,i #aafth ,,congress #ast ,session ,h4 ,r4 #djgi ,,in ,,the ,,house ,,of ,,representatives ,july #be1 #bjai,mr4 ,zeldin introduced the following bill2 which was referred to the ,committee on ,education and ,labor1 and in addition to the ,committee on ,ways and ,means1 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 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 ,earnings ,contingent ,education ,loans ,act of #bjai or the ,ex,c,e,l ,act of #bjai4 #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 #bjai-- 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 #bjai1 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 #bjba4 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;a et seq47 is amended by adding at the end the following new part3 ,j ,income ,dependent ,education ,assistance ,loans #a ,,idea ,loans #dii;,a4 ,program authority and agreements 7a7 ,program authority 7#a7 ,in general ,there are hereby made available1 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 during the period beginning ,july #a1 #bjai4 ,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 provides funds for the origination of ,federal ,direct ,student ,loans under part ,d in accordance with section #deb4 ,the requirements1 rights1 and limitations under section #deb with respect to the ,secretary and institutions for funds provided for loans under part ,d 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 #bjai4 ,the provisions of section #dec 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 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 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 7hereinafter referred to 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 ,earnings ,contingent ,education ,loans ,act of #bjai4 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 ,earnings ,contingent ,education ,loans ,act of #bjai4 7#b7 ,graduate and professional students ,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 ,earnings ,contingent ,education ,loans ,act of #bjai1 the maximum annual amounts and maximum aggregate amounts1 respectively1 of ,,idea ,loans that the 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 loan1 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 ,in general ,except as provided in paragraph 7#b71 for ,,idea ,loans for which the first disbursement is made on or after ,july #a1 #bjai1 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-- 7,a7 the bond equivalent rate of #aj-year ,treasury bills auctioned at the final auction held prior to such ,june #a1 plus 7,b7 #c4j percent4 7#b7 ,certain graduate and professional students ,notwithstanding paragraph 7#a71 with respect to graduate or professional students who have increased maximum annual and aggregate loan limits under subsection 7c77#b71 for ,,idea ,loans for which the first disbursement is made on or after ,july #a1 #bjai1 the applicable rate of interest shall be the weighted average of-- 7,a7 the rate determined under paragraph 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#a72 and 7,b7 the rate determined under paragraph 7#a71 except that #d4a percent shall be substituted for #c4j percent in such determination1 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#b74 7#c7 ,consultation ,the ,secretary shall determine the applicable rate of interest under paragraph 7#a7 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 ,fixed rate until cap ,the applicable rate of interest determined under paragraph 7#a7 or 7#b7 for an ,,idea ,loan shall be fixed for the life of the loan1 except that interest shall cease to accrue when the total amount of interest 7both paid and unpaid7 that has accrued during the borrower's grace and repayment periods equals #ej percent of the total amount of the loan 7equal to the sum of the unpaid principal1 interest1 penalties1 and fees due on the loan7 as of first day of the borrower's grace period4 7,b7 ,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,c7 ,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 #bagd of title #aj1 ,united ,states ,code1 for the payment of interest on a loan made under this part to a member of the ,armed ,forces1 the ,secretary shall pay the interest on the loan 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 ,servicemembers 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 #bjai4 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 #bjai1 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 ,no public service loan forgiveness ,a loan made under this part shall not be eligible for the public service loan forgiveness program under section #dee7m74 #dii;,c4 ,,idea ,consolidation ,loans 7a7 ,,idea ,consolidation ,loans 7#a7 ,in general ,except as provided in this section1 an ,,idea ,consolidation ,loan under this section shall have the same terms1 conditions1 and benefits1 as ,,idea ,loans 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 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 which 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 7#a7 ,in general ,notwithstanding section #dii;,b7e71 an ,,idea ,consolidation ,loan for which the application is received on or after ,july #a1 #bjai1 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 7#b7 ,application of interest rate during the life of the loan ,the applicable rate of interest determined under paragraph 7#a7 shall be fixed for the life of the ,,idea ,consolidation ,loan1 except that interest shall cease to accrue when the total amount of interest 7both paid and unpaid7 that has accrued on such ,loan equals #ej percent of the total amount of the loans consolidated 7as calculated on the date such ,consolidation ,loan is made1 and 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 section74 #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 ,the ,secretary of the ,treasury1 in consultation with the ,secretary of ,education1 shall establish a program 7hereinafter referred to as the ,,idea ,loan ,repayment ,program7 that provides for-- 7#a7 repaying loans under this part through voluntary wage withholding and quarterly estimated payments as provided in subsection 7b72 and 7#b7 transmitting to the ,secretary of ,education-- 7,a7 an account of the amounts collected under subsection 7b7 with respect to each individual for whom a loan made under this part is in repayment status2 and 7,b7 such tax return information of each such individual as is necessary to determine the individual's income-based repayment obligation as provided in subsection 7c74 7b7 ,wage withholding and estimated payments 7#a7 ,in general ,the ,secretary of the ,treasury shall1 under rules similar to the rules of chapter #bd of the ,internal ,revenue ,code of #aihf1 provide for employers making payment of wages to deduct and withhold upon such wages amounts determined in accordance with tables or computational procedures prescribed by the ,secretary with respect to an employee who elects withholding under this subsection with respect to a loan made under this part that is in repayment status and1 if so elected1 with respect to any such loans of the employee's spouse4 7#b7 ,withholding requirements ,the tables1 procedures1 and guidance prescribed under paragraph 7#a7 shall provide-- 7,a7 for the election to have amounts withheld as provided under this subsection2 7,b7 procedures and forms for an employee to indicate-- 7i7 whether the employee 7and1 in the case of a married individual1 whether the employee's spouse7 has a loan made under this part that is in repayment status2 7ii7 in the case of a married individual1 whether the employee anticipates filing jointly 7and accompanying guidance explaining that if filing status for the taxable year is uncertain the employee should indicate filing jointly to avoid underwithholding72 7iii7 whether the exemption amount to which the employee is entitled under this section should be taken into account in determining withholding 7and accompanying guidance explaining that1 in order to avoid underwithholding1 the employee should only take into account the exemption in the case of the employee's primary employer1 unless total wages from more than one place of employment will not exceed the exemption amount72 7iv7 in the case of a married individual1 whether the exemption amount to which the employee's spouse is entitled under this section should be taken into account in determining withholding from the wages of the employee 7and accompanying guidance explaining that1 in order to avoid underwithholding1 the employee should only take into account such exemption if such spouse is not employed1 or if the total wages from the employee's job and the spouse's employment will not exceed the exemption amount72 7v7 the number of dependents of the employee with respect to whom the employee is entitled to a deduction under section #aea7;c7 of the ,internal ,revenue ,code of #aihf1 and1 if a different number1 in the case of a married employee1 the number of dependents of the employee's spouse with respect to whom such spouse is entitled to such deduction2 and 7vi7 an election to have additional amounts withheld2 and 7,c7 for withholding with respect to any employee in an amount equal to the sum of-- 7i7 in the case of an employee who has a loan made under this part in repayment status1 the percentage of so much of the employee's wages that would count towards the employee's income-based repayment obligation provided in subsection 7c7 as exceeds any exemption amount taken into account with respect to the employee under subparagraph 7,a77iii7 7prorated to the payroll period71 plus 7ii7 in the case of an employee who indicates that the employee's spouse has a loan made under this part in repayment status1 the percentage of so much of the employee's wages that would count towards the employee's spouse's income-based repayment obligation 7as provided in subsection 7c77 as exceeds any exemption amount taken into account with respect to the employee's spouse under subparagraph 7,a77iv7 7prorated to the payroll period74 7#c7 ,quarterly estimated tax payments ,in the case of taxpayers who make quarterly estimated tax return payments under section #ffed of the ,internal ,revenue ,code of #aihf and who have a loan made under this part in repayment status1 the ,secretary shall provide similar tables and procedures for making voluntary repayments of loans made under this part concurrently with such quarterly payments4 7#d7 ,collection and payment ,the amounts required to be deducted and withheld under paragraph 7#a71 and amounts required to be paid under paragraph 7#c71 shall be collected by the ,secretary of the ,treasury and shall be paid into the general fund of the ,treasury of the ,united ,states4 7c7 ,determination of income-,based repayment obligation 7#a7 ,in general ,as soon as practicable after an individual for whom a loan made under this part is in repayment status during the taxable year files an income tax return for such taxable year1 the ,secretary of the ,treasury shall transmit to the ,secretary of ,education such tax information as is necessary to determine-- 7,a7 the amount deducted and withheld under subsection 7b77#a71 and the amount paid under subsection 7b77#c71 for the taxable year with respect to such individual2 and 7,b7 the income-based repayment obligation for the taxable year for such individual4 7#b7 ,income-based repayment obligation ,for purposes of this section3 7,a7 ,in general ,the income-based repayment obligation with respect to an individual for any taxable year is an amount equal to #ae percent of the excess of-- 7i7 the sum of-- 7,i7 the wages1 salaries1 tips1 and other employee compensation of the taxpayer1 but only if such amounts are includible in gross income for the taxable year 7determined without regard to section #iaa1 #ica1 or #icc71 7,,ii7 the amount of the taxpayer's net earnings from self-employment for the taxable year 7within the meaning of section #adjb7;a771 determined with regard to the deduction allowed to the taxpayer by section #afd7;f71 plus 7,,iii7 any other amount included in total income of the taxpayer for the taxable year but not described in subclause 7,i7 or 7,,ii71 over 7ii7 the sum of-- 7,i7 the exemption amount with respect to such individual1 plus 7,,ii7 the lesser of the amount determined with respect to the taxpayer under subclauses 7,,ii7 and 7,,iii7 of clause 7i71 or #c1jjj4 7,b7 ,special rules for married individuals 7i7 ,each spouse with loan ,except as provided in clause 7ii71 in the case of a joint return of two individuals who each have a loan made under this part in repayment status1 the income-based repayment obligation with respect to each spouse shall be an amount determined under subparagraph 7,a7 by apportioning of the total income on such return to each spouse4 7ii7 ,special rule for first year of marriage ,in the case of the first taxable year for which any two individuals make a joint return1 the income-based repayment obligation with respect to such an individual shall be an amount equal to the lesser of-- 7,i7 the amount determined with respect to such individual under this paragraph 7determined without regard to this clause71 or 7,,ii7 the amount determined with respect to such individual under this paragraph 7determined by allocating to each spouse the amounts described in subclauses 7,i7 and 7,,ii7 of subparagraph 7,a77i7 in proportion to the amounts attributable to each spouse1 by allocating of the amount described in subparagraph 7,a77i77,,iii7 to each spouse1 and without regard to clause 7i774 7,c7 ,exclusion of certain amounts paid on behalf of individual ,any amount paid on the borrower's behalf under section #dii;,e7#e7 shall not be taken into account in determining such borrower's income-based repayment obligation4 7#c7 ,exemption amount ,for purposes of this section3 7,a7 ,in general ,except as provided in subparagraph 7,b71 the exemption amount with respect to an individual shall be an amount equal to #aej percent of the poverty line for the individual's household size 7as determined under section #fgc7b7 of the ,community ,services ,block ,grant ,act 7#db ,u4,s4,c4 #iijb7b777 for the calendar year in which the taxable year ends4 7,b7 ,special rule for married individuals who both have loans made under this part ,if for any taxable year an individual is married1 files a joint return1 and has a spouse with a loan made under this part in repayment status1 then the exemption amount with respect to such individual shall be an amount equal to the sum of-- 7i7 #aej percent of the poverty line for a household size of one 7as determined under section #fgc7b7 of the ,community ,services ,block ,grant ,act 7#db ,u4,s4,c4 #iijb7b777 for the calendar year in which the taxable year ends1 and 7ii7 of the excess of-- 7,i7 #aej percent of the poverty line for the individual's household size minus #a 7as determined under section #fgc7b7 of the ,community ,services ,block ,grant ,act 7#db ,u4,s4,c4 #iijb7b777 for the calendar year in which the taxable year ends1 over 7,,ii7 the amount determined under clause 7i74 7,c7 ,household size ,for purposes of this paragraph1 an individual's household size shall be determined by reference to the individual1 the number of dependents of the