,i  #aaf? ,,congress  #a/ ,session  ,h4 
,r4 #djgi  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,july #be1 #bjai,mr4  
,zeld9 introduc$ ! foll[+ bill2 :i* 0   
ref]r$ to ! ,committee on ,education &  
,labor1 & 9 addition to ! ,committee on 
,ways & ,means1 = a p]iod to be         
subsequ5tly det]m9$ by ! ,speak]1 9 ea* 
case = consid]ation ( su* provisions z  
fall )9 ! jurisdiction ( ! committee    
conc]n$  ,a ,,bill  ,to simplify &      
improve ! ,f$]al /ud5t loan program     
?r\gh income-cont+5t repaym5t to provide
 /rong] protections = borr[]s1 enc\rage 
responsible borr[+1 & save money =      
taxpay]s4  #a4 ,%ort title ,?is ,act may
 be cit$ z ! ,e>n+s ,cont+5t ,education 
,loans ,act ( #bjai or ! ,ex,c,e,l ,act 
( #bjai4  #b4 ,t]m9ation ( au?ority to  
make ,f$]al ,direct ,/af=d ,loans1      
,f$]al ,direct ,unsubsidiz$ ,/af=d      
,loans1 & ,f$]al ,direct ,,plus ,loans  
to /ud5ts "u ! ,william ,d4 ,=d ,f$]al  
,direct ,loan ,program ,section #dee7;a7
 ( ! ,high] ,education ,act ( #aife 7#bj

 ,u4,s4,c4 #ajhg;e7a77 is am5d$ by add+ 
at ! end ! foll[+3  7#d7 ,t]m9ation (   
au?ority to make ,f$]al ,direct ,/af=d  
,loans1 ,f$]al ,direct ,unsubsidiz$     
,/af=d ,loans1 & ,f$]al ,direct ,,plus  
,loans to /ud5ts "u ?is "p  7,a7 ,9     
g5]al ,not)/&+ any provision ( ?is "p or
 "p ,b1 = any p]iod ( in/ruction beg9n+ 
on or aft] ,july #a1 #bjai--  7i7 a     
/ud5t %all n be eligible to receive a   
,f$]al ,direct ,/af=d ,loan "u ?is "p2 &
  7ii7 a /ud5t %all n be eligible to    
receive a ,f$]al ,direct ,unsubsidiz$   
,/af=d ,loan or ,f$]al ,direct ,,plus   
,loan "u ?is "p1 except z provid$ 9     
subp>agraph 7,b74  7,b7 ,exceptions     
,subp>agraph 7,a77ii7 %all n be         
applicable ) respect to ! foll[+3 7i7   
,exi/+ /ud5t borr[]s ,a /ud5t :o1 z (   
,july #a1 #bjai1 has an out/&+ balance (
 pr9cipal or int]e/ ow+ on any loan     
made1 insur$1 or gu>ante$ "u "p ,b or   
?is "p may cont9ue to be eligible to    
borr[ a loan "u ?is "p1 except = a      
,f$]al ,direct ,/af=d ,loan1 9          

accordance ) subp>agraph 7,c7 until     
,june #cj1 #bjba4  7ii7 ,p>5t ,,plus    
,loans ,an except$ ,,plus loan or       
except$ consolidation loan 7z su* t]ms  
are def9$ 9 section #dic;,c7a77 "u ?is  
"p t is made to a p>5t on behalf ( an   
und]graduate dep5d5t /ud5t4  7iii7      
,f$]al ,direct ,consolidation ,loans ,a 
,f$]al ,direct ,consolidation ,loan "u  
?is "p4  7,c7 ,maximum annual am\nts (  
,f$]al ,direct ,unsubsidiz$ ,/af=d      
,loans ,! maximum annual am\nt ( ,f$]al 
,direct ,unsubsidiz$ ,/af=d ,loans a    
/ud5t describ$ 9 subp>agraph 7,b77i7 may
 borr[ 9 an academic ye> 7z def9$ 9     
section #dha7;a77#b77 or its equival5t  
%all be ! maximum annual am\nt = su*    
/ud5t det]m9$ "u section #dbh;,h1 plus  
an am\nt equal to ! am\nt ( ,f$]al      
,direct ,/af=d ,loans ! /ud5t w\ld h    
receiv$ 9 ! abs5ce ( subp>agraph        
7,a77i74  4  #c4 ,e/abli%m5t ( ! ,income
 ,dep5d5t ,education ,assi/ance ,loan   
,program & ! ,,idea ,loan ,repaym5t     
,program ,title ,,iv ( ! ,high]         

,education ,act ( #aife 7#bj ,u4,s4,c4  
#ajgj;a et seq47 is am5d$ by add+ at !  
end ! foll[+ new "p3  ,j ,income        
,dep5d5t ,education ,assi/ance ,loans   
#a ,,idea ,loans  #dii;,a4 ,program     
au?ority & agreem5ts  7a7 ,program      
au?ority  7#a7 ,9 g5]al ,!re are h]eby  
made available1 9 accordance ) !        
provisions ( ?is "p1 su* sums z may be  
necess>y to make loans to all eligible  
/ud5ts 9 att5dance at p>ticipat+        
in/itutions ( high] education select$ by
 ! ,secret>y1 to enable su* /ud5ts to   
pursue _! c\rses ( /udy at su*          
in/itutions dur+ ! p]iod beg9n+ ,july   
#a1 #bjai4 ,loans made "u ?is "p %all be
 made by p>ticipat+ in/itutions1 or     
consortia !re(1 t h agreem5ts ) !       
,secret>y to orig9ate loans1 or by      
alt]native orig9ators designat$ by !    
,secret>y to make loans = /ud5ts 9      
att5dance at p>ticipat+ in/itutions4    
7#b7 ,designation ,! program e/abli%$ "u
 ?is subp>t %all be ref]r$ to z !       
,income ,dep5d5t ,education ,assi/ance  

,loan ,program1 or ! ,,idea ,loan       
,program4  7b7 ,funds = ! orig9ation (  
,,idea ,loans ,! ,secret>y %all provide 
funds = /ud5t loans "u ?is "p 9 ! same  
mann] z ! ,secret>y provides funds = !  
orig9ation ( ,f$]al ,direct ,/ud5t      
,loans "u "p ,d 9 accordance ) section  
#deb4 ,! requirem5ts1 rights1 &         
limitations "u section #deb ) respect to
 ! ,secret>y & in/itutions = funds      
provid$ = loans "u "p ,d %all apply )   
respect to ! ,secret>y & in/itutions =  
funds provid$ = loans "u ?is "p1 except 
t funds "u ?is "p %all n be provid$ =   
p>5t loans4  7c7 ,selection (           
in/itutions = p>ticipation & orig9ation1
 & agreem5ts ) in/itutions  7#a7        
,selection ( in/itutions = p>ticipation 
& orig9ation ,! ,secret>y %all ent] into
 agreem5ts ) in/itutions ( high]        
education to p>ticipate 9 ! ,,idea ,loan
 ,program "u ?is "p & agreem5ts )       
in/itutions ( high] education1 or       
consortia !re(1 to orig9ate loans 9 su* 
program = academic ye>s beg9n+ on or    

aft] ,july #a1 #bjai4 ,! provisions (   
section #dec %all apply ) respect to    
agreem5ts "u ?is section4 ,! ,secret>y  
%all provide alt]native orig9ation      
s]vices = loans "u ?is "p1 z            
appropriate1 9 a mann] consi/5t ) !     
provisions ( sections #dec & #def relat$
 to alt]native orig9ation s]vices =     
loans "u "p ,d4  7#b7 ,p>ticipation &   
orig9ation agreem5ts ) in/itutions ,an  
agreem5t ) any in/itution ( high]       
education = p>ticipation 9 ! ,,idea     
,loan ,program "u ?is "p1 & an agreem5t 
) any in/itution ( high] education1 or  
consortia !re(1 to orig9ate loans 9 su* 
program1 %all h ! same t]ms z ! t]ms    
requir$ "u section #ded = agreem5ts ) an
 in/itution = p>ticipation or           
orig9ation1 respectively1 9 ! /ud5t loan
 program "u "p ,d1 except t agreem5ts = 
p>ticipation or orig9ation "u ?is "p    
%all n apply to p>5t loans4  7#c7       
,)drawal & ,t]m9ation ,proc$ures ,!     
,secret>y %all e/abli% proc$ures by :i* 
in/itutions or consortia may )draw or be

