[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4144 Introduced in House (IH)]
<DOC>
118th CONGRESS
1st Session
H. R. 4144
To streamline and improve the Federal student loan repayment system to
protect borrowers and taxpayers.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 15, 2023
Mr. Owens (for himself, Mrs. McClain, and Ms. Foxx) introduced the
following bill; which was referred to the Committee on Education and
the Workforce
_______________________________________________________________________
A BILL
To streamline and improve the Federal student loan repayment system to
protect borrowers and taxpayers.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Federal Assistance
to Initiate Repayment Act'' or the ``FAIR Act''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. References.
Sec. 3. Return to repayment requirements.
Sec. 4. Repayment plans.
Sec. 5. Income-driven repayment assistance plan.
Sec. 6. Deferment on loans made on or after July 1, 2024.
Sec. 7. Loan rehabilitation.
Sec. 8. Limitation on authority of Secretary to propose or issue
regulations and executive actions.
SEC. 2. REFERENCES.
Except as otherwise expressly provided, whenever in this Act an
amendment or repeal is expressed in terms of an amendment to, or repeal
of, a section or other provision, the reference shall be considered to
be made to a section or other provision of the Higher Education Act of
1965 (20 U.S.C. 1001 et seq.).
SEC. 3. RETURN TO REPAYMENT REQUIREMENTS.
(a) Borrower Notification.--
(1) Notice to federal student loan borrowers who received
temporary relief.--During the period beginning on the date of
the enactment of this Act and ending on August 31, 2023, the
Secretary of Education shall provide, through 2 or more methods
of communication (including postal mail, telephone, and
electronic communication), a total of not fewer than 12 notices
to each borrower of any loan made, insured, or guaranteed under
title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et
seq.) indicating--
(A) the date on which such borrower is required to
make monthly payments on such a loan pursuant to
section 271 of the Fiscal Responsibility Act (Public
Law 118-5);
(B) indicating the borrower's options for
repayment, including that such borrower may be eligible
to enroll, or may be automatically enrolled, as
applicable, in an income driven repayment assistance
plan under section 494A of the Higher Education Act of
1965 (as added by section 5 of this Act), including a
brief description of the plan and its associated
benefits; and
(C) the options available to such a borrower who is
in default, including--
(i) the option to consolidate or
rehabilitate the loans under section 428F(a)(5)
(as amended by section 7 of this Act); and
(ii) a brief description of the benefits
and consequences of each option.
(2) Additional notification.--
(A) In general.--During the period described in
paragraph (1), and in addition to the notices required
under such subsection, the Secretary of Education shall
provide the information described in subparagraph (B)
to each at-risk borrower.
(B) At-risk borrower outreach.--In carrying out
subparagraph (A), the Secretary of Education shall
provide, in the manner described in paragraph (1), a
total of not fewer than 6 notices to each at-risk
borrower indicating--
(i) the information described in
subparagraphs (A) through (C) of paragraph (1);
and
(ii) information specific to such borrower
detailing--
(I) why such borrower is receiving
the notice; and
(II) the steps such borrower may
take to avoid delinquency and default.
(3) Return to repayment portal.--Not later than 30 days
after the date of the enactment of this Act, the Secretary of
Education shall--
(A) publish, on a publicly accessible website of
the Department, an electronic resource portal; and
(B) through the use of such portal--
(i) disclose, in an easily searchable
format, the date or dates upon which the
Secretary carried out the borrower
notifications required under paragraphs (1) and
(2);
(ii) disclose copies of any final contract
modifications (as such term is defined in
section 2.101 of title 48, Code of Federal
Regulations) the Secretary provided to Federal
student loan servicers under contract during
the period beginning March 1, 2020 and ending
September 30, 2024, except that proprietary or
confidential information related to such
contracts or contract modifications, including
source selection information (as such term is
defined in section 2.101 of title 48, Code of
Federal Regulations) and any information
treated as confidential by such a loan servicer
and obtained by the Secretary for purposes of
such a final contract modification, shall be
deemed confidential and exempt from disclosure
under this clause and section 552 of title 5,
United States Code, relating to freedom of
information;
(iii) provide template examples of the
language the Secretary used to carry out the
borrower notifications required under
paragraphs (1) and (2); and
(iv) provide examples of social media posts
for public stakeholders who wish to amplify the
Secretary's communications and provide
borrowers with accurate information.
