,,ii #aagth ,,congress #ast ,session ,s4 #hba ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,march #ah1 #bjba,mr4 ,burr 7for himself and ,mr4 ,king7 introduced the following bill2 which was read twice and referred to the ,committee on ,health1 ,education1 ,labor1 and ,pensions ,a ,,bill ,to amend the ,higher ,education ,act of #aife to establish a simplified income-driven repayment plan1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,repay ,act of #bjba4 #b4 ,simplified income-driven repayment plan ,part ,g of title ,,iv of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhh et seq47 is amended by inserting after section #dic;,d the following3 #dic;,e4 ,simplified income-driven repayment plan 7a7 ,definitions ,in this section3 7#a7 ,covered ,federal ,direct ,loan ,the term covered ,federal ,direct ,loan means a ,federal ,direct ,stafford ,loan1 a ,federal ,direct ,unsubsidized ,stafford ,loan1 a ,federal ,direct ,consolidation ,loan 7other than a ,federal ,direct ,consolidation ,loan whose proceeds were used to discharge the liability of a ,federal ,direct ,,plus loan made on behalf of a dependent student or a loan under section #dbh;,b made on behalf of a dependent student71 or a ,federal ,direct ,,plus ,loan 7other than a ,federal ,direct ,,plus ,loan made on behalf of a dependent student7 made under part ,d4 7#b7 ,discretionary income ,the term discretionary income means the amount by which a borrower's 7and the borrower's spouse1 if applicable7 annual adjusted gross income exceeds #aej percent of the poverty line applicable to the borrower's family size4 7#c7 ,discretionary income bend point ,the term discretionary income bend point means #be1jjj1 adjusted annually for inflation as determined by the ,consumer ,price ,index 7as such term is defined in section #dgh7;f77 for the previous calendar year4 7#d7 ,income-driven calculation 7,a7 ,in general ,the term income-driven calculation1 when used with respect to a borrower1 means the annual amount due on the total amount of covered ,federal ,direct ,loans1 which annual amount is equivalent to-- 7i7 #aj percent of the borrower's discretionary income that is less than the discretionary income bend point1 plus 7ii7 #ae percent of the borrower's discretionary income that is equal to or greater than the discretionary income bend point4 7,b7 ,annual calculation ,the calculation under subparagraph 7,a7 shall be determined on an annual basis for the duration of the repayment period described in subsection 7b74 7#e7 ,new borrower ,the term new borrower means a borrower who-- 7,a7 as of ,july #a1 #bjbb1 has no outstanding balance on a student loan made1 insured1 or guaranteed under part ,b or ,d2 or 7,b7 has no outstanding balance on a student loan made1 insured1 or guaranteed under part ,b or ,d on the date the borrower receives a loan made under part ,d on or after ,july #a1 #bjbb4 7b7 ,simplified income-,driven repayment plan authorized 7#a7 ,in general ,the ,secretary shall carry out a simplified income-driven repayment program for new borrowers that meets the following requirements3 7,a7 ,a new borrower of any covered ,federal ,direct ,loan may elect to have the borrower's aggregate monthly payment for all such loans equal to the income-driven calculation1 divided by #ab4 7,b7 ,the holder of such a loan shall apply the borrower's monthly payment under this subsection first toward interest due on the loan1 next toward any fees due on the loan1 and then toward the principal of the loan4 7,c7 ,any interest due and not paid under subparagraph 7,b7-- 7i7 shall1 on ,federal ,direct ,stafford ,loans1 be paid by the ,secretary for a period of not more than #c years after the date of the borrower's election under subparagraph 7,a71 except that such period shall not include any period during which the borrower is in deferment due to an economic hardship described in section #dce7o72 and 7ii7 shall be capitalized-- 7,i7 in the case of a ,federal ,direct ,stafford ,loan1 subject to clause 7i7-- 7aa7 at the time the borrower ends the election to make simplified income-driven repayment under this subsection2 or 7bb7 at the time the borrower's monthly payment calculation under