be a    
valid1 b9d+1 & en=ceable contract       

not)/&+ any ,/ate law limit+ or o!rwise 
regulat+ assignm5ts ( future wages or   
o!r income4  #ajb4 ,t]ms & conditions ( 
income %>e agreem5t contracts  7a7      
,def9ition ( income %>e agreem5t ,=     
purposes ( ?is title1 ! t]m income %>e  
agreem5t means an agreem5t betwe5 an    
individual & any o!r p]son "u :i* !     
individual commits to pay a specifi$    
p]c5tage ( ! individual's future income1
 = a specifi$ p]iod ( "t1 9 ex*ange =   
paym5ts to or on behalf ( su* individual
 = po/second>y education1 work=ce       
developm5t1 or o!r purposes4  7b7 ,t]ms 
& conditions ( agreem5ts ,an income %>e 
agreem5t complies ) ! requirem5ts ( ?is 
section if ! contract complies ) ea* ( !
 foll[+ conditions3  7#a7 ,specifi$     
p]c5tage ( income ,! income-%>e agreem5t
 %all specify ! p]c5tage ( future income
 t ! individual subject to ! agreem5t w 
be obligat$ to pay1 except t ! agreem5t 
%all provide = t any ye> cov]$ by su*   
agreem5t dur+ :i* ! individual has an   
income t is less ?an #ae1jjj 7adju/$ ea*

 ye> to reflect *anges 9 ! ,consum]     
,price ,index = ,all ,urban ,consum]s   
publi%$ by ! ,bureau ( ,labor ,/ati/ics 
( ! ,dep>tm5t ( ,labor = ! mo/ rec5t    
#ab-mon? p]iod = :i* su* data are       
available7 ! individual %all n be       
requir$ to pay = su* ye> any portion ( !
 individual's income4  7#b7 ,def9ition (
 income ,an income %>e agreem5t %all    
specify ! def9ition ( income to be us$ =
 purposes ( calculat+ an individual's   
obligation "u ! contract4  7#c7 ,annual 
limitation on obligation ,! p]c5tage (  
income requir$ "u ! income %>e agreem5t 
to be paid by ! individual subject to ! 
agreem5t may n exce$ a p]c5tage su* t1  
:5 multipli$ by #ae1jjj1 ! product      
exce$s ! aggregate am\nt ( p]iodic      
paym5ts ( pr9cipal & int]e/ t w\ld be   
requir$ to be paid dur+ a #ab-mon? p]iod
 "u a comp>able loan t be>s int]e/ at a 
fix$ annual rate ( #bj p]c5t4  7#d7     
,aggregate limitation on obligation ,no 
eligible individual may ent] into any   
income %>e agreem5t if ! total p]c5tage 

( su* individual's future income t !    
individual agrees to pay "u t contract1 
& any o!r income %>e agreem5ts ( su*    
individual1 exce$s #ae p]c5t ( su*      
future income4  7#e7 ,"t-bas$ limitation
 on obligation  7,a7 ,limitation ,!     
income-%>e agreem5t may n provide = !   
individual subject to ! agreem5t to     
assume a commitm5t to pay future income 
hav+ a commitm5t factor1 t :5 add$ to ! 
commitm5t factors = any o!r income-%>e  
agreem5ts to :i* su* individual is      
subject1 equals a sum t exce$s ! maximum
 commitm5t factor4  7,b7 ,commitm5t     
factor ,z us$ 9 ?is p>agraph1 ! t]m     
commitm5t factor means1 ) respect to an 
income-%>e agreem5t1 ! product (-- 7i7 !
 p]c5tage 7express$ z a decimal7 ( su*  
future income requir$ to be paid dur+   
su* p]iod2 &  7ii7 ! rema9+ numb] ( ye>s
 "u ! agreem5t t future income is       
requir$ to be paid at su* p]c5tage4     
7,c7 ,maximum commitm5t factor ,z us$ 9 
?is p>agraph1 ! t]m maximum commitm5t   
factor means1 ) respect to an income-%>e