(4) At-risk borrower defined.--In this subsection, the term
``at-risk borrower'' means a borrower of a loan described in
paragraph (1) that is held by the Secretary of Education who,
with respect to any such loan--
(A) on or after March 1, 2020, was assigned a new
student loan servicer;
(B) on or after March 1, 2020, entered repayment
for the first time;
(C) on or after March 1, 2020, was in default;
(D) during the 2-year period preceding March 1,
2020, missed a payment or payments for a period of not
less than 60 days;
(E) submitted an application for one-time student
debt cancellation (as described by the Department of
Education in the Federal Register on October 12, 2022
(87 Fed. Reg. 61513 et seq.)); or
(F) received a refund from the Department of
Education for any payment made during the period
beginning on March 1, 2020, and ending on August 31,
2023, that, pursuant to a waiver or modification
described by the Department of Education in the Federal
Register on October 12, 2022 (87 Fed. Reg. 61513 et
seq.), was not required.
(b) Federal Preemption.--Section 456 (20 U.S.C. 1087f) is amended
by adding at the end the following:
``(c) Federal Preemption.--
``(1) In general.--Covered activities shall not be subject
to any law or other requirement of any State or political
subdivision of a State with respect to--
``(A) disclosure requirements;
``(B) requirements or restrictions on the content,
time, quantity, or frequency of communications with
borrowers, endorsers, or references with respect to
such loans; or
``(C) any other requirement relating to the
servicing or collection of a loan made under this
title.
``(2) Covered activities defined.--In this subsection, the
term `covered activities' means any of the following
activities, as carried out by a qualified entity:
``(A) Origination of a loan made under this title.
``(B) Servicing of a loan made under this title.
``(C) Collection of a loan made under this title.
``(D) Any other activity related to the activities
described in subparagraphs (A) through (C).''.
(c) Procurement Flexibility.--Section 142 (20 U.S.C. 1018a) is
amended--
(1) by redesignating subsection (l) as subsection (m); and
(2) by inserting after subsection (k) the following:
``(l) Guidance to Student Loan Servicers.--
``(1) In general.--In notifying a student loan servicer of
a final contract modification (as such term is defined in
section 2.101 of title 48, Code of Federal Regulations) that
instructs such loan servicer to perform a function that is new
or different from a function such servicer performs pursuant to
an existing contract, the PBO shall, not later than 30 days
before such contract change takes effect, provide such
servicers with written guidance in the form of--
``(A) a change order (as such term is defined in
section 2.101 of title 48, Code of Federal
Regulations);
``(B) a dear colleague letter; or
``(C) an electronic announcement.
``(2) Non-binding directives.--A student loan servicer that
is notified of a final contract modification described in
paragraph (1) and receives guidance in a form other than a form
described in paragraph (1) (including through emails or phone
calls) shall not be subject to such contract modification.''.
(d) Requirements Relating to Annual Bonuses of Performance-Based
Organization Officers.--Section 141 (20 U.S.C. 1018) is amended--
(1) in subsection (c)(4)--
(A) in subparagraph (A), by striking ``and'' at the
end;
(B) in subparagraph (B), by striking the period at
the end and inserting ``; and''; and
(C) by adding at the end the following:
``(C) that the Department has carried out the
borrower notifications required under section 3(a) of
the FAIR Act.'';
(2) by amending subsection (d)(5)(B) to read as follows:
``(B) Bonus.--
``(i) In general.--In addition, subject to
clause (ii), the Chief Operating Officer may
receive a bonus in an amount that does not
exceed 50 percent of such annual rate of basic
pay, based upon the Secretary's evaluation of
the Chief Operating Officer's performance in
relation to the goals set forth in the
performance agreement described in paragraph
(4).