subparagraph 7,a7 exceeds the monthly payment calculation under the fixed repayment plan1 based on a #aj-year repayment period1 when the borrower first made the election under subparagraph 7,a72 and 7,,ii7 in the case of a ,federal ,direct ,unsubsidized ,stafford ,loan-- 7aa7 at the time the borrower ends the election to make simplified income-driven repayment under this subsection2 or 7bb7 at the time the borrower's monthly payment calculation under subparagraph 7,a7 exceeds the monthly payment calculation under the fixed repayment plan1 based on a #aj-year repayment period1 when the borrower first made the election under subparagraph 7,a74 7,d7 ,any principal due and not paid under subparagraph 7,b7 shall be deferred4 7,e7 ,the amount of time a new borrower shall make monthly payments under subparagraph 7,a7 may exceed #aj years4 7,f7 ,if the borrower no longer wishes to continue the election under this subsection1 then-- 7i7 the maximum monthly payment required to be paid for all covered ,federal ,direct ,loans shall be equal to the monthly amount calculated under section #dbh7;b77#i77;,a77i7 or #dee7;d77#a77;,a71 based on a #aj-year repayment period1 when the borrower first made the election described in this subsection2 and 7ii7 the amount of time the borrower is permitted to repay such loans may exceed #aj years4 7,g7 ,the ,secretary shall cancel the outstanding balance of principal and interest due for a new borrower whose balance of principal of covered ,federal ,direct ,loans did not exceed #eg1ejj on the date the borrower's repayment period began1 or whose balance of principal of covered ,federal ,direct ,loans did not exceed the maximum aggregate amount of loans an independent undergraduate student could borrow1 pursuant to section #dbh;,h7d77#d77;,b71 on the date the borrower's final covered ,federal ,direct ,loan was disbursed1 whichever amount is greater1 if the borrower-- 7i7 at any time1 elected to participate under subparagraph 7,a72 and 7ii7 for #bj years-- 7,i7 made monthly payments pursuant to subparagraph 7,a72 or 7,,ii7 was in deferment due to an economic hardship described in section #dce7o74 7,h7 ,the ,secretary shall cancel the outstanding balance of principal and interest due for a new borrower whose balance of principal of covered ,federal ,direct ,loans exceeded #eg1ejj on the date the borrower's repayment period began1 or whose balance of principal of covered ,federal ,direct ,loans exceeded the maximum aggregate amount of loans an independent undergraduate student could borrow1 pursuant to section #dbh;,h7d77#d77;,b71 on the date the borrower's final covered ,federal ,direct ,loan was disbursed1 whichever amount is greater1 if the borrower-- 7i7 at any time1 elected to participate under subparagraph 7,a72 and 7ii7 for #be years-- 7,i7 made monthly payments pursuant to subparagraph 7,a72 or 7,,ii7 was in deferment due to an economic hardship described in section #dce7o74 7,i7 ,a borrower may elect to discontinue repayment pursuant to this subsection1 at any time1 and enter into repayment pursuant to section #dee7;d77#b77;,a74 7#b7 ,monthly payments ,only monthly payments made pursuant to paragraph 7#a77;,a7 shall be considered eligible payments toward the forgiveness of outstanding loan principal and interest under subparagraphs 7,g7 and 7,h7 of paragraph 7#a74 7c7 ,eligibility determinations ,the ,secretary shall annually determine a borrower's eligibility for the simplified income-driven repayment plan under this section through-- 7#a7 verification of a borrower's annual adjusted gross income2 7#b7 the annual amount due on the total amount of covered ,federal ,direct ,loans2 and 7#c7 such other procedures as are necessary to effectively implement the simplified income-driven repayment plan under this section4 7d7 ,special rule for married borrowers filing separately ,in the case of a married borrower who files a separate ,federal income tax return1 the ,secretary shall calculate the borrower's income-driven calculation on the basis of the borrower's total amount due on covered ,federal ,direct ,loans and the married couple's combined adjusted gross income4 ,in the case of a married couple in