 agreem5t1 #b4be 7:i* figure is !       
product ( #g4e p]c5t & ! numb] ( ye>s 9 
! longe/ all[able contract "u p>agraph  
7#f77;,a774  7#f7 ,ext5sion ( p]iod ,!  
income-%>e agreem5t may provide t su*   
p]iod may be ext5d$ by a numb] ( ye>s t 
is equal to ! numb] ( ye>s dur+ :i* !   
agreem5t is 9 =ce = :i* ! individual's  
annual income is bel[ ! doll> am\nt     
specifi$ 9 p>agraph 7#a74  7#g7 ,e>ly   
t]m9ation ,! income-%>e agreem5t %all   
specify ! t]ms & conditions by :i* !    
individual subject to ! agreem5t may    
ext+ui% ! individual's obligations "u ! 
agreem5t be=e ! end ( ! paym5t p]iod    
specifi$ 9 ! agreem5t & any application 
ext5sion provid$ = 9 ! agreem5t pursuant
 to p>agraph 7#f77;,b74  7c7 ,requir$   
disclosures ,an income %>e agreem5t does
 n comply ) ! requirem5ts ( ?is section 
unless ! individual :o is committ+ to   
pay future income is provid$1 be=e entry
 into su* agreem5t1 a disclosure docum5t
 t cle>ly & simply discloses--  7#a7 t--
 7,a7 ! agreem5t is n a debt in/rum5t1 &

 t ! am\nt ! individual w be requir$ to 
pay "u ! agreem5t--  7i7 may be m or    
less ?an ! am\nt provid$ to !           
individual2 &  7ii7 w v>y 9 proportion  
to ! individual's future income2  7,b7 t
 ! obligations ( ! individual "u !      
agreem5t are n dis*>geable "u bankruptcy
 law1 except 9 a case t w\ld impose an  
undue h>d%ip on ! debtor & ! debtor's   
dep5d5ts2  7,c7 :e!r ! obligations ( !  
individual "u ! agreem5t may be ext+ui%$
 by accel]at+ paym5ts1 &1 if s1 "u :at  
t]ms2  7,d7 ! duration ( ! individual's 
obligations "u ! agreem5t 7abs5t su*    
accel]at+ paym5ts71 includ+ any         
circum/ances "u :i* ! contract w\ld be  
ext5d$2  7,e7 ! p]c5tage ( income !     
individual is committ+ to pay "u !      
agreem5t & ! m9imum am\nt ( annual      
income t1 pursuant to subsection        
7b77#a71 trigg]s ! individual's         
obligation "u ! agreem5t to make paym5ts
 = su* ye>2 &  7,f7 ! def9ition ( income
 to be us$ = purposes ( calculat+ !     
individual's obligation2 &  7#b7 a      

comp>ison (--  7,a7 ! am\nts an         
individual w\ld be requir$ to pay "u !  
income-%>e agreem5t at a range ( annual 
income levels1 :i* income levels %all   
correspond to ! levels ! individual     
might reasonably be expect$ to make giv5
 ! int5d$ use ( ! funds provid$ "u !    
agreem5t1 z det]m9$ 9 accordance )      
guidance issu$ by ! ,secret>y ( !       
,treasury2 to  7,b7 ! am\nts requir$ to 
be paid "u a comp>able loan t be>s      
int]e/ at a fix$ annual rate ( #aj      
p]c5t4  7d7 ,non-,int]f]5ce ,an         
income-%>e agreem5t repres5ts an        
obligation by ! individual pay !        
specific p]c5tage ( future income1 b    
%all n be con/ru$ to give ! contract    
hold] any rights ov] an individual's    
actions4  #ajc4 ,def9itions ,z us$ 9 ?is
 title3 7#a7 ,/ate ,! t]m ,/ate         
includes1 9 addition to ! sev]al ,/ates 
( ! ,union1 ! ,commonweal? ( ,pu]to     
,rico1 ! ,di/rict ( ,columbia1 ,guam1   
,am]ican ,samoa1 ! ,virg9 ,isl&s1 !     
gov]nm5t ( ! ,nor!rn ,m>iana ,isl&s1 & !

 ,tru/ ,t]ritory ( ! ,pacific ,isl&s4   
7#b7 ,/ate law ,! t]m ,/ate law means   
any law1 decision1 rule1 regulation1 or 
o!r action hav+ ! effect ( a law ( any  
,/ate or any political subdivision ( a  
,/ate1 or any ag5cy or in/rum5tality ( a
 ,/ate or political subdivision ( a     
,/ate1 except t a law ( ! ,unit$ ,/ates 
applicable only to ! ,di/rict (         
,columbia %all be treat$ z a ,/ate law  
7r ?an a law ( ! ,unit$ ,/ates74  #ajd4 
,preemption ( ,/ate ,law ) respect to   
usury ,income %>e agreem5ts %all n be   
subject to ,/ate usury laws4  #aje4     
,rulemak+2 model disclosure =ms  7a7 ,9 
g5]al ,! ,secret>y ( ! ,treasury1 9     
consultation ) su* o!r ag5cy heads z !  
,secret>y consid]s appropriate1 may     
issue su* regulations z may be necess>y 
to c>ry out ?is title4  7b7 ,model      
disclosure =ms  7#a7 ,9 g5]al ,n lat]   
?an ! end ( ! #ahj-;day p]iod beg9n+ ^u 
! date ( ! enactm5t ( ?is ,act1 !       
,secret>y ( ! ,treasury1 aft]           
consultation ) su* o!r ag5cy heads z !  