``(ii) Exception.--In the case of a year in
which the Department does not carry out the
activities required under section 3(a) of the
FAIR Act or comply with the requirements of
sections 142(l) or 456(c), the Chief Operating
Officer may not receive a bonus described in
clause (i).''; and
(3) by amending subsection (e)(3)(B) to read as follows:
``(B) Bonus.--
``(i) In general.--In addition, subject to
clause (ii), a senior manager may receive a
bonus in an amount such that the manager's
total annual compensation does not exceed 125
percent of the maximum rate of basic pay for
the Senior Executive Service, including any
applicable locality-based comparability
payment, based upon the Chief Operating
Officer's evaluation of the manager's
performance in relation to the goals set forth
in the performance agreement described in
paragraph (2).
``(ii) Exception.--In the case of a year in
which the Department does not carry out the
activities required under section 3(a) of the
FAIR Act or comply with the requirements of
sections 142(l) or 456(c), the senior manager
may not receive a bonus described in clause
(i).''.
SEC. 4. REPAYMENT PLANS.
(a) Direct Loans.--Section 455(d) (20 U.S.C. 1087e(d)) is amended
by adding at the end the following:
``(6) Repayment plans for loans in repayment on or after
july 1, 2023.--
``(A) Design and selection.--Notwithstanding
paragraph (1), and subject to subparagraph (E),
beginning on July 1, 2023, the Secretary shall offer a
borrower of a loan made under this part two plans for
repayment of such loan, including principal and
interest on the loan. The borrower shall be entitled to
accelerate, without penalty, repayment on such loans.
The borrower may choose--
``(i) a standard repayment plan with a
fixed monthly repayment amount paid over a
fixed period of time, not to exceed 10 years;
or
``(ii) an income-driven repayment
assistance plan under section 494A.
``(B) Selection by secretary.--If such borrower
does not select a repayment plan described in
subparagraph (A), the Secretary shall provide the
borrower with the repayment plan described in
subparagraph (A)(i).
``(C) Changes in selection.--
``(i) In general.--Subject to clause (ii),
a borrower may change the borrower's selection
of a repayment plan under subparagraph (A), or
the Secretary's selection of a plan for the
borrower under subparagraph (B), as the case
may be. Nothing in this subsection shall
prohibit the Secretary from encouraging
distressed borrowers from enrolling in the
income-driven repayment assistance plan under
section 494A.
``(ii) Same repayment plan required.--All
loans made under this part on or after July 1,
2023, to a borrower shall be repaid under the
same repayment plan under subparagraph (A),
except that the borrower may repay an excepted
PLUS loan or an excepted consolidation loan (as
such terms are defined in section 494A)
separately from other loans made under this
part to the borrower.
``(D) Repayment after default.--The Secretary may
require a borrower who has defaulted on a loan made
under this part to--
``(i) pay all reasonable collection costs
associated with such loan; and
``(ii) repay the loan pursuant to the
income-driven repayment assistance plan under
section 494A.
``(E) Rules for existing borrowers.--
``(i) Existing borrowers in standard or
graduated plans.--A borrower who, as of the day
before the date of enactment of FAIR Act, was
repaying a loan made under this part pursuant
to a plan described in subparagraph (A), (B),
or (C) of paragraph (1) may--
``(I) continue to repay such loan
pursuant to such plan; or
``(II) choose to repay such loan
pursuant to a plan described in clause
(i) or (ii) of subparagraph (A).
``(ii) Other existing borrowers.--With
respect to a borrower who, as of the day before
the date of enactment of FAIR Act, was repaying
a loan made under this part pursuant to a plan
described in subparagraph (D) or (E) of
paragraph (1), the Secretary shall, pursuant to
section 494A(b), enroll such borrower into the
income-driven repayment assistance plan under
section 494A.
``(F) Prohibition.--Except as provided in
subparagraph (E), the Secretary may not--
``(i) authorize a borrower of a loan made
under this part to repay such loan pursuant to
a repayment plan that is not described in
clause (i) or (ii) of subparagraph (A); or
``(ii) carry out or modify a repayment plan
that is not described in such clause (i) or
(ii).''.