 t]m9at$ f ! program "u ?is "p4         
#dii;,b4 ,t]ms & conditions ( ,,idea    
,loans  7a7 ,p>allel t]ms1 conditions1  
b5efits1 & am\nts ,unless o!rwise       
specifi$ 9 ?is "p1 ,income ,dep5d5t     
,education ,assi/ance ,loans 7h]e9aft]  
ref]r$ to z ,,idea ,loans7 made to      
borr[]s "u ?is "p %all h ! same t]ms1   
conditions1 & b5efits1 & be available 9 
! same am\nts1 z ,f$]al ,direct         
,unsubsidiz$ ,/af=d ,loans made to      
borr[]s "u "p ,d1 & fir/ disburs$ on !  
day be=e ! date ( enactm5t ( ! ,e>n+s   
,cont+5t ,education ,loans ,act ( #bjai4
  7b7 ,eligible borr[]s  7#a7 ,9 g5]al  
,9 addition to ! requirem5ts ( section  
#dhd1 to be eligible to receive a loan  
7o!r ?an an ,,idea ,consolidation ,loan7
 "u ?is "p1 a borr[]--  7,a7 %all be an 
individual :o1 on ! date ( application =
 su* loan1 has no out/&+ balance (      
pr9cipal or int]e/ ow+ on any loan made1
 insur$1 or gu>ante$ "u "p ,b or ,d 7o!r
 ?an an except$ ,,plus loan or an       
except$ consolidation loan 7z su* t]ms  

are def9$ 9 section #dic;,c7a7772 or    
7,b7 9 ! case ( an individual ) an      
out/&+ balance ( pr9cipal or int]e/ ow+ 
on any loan describ$ 9 subp>agraph 7,a71
 %all consolidate all su* exi/+ loans   
into an ,,idea ,consolidation ,loan "u  
section #dii;,c4  7#b7 ,only /ud5t      
borr[]s eligible ,= purposes ( ?is "p1 !
 t]m borr[] %all n include a p>5t       
borr[]4  7c7 ,annual & ,aggregate       
,limits  7#a7 ,9 g5]al ,subject to      
p>agraph 7#b71 ! maximum annual am\nt ( 
,,idea ,loans 9 any academic ye> 7z     
def9$ 9 section #dha7;a77#b77 or its    
equival5t1 & ! maximum aggregate am\nt (
 ,,idea ,loans t a /ud5t may borr[1 %all
 be ! maximum annual am\nts & maximum   
aggregate am\nts1 respectively1 ( ,f$]al
 ,direct ,unsubsidiz$ ,/af=d ,loans "u  
"p ,d t su* /ud5t w\ld h be5 eligible to
 borr[ 9 ! abs5ce ( section             
#dee7;a77#d71 z add$ by ,e>n+s ,cont+5t 
,education ,loans ,act ( #bjai4  7#b7   
,graduate & pr(essional /ud5ts ,9 ! case
 ( a graduate or pr(essional /ud5t :o   

w\ld h be5 eligible to borr[ a ,f$]al   
,direct ,,plus ,loan "u "p ,d 9 ! abs5ce
 ( section #dee7;a77#d71 z add$ by      
,e>n+s ,cont+5t ,education ,loans ,act (
 #bjai1 ! maximum annual am\nts &       
maximum aggregate am\nts1 respectively1 
( ,,idea ,loans t ! /ud5t may borr[ z   
det]m9$ "u p>agraph 7#a7 = any academic 
ye> 7z def9$ 9 section #dha7;a77#b77 or 
its equival5t1 may be increas$ to an    
am\nt equal to ! maximum annual am\nts &
 maximum aggregate am\nts1 respectively1
 ( ,f$]al ,direct ,,plus ,loans t su*   
/ud5t w\ld h be5 eligible to borr[ 9 !  
abs5ce ( su* section #dee7;a77#d74  7d7 
,loan ,fee ,! ,secret>y %all *>ge !     
borr[] ( a loan 7o!r ?an an ,,idea      
,consolidation ,loan7 made "u ?is "p an 
orig9ation fee4 ,su* fee %all be ! sum  
(--  7#a7 = ! portion ( ! pr9cipal am\nt
 ( ! loan t is equal to 7or less ?an7 ! 
maximum annual am\nt a /ud5t may borr[  
"u subsection 7c77#a71 #a4j p]c5t ( su* 
portion ( ! pr9cipal am\nt ( ! loan1    
plus  7#b7 = ! portion ( ! pr9cipal     

am\nt ( ! loan t exce$s ! maximum annual
 am\nt a /ud5t may borr[ "u subsection  
7c77#a71 z au?oriz$ by subsection       
7c77#b71 #d4j p]c5t ( su* portion ( !   
pr9cipal am\nt ( ! loan4  7e7 ,int]e/   
rates  7#a7 ,9 g5]al ,except z provid$ 9
 p>agraph 7#b71 = ,,idea ,loans = :i* ! 
fir/ disbursem5t is made on or aft]     
,july #a1 #bjai1 ! applicable rate (    
int]e/ %all1 dur+ any #ab-mon? p]iod    
beg9n+ on ,july #a & end+ on ,june #cj1 
be det]m9$ on ! prec$+ ,june #a & be    
equal to--  7,a7 ! bond equival5t rate (
 #aj-ye> ,treasury bills auction$ at !  
f9al auction held prior to su* ,june #a1
 plus  7,b7 #c4j p]c5t4  7#b7 ,c]ta9    
graduate & pr(essional /ud5ts ,not)/&+  
p>agraph 7#a71 ) respect to graduate or 
pr(essional /ud5ts :o h increas$ maximum
 annual & aggregate loan limits "u      
subsection 7c77#b71 = ,,idea ,loans =   
:i* ! fir/ disbursem5t is made on or    
aft] ,july #a1 #bjai1 ! applicable rate 
( int]e/ %all be ! weight$ av]age (--   
7,a7 ! rate det]m9$ "u p>agraph 7#a7 = !

 portion ( ! pr9cipal am\nt ( ! loan t  
is equal to 7or less ?an7 ! maximum     
annual am\nt a /ud5t may borr[ "u       
subsection 7c77#a72 &  7,b7 ! rate      
det]m9$ "u p>agraph 7#a71 except t #d4a 
p]c5t %all be sub/itut$ = #c4j p]c5t 9  
su* det]m9ation1 = ! portion ( !        
pr9cipal am\nt ( ! loan t exce$s !      
maximum annual am\nt a /ud5t may borr[  
"u subsection 7c77#a71 z au?oriz$ by    
subsection 7c77#b74  7#c7 ,consultation 
,! ,secret>y %all det]m9e ! applicable  
rate ( int]e/ "u p>agraph 7#a7 aft]     
consultation ) ! ,secret>y ( ! ,treasury
 & %all publi% su* rate 9 ! ,f$]al      
,regi/] z soon z practicable aft] ! date
 ( det]m9ation4  7#d7 ,application (    
int]e/ rate dur+ ! life ( ! loan  7,a7  
,fix$ rate until cap ,! applicable rate 
( int]e/ det]m9$ "u p>agraph 7#a7 or    
7#b7 = an ,,idea ,loan %all be fix$ = ! 
life ( ! loan1 except t int]e/ %all     
cease to accrue :5 ! total am\nt (      
int]e/ 7bo? paid & unpaid7 t has accru$ 
dur+ ! borr[]'s grace & repaym5t p]iods 

equals #ej p]c5t ( ! total am\nt ( !    
loan 7equal to ! sum ( ! unpaid         
pr9cipal1 int]e/1 p5alties1 & fees due  
on ! loan7 z ( fir/ day ( ! borr[]'s    
grace p]iod4  7,b7 ,9-s*ool def]m5t     
p]iod ,int]e/ %all accrue & be          
capitaliz$ or paid by ! borr[] 7b       
p]iodic in/allm5ts ( pr9cipal ne$ n be  
paid7 dur+ ! 9-s*ool def]m5t p]iod )    
respect to an ,,idea ,loan4 ,= !        
purposes ( ?is "p1 ! 9-s*ool def]m5t    
p]iod ) respect to an ,,idea ,loan is ! 
fir/ p]iod dur+ :i* ! borr[] is pursu+  
at lea/ "o-half ! normal full-"t        
academic workload 7z det]m9$ by !       
in/itution7 9 ! c\rse ( /udy = :i* !    
borr[] receiv$ su* loan & end+ on ! fir/
 day ( ! fir/ mon? t beg9s aft] ! borr[]
 ceases to c>ry at lea/ "o-half ! normal
 full-"t academic workload 7z det]m9$ by
 ! in/itution7 9 ! c\rse ( /udy4  7,c7  
,grace & repaym5t p]iods ,int]e/ t      
accrues dur+ ! borr[]'s grace p]iod 7= !
 purposes ( ?is title1 def9$ z ! p]iod  
betwe5 ! borr[]'s 9-s*ool def]m5t p]iod 