,secret>y consid]s appropriate1 %all    
promulgate a model disclosure =m = !    
disclosures requir$ "u section #ajb7;c74
  7#b7 ,safe h>bor ,any p]son :o uses ! 
model disclosure =m promulgat$ pursuant 
to p>agraph 7#a7 & includes accurate    
in=mation requir$ "u section #ajb7;c7 to
 be disclos$ %all be deem$ to h satisfi$
 ! requirem5ts ( section #ajb7;c74  ,,ii
 ,tax ,treatm5t ( ,income ,%>e          
,agreem5ts  #bja4 ,tax treatm5t ( income
 %>e agreem5ts  7a7 ,exclusion f gross  
income ( income %>e agreem5t proce$s    
,paym5ts made "u an income-%>e agreem5t 
t complies ) ! requirem5ts ( section    
#ajb to or on behalf ( ! individual :o  
commits to pay a specifi$ p]c5tage ( su*
 individual's future income to ano!r    
p]son "u su* agreem5t1 & any diff]5ce 9 
value ( ! paym5ts to or on behalf ( su* 
individual & ! total am\nt paid by su*  
individual1 %all n be includible 9 !    
gross income ( su* individual = purposes
 ( ! ,int]nal ,rev5ue ,code ( #aihf4    
7b7 ,treatm5t ( paym5ts ( future income 

,paym5ts ( future income receiv$ by     
ano!r p]son "u an income %>e agreem5t   
%all be treat$ = purposes ( ! ,int]nal  
,rev5ue ,code ( #aihf--  7#a7 fir/1 )   
respect to s mu* ( su* paym5ts z does n 
exce$ ! am\nt ( ! paym5ts to :i*        
subsection 7a7 applies ) respect to su* 
agreem5t1 z a repaym5t ( inve/m5t 9 !   
contract :i* r$uces ! hold]'s basis 9   
su* agreem5t1 &  7#b7 second1 z income  
on ! contract :i* is includible 9 gross 
income4  7c7 ,income %>e agreem5t ,=    
purposes ( ?is title1 ! t]m income %>e  
agreem5t has ! mean+ giv5 su* t]m "u    
title ,i4  ,,iii ,qualifi$ education    
loan  #cja4 ,qualifi$ education loan    
7a7 ,9 g5]al ,p>agraph 7#a7 ( section   
#bba7;d7 ( ! ,int]nal ,rev5ue ,code (   
#aihf is am5d$ by add+ at ! end !       
foll[+3 ,su* t]m includes any income %>e
 agreem5t 7z def9$ 9 section #ajb ( !   
,inve/+ 9 ,/ud5t ,success ,act ( #bjae71
 except t paym5ts made by ! taxpay] dur+
 ! taxable ye> to meet an income %>e    
agreem5t obligation %all n be tak5 into 

acc\nt "u subsection 7a74  7b7          
,in=mation report+ n requir$ ,subsection
 7e7 ( section #fjej,s ( su* ,code is   
am5d$ by ins]t+ 7)\t reg>d to ! la/     
s5t5ce !re(7 aft] section #bba7;d77#a74 
,,iv ,f$]al ,individual ,assi/ance      
,treatm5t ( ,income ,%>e ,agreem5ts     
#dja4 ,am\nts receiv$ n treat$ z income 
9 calculation ( f9ancial ne$ "u ! ,high]
 ,education ,act ( #aife ,no portion (  
any am\nts receiv$ by an individual =   
ent]+ into an income %>e agreem5t 7z su*
 t]m is def9$ 9 title ,i7 %all be       
includ$ z income or assets 9 !          
computation ( expect$ family            
contribution = any program fund$ 9 :ole 
or 9 "p "u ! ,high] ,education ,act (   
#aife4  ,v ,inve/m5t ,company treatm5t  
#eja4 ,bus9esses mak+ income %>e        
agreem5ts exclud$ f inve/m5t company    
treatm5t ,section #c7;c7 ( ! ,inve/m5t  
,company ,act ( #aidj 7#ae ,u4,s4,c4    
#hj;a-#c7;c77 is am5d$-- 7#a7 9 p>agraph
 7#d71 by ins]t+ aft] indu/rial bank+1 !
 foll[+3 income %>e agreem5ts 7z def9$  

"u section #ajb ( ! ,inve/+ 9 ,/ud5t    
,success ,act ( #bjae712 &  7#b7 9      
p>agraph 7#e71 by ins]t+ 1 includ+      
income %>e agreem5ts aft] s]vices ea*   
place su* t]m appe>s4