which both individuals repay their loans under this section1 the ,secretary shall calculate each borrower's income-driven calculation on the basis of each borrower's total amount due on covered ,federal ,direct ,loans and the married couple's combined adjusted gross income divided by #b4 7e7 ,annual income verification 7#a7 ,in general ,a borrower who elects to participate in the simplified income-driven repayment plan under this section shall submit to the ,secretary1 on an annual basis1 verification of the borrower's annual adjusted gross income4 7#b7 ,consequence of failure to submit ,with respect to a borrower who fails to submit to the ,secretary verification of the borrower's annual adjusted gross income as required under paragraph 7#a71 any monthly payments made during the period the borrower is in violation of the requirement of paragraph 7#a7 shall not be considered eligible payments toward the forgiveness of outstanding loan principal and interest under subparagraphs 7,g7 and 7,h7 of subsection 7b77#a74 4 #c4 ,streamlining repayment plans for new borrowers ,section #dee of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;e7 is amended-- 7#a7 by striking subsection 7d7 and inserting the following3 7d7 ,repayment plans 7#a7 ,design and selection for borrowers before ,july #a1 #bjbb ,with respect to a borrower of a loan made under this part before ,july #a1 #bjbb1 and consistent with criteria established by the ,secretary1 the ,secretary shall offer such borrower a variety of plans for repayment of such loan1 including principal and interest on the loan4 ,the borrower shall be entitled to accelerate1 without penalty1 repayment on the borrower's loans under this part4 ,the borrower may choose-- 7,a7 a fixed repayment plan1 consistent with subsection 7a77#a7 of this section and with section #dbh7;b77#i77;,a77i72 7,b7 a graduated repayment plan1 consistent with section #dbh7;b77#i77;,a77ii72 7,c7 an extended repayment plan1 consistent with section #dbh7;b77#i77;,a77iv71 except that the borrower shall annually repay a minimum amount determined by the ,secretary in accordance with section #dbh7;b77#a77,l72 7,d7 an income contingent repayment plan1 with varying annual repayment amounts based on the income of the borrower1 paid over an extended period of time prescribed by the ,secretary1 not to exceed #be years1 except that the plan described in this subparagraph shall not be available to the borrower of a ,federal ,direct ,,plus loan made on behalf of a dependent student2 and 7,e7 an income-based repayment plan that enables borrowers who have a partial financial hardship to make a lower monthly payment in accordance with section #dic;,c1 except that the plan described in this subparagraph shall not be available to the borrower of a ,federal ,direct ,,plus ,loan made on behalf of a dependent student or a ,federal ,direct ,consolidation ,loan1 if the proceeds of such loan were used to discharge the liability on such ,federal ,direct ,,plus ,loan or a loan under section #dbh;,b made on behalf of a dependent student4 7#b7 ,design and selection for new borrowers on or after ,july #a1 #bjbb ,the ,secretary shall offer a borrower of a loan made under this part on or after ,july #a1 #bjbb1 the following plans for repayment of such loan1 including principal and interest on the loan4 ,the borrower shall be entitled to accelerate1 without penalty1 repayment on the borrower's loans under this part4 ,the borrower may choose-- 7,a7 a fixed repayment plan1 consistent with subsection 7a77#a7 of this section and with section #dbh7;b77#i77;,a77i72 or 7,b7 a simplified income-driven repayment plan1 consistent with section #dic;,e1 except the plan described in this subparagraph shall not be available to a borrower of a ,federal ,direct ,,plus ,loan made on behalf of a dependent student1 a ,federal ,direct ,consolidation ,loan1 if the proceeds of such loan were used to discharge the liability on such ,federal ,direct ,,plus ,loan or a loan under section #dbh;,b made on behalf of a dependent student4 7#c7 ,borrower non-selection ,if a borrower of a loan made under this part does not select a repayment plan described in paragraph 7#a7 or 7#b71 