& ! borr[]'s repaym5t p]iod7 & dur+ !   
borr[]'s repaym5t p]iod %all n be       
capitaliz$4  7f7 ,arm$ ,=ces ,/ud5t     
,loan ,int]e/ ,paym5t ,program ,us+     
funds receiv$ by transf] to ! ,secret>y 
"u section #bagd ( title #aj1 ,unit$    
,/ates ,code1 = ! paym5t ( int]e/ on a  
loan made "u ?is "p to a memb] ( ! ,arm$
 ,=ces1 ! ,secret>y %all pay ! int]e/ on
 ! loan z due = a p]iod n 9 excess ( #cf
 consecutive mon?s4 ,! ,secret>y may n  
pay int]e/ on su* a loan out ( any funds
 o!r ?an funds t h be5 s transf]r$4  7g7
 ,no ,accrual ( ,int]e/ = ,active ,duty 
,s]vicememb]s  7#a7 ,9 g5]al ,not)/&+   
any o!r provision ( ?is "p & 9          
accordance ) p>agraphs 7#b7 & 7#d71     
int]e/ %all n accrue = an eligible      
milit>y borr[] on a loan made "u ?is "p 
= :i* ! fir/ disbursem5t is made on or  
aft] ,july #a1 #bjai4  7#b7 ,,idea      
,consolidation loans ,9 ! case ( any    
,,idea ,consolidation loan made "u ?is  
"p t is disburs$ on or aft] ,july #a1   
#bjai1 int]e/ %all n accrue pursuant to 

?is subsection only on su* portion ( su*
 loan z 0 us$ to repay a loan made "u "p
 ,d = :i* ! fir/ disbursem5t is made on 
or aft] ,octob] #a1 #bjjh4  7#c7        
,eligible milit>y borr[] ,9 ?is         
subsection1 ! t]m eligible milit>y      
borr[] means an individual :o-- 7,a7 7i7
 is s]v+ on active duty dur+ a w> or o!r
 milit>y op]ation or national em]g5cy2  
or  7ii7 is p]=m+ qualify+ ,national    
,gu>d duty dur+ a w> or o!r milit>y     
op]ation or national em]g5cy2 &  7,b7 is
 s]v+ 9 an area ( ho/ilities 9 :i*      
s]vice qualifies = special pay "u       
section #caj ( title #cg1 ,unit$ ,/ates 
,code4  7#d7 ,limitation ,an individual 
:o qualifies z an eligible milit>y      
borr[] "u ?is subsection may receive !  
b5efit ( ?is subsection = n m ?an #fj   
mon?s4  7h7 ,loan cancellation & dis*>ge
 ,! ,secret>y %all dis*>ge a borr[]'s   
liability on a loan made "u ?is "p 9    
accordance ) subsections 7a7 & 7c7 (    
section #dcg4  7i7 ,no public s]vice    
loan =giv5ess ,a loan made "u ?is "p    

%all n be eligible = ! public s]vice    
loan =giv5ess program "u section        
#dee7m74  #dii;,c4 ,,idea ,consolidation
 ,loans  7a7 ,,idea ,consolidation      
,loans  7#a7 ,9 g5]al ,except z provid$ 
9 ?is section1 an ,,idea ,consolidation 
,loan "u ?is section %all h ! same t]ms1
 conditions1 & b5efits1 z ,,idea ,loans 
"u ?is "p4  7#b7 ,borr[] & loan         
eligibility ,to be eligible to receive  
an ,,idea ,consolidation ,loan "u ?is   
section1 a borr[]-- 7,a7 %all--  7i7    
meet ! crit]ia describ$ 9 section       
#dbh;,c7a77#c77;,a72 &  7ii7 9 ! case ( 
a borr[] describ$ 9 section             
#dii;,b7b77#a77;,b71 agree to           
consolidate into an ,,idea              
,consolidation ,loan all loans made to !
 borr[] t are describ$ 9 subp>agraphs   
7,a7 & 7,c7 ( section #dbh;,c7a77#d7    
7o!r ?an an except$ ,,plus loan or an   
except$ consolidation loan 7z su* t]ms  
are def9$ 9 section #dic;,c7a7772  7,b7 
may consolidate ! loans describ$ 9      
subp>agraphs 7,b71 7,d71 & 7,e7 (       

section #dbh;,c7a77#d7 into su* ,,idea  
,consolidation ,loan2 &  7,c7 may n     
consolidate an ,,idea ,loan "u section  
#dii;,b into su* ,,idea ,consolidation  
,loan4  7#c7 ,requirem5ts = ! ,secret>y 
,9 mak+ ,,idea ,consolidation ,loans "u 
?is section1 ! ,secret>y--  7,a7 %all   
ensure t-- 7i7 ea* ,,idea ,consolidation
 ,loan w be made1 not)/&+ any o!r       
provision ( ?is title limit+ ! annual or
 aggregate pr9cipal am\nt = all loans   
made to ! borr[]1 9 an am\nt :i* is     
equal to ! sum ( ! unpaid pr9cipal1     
int]e/1 p5alties1 & fees ( all loans    
receiv$ by ! borr[] :i* are select$ by !
 borr[] = consolidation "u ?is section2 
&  7ii7 ! proce$s ( ea* ,,idea          
,consolidation ,loan w be paid by !     
,secret>y to ! hold] or hold]s ( ! loans
 be+ consolidat$ to dis*>ge ! liability 
on su* loans2  7,b7 %all n discrim9ate  
aga9/ any borr[] seek+ su* an ,,idea    
,consolidation ,loan-- 7i7 bas$ on !    
numb] or type ( loans ! borr[] seeks to 
consolidate2  7ii7 bas$ on ! int]e/ rate

 to be *>g$ to ! borr[] ) respect to !  
consolidation loan2 or  7iii7 bas$ on ! 
type or category ( in/itution ( high]   
education t ! borr[] att5ds or att5d$2 &
  7,c7 %all disclose to a prospective   
borr[]1 9 simple & und]/&able t]ms1 at !
 "t ! ,secret>y provides an application 
= an ,,idea ,consolidation ,loan--  7i7 
:e!r consolidation w\ld result 9 a loss 
( loan b5efits "u "p ,b or "p ,d1       
includ+ loan =giv5ess1 cancellation1 &  
def]m5t2  7ii7 ) respect to ,f$]al      
,p]k9s ,loans "u "p ,e-- 7,i7 t if a    
borr[] includes a ,f$]al ,p]k9s ,loan "u
 "p ,e 9 ! consolidation loan1 ! borr[] 
w lose all int]e/-free p]iods t w\ld h  
be5 available = ! ,f$]al ,p]k9s ,loan1  
includ+--  7aa7 ! p]iods dur+ :i* no    
int]e/ accrues on su* loan :ile ! borr[]
 is enroll$ 9 s*ool at lea/ half-"t2    
7bb7 ! grace p]iod "u section           
#dfd7;c77#a77;,a72 &  7cc7 ! p]iods dur+
 :i* ! borr[]'s /ud5t loan repaym5ts are
 def]r$ "u section #dfd7;c77#b72  7,,ii7
 t if a borr[] includes a ,f$]al ,p]k9s 

,loan 9 ! consolidation loan1 ! borr[] w
 no long] be eligible = cancellation (  
"p or all ( ! ,f$]al ,p]k9s ,loan "u    
section #dfe7;a72 &  7,,iii7 !          
occupations li/$ 9 section #dfe t       
qualify = ,f$]al ,p]k9s ,loan           
cancellation "u section #dfe7;a72  7iii7
 ! options ( ! borr[] to prepay ! ,,idea
 ,consolidation ,loan2  7iv7 !          
consequ5ces ( default on ! ,,idea       
,consolidation ,loan2 &  7v7 t by apply+
 = an ,,idea ,consolidation ,loan1 !    
borr[] is n obligat$ to agree to take ! 
consolidation loan4  7b7 ,int]e/ rate   
7#a7 ,9 g5]al ,not)/&+ section          
#dii;,b7e71 an ,,idea ,consolidation    
,loan = :i* ! application is receiv$ on 
or aft] ,july #a1 #bjai1 %all be> int]e/
 at an annual rate on ! unpaid pr9cipal 
balance ( ! loan t is equal to ! weight$
 av]age ( ! int]e/ rates on ! loans     
consolidat$1 r\nd$ to ! ne>e/ high]     
"o-eigh? ( "o p]c5t4 ,int]e/ t accrues  
on su* an ,,idea ,consolidation ,loan   
%all n be capitaliz$4  7#b7 ,application

