,i #aafth ,,congress #ast ,session ,h4 ,r4 #dfjc ,,in ,,the ,,house ,,of ,,representatives ,october #d1 #bjai,mr4 ,carbajal 7for himself and ,ms4 ,jackson ,lee7 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 amend the ,higher ,education ,act of #aife to provide for ,federal student loan reform4 #a4 ,short title ,this ,act may be cited as the ,leveraging ,opportunities for ,americans ,now ,act of #bjai or the ,,loan ,act of #bjai4 #b4 ,elimination of interest and replacement with financing fees ,section #dee of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;e7 is amended by adding at the end the following3 7r7 ,elimination of interest and replacement with financing fees 7#a7 ,in general 7,a7 ,in general ,except as provided under subparagraph 7,b71 beginning on ,july #a1 #bjba1 the ,secretary shall make loans under this part in accordance with this subsection4 7,b7 ,exception ,beginning on ,july #a1 #bjba1 the ,secretary shall make loans under this part in accordance with the provisions of this part other than this subsection to a borrower who-- 7i7 was enrolled in an institution of higher education on ,june #cj1 #bjba2 and 7ii7 elects to borrow a loan under this part in accordance with the provisions of this part other than this subsection4 7#b7 ,elimination of interest ,for loans made under this part in accordance with this subsection for which the first disbursement is made on or after ,july #a1 #bjba1 the applicable rate of interest shall be equal to #j percent4 7#c7 ,financing fees 7,a7 ,in general ,beginning on ,july #a1 #bjba1 the ,secretary shall charge the borrower of a loan made under this part in accordance with this subsection a financing fee determined in accordance with this paragraph and issued on the date the loan is dispersed4 7,b7 ,determination of fee ,the financing fee for a borrower of a loan made under this part-- 7i7 that is used for enrollment in an undergraduate course of study 7except a ,federal ,direct ,,plus ,loan made on behalf of a dependent student71 shall be equal to1 from the principal amount of the loan1 #be percent of the amount of such loan2 7ii7 that is used for enrollment in a course of study necessary for enrollment in a program leading to a degree or certificate1 shall be equal to1 from the principal amount of the loan1 #be percent of the amount of such loan2 7iii7 that is used for enrollment in a program that is necessary for a professional credential or certification from a ,state that is required for employment as a teacher in an elementary or secondary school in that ,state1 shall be equal to1 from the principal amount of the loan1 #be percent of the amount of such loan2 and 7iv7 that is a ,federal ,direct ,,plus ,loan made on behalf of a dependent student or used for enrollment in a graduate or professional course of study1 shall be equal to1 from the principal amount of the loan1 #ch percent of the amount of such loan4 7,c7 ,reduction due to prepayment 7i7 ,in general ,in order to provide an incentive to borrowers to pay the balance of a loan made under this part earlier than required under the applicable repayment plan1 the ,secretary may credit or refund any such borrowers for an amount of the financing fee charged under this subsection4 7ii7 ,regulations 7,i7 ,in general ,not later than #i months after the date of enactment of the ,,loan ,act of #bjai1 the ,secretary shall promulgate regulations establishing the methodology for crediting or refunding a financing fee charged under this subsection pursuant to clause 7i74 ,such credit or refund shall not reduce the financing fee by more than-- 7aa7 with respect to a borrower whose income1 as determined under subclause 7,,ii71 was not more than #de1jjj in the taxable year in which the borrower paid an amount from the balance of a loan made under this part earlier than required under the applicable repayment plan1 #ae percentage points of such amount2 7bb7 with respect to a borrower whose income1 as determined under subclause 7,,ii71 was more than #de1jjj but not more than #ie1jjj in the taxable year in which the borrower paid an amount from the balance of a loan made under this part earlier than required under the applicable repayment plan1 #aj percentage points of such amount2 and 7cc7 with respect to a borrower whose income1 as determined under subclause 7,,ii71 was more than #ie1jjj in the taxable year in which the borrower paid an amount from the balance of a loan made under this part earlier than required under the applicable repayment plan1 #e percentage points of such amount4 7,,ii7 ,income determination ,for purposes of subclause 7,i71 a borrower's income is equal to the amount of the gross income of the borrower for the taxable year that exceeds #aj1jjj 7adjusted each year to reflect changes in the ,consumer ,price ,index for ,all ,urban ,consumers published by the ,bureau of ,labor ,statistics for the ,department of ,labor for the most recent #ab-month period for which such data are available74 7,d7 ,methodology of payment ,the ,secretary shall establish an amortization schedule for the repayment of financing fees charged under this subsection4 7#d7 ,rulemaking for consolidation ,not later than #ah months after the date of enactment of the ,,loan ,act of #bjai1 the ,secretary shall promulgate rules regarding ,federal ,direct ,consolidation ,loans made under this part in accordance with this subsection1 including a rule that the financing fee for such a ,federal ,direct ,consolidation ,loan determined in accordance with this subsection shall not exceed the sum of the financing fees applicable to the consolidated loans4 4 #c4 ,income dependent education assistance repayment plan ,part ,d of title ,,iv of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;a et seq47 is amended by adding at the end the following3 #dfj;,a4 ,income dependent education assistance repayment plan 7a7 ,in general 7#a7 ,applicability ,notwithstanding any other provision of this ,act1 with respect to any loan made under this part after the date of enactment of the ,,loan ,act of #bjai1 the repayment plan options are only a #aj-year fixed repayment plan and the repayment plan under this section4 ,if the borrower of the loan does not select a repayment plan1 the repayment of such loan shall be made in accordance with this section4 ,a borrower of a loan made under this part after the date of enactment of the ,,loan ,act of #bjai may affirmatively select the repayment plan under this section4 7#b7 ,regulations ,not later than #ah months after the date of enactment of the ,,loan ,act of #bjai1 the ,secretary shall promulgate rules-- 7,a7 outlining how the ,department will implement the income dependent education assistance repayment plan requirements for borrowers under this section2 and 7,b7 regarding monthly repayment processes for borrowers of loans made under this part before the date of enactment of the ,,loan ,act of #bjai4 7#c7 ,rule of construction ,nothing in this section shall be construed to eliminate or otherwise affect the loan forgiveness or loan cancellation options available under this part to a borrower4 7b7 ,duties of the ,secretary of the ,treasury 7#a7 ,in general ,the ,secretary of the ,treasury shall1 with respect to each individual for whom a loan made under this part after the date of enactment of the ,,loan ,act of #bjai is in repayment status1 transmit to the ,secretary of ,education-- 7,a7 in the case of such an individual who files an income tax return for such taxable year1 such tax information as is necessary to determine the individual's repayment obligation and financing fee adjustments1 as determined by the ,secretary under this part2 and 7,b7 in the case of any such individual who does not file a return for such taxable year1 any available tax information of the individual as may be necessary to determine such obligation and whether such individual is delinquent under the terms of such loan for not so filing4 7#b7 ,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 underreporting and evasion of repayment or filing4 7c7 ,duties of the ,secretary of ,education 7#a7 ,in general ,the ,secretary shall carry out1 as part of the loan repayment plan established under this section1 the following activities3 7,a7 ,calculation of annual repayment amounts ,the ,secretary shall calculate the annual repayment amount under this section for borrowers with one or more loans made under this part after the date of enactment of the ,,loan ,act of #bjai in repayment status for one or more months in the taxable year for which the amount is determined regardless of which repayment plan the borrower is in1 including the repayment obligations of such borrowers in accordance with subsection 7d77#c74 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 subsection 7d77#c74 7,c7 ,annual statements ,upon calculating the annual repayment amounts under subparagraph 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 part after the date of enactment of the ,,loan ,act of #bjai regardless of which repayment plan the borrower is in1 which lists the following3 7i7 ,total payments made on the borrower's annual repayment amount for such taxable year4 7ii7 ,the borrower's annual repayment amount for such taxable year4 7iii7 ,the outstanding balances on all the loans made to the borrower under this part after the date of enactment of the ,,loan ,act of #bjai and any other outstanding balances on loans of the borrower that were made1 insured1 or guaranteed under this title4 7iv7 ,a description of how the borrower's annual repayment amount was calculated4 7,d7 ,payments on a borrower's behalf ,the ,secretary shall-- 7i7 provide a mechanism for other individuals or entities to make payments on the annual repayment amount of a borrower for a taxable year2 and 7ii7 notify the borrower that any payments made under clause 7i7 for the taxable year that exceed the annual repayment amount for the year shall not be refunded to the borrower4 7,e7 ,appeals process 7i7 ,in general ,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 7ii7 ,good standing ,a borrower who makes an appeal under clause 7i7 with respect to a loan shall be considered in good standing on such loan during the duration of the appeal4 7iii7 ,regulations ,the ,secretary shall issue regulations outlining such process not later than #ah months after the date of enactment of the ,,loan ,act of #bjai4 7,f7 ,delinquent for failure to file a return 7i7 ,in general ,in a case in which the ,secretary receives information from the ,secretary of the ,treasury under subsection 7b7 that a borrower with a loan made under this part after the date of enactment of the ,,loan ,act of #bjai in repayment status in the repayment plan under this section1 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,i7 notify the borrower of the borrower's failure to file such a return2 and 7,,ii7 if the borrower fails to file such a return within #ij days of receipt of the notice described in subclause 7,i71 consider the borrower's loans made under this part after the date of enactment of the ,,loan ,act of #bjai in repayment status in the repayment plan under this section to be delinquent4 7ii7 ,appeals process ,the ,secretary shall make available a process through which a borrower can appeal a determination under clause 7i7 that the borrower 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 return4 ,the ,secretary shall issue regulations outlining such process not later than #ah months after the date of enactment of the ,,loan ,act of #bjai4 7,g7 ,monthly payments process ,the ,secretary shall-- 7i7 establish a monthly payments process described in paragraph 7#b72 and 7ii7 issue regulations establishing penalties for default on such monthly payments4 7,h7 ,calculating loan forgiveness ,the ,secretary shall determine appropriate loan forgiveness options for students who select the repayment plan under this section4 7,i7 ,financial hardships 7i7 ,in general ,the ,secretary shall establish a process for providing an adjustment in both the monthly payment and annual repayment amount obligations on a loan for a borrower experiencing extreme unforeseen financial circumstances unrelated to a change in annual income4 7ii7 ,repayment status ,a borrower who receives an adjustment under clause 7i7 for a loan shall be deemed in repayment status with respect to such loan4 7#b7 ,monthly payments process 7,a7 ,in general ,the ,secretary shall establish a process under which a borrower1 or one making payments on behalf of a borrower under paragraph 7#a77;,d71 shall make monthly payments towards the borrower's annual repayment amount4 7,b7 ,information required ,the procedure for initiating the monthly payments process under subparagraph 7,a7 shall include an income estimate based on the income verification provided by the ,secretary of the ,treasury under subsection 7b74 7,c7 ,automatic continuation ,the monthly payments process shall continue until the borrower's loans made under this part after the date of enactment of the ,,loan ,act of #bjai are repaid4 7,d7 ,updating payment amounts 7i7 ,secretary ,the ,secretary shall automatically recalculate a borrower's monthly payment amount-- 7,i7 at the beginning of a new taxable year using the most recent income estimate provided under subsection 7b77#a7 by the ,secretary of the ,treasury2 and 7,,ii7 not later than #cj days after the date the borrower's income estimate is adjusted after an appeal under paragraph 7#a77;,e74 7ii7 ,borrower ,a borrower may request that the ,secretary update the borrower's income estimate to adjust monthly payment amounts pursuant to subparagraph 7,e7 or 7,i7 of paragraph 7#a7 at any time4 7d7 ,borrower repayment 7#a7 ,repayment period ,the repayment period of a loan in the repayment plan under this section shall-- 7,a7 begin on the first day of the first taxable year that begins after the borrower's in-school deferment period2 and 7,b7 continue until the loan is paid in full1 except that the ,secretary may grant a borrower deferment of the borrower's annual repayment amount-- 7i7 for a period not to exceed #fj days1 due to administrative or technical reasons2 7ii7 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 7iii7 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 7#b7 ,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 shall be applied in accordance with section #dee7r77#c77;,c74 7#c7 ,determination of income-,based repayment obligation 7,a7 ,in general ,the repayment obligation under this section with respect to an individual for any taxable year is an amount equal to #aj percent of the amount of the gross income of the borrower for the taxable year that exceeds the exemption amount under subparagraph 7,c74 7,b7 ,exclusion of certain amounts paid on behalf of individual ,any amount paid on the borrower's behalf under subsection 7c77#a77;,d7 shall not be taken into account in determining such borrower's income-based repayment obligation4 7,c7 ,exemption amount ,for purposes of this section1 the exemption amount with respect to an individual shall be #aj1jjj 7adjusted each year to reflect changes in the ,consumer ,price ,index for ,all ,urban ,consumers published by the ,bureau of ,labor ,statistics of the ,department of ,labor for the most recent #ab-month period for which such data are available74 7,d7 ,individuals not filing a return ,the income-based repayment obligation with respect to an individual not required to file a return under section #fjab7;a77#a7 of the ,internal ,revenue ,code of #aihf shall be treated as zero4 4