taxpayer with respect to whom the taxpayer is entitled to a deduction under section #aea7;c7 of the ,internal ,revenue ,code of #aihf1 and1 if married and filing jointly1 such individual's spouse4 7#d7 ,individuals not filing a return 7,a7 ,individuals not required to file ,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 7,b7 ,failure to file ,in the case of an individual who makes an election under subsection 7b7 with respect to a loan made under this part in repayment status and fails to file a return under section #fjab7;a77#a71 the ,secretary of the ,treasury shall transmit to the ,secretary of ,education any such tax information of the individual as may be necessary to determine whether such individual is in default under the terms of such loan4 7#e7 ,subsequent transmission of employer information reporting ,as soon as practicable after receiving from an employer information reporting with respect to withholding under subsection 7b77#a7 of an individual1 the ,secretary of the ,treasury shall transmit to the ,secretary of ,education such information as may be useful in verifying the information with respect to withholding transmitted under paragraph 7#a74 7d7 ,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 section1 including measures to prevent underwithholding1 underreporting1 and evasion of repayment or filing4 ,amounts shall be deducted and withheld under this section as the ,secretary determines to be most appropriate to carry out the purposes of the ,,idea ,loan ,repayment ,program and to reflect1 as accurately as is practicable1 an individual's income-based repayment obligation4 #dii;,e4 ,duties of the ,secretary of ,education ,the ,secretary shall carry out the following activities as part of the ,,idea ,loan ,repayment ,program established under this chapter3 7#a7 ,calculation of annual repayment amounts ,the ,secretary shall calculate the annual repayment amounts under #dii;,f7b7 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;,d7c77#b74 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;,d4 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 year1 including by providing a process for the borrower to make such payments automatically1 on a periodic basis1 and in an amount specified by the borrower4 7#e7 ,payments on a taxpayer'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 or quarterly estimated payments under section #dii;,d7b7 for the taxable year were made in #ab equal increments throughout the year4 7#g7 ,managing loans ,the ,secretary shall provide1 through the ,internet1 a tool that has an interface that is consistent for all borrowers with a loan under this part1 which enables each such borrower to-- 7,a7 view the outstanding balances on the borrower's loans made under this part2 7,b7 make a direct payment on the borrower's annual repayment amount or indicate that any overpayment should be refunded or applied to such loans as a prepayment amount2 7,c7 view prior annual statements for such loans provided under paragraph 7#c72 7,d7 view a history of payments made on such loans 7including the method and source of each payment1 such as tax withholding1 estimated taxes1 direct payment1 or payments made on the borrower's behalf72 7,e7 view the borrower's annual repayment amount for that year1 the amount already paid on such annual repayment amount1 and any amount owed by the borrower or due to be refunded to the borrower2 7,f7 view the borrower's loans made under this part that have been paid off2 7,g7 enable the borrower to initiate an appeal process under paragraph 7#h72 and 7,h7 easily determine whether benefits under the ,servicemembers ,civil ,relief ,act 7#ej ,u4,s4,c4 ,app4 #eja et seq471 if applicable1 have been applied to the borrower's loans made under this part4 7#h7 ,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#i7 ,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;,d7c77#d7 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#aj7 ,national ,directory of ,new ,hires ,the ,secretary shall send notices to borrowers under paragraph 7#e7 of section #dce7;i7 of the ,social ,security ,act 7#db ,u4,s4,c4 #fec7;i771 as added by section #e of the ,earnings ,contingent ,education ,loans ,act of #bjai4 #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;,e7#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 ,in repaying an annual repayment amount owed by a borrower for a taxable year1 a borrower may-- 7#a7 with respect to any wages earned by the borrower that are subject to ,federal income tax withholding1 have amounts withheld upon such wages under section #dii;,d7b77#b72 7#b7 in the case of a borrower who makes quarterly estimated tax return payments under section #ffed of the ,internal ,revenue ,code of #aihf for the year1 pay such annual repayment amount concurrently with such quarterly payments under section #dii;,d7b77#c72 7#c7 make direct payments under section #dii;,e7#d7 on such amount to the ,secretary throughout the year2 or 7#d7 have other individuals or entities make payments under section #dii;,e7#e7 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 ,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#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;,e7#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 #cfj days after the date of receipt by the borrower of the borrower's annual statement described in subparagraph 7,a7 shall be considered to be 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;,e7#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;,d7b77#b7 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 section #dii7;b77#b71 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 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 or 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 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 7#b7 ,loan cancellation for teachers ,section #dfj of such ,act 7#bj ,u4,s4,c4 #ajhg;j7 is amended-- 7,a7 in subsection 7b71 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 such ,act 7#bj ,u4,s4,c4 #ajgh-aa7;a77#b77 is amended-- 7#a7 by striking and at the end of subparagraph 7,a72 7#b7 by striking the period at the end of subparagraph 7,b7 and inserting 2 and2 and 7#c7 by adding at the end the following new subparagraph3 7,c7 to cancel the qualified loan amount for a loan made under part ,j of this title4 4 7c7 ,loan repayment for civil legal assistance attorneys ,section #dbh,l7b77#b77;,a7 of such ,act 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 by striking or at the end of subclause 7,,ii72 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 such ,act 7#bj ,u4,s4,c4 #ajhb7m77#a77;,d77 is amended-- 7#a7 by striking this part and part ,d each place it appears and inserting this part1 part ,d1 and part ,j2 and 7#b7 by striking this part or part ,d each place it appears and inserting this part1 part ,d1 or part ,j4 7e7 ,contracts ,section #def of such ,act 7#bj ,u4,s4,c4 #ajhg;f7 is amended-- 7#a7 in subsection 7a77#b71 by striking this part each place it appears and inserting this part or part ,j2 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 such ,act 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 such ,act 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#d71 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 each place 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 such ,act 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;i7 of the ,social ,security ,act 7#db ,u4,s4,c4 #fec7;i77 is amended by adding at the end the following new paragraph3 7#e7 ,sending notice to borrowers of certain student loans ,the ,secretary of ,education shall have access to the information in the ,national ,directory of ,new ,hires for purposes of-- 7,a7 identifying1 on at least a monthly basis1 newly hired employees with an ,,idea ,loan or ,,idea ,consolidation loan made under part ,j of title ,,iv of the ,higher ,education ,act of #aife in repayment status2 and 7,b7 sending a notice to each such individual to remind such individual that-- 7i7 the individual has #a or more loans described in subparagraph 7,a7 in repayment status2 7ii7 the individual is responsible for providing accurate information to the individual's employer to ensure that the employer will deduct and withhold upon such wages amounts to repay such loans in accordance with section #dii;,d7b7 of the ,higher ,education ,act of #aife2 and 7iii7 failure to provide such accurate information will likely result in significant penalties1 default1 or collections proceedings4 4 #f4 ,withheld amounts included on ,w-#b 7a7 ,in general ,section #fjea7;a7 of the ,internal ,revenue ,code of #aihf is amended by striking and at the end of paragraph 7#af71 by striking the period at the end of paragraph 7#ag7 and inserting 1 and1 and by inserting after paragraph 7#ag7 the following new paragraph3 7#ah7 the total amount deducted and withheld under the ,,idea ,loan ,repayment ,program established under chapter #a of subpart #b of part ,j of title ,,iv of the ,higher ,education ,act of #aife4 4 7b7 ,effective date ,the amendments made by this section shall apply to amounts deducted and withheld after the date of the enactment of this ,act4 #g4 ,disclosure of return information for purposes of ,,idea ,loan ,repayment ,program 7a7 ,in general ,section #fajc7l7 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-- 7i7 determining income-based repayment obligations under the ,,idea ,loan ,repayment ,program1 and 7ii7 determining amounts deducted and withheld1 and amounts paid concurrently with quarterly estimated taxes1 under the ,,idea ,loan ,repayment ,program4 4 7b7 ,effective date ,the amendments made by this section shall take effect on the date of the enactment of this ,act4 #h4 ,sense of ,congress ,it is the sense of ,congress that any loan repayment or forgiveness program available under a ,federal law outside of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajja et seq47 to students with loans made under part ,d of title ,,iv of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;a et seq47 should be available to students with loans made under part ,j of such title of such ,act4