 ( int]e/ rate dur+ ! life ( ! loan ,!  
applicable rate ( int]e/ det]m9$ "u     
p>agraph 7#a7 %all be fix$ = ! life ( ! 
,,idea ,consolidation ,loan1 except t   
int]e/ %all cease to accrue :5 ! total  
am\nt ( int]e/ 7bo? paid & unpaid7 t has
 accru$ on su* ,loan equals #ej p]c5t ( 
! total am\nt ( ! loans consolidat$ 7z  
calculat$ on ! date su* ,consolidation  
,loan is made1 & equal to ! sum ( !     
unpaid pr9cipal1 int]e/1 p5alties1 &    
fees ( all loans receiv$ by ! borr[] :i*
 are select$ by ! borr[] = consolidation
 "u ?is section74  #b ,,idea ,loan      
,repaym5t ,program  #a ,e/abli%m5t ( !  
,,idea ,loan ,repaym5t ,program         
#dii;,d4 ,duties ( ! ,secret>y ( !      
,treasury  7a7 ,9 g5]al ,! ,secret>y ( !
 ,treasury1 9 consultation ) ! ,secret>y
 ( ,education1 %all e/abli% a program   
7h]e9aft] ref]r$ to z ! ,,idea ,loan    
,repaym5t ,program7 t provides =--  7#a7
 repay+ loans "u ?is "p ?r\gh volunt>y  
wage )hold+ & qu>t]ly e/imat$ paym5ts z 
provid$ 9 subsection 7b72 &  7#b7       

transmitt+ to ! ,secret>y ( ,education--
 7,a7 an acc\nt ( ! am\nts collect$ "u  
subsection 7b7 ) respect to ea*         
individual = :om a loan made "u ?is "p  
is 9 repaym5t /atus2 &  7,b7 su* tax    
return in=mation ( ea* su* individual z 
is necess>y to det]m9e ! individual's   
income-bas$ repaym5t obligation z       
provid$ 9 subsection 7c74  7b7 ,wage    
)hold+ & e/imat$ paym5ts  7#a7 ,9 g5]al 
,! ,secret>y ( ! ,treasury %all1 "u     
rules simil> to ! rules ( *apt] #bd ( ! 
,int]nal ,rev5ue ,code ( #aihf1 provide 
= employ]s mak+ paym5t ( wages to d$uct 
& )hold ^u su* wages am\nts det]m9$ 9   
accordance ) tables or computational    
proc$ures prescrib$ by ! ,secret>y )    
respect to an employee :o elects )hold+ 
"u ?is subsection ) respect to a loan   
made "u ?is "p t is 9 repaym5t /atus &1 
if s elect$1 ) respect to any su* loans 
( ! employee's sp\se4  7#b7 ,)hold+     
requirem5ts ,! tables1 proc$ures1 &     
guidance prescrib$ "u p>agraph 7#a7 %all
 provide-- 7,a7 = ! election to h am\nts

 )held z provid$ "u ?is subsection2     
7,b7 proc$ures & =ms = an employee to   
indicate-- 7i7 :e!r ! employee 7&1 9 !  
case ( a m>ri$ individual1 :e!r !       
employee's sp\se7 has a loan made "u ?is
 "p t is 9 repaym5t /atus2  7ii7 9 !    
case ( a m>ri$ individual1 :e!r !       
employee anticipates fil+ jo9tly 7&     
accompany+ guidance expla9+ t if fil+   
/atus = ! taxable ye> is unc]ta9 !      
employee %\ld indicate fil+ jo9tly to   
avoid und])hold+72  7iii7 :e!r !        
exemption am\nt to :i* ! employee is    
entitl$ "u ?is section %\ld be tak5 into
 acc\nt 9 det]m9+ )hold+ 7& accompany+  
guidance expla9+ t1 9 ord] to avoid     
und])hold+1 ! employee %\ld only take   
into acc\nt ! exemption 9 ! case ( !    
employee's prim>y employ]1 unless total 
wages f m ?an "o place ( employm5t w n  
exce$ ! exemption am\nt72  7iv7 9 ! case
 ( a m>ri$ individual1 :e!r ! exemption 
am\nt to :i* ! employee's sp\se is      
entitl$ "u ?is section %\ld be tak5 into
 acc\nt 9 det]m9+ )hold+ f ! wages ( !  

employee 7& accompany+ guidance expla9+ 
t1 9 ord] to avoid und])hold+1 !        
employee %\ld only take into acc\nt su* 
exemption if su* sp\se is n employ$1 or 
if ! total wages f ! employee's job & ! 
sp\se's employm5t w n exce$ ! exemption 
am\nt72  7v7 ! numb] ( dep5d5ts ( !     
employee ) respect to :om ! employee is 
entitl$ to a d$uction "u section        
#aea7;c7 ( ! ,int]nal ,rev5ue ,code (   
#aihf1 &1 if a diff]5t numb]1 9 ! case (
 a m>ri$ employee1 ! numb] ( dep5d5ts ( 
! employee's sp\se ) respect to :om su* 
sp\se is entitl$ to su* d$uction2 &     
7vi7 an election to h additional am\nts 
)held2 &  7,c7 = )hold+ ) respect to any
 employee 9 an am\nt equal to ! sum (-- 
7i7 9 ! case ( an employee :o has a loan
 made "u ?is "p 9 repaym5t /atus1 !     
p]c5tage ( s mu* ( ! employee's wages t 
w\ld c\nt t[>ds ! employee's income-bas$
 repaym5t obligation provid$ 9          
subsection 7c7 z exce$s any exemption   
am\nt tak5 into acc\nt ) respect to !   
employee "u subp>agraph 7,a77iii7       

7prorat$ to ! payroll p]iod71 plus  7ii7
 9 ! case ( an employee :o indicates t !
 employee's sp\se has a loan made "u ?is
 "p 9 repaym5t /atus1 ! p]c5tage ( s mu*
 ( ! employee's wages t w\ld c\nt t[>ds 
! employee's sp\se's income-bas$        
repaym5t obligation 7z provid$ 9        
subsection 7c77 z exce$s any exemption  
am\nt tak5 into acc\nt ) respect to !   
employee's sp\se "u subp>agraph 7,a77iv7
 7prorat$ to ! payroll p]iod74  7#c7    
,qu>t]ly e/imat$ tax paym5ts ,9 ! case (
 taxpay]s :o make qu>t]ly e/imat$ tax   
return paym5ts "u section #ffed ( !     
,int]nal ,rev5ue ,code ( #aihf & :o h a 
loan made "u ?is "p 9 repaym5t /atus1 ! 
,secret>y %all provide simil> tables &  
proc$ures = mak+ volunt>y repaym5ts (   
loans made "u ?is "p concurr5tly ) su*  
qu>t]ly paym5ts4  7#d7 ,collection &    
paym5t ,! am\nts requir$ to be d$uct$ & 
)held "u p>agraph 7#a71 & am\nts requir$
 to be paid "u p>agraph 7#c71 %all be   
collect$ by ! ,secret>y ( ! ,treasury & 
%all be paid into ! g5]al fund ( !      

,treasury ( ! ,unit$ ,/ates4  7c7       
,det]m9ation ( income-,bas$ repaym5t    
obligation  7#a7 ,9 g5]al ,z soon z     
practicable aft] an individual = :om a  
loan made "u ?is "p is 9 repaym5t /atus 
dur+ ! taxable ye> files an income tax  
return = su* taxable ye>1 ! ,secret>y ( 
! ,treasury %all transmit to ! ,secret>y
 ( ,education su* tax in=mation z is    
necess>y to det]m9e--  7,a7 ! am\nt     
d$uct$ & )held "u subsection 7b77#a71 & 
! am\nt paid "u subsection 7b77#c71 = ! 
taxable ye> ) respect to su* individual2
 &  7,b7 ! income-bas$ repaym5t         
obligation = ! taxable ye> = su*        
individual4  7#b7 ,income-bas$ repaym5t 
obligation ,= purposes ( ?is section3   
7,a7 ,9 g5]al ,! income-bas$ repaym5t   
obligation ) respect to an individual = 
any taxable ye> is an am\nt equal to #ae
 p]c5t ( ! excess (--  7i7 ! sum (--    
7,i7 ! wages1 sal>ies1 tips1 & o!r      
employee comp5sation ( ! taxpay]1 b only
 if su* am\nts are includible 9 gross   
income = ! taxable ye> 7det]m9$ )\t     

reg>d to section #iaa1 #ica1 or #icc71  
7,,ii7 ! am\nt ( ! taxpay]'s net e>n+s f
 self-employm5t = ! taxable ye> 7)9 !   
mean+ ( section #adjb7;a771 det]m9$ )   
reg>d to ! d$uction all[$ to ! taxpay]  
by section #afd7;f71 plus  7,,iii7 any  
o!r am\nt includ$ 9 total income ( !    
taxpay] = ! taxable ye> b n describ$ 9  
subclause 7,i7 or 7,,ii71 ov]  7ii7 !   
sum (-- 7,i7 ! exemption am\nt ) respect
 to su* individual1 plus  7,,ii7 ! less]
 ( ! am\nt det]m9$ ) respect to !       
taxpay] "u subclauses 7,,ii7 & 7,,iii7 (
 clause 7i71 or #c1jjj4  7,b7 ,special  
rules = m>ri$ individuals  7i7 ,ea*     
sp\se ) loan ,except z provid$ 9 clause 
7ii71 9 ! case ( a jo9t return ( two    
individuals :o ea* h a loan made "u ?is 
"p 9 repaym5t /atus1 ! income-bas$      
repaym5t obligation ) respect to ea*    
sp\se %all be an am\nt det]m9$ "u       
subp>agraph 7,a7 by apportion+  ( !     
total income on su* return to ea* sp\se4
  7ii7 ,special rule = fir/ ye> (       
m>riage ,9 ! case ( ! fir/ taxable ye> =