the ,secretary may provide the borrower with a repayment plan described in subparagraph 7,a71 7,b71 or 7,c7 of paragraph 7#a7 for borrowers before ,july #a1 #bjbb1 or a repayment plan described in paragraph 7#b77;,a7 for new borrowers on or after ,july #a1 #bjbb4 7#d7 ,changes in selections ,the borrower of a loan made under this part may change the borrower's selection of a repayment plan under paragraph 7#a7 or 7#b71 or the ,secretary's selection of a plan for the borrower under paragraph 7#c71 as the case may be1 under such terms and conditions as may be established by the ,secretary4 7#e7 ,alternative repayment plans ,the ,secretary may provide1 on a case-by-case basis1 an alternative repayment plan to a borrower of a loan made under this part on or after ,july #a1 #bjbb1 who demonstrates to the satisfaction of the ,secretary that the terms and conditions of the repayment plans available under paragraph 7#b7 are not adequate to accommodate the borrower's exceptional circumstances4 ,upon request1 the ,secretary shall make available for such borrower's repayment plans described in subparagraphs 7,b7 and 7,c7 of paragraph 7#a74 ,in designing such alternative repayment plans1 the ,secretary shall ensure that such plans do not exceed the cost to the ,federal ,government1 as determined on the basis of the present value of future payments by such borrowers1 of loans made using the plans available under paragraph 7#b74 7#f7 ,repayment after default ,for any borrower who has defaulted on a loan made under this part1 the ,secretary-- 7,a7 may require the borrower to pay all reasonable collection costs associated with such loan2 and 7,b7 if such loan was made-- 7i7 to any borrower who1 before ,july #a1 #bjbb1 had an outstanding balance on a student loan made1 insured1 or guaranteed under this part or part ,b1 may require the borrower to repay the loan pursuant to an income contingent repayment plan1 as described in paragraph 7#a77;,d71 or an income-based repayment plan1 as described in paragraph 7#a77;,e72 or 7ii7 to a new borrower 7as defined in section #dic;,e7a77#e771 may provide the borrower the option to enroll in the repayment plan described in paragraph 7#b77;,b74 7#g7 ,applicability provision 7,a7 ,in general ,except as provided in paragraph 7#e7 and subparagraph 7,b71 the repayment plans under subparagraphs 7,b71 7,c71 7,d71 and 7,e7 of paragraph 7#a7 are not available for a borrower who received the borrower's first disbursement of a ,federal ,direct ,loan on or after ,july #a1 #bjbb4 7,b7 ,exception ,the repayment plans available to a borrower of a ,federal ,direct ,,plus ,loan made on behalf of a dependent student or a ,federal ,direct ,consolidation ,loan whose proceeds were used to discharge the liability of a ,federal ,direct ,,plus ,loan made on behalf of a dependent student or a loan under section #dbh;,b made on behalf of a dependent student on or after ,july #a1 #bjbb1 shall be those described under subparagraphs 7,a71 7,b71 and 7,c7 of paragraph 7#a74 2 and 7#b7 in subsection 7m7-- 7,a7 in paragraph 7#a7-- 7i7 in the paragraph heading1 by striking ,in general and inserting ,borrowers before ,july #a1 #bjbb2 and 7ii7 in the matter preceding subparagraph 7,a71 by striking ,the ,secretary and inserting ,except as provided in paragraph 7#e71 the ,secretary2 7,b7 in paragraph 7#b71 by inserting or 7#e7 after paragraph 7#a72 and 7,c7 by adding at the end the following3 7#e7 ,simplified income-driven repayment for new borrowers on or after ,july #a1 #bjbb 7,a7 ,in general ,with respect to an eligible ,federal ,direct ,loan not in default made under this part on or after ,july #a1 #bjbb1 the ,secretary shall cancel the balance of interest and principal due1 after the conclusion of the employment period described in paragraph clause 7iv71 as of the time of such cancellation1 on any such loan for a borrower who-- 7i7 as of ,july #a1 #bjbb1 had no outstanding balance on a student loan made1 insured1 or guaranteed under this part or part ,b or had no outstanding balance on a student loan made1 insured1 or guaranteed under this part or part ,b on the date the borrower received the loan made under this part on or after ,july #a1 #bjbb2 7ii7 has made #abj monthly payments on the eligible ,federal ,direct ,loan under a simplified income-driven repayment plan under subsection 7d77#b77;,b72 7iii7 is employed in a public service job at the time of such forgiveness2 and 7iv7 has been employed in a public service job during the period in which the borrower makes each of the #abj payments described in clause 7ii74 7,b7 ,annual income verification ,with respect to a borrower who fails to submit to the ,secretary verification of the borrower's annual adjusted gross income as required under section #dic;,e7e71 any monthly payments made during the period the borrower is in violation of such requirement shall not be considered eligible payments under subparagraph 7,a77ii7 toward the cancellation pursuant to this paragraph of the balance of interest and principal due on the borrower's loan4 4 #d4 ,fixed repayment plan ,the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajja et seq47 is amended-- 7#a7 in section #aec7;a77#a77;,b77iii77,v71 by striking standard repayment plan and inserting fixed repayment plan2 7#b7 in section #dbh7;b77#i77;,a77i71 by striking standard repayment plan and inserting fixed repayment plan2 7#c7 in section #dcc7;b77#g77;,b71 by striking standard repayment plan and inserting fixed repayment plan2 7#d7 in section #dee-- 7,a7 in subsection 7e77#g77;,b77iv71 by striking standard repayment plan and inserting fixed repayment plan2 and 7,b7 in subsection 7m77#a77;,a77ii71 by striking standard repayment plan and inserting fixed repayment plan2 and 7#e7 in section #dic;,c-- 7,a7 in subsection 7a77#c77;,a71 by striking standard repayment plan and inserting fixed repayment plan2 and 7,b7 in subsection 7b7-- 7i7 in paragraph 7#g77;,b77iii71 by striking standard repayment plan and inserting fixed repayment plan2 and 7ii7 in paragraph 7#h71 by striking standard repayment plan and inserting fixed repayment plan4 #e4 ,notification to borrowers about repayment options and alternatives to default ,not later than #a year after the date of enactment of this ,act1 the ,secretary of ,education shall require servicers of loans made1 insured1 or guaranteed under part ,b or ,d of title ,,iv of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajga et seq4 and #ajhg;a et seq47 to-- 7#a7 notify borrowers1 in writing and through electronic format1 about all repayment options for which the borrower may qualify2 7#b7 provide borrowers1 in writing and through electronic format1 information about alternative repayment plans1 including the borrower's estimated monthly payment1 expected number of years to repay1 expected amount of loan forgiveness1 expected total loan forgiveness1 and expected total principal and interest paid1 associated with each repayment plan in a format that permits the borrower to compare the current repayment plan with alternative repayment plans2 and 7#c7 offer to enroll such borrowers in alternative plans1 if eligible4 #f4 ,,gao study on improving enrollment and verification associated with income-driven repayment ,not later than #b years after the date of enactment of this ,act1 the ,comptroller ,general of the ,united ,states1 in consultation with the ,secretary of the ,treasury1 shall-- 7#a7 complete a study that-- 7,a7 examines the feasibility of simplifying the process for enrolling in1 and verifying annual eligibility for1 the simplified income-driven repayment program authorized under the amendments made by this ,act2 and 7,b7 provides recommendations1 including those relating to streamlined income and employment verification and simplified methods of repayment1 for efficient administration of income-based repayment programs1 including those authorized under the amendments made by this ,act2 and 7#b7 prepare and submit a report to the ,committee on ,health1 ,education1 ,labor1 and ,pensions of the ,senate and the ,committee on ,education and the ,workforce of the ,house of ,representatives setting forth the conclusions of the study described in paragraph 7#a7 in such a manner that the recommendations included in the report can inform future reauthorizations of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajja et seq474