(b) FFEL Loans.--Section 428(b)(9) is amended--
(1) in subparagraph (A)--
(A) in clause (iv), by striking ``and'' at the end;
(B) in clause (v), by striking the period at the
end and inserting ``; and'';
(C) by adding at the end the following:
``(vi) for any borrower repaying, on or
after July 1, 2023, a loan made, insured, or
guaranteed under this part--
``(I) in the case of a borrower
who, as of the day before the date of
enactment of FAIR Act, was repaying
such loan pursuant to a plan described
in clause (i), (ii), (iii), or (iv),
continuing to repay such loan pursuant
to such plan; or
``(II)(aa) an income-driven
repayment assistance plan under section
494A; or
``(bb) the standard repayment plan
described in clause (i).'';
(2) by adding at the end the following:
``(C) Repayment plans for loans in repayment on or
after july 1, 2023.--
``(i) Changes in selection.--In the case of
any borrower not described in subparagraph
(A)(vi)(I), the borrower may change the
borrower's selection of a repayment plan under
subparagraph (A)(vi)(II). Nothing in this
subsection shall prohibit the lender from
encouraging distressed borrowers from enrolling
in the income-driven repayment assistance plan
under section 494A.
``(ii) Treatment of certain borrowers.--
With respect to a borrower who, as of the day
before the date of enactment of the FAIR Act
was repaying a loan made, insured, or
guaranteed under this part pursuant to a plan
described in subparagraph (A)(v), the Secretary
shall, pursuant to section 494A(b), enroll such
borrower into an income-driven repayment
assistance plan under section 494A.
``(iii) Repayment after default.--The
Secretary may require a borrower who has
defaulted on a loan made, insured, or
guaranteed under this part to--
``(I) pay all reasonable collection
costs associated with such loan; and
``(II) repay the loan pursuant to
the income-driven repayment assistance
plan under section 494A.
``(iv) Prohibition.--The Secretary may
not--
``(I) authorize a borrower of a
loan made, insured, or guaranteed under
this part to repay such loan pursuant
to a repayment plan that is not
described in subparagraph (A)(vi); or
``(II) carry out or modify a
repayment plan that is not described in
subparagraph (A)(vi).''.
(c) Federal Direct Consolidation Loans.--Section 428C (20 U.S.C.
1078-3) is amended--
(1) in subsection (a)(3)(B)(i)(V)(aa), by striking ``or
income-based repayment'' and inserting ``, income-based
repayment, or income-driven repayment assistance under section
494A''; and
(2) in subsection (c)--
(A) in paragraph (2)(A)--
(i) in the first sentence, by inserting ``,
or a schedule for income-driven repayment
assistance under section 494A,'' after
``schedules''; and
(ii) in the second sentence, by inserting
``or by the terms of repayment pursuant to
income-driven repayment assistance under
section 494A,'' after ``subsection (b)(5)'';
and
(B) in paragraph (3)--
(i) in subparagraph (A), by inserting ``or
an income-driven repayment assistance schedule
under section 494A'' after ``section 493C'';
and
(ii) in subparagraph (C), by inserting ``or
an income-based repayment assistance schedule
under section 494A'' after ``section 493C''.
(d) Repayment Incentives.--
(1) Amendment.--Section 455(b)(9)(C) (20 U.S.C.
1087e(b)(9)(C)) is amended by inserting ``(which in the case of
a loan for which the first disbursement of principal is made on
or after July 1, 2023, may not exceed than 0.25 percentage
points)'' after ``interest rate reduction''.
(2) Application of amendment.--The amendment made by this
section shall not apply to any borrower who is a student
enrolled in a program of study at an institution of higher
education (as defined in section 102 of the Higher Education
Act of 1965 (20 U.S.C. 1002)) as of June 30, 2023, or any loans
made under part D of title IV of the Higher Education Act of
1965 (20 U.S.C. 1087a et seq.) to (or on behalf of) such
student, during the period required for the completion of such
program.