 :i* any two individuals make a jo9t    
return1 ! income-bas$ repaym5t          
obligation ) respect to su* an          
individual %all be an am\nt equal to !  
less] (--  7,i7 ! am\nt det]m9$ )       
respect to su* individual "u ?is        
p>agraph 7det]m9$ )\t reg>d to ?is      
clause71 or  7,,ii7 ! am\nt det]m9$ )   
respect to su* individual "u ?is        
p>agraph 7det]m9$ by allocat+ to ea*    
sp\se ! am\nts describ$ 9 subclauses    
7,i7 & 7,,ii7 ( subp>agraph 7,a77i7 9   
proportion to ! am\nts attributable to  
ea* sp\se1 by allocat+  ( ! am\nt       
describ$ 9 subp>agraph 7,a77i77,,iii7 to
 ea* sp\se1 & )\t reg>d to clause 7i774 
7,c7 ,exclusion ( c]ta9 am\nts paid on  
behalf ( individual ,any am\nt paid on !
 borr[]'s behalf "u section #dii;,e7#e7 
%all n be tak5 into acc\nt 9 det]m9+ su*
 borr[]'s income-bas$ repaym5t          
obligation4  7#c7 ,exemption am\nt ,=   
purposes ( ?is section3 7,a7 ,9 g5]al   
,except z provid$ 9 subp>agraph 7,b71 ! 
exemption am\nt ) respect to an         

individual %all be an am\nt equal to    
#aej p]c5t ( ! pov]ty l9e = !           
individual's h\sehold size 7z det]m9$ "u
 section #fgc7b7 ( ! ,community ,s]vices
 ,block ,grant ,act 7#db ,u4,s4,c4      
#iijb7b777 = ! cal5d> ye> 9 :i* !       
taxable ye> ends4  7,b7 ,special rule = 
m>ri$ individuals :o bo? h loans made "u
 ?is "p ,if = any taxable ye> an        
individual is m>ri$1 files a jo9t       
return1 & has a sp\se ) a loan made "u  
?is "p 9 repaym5t /atus1 !n ! exemption 
am\nt ) respect to su* individual %all  
be an am\nt equal to ! sum (--  7i7 #aej
 p]c5t ( ! pov]ty l9e = a h\sehold size 
( "o 7z det]m9$ "u section #fgc7b7 ( !  
,community ,s]vices ,block ,grant ,act  
7#db ,u4,s4,c4 #iijb7b777 = ! cal5d> ye>
 9 :i* ! taxable ye> ends1 &  7ii7  ( ! 
excess (-- 7,i7 #aej p]c5t ( ! pov]ty   
l9e = ! individual's h\sehold size m9us 
#a 7z det]m9$ "u section #fgc7b7 ( !    
,community ,s]vices ,block ,grant ,act  
7#db ,u4,s4,c4 #iijb7b777 = ! cal5d> ye>
 9 :i* ! taxable ye> ends1 ov]  7,,ii7 !

 am\nt det]m9$ "u clause 7i74  7,c7     
,h\sehold size ,= purposes ( ?is        
p>agraph1 an individual's h\sehold size 
%all be det]m9$ by ref]5ce to !         
individual1 ! numb] ( dep5d5ts ( !      
taxpay] ) respect to :om ! taxpay] is   
entitl$ to a d$uction "u section        
#aea7;c7 ( ! ,int]nal ,rev5ue ,code (   
#aihf1 &1 if m>ri$ & fil+ jo9tly1 su*   
individual's sp\se4  7#d7 ,individuals n
 fil+ a return  7,a7 ,individuals n     
requir$ to file ,! income-bas$ repaym5t 
obligation ) respect to an individual n 
requir$ to file a return "u section     
#fjab7;a77#a7 ( ! ,int]nal ,rev5ue ,code
 ( #aihf %all be treat$ z z]o4  7,b7    
,failure to file ,9 ! case ( an         
individual :o makes an election "u      
subsection 7b7 ) respect to a loan made 
"u ?is "p 9 repaym5t /atus & fails to   
file a return "u section #fjab7;a77#a71 
! ,secret>y ( ! ,treasury %all transmit 
to ! ,secret>y ( ,education any su* tax 
in=mation ( ! individual z may be       
necess>y to det]m9e :e!r su* individual 

is 9 default "u ! t]ms ( su* loan4  7#e7
 ,subsequ5t transmission ( employ]      
in=mation report+ ,z soon z practicable 
aft] receiv+ f an employ] in=mation     
report+ ) respect to )hold+ "u          
subsection 7b77#a7 ( an individual1 !   
,secret>y ( ! ,treasury %all transmit to
 ! ,secret>y ( ,education su* in=mation 
z may be useful 9 v]ify+ ! in=mation )  
respect to )hold+ transmitt$ "u p>agraph
 7#a74  7d7 ,additional program         
requirem5ts ,! ,secret>y ( ! ,treasury  
%all e/abli% su* o!r policies1          
proc$ures1 & guidance z may be necess>y 
to c>ry out ! purposes ( ?is section1   
includ+ measures to prev5t und])hold+1  
und]report+1 & evasion ( repaym5t or    
fil+4 ,am\nts %all be d$uct$ & )held "u 
?is section z ! ,secret>y det]m9es to be
 mo/ appropriate to c>ry out ! purposes 
( ! ,,idea ,loan ,repaym5t ,program & to
 reflect1 z accurately z is practicable1
 an individual's income-bas$ repaym5t   
obligation4  #dii;,e4 ,duties ( !       
,secret>y ( ,education ,! ,secret>y %all

 c>ry out ! foll[+ activities z "p ( !  
,,idea ,loan ,repaym5t ,program e/abli%$
 "u ?is *apt]3  7#a7 ,calculation (     
annual repaym5t am\nts ,! ,secret>y %all
 calculate ! annual repaym5t am\nts "u  
#dii;,f7b7 = borr[]s ) #a or m loans    
made "u ?is "p 9 repaym5t /atus1 includ+
 ! income-bas$ repaym5t obligations (   
su* borr[]s 9 accordance ) section      
#dii;,d7c77#b74  7#b7 ,communication ) !
 ,secret>y ( ! ,treasury ,! ,secret>y   
%all transmit to ! ,secret>y ( !        
,treasury su* in=mation z is necess>y = 
! ,secret>y ( ! ,treasury to c>ry out   
section #dii;,d4  7#c7 ,annual /atem5ts 
,^u calculat+ ! annual repaym5t am\nts  
"u p>agraph 7#a7 = a taxable ye>1 !     
,secret>y %all provide a /atem5t1 on an 
annual basis1 to ea* borr[] ) a loan    
made "u ?is "p1 :i* li/s ! foll[+3  7,a7
 ,total paym5ts made on ! borr[]'s      
annual repaym5t am\nt = su* taxable ye>4
  7,b7 ,! borr[]'s annual repaym5t am\nt
 = su* taxable ye>4  7,c7 ,9 ! case ( a 
borr[] :o1 accord+ to section           

#dii;,f7f71 has und]paid su* annual     
repaym5t am\nt1 ! am\nt ( su* und]paym5t
 & ! process = pay+ su* und]paym5t "u   
section #dii;,f7f77#b74  7,d7 ,9 ! case 
( a borr[] ) an ov]paym5t on su* annual 
repaym5t am\nt1 ! am\nt ( su* ov]paym5t 
& ! process = reque/+ a refund ( su*    
am\nt "u section #dii;,f7g71 if         
applicable4  7,e7 ,! out/&+ balances on 
all ! loans made to ! borr[] "u ?is "p4 
7,f7 ,a description ( h[ ! borr[]'s     
annual repaym5t am\nt 0 calculat$ "u    
p>agraph 7#a7 or 7#b7 ( section         
#dii;,f7b74  7#d7 ,direct paym5t ,!     
,secret>y %all enable a borr[] to make  
direct paym5ts on ! borr[]'s annual     
repaym5t am\nt = ! taxable ye> to !     
,secret>y ?r\gh\t ! ye>1 includ+ by     
provid+ a process = ! borr[] to make su*
 paym5ts automatically1 on a p]iodic    
basis1 & 9 an am\nt specifi$ by !       
borr[]4  7#e7 ,paym5ts on a taxpay]'s   
behalf ,! ,secret>y %all-- 7,a7 provide 
a me*anism = o!r individuals or entities
 to make paym5ts on ! annual repaym5t   

am\nt ( a borr[] = a taxable ye>2 &     
7,b7 notify ! borr[] t any paym5ts made 
"u subp>agraph 7,a7 = ! taxable ye> t   
exce$ ! annual repaym5t am\nt = ! ye>   
%all n be refund$ to ! borr[]4  7#f7    
,calculat+ int]e/ accru$ ,! ,secret>y   
%all calculate ! int]e/ accru$ = !      
taxable ye> z if ! borr[]'s paym5ts "u  
wage )hold+ or qu>t]ly e/imat$ paym5ts  
"u section #dii;,d7b7 = ! taxable ye> 7 
made 9 #ab equal increm5ts ?r\gh\t !    
ye>4  7#g7 ,manag+ loans ,! ,secret>y   
%all provide1 ?r\gh ! ,int]net1 a tool t
 has an int]face t is consi/5t = all    
borr[]s ) a loan "u ?is "p1 :i* enables 
ea* su* borr[] to--  7,a7 view ! out/&+ 
balances on ! borr[]'s loans made "u ?is
 "p2  7,b7 make a direct paym5t on !    
borr[]'s annual repaym5t am\nt or       
indicate t any ov]paym5t %\ld be refund$
 or appli$ to su* loans z a prepaym5t   
am\nt2  7,c7 view prior annual /atem5ts 
= su* loans provid$ "u p>agraph 7#c72   
7,d7 view a hi/ory ( paym5ts made on su*
 loans 7includ+ ! me?od & s\rce ( ea*   

paym5t1 su* z tax )hold+1 e/imat$ taxes1
 direct paym5t1 or paym5ts made on !    
borr[]'s behalf72  7,e7 view ! borr[]'s 
annual repaym5t am\nt = t ye>1 ! am\nt  
already paid on su* annual repaym5t     
am\nt1 & any am\nt ow$ by ! borr[] or   
due to be refund$ to ! borr[]2  7,f7    
view ! borr[]'s loans made "u ?is "p t h
 be5 paid (f2  7,g7 enable ! borr[] to  
initiate an appeal process "u p>agraph  
7#h72 &  7,h7 easily det]m9e :e!r       
b5efits "u ! ,s]vicememb]s ,civil       
,relief ,act 7#ej ,u4,s4,c4 ,app4 #eja  
et seq471 if applicable1 h be5 appli$ to
 ! borr[]'s loans made "u ?is "p4  7#h7 
,appeals process ,! ,secret>y %all make 
available a process ?r\gh :i* a borr[] c
 appeal ! calculation ( ! borr[]'s      
annual repaym5t am\nt1 includ+ a        
work%eet t enables a borr[] to calculate
 ! borr[]'s annual repaym5t am\nt4  7#i7
 ,default = failure to file a return ,9 
a case 9 :i* ! ,secret>y receives       
in=mation f ! ,secret>y ( ! ,treasury "u
 section #dii;,d7c77#d7 t a borr[] ) a  

loan made "u ?is "p 9 repaym5t /atus has
 fail$ to file a return "u section      
#fjab7;a77#a7 ( ! ,int]nal ,rev5ue ,code
 ( #aihf & su* borr[] 0 requir$ to file 
su* a return1 ! ,secret>y %all--  7,a7  
notify ! borr[] ( ! borr[]'s failure to 
file su* a return2 &  7,b7 if ! borr[]  
fails to file su* a return )9 #ij days (
 receipt ( ! notice describ$ 9          
subp>agraph 7,a71 consid] ! borr[]'s    
loans made "u ?is "p 9 repaym5t /atus to
 be 9 default4  7#aj7 ,national         
,directory ( ,new ,hires ,! ,secret>y   
%all s5d notices to borr[]s "u p>agraph 
7#e7 ( section #dce7;i7 ( ! ,social     
,security ,act 7#db ,u4,s4,c4 #fec7;i771
 z add$ by section #e ( ! ,e>n+s        
,cont+5t ,education ,loans ,act ( #bjai4
  #b ,borr[] repaym5t ( ,,idea ,loans & 
,,idea ,consolidation ,loans  #dii;,f4  
,borr[] repaym5t  7a7 ,repaym5t p]iod ,!
 repaym5t p]iod ( a loan made "u ?is "p 
%all-- 7#a7 beg9 on ! fir/ day ( ! fir/ 
taxable ye> t beg9s aft] ! borr[]'s     
9-s*ool def]m5t p]iod1 or 9 ! case ( an 

,,idea ,consolidation ,loan1 on ! fir/  
day ( ! fir/ taxable ye> t beg9s aft]   
su* ,consolidation ,loan is disburs$2 & 
7#b7 cont9ue until ! loan is paid 9     
full1 except t ! ,secret>y may grant a  
borr[] =be>ance ( ! borr[]'s annual     
repaym5t am\nt--  7,a7 = a p]iod n to   
exce$ #fj days1 due to adm9i/rative or  
te*nical reasons2  7,b7 = a p]iod n to  
exce$ #c mon?s1 due to unusual          
circum/ances t disrupt ! borr[]'s       
ability to make timely paym5ts on !     
loan2 or  7,c7 r5ewable at #ab-mon?     
int]vals = a p]iod n to exce$ #c ye>s1  
due to docum5t$ extreme economic h>d%ip 
on ! "p ( a borr[]4  7b7 ,annual        
repaym5t am\nt ,! annual repaym5t am\nt 
"u ?is "p = a taxable ye> = a borr[] )  
#a or m loans made "u ?is "p 9 repaym5t 
/atus %all be equal to ! less] (--  7#a7
 ! income-bas$ repaym5t obligation = su*
 borr[] = su* ye>1 z calculat$ "u       
section #dii;,e7#a72 or  7#b7 an am\nt  
equal to ! sum ( ! out/&+ balances      
7equal to ! sum ( ! unpaid pr9cipal1    

int]e/1 p5alties1 & fees7 t ! borr[]    
owes on su* loans4  7c7 ,me?ods (       
repaym5t ,9 repay+ an annual repaym5t   
am\nt ow$ by a borr[] = a taxable ye>1 a
 borr[] may-- 7#a7 ) respect to any     
wages e>n$ by ! borr[] t are subject to 
,f$]al income tax )hold+1 h am\nts )held
 ^u su* wages "u section #dii;,d7b77#b72
  7#b7 9 ! case ( a borr[] :o makes     
qu>t]ly e/imat$ tax return paym5ts "u   
section #ffed ( ! ,int]nal ,rev5ue ,code
 ( #aihf = ! ye>1 pay su* annual        
repaym5t am\nt concurr5tly ) su* qu>t]ly
 paym5ts "u section #dii;,d7b77#c72     
7#c7 make direct paym5ts "u section     
#dii;,e7#d7 on su* am\nt to ! ,secret>y 
?r\gh\t ! ye>2 or  7#d7 h o!r           
individuals or entities make paym5ts "u 
section #dii;,e7#e7 on ! borr[]'s annual
 repaym5t am\nt = ! ye>4  7d7 ,ord] (   
cr$it+ ,paym5ts on loans made "u ?is "p 
%all be appli$1 )\t reg>d to ! me?od (  
su* paym5ts1 fir/ t[>d p5alties due on !
 loans1 next t[>d any fees due on !     
loans1 !n t[>d any int]e/ due on !      

loans1 & f9ally t[>d ! pr9cipal due on !
 loan ) ! highe/ applicable rate (      
int]e/ among su* loans4  7e7 ,prepaym5t 
au?oriz$ ,a borr[] %all h ! "r to prepay
 all or "p ( su* loan1 at any "t & )\t  
p5alty4 ,any su* prepaym5t am\nt w be   
appli$ to loans made "u ?is "p 9 ! same 
ord] z describ$ 9 subsection 7d74  7f7  
,und]paym5ts  7#a7 ,p5alties =          
und]paym5ts  7,a7 ,9 g5]al ,subject to  
subp>agraph 7,c71 if1 z ( ! la/ day ( a 
taxable ye>1 a borr[] has n paid at lea/
 #ij p]c5t ( ! borr[]'s annual repaym5t 
am\nt = su* ye>1 ! borr[] %all be *>g$ a
 p5alty 9 an am\nt equal to #aj p]c5t ( 
! diff]5ce betwe5--  7i7 an am\nt equal 
to #ij p]c5t ( ! borr[]'s annual        
repaym5t am\nt = su* ye>2 &  7ii7 !     
am\nt paid on su* annual repaym5t am\nt 
z ( su* day4  7,b7 ,increase ( annual   
repaym5t am\nt ,a borr[]'s annual       
repaym5t am\nt calculat$ "u subsection  
7b7 = su* ye> %all be increas$ by !     
am\nt ( su* p5alty1 b su* p5alty %all n 
be treat$ z a pr9cipal or int]e/ am\nt =