(e) Other Conforming Amendments.--
(1) Departmental publication of descriptions of assistance
programs.--The third sentence of section 485(d)(1) is amended--
(A) by striking ``income-sensitive and income-based
repayment plans for loans made, insured or guaranteed
under part B'' and inserting ``income-sensitive
repayment plans and an income-driven repayment plan
under section 494A for loans made, insured or
guaranteed under part B''; and
(B) by striking ``and income-contingent'' and all
that follows through ``under part D'' and inserting
``and an income-driven repayment assistance plan under
section 494A for loans made under part D''.
(2) PSLF.--Section 455(m)(1)(A) (20 U.S.C. 1087e(m)(1)(A))
is amended--
(A) by striking ``or'' at the end of clause (iii);
(B) in clause (iv), by striking ``and'' and
inserting ``or''; and
(C) by inserting at the end the following:
``(v) payments under an income-driven
repayment assistance plan under section 494A;
and''.
SEC. 5. INCOME-DRIVEN REPAYMENT ASSISTANCE PLAN.
(a) Establishment of New Plan.--Part G of title IV (20 U.S.C. 1088
et seq.) is amended by adding at the end the following:
``SEC. 494A. INCOME-DRIVEN REPAYMENT ASSISTANCE PROGRAM.
``(a) In General.--Notwithstanding any other provision of this Act,
the Secretary shall carry out a program under which--
``(1) a borrower of any loan made, insured, or guaranteed
under part B or D (other than an excepted PLUS loan or excepted
consolidation loan), may elect to have the borrower's aggregate
monthly payment for all such loans not exceed the applicable
monthly payment for the borrower, except that a borrower may
not be precluded from repaying an amount that exceeds such
applicable monthly payment for any month;
``(2) the Secretary shall apply the borrower's monthly
payment under this section first toward interest due on such a
loan, next toward any fees due on the loan, and then toward the
principal of the loan;
``(3) any principal due and not paid under paragraph (2)
shall be deferred;
``(4) the amount of time the borrower makes monthly
payments under paragraph (1) may exceed 10 years;
``(5) the Secretary provides the repayment assistance for
distressed borrowers described in subsection (c);
``(6) the Secretary shall repay or cancel any outstanding
balance of principal and interest due on all loans made under
part B or D (other than excepted PLUS loans or excepted
consolidation loans) to a borrower--
``(A) who, at any time, elected to participate in
income-driven repayment assistance under paragraph (1);
``(B) whose final monthly payment for such loans
prior to the loan cancellation under this paragraph was
made under such income-driven repayment assistance; and
``(C) who has repaid on such loans (pursuant to
income-driven repayment assistance under paragraph (1),
a standard repayment plan under section 428(b)(9)(A)(i)
or 455(d)(6)(A)(i), or a combination of any such plan
or any of the repayment plans listed in clauses (i)
through (iv) of section 493C(b)(7)(B), or in the case
of a consolidation loan, pursuant to a repayment
schedule described clause (i)(II) of this subparagraph)
an amount that is equal to--
``(i)(I) the total amount of principal and
interest that the borrower would have repaid
under a standard repayment plan under section
428(b)(9)(A)(i), or paragraph (1)(A) or
(6)(A)(i) of section 455(d), based on a 10-year
repayment period, when the borrower entered
repayment on such loans; or
``(II) in the case of a Federal Direct
Consolidation Loan or loans made under section
428C, the total amount of principal and
interest that the borrower would have repaid
under the repayment schedule established for
the loan under section 428C(c)(2) on the date
on which such loan was made; plus
``(ii) an amount equal to the amount of any
unpaid interest that has accrued, but was not
included in the calculation of the total amount
of principal and interest that would have been
repaid under the standard repayment plan or
schedule described in clause (i)--
``(I) during any deferment period
described in clause (i) or (ii) of
section 455(f)(2)(A) or during any
period of deferment under subparagraph
(A) or (B) of section 460A(b)(1); and
``(II) during any forbearance
period while serving in a medical or
dental internship or residency program
as described in section
428(c)(3)(A)(i)(I) or subparagraph (F)
of section 460A(b)(1);
``(7) in repaying under paragraph (6) the outstanding
balance of principal and interest due on a loan made under part
B to a borrower who meets the requirements of paragraph (6),
the Secretary shall--
``(A) enter into an agreement with the holder of
such loan (or, if the holder acts as an eligible lender