 a loan made "u ?is "p4  7,c7 ,exception
 ,a borr[] :o has paid #ajj p]c5t ( !   
borr[]'s annual repaym5t am\nt = !      
taxable ye> prec$+ ! taxable ye>        
describ$ 9 subp>agraph 7,a7 %all n be   
subject to ! p5alty "u ?is p>agraph = ! 
taxable ye> describ$ 9 subp>agraph 7,a74
  7#b7 ,reconcil+ und]paym5ts  7,a7 ,9  
g5]al ,if1 z ( ! la/ day ( a taxable    
ye>1 ! sum ( ! paym5ts made on a        
borr[]'s annual repaym5t am\nt = su* ye>
 is less ?an ! total am\nt ( ! borr[]'s 
annual repaym5t am\nt = su* ye>1 !      
borr[]--  7i7 9 ! case ( ! fir/ ye> t ! 
borr[] has a diff]5ce betwe5 su*        
am\nts-- 7,i7 may reque/1 9 su* mann] z 
! ,secret>y %all require1 t ! ,secret>y 
r$uce ! borr[]'s annual repaym5t am\nt =
 su* ye> to ! sum (--  7aa7 ! paym5ts   
made1 z ( su* day1 on ! borr[]'s annual 
repaym5t am\nt = su* ye>2 &  7bb7 any   
p5alties calculat$ "u p>agraph 7#a7     
result+ f su* und]paym5t2 &  7,,ii7 if !
 borr[] qualifies = ! r$uction reque/$  
"u subclause 7,i71 %all pay ! sum       

calculat$ "u su* subclause at su* "t & 9
 su* mann] z requir$ by ! ,secret>y2    
7ii7 if ! borr[] does n qualify = a     
r$uction "u clause 7i7 or does n reque/ 
su* a r$uction1 %all pay to ! ,secret>y 
an am\nt equal to ! diff]5ce betwe5 su* 
am\nts )9 ! #cj-;day p]iod beg9n+ on !  
date ( receipt by ! borr[] ( ! borr[]'s 
annual /atem5t describ$ 9 section       
#dii;,e7#c7 = su* ye>2 or  7iii7 if !   
borr[] fails to pay ! am\nt ow$ by !    
borr[] z calculat$ "u clause 7ii7 )9 !  
#cj-;day p]iod1 %all be *>g$ a p5alty   
equal to #b p]c5t ( su* am\nt = ea* mon?
 7prorat$ bas$ on ! p]c5tage ( a mon?   
su* p5alty is *>g$7 t su* am\nt is ow$  
or until ! borr[] defaults on ! loan =  
:i* su* am\nt is ow$1 :i*ev] occurs     
fir/4  7,b7 ,default ,a loan = :i* an   
am\nt is ow$ "u subp>agraph 7,a7 & t is 
n paid )9 #cfj days aft] ! date (       
receipt by ! borr[] ( ! borr[]'s annual 
/atem5t describ$ 9 subp>agraph 7,a7 %all
 be consid]$ to be default4  7g7        
,ov]paym5ts ,if1 z ( ! la/ day ( a      

taxable ye>1 ! sum ( ! paym5ts made on a
 borr[]'s annual repaym5t am\nt = su*   
ye> is great] ?an ! total am\nt ( !     
borr[]'s annual repaym5t am\nt = su*    
ye>1 ! ,secret>y %all--  7#a7 refund !  
ov]paym5t am\nt1 if ! borr[] notifies ! 
,secret>y1 )9 ! #ij-;day p]iod beg9n+ on
 ! date ( receipt ( ! borr[]'s annual   
/atem5t describ$ 9 section #dii;,e7#c7 =
 su* ye> & 9 a mann] prescrib$ by !     
,secret>y1 t ! borr[] desires to h !    
ov]paym5t am\nt refund$2 or  7#b7 if a  
borr[] fails to notify ! ,secret>y ( !  
borr[]'s desire = a refund ( su* am\nt  
)9 su* #ij-;day p]iod1 apply su* am\nt z
 a prepaym5t to ! borr[]'s loans made "u
 ?is "p 9 ! same mann] z a prepaym5t    
au?oriz$ "u subsection 7e74  7h7        
,employ] failure ,to )hold paym5ts ,9 ! 
case ( a borr[] ^: employ] fails to     
)hold am\nts "u section #dii;,d7b77#b7  
^u any wages e>n$ by ! borr[] t are     
subject to ,f$]al income tax )hold+ & ) 
respect to :i* ! borr[] made an election
 to h am\nts )held "u section           

#dii7;b77#b71 ! ,secret>y %all--  7#a7  
r$uce ! borr[]'s annual repaym5t to an  
am\nt equal to ! borr[]'s annual        
repaym5t am\nt _h wages f su* employ]   
be5 exclud$ :5 calculat+ ! borr[]'s     
annual repaym5t am\nt2 &  7#b7 r$uce any
 p5alties = und]paym5ts calculat$ "u    
subsection 7f77#a7 & refund any         
ov]paym5ts on su* annual repaym5t am\nt1
 accord+ly4  4  #d4 ,con=m+ *anges to ! 
,high] ,education ,act ( #aife  7a7     
,loan =giv5ess & cancellation = tea*]s  
7#a7 ,loan =giv5ess = tea*]s ,section   
#dbh;,j ( ! ,high] ,education ,act (    
#aife 7#bj ,u4,s4,c4 #ajgh-aj7 is       
am5d$-- 7,a7 9 subsection 7b71 by ins]t+
 or = an ,,idea loan made "u "p ,j1 aft]
 or #dbh;,h12 &  7,b7 9 subsection 7c7--
 7i7 9 p>agraph 7#a71 by ins]t+ or an   
,,idea loan made "u "p ,j aft] or       
#dbh;,h2 or  7ii7 9 p>agraph 7#b7-- 7,i7
 by /rik+ ,a loan & ins]t+ ! foll[+3    
7,a7 ,loans made "u section #dbh;,c ,a  
loan  2 &  7,,ii7 by add+ at ! end !    
foll[+ new subp>agraph3  7,b7 ,,idea    

,consolidation ,loan ,a loan am\nt = an 
,,idea ,consolidation ,loan may be a    
qualifi$ loan am\nt = purposes ( ?is    
subsection only to ! ext5t t su* loan   
am\nt 0 us$ to repay a ,f$]al ,direct   
,/af=d ,loan1 a ,f$]al ,direct          
,consolidation ,loan1 a ,f$]al ,direct  
,unsubsidiz$ ,/af=d ,loan1 or a loan    
made "u section #dbh1 #dbh;,c1 or       
#dbh;,h4  4  7#b7 ,loan cancellation =  
tea*]s ,section #dfj ( su* ,act 7#bj    
,u4,s4,c4 #ajhg;j7 is am5d$-- 7,a7 9    
subsection 7b71 by ins]t+ or = an ,,idea
 loan made "u "p ,j aft] "u ?is "p2 &   
7,b7 9 subsection 7c7-- 7i7 9 p>agraph  
7#a71 by /rik+ or a ,f$]al ,direct      
,unsubsidiz$ ,/af=d ,loan & ins]t+ 1 a  
,f$]al ,direct ,unsubsidiz$ ,/af=d      
,loan1 or an ,,idea loan made "u "p ,j2 
&  7ii7 9 p>agraph 7#b7-- 7,i7 by /rik+ 
,a loan & ins]t+ ! foll[+3  7,a7 ,f$]al 
,direct ,consolidation ,loan ,a loan  2 
&  7,,ii7 by add+ at ! end ! foll[+ new 
subp>agraph3  7,b7 ,,idea ,consolidation
 ,loan ,a loan am\nt = an ,,idea        

,consolidation ,loan may be a qualifi$  
loan am\nt = purposes ( ?is subsection  
only to ! ext5t t su* loan am\nt 0 us$  
to repay a ,f$]al ,direct ,/af=d ,loan1 
a ,f$]al ,direct ,consolidation ,loan1 a
 ,f$]al ,direct ,unsubsidiz$ ,/af=d     
,loan1 or a loan made "u section #dbh1  
#dbh;,c1 or #dbh;,h4  4  7b7 ,loan      
=giv5ess = s]vice 9 areas ( national ne$
 ,section #dbh,k7a77#b7 ( su* ,act 7#bj 
,u4,s4,c4 #ajgh-aa7;a77#b77 is am5d$--  
7#a7 by /rik+ & at ! end ( subp>agraph  
7,a72  7#b7 by /rik+ ! p]iod at ! end ( 
subp>agraph 7,b7 & ins]t+ 2 &2 &  7#c7  
by add+ at ! end ! foll[+ new           
subp>agraph3  7,c7 to cancel ! qualifi$ 
loan am\nt = a loan made "u "p ,j ( ?is 
title4  4  7c7 ,loan repaym5t = civil   
legal assi/ance attorneys ,section      
#dbh,l7b77#b77;,a7 ( su* ,act 7#bj      
,u4,s4,c4 #ajgh-ab7;b77#b77;,a77 is     
am5d$--  7#a7 9 clause 7i71 by /rik+ or 
"p ,e & ins]t+ 1 "p ,e1 or "p ,j2 &     
7#b7 9 clause 7ii7--  7,a7 9 ! matt]    
prec$+ subclause 7,i71 by /rik+ or      

#dee7;g7 & ins]t+ 1 #dee7;g71 or        
#dii;,c2  7,b7 by /rik+ or at ! end (   
subclause 7,,ii72  7,c7 by r$esignat+   
subclause 7,,iii7 z subclause 7,,iv72 & 
7,d7 by ins]t+ aft] subclause 7,,ii7 !  
foll[+3  7,,iii7 a ,f$]al ,direct       
,consolidation loan or a loan made "u   
section #dbh;,c1 9 ! case ( a loan made 
"u section #dii;,c2 or  4  7d7 ,ma/]    
promissory note ,section                
#dcb7m77#a77;,d7 ( su* ,act 7#bj        
,u4,s4,c4 #ajhb7m77#a77;,d77 is am5d$-- 
7#a7 by /rik+ ?is "p & "p ,d ea* place x
 appe>s & ins]t+ ?is "p1 "p ,d1 & "p ,j2
 &  7#b7 by /rik+ ?is "p or "p ,d ea*   
place x appe>s & ins]t+ ?is "p1 "p ,d1  
or "p ,j4  7e7 ,contracts ,section #def 
( su* ,act 7#bj ,u4,s4,c4 #ajhg;f7 is   
am5d$--  7#a7 9 subsection 7a77#b71 by  
/rik+ ?is "p ea* place x appe>s & ins]t+
 ?is "p or "p ,j2 &  7#b7 9 subsection  
7b7--  7,a7 9 p>agraph 7#a71 by ins]t+  
or ! program "u "p ,j aft] 7or _!       
p>5ts72  7,b7 9 p>agraph 7#b71 by ins]t+
 or "p ,j aft] ?is "p2  7,c7 9 p>agraph 

7#c71 by ins]t+ or "p ,j aft] ?is "p2 & 
7,d7 9 p>agraph 7#d71 by ins]t+ or !    
,,idea ,loan ,program aft] loan program4
  7f7 ,funds = adm9i/rative exp5ses     
,section #deh7;a77#c7 ( su* ,act 7#bj   
,u4,s4,c4 #ajhg;h7a77#c77 is am5d$--    
7#a7 by /rik+ ?is "p & "p ,b & ins]t+   
?is "p1 "p ,b1 & "p ,j2 &  7#b7 by      
ins]t+ be=e ! p]iod at ! end ! foll[+3 &
 "p ,j4  7g7 ,/ud5t eligibility ,section
 #dhd ( su* ,act 7#bj ,u4,s4,c4 #ajia7  
is am5d$--  7#a7 9 subsection 7b7-- 7,a7
 9 p>agraph 7#c71 by /rik+ or ,d &      
ins]t+ 1 ,d1 or ,e2 &  7,b7 9 p>agraph  
7#d71 by /rik+ or ,e & ins]t+ ,e1 or ,j2
  7#b7 9 subsection 7d71 by /rik+ & ,e &
 ins]t+ ,e1 & ,j2  7#c7 9 subsection    
7f71 by /rik+ or "p ,e ea* place x      
appe>s & ins]t+ "p ,e1 or "p ,j2 &  7#d7
 9 subsection 7m71 by /rik+ & ,e &      
ins]t+ ,e1 & ,j4  7h7 ,in/itutional &   
f9ancial assi/ance in=mation = /ud5ts   
,section #dhe ( su* ,act 7#bj ,u4,s4,c4 
#ajib7 is am5d$-- 7#a7 9 subsection     
7a7--  7,a7 9 p>agraph 7#a77,m71 by     

/rik+ & ,e & ins]t+ ,e1 & ,j2 &  7,b7 9 
p>agraph 7#g77;,a77i71 by /rik+ ,loan7  
ea* place x appe>s & ins]t+ ,loan7 or "p
 ,j2  7#b7 9 subsection 7b7-- 7,a7 9    
p>agraph 7#a77;,a7--  7i7 9 ! matt]     
prec$+ clause 7i71 by ins]t+ or made "u 
"p ,j aft] "p ,e2 &  7ii7 9 clause      
7vii7--  7,i7 by ins]t+ or an ,,idea    
,consolidation ,loan aft] ,f$]al ,direct
 ,consolidation ,loan2 &  7,,ii7 by     
/rik+ & ,e & ins]t+ ,e1 & ,j2 &  7,b7 9 
p>agraph 7#b77;,a71 by /rik+ or ,e &    
ins]t+ ,e1 or ,j2 &  7#c7 9 subsection  
7l77#a7--  7,a7 9 subp>agraph 7,a71 9 ! 
matt] prec$+ clause 7i71 by ins]t+ or   
made "u "p ,j aft] /ud5t72 &  7,b7 9    
subp>agraph 7,b71 by /rik+ or ,d &      
ins]t+ 1 ,d1 or ,j4  #e4 ,national      
,directory ( ,new ,hires ,section       
#dec7;i7 ( ! ,social ,security ,act 7#db
 ,u4,s4,c4 #fec7;i77 is am5d$ by add+ at
 ! end ! foll[+ new p>agraph3  7#e7     
,s5d+ notice to borr[]s ( c]ta9 /ud5t   
loans ,! ,secret>y ( ,education %all h  
access to ! in=mation 9 ! ,national     

,directory ( ,new ,hires = purposes (-- 
7,a7 id5tify+1 on at lea/ a mon?ly      
basis1 newly hir$ employees ) an ,,idea 
,loan or ,,idea ,consolidation loan made
 "u "p ,j ( title ,,iv ( ! ,high]       
,education ,act ( #aife 9 repaym5t      
/atus2 &  7,b7 s5d+ a notice to ea* su* 
individual to rem9d su* individual t--  
7i7 ! individual has #a or m loans      
describ$ 9 subp>agraph 7,a7 9 repaym5t  
/atus2  7ii7 ! individual is responsible
 = provid+ accurate in=mation to !      
individual's employ] to ensure t !      
employ] w d$uct & )hold ^u su* wages    
am\nts to repay su* loans 9 accordance )
 section #dii;,d7b7 ( ! ,high]          
,education ,act ( #aife2 &  7iii7       
failure to provide su* accurate         
in=mation w likely result 9 significant 
p5alties1 default1 or collections       
proce$+s4  4  #f4 ,)held am\nts includ$ 
on ,w-#b  7a7 ,9 g5]al ,section         
#fjea7;a7 ( ! ,int]nal ,rev5ue ,code (  
#aihf is am5d$ by /rik+ & at ! end (    
p>agraph 7#af71 by /rik+ ! p]iod at !   

end ( p>agraph 7#ag7 & ins]t+ 1 &1 & by 
ins]t+ aft] p>agraph 7#ag7 ! foll[+ new 
p>agraph3  7#ah7 ! total am\nt d$uct$ & 
)held "u ! ,,idea ,loan ,repaym5t       
,program e/abli%$ "u *apt] #a ( subp>t  
#b ( "p ,j ( title ,,iv ( ! ,high]      
,education ,act ( #aife4  4  7b7        
,effective date ,! am5dm5ts made by ?is 
section %all apply to am\nts d$uct$ &   
)held aft] ! date ( ! enactm5t ( ?is    
,act4  #g4 ,disclosure ( return         
in=mation = purposes ( ,,idea ,loan     
,repaym5t ,program  7a7 ,9 g5]al        
,section #fajc7l7 ( ! ,int]nal ,rev5ue  
,code ( #aihf is am5d$ by add+ at ! end 
! foll[+ new p>agraph3  7#bc7           
,disclosure ( return in=mation to       
,dep>tm5t ( ,education = purposes (     
adm9i/]+ ,,idea ,loan ,repaym5t ,program
  7,a7 ,9 g5]al ,! ,secret>y %all1 ^u   
writt5 reque/1 disclose to ! ,dep>tm5t (
 ,education su* return in=mation z is   
necess>y = purposes ( c>ry+ out ! ,,idea
 ,loan ,repaym5t ,program e/abli%$ "u   
subp>t #b ( "p ,j ( ! ,high] ,education 

,act ( #aife4  7,b7 ,re/riction on      
disclosure ,return in=mation disclos$ "u
 subp>agraph 7,a7 may be us$ by (fic]s1 
employees1 & contractors ( ! ,dep>tm5t (
 ,education only = purposes (1 & to !   
ext5t necess>y 9--  7i7 det]m9+         
income-bas$ repaym5t obligations "u !   
,,idea ,loan ,repaym5t ,program1 &  7ii7
 det]m9+ am\nts d$uct$ & )held1 & am\nts
 paid concurr5tly ) qu>t]ly e/imat$     
taxes1 "u ! ,,idea ,loan ,repaym5t      
,program4  4  7b7 ,effective date ,!    
am5dm5ts made by ?is section %all take  
effect on ! date ( ! enactm5t ( ?is     
,act4  #h4 ,s5se ( ,congress ,x is !    
s5se ( ,congress t any loan repaym5t or 
=giv5ess program available "u a ,f$]al  
law outside ( ! ,high] ,education ,act (
 #aife 7#bj ,u4,s4,c4 #ajja et seq47 to 
/ud5ts ) loans made "u "p ,d ( title    
,,iv ( ! ,high] ,education ,act ( #aife 
7#bj ,u4,s4,c4 #ajhg;a et seq47 %\ld be 
available to /ud5ts ) loans made "u "p  
,j ( su* title ( su* ,act4