trustee for the beneficial owner of the loan, the
beneficial owner of the loan) for the purpose of
assuming the repayment obligations of the borrower in
accordance with subparagraph (B), except that the
Secretary shall not assign to the United States the
right to such loan;
``(B) assume the obligation of the borrower to
repay the holder of such loan (or, if the holder acts
as an eligible lender trustee for the beneficial owner
of the loan, the beneficial owner of the loan) the
total amount of principal and interest remaining to be
repaid on such loan (after taking into account the
amounts repaid by the borrower pursuant to paragraph
(6) and the Secretary under subsection (c), if
applicable) according to the terms and conditions,
including the repayment schedule, that were in effect
with respect to such loan on the day before the
Secretary assumes such obligation; and
``(C) ensure that the holder of such loan (or, if
the holder acts as an eligible lender trustee for the
beneficial owner of the loan, the beneficial owner of
the loan) shall, upon entering into an agreement
described in subparagraph (A) with respect to a loan of
a borrower, reports to consumer reporting agencies that
the borrower's liability on such loan has been
discharged;
``(8) a borrower who is repaying a loan pursuant to income-
driven repayment under paragraph (1) may elect, at any time, to
terminate repayment pursuant to such income-driven repayment
assistance and repay such loan under the standard repayment
plan under section 455(d)(6)(A)(i);
``(9) in the case of a borrower who, as of the date before
the date of enactment of the FAIR Act, was repaying any loan
made, insured, or guaranteed under part B or D (other than an
excepted PLUS loan or excepted consolidation loan) pursuant to
an income-based repayment plan described in section 493C or an
income-contingent repayment plan described in section
455(d)(1)(D), which has a term or condition (including a term
or condition related to loan forgiveness or cancellation,
required monthly payments, or interest subsidies) that is more
favorable for such borrower than a similar term or condition
under the income-driven repayment assistance plan under
paragraph (1), the Secretary shall apply the more favorable
term or condition to the income-driven repayment assistance
plan under paragraph (1) pursuant to which the borrower is
repaying such loan, in lieu of the similar, less favorable term
or condition; and
``(10) the special allowance payment to a lender calculated
under section 438, when calculated for a loan in repayment
under this section, shall be calculated on the principal
balance of the loan and on any accrued interest unpaid by the
borrower in accordance with this section.
``(b) Eligibility Determinations and Notification Requirement.--The
Secretary shall establish and implement with respect to any borrower
who is (or will be) repaying a loan pursuant to income-driven repayment
assistance under this section, procedures to--
``(1) enroll into such income-driven repayment assistance
plan, any borrower who, as of the date before the date of
enactment of the FAIR Act, was repaying a loan pursuant to an
income-based repayment plan described in section 493C or an
income-contingent repayment plan described in section
455(d)(1)(D), without further action from the borrower, other
than any action related to compliance with the recertification
requirements applicable to the borrower under section
494(a)(4)(B);
``(2) notify the borrower of the terms and conditions of
such plan;
``(3) use return information disclosed under section
6103(l)(13) of the Internal Revenue Code of 1986, pursuant to
approval provided under section 494, to determine the repayment
obligation of the borrower without further action by the
borrower;
``(4) allow the borrower (or the spouse of the borrower),
at any time, to opt out of disclosure under such section
6103(l)(13) and instead provide such information as the
Secretary may require to determine the repayment obligation of
the borrower (or withdraw from the repayment plan under this
section); and
``(5) provide the borrower with an opportunity to update
the return information so disclosed before the determination of
the repayment obligation of the borrower.
``(c) Repayment Assistance for Distressed Borrowers.--
``(1) Excessive interest.--For each month for which a
borrower's aggregate monthly payment under this section is
insufficient to pay the total amount of interest that accrues
on a loan for the month, the amount of interest accrued and not
paid for the month shall be subtracted from the total amount of
interest due on such loan for the month.
``(2) Repayment credit.--For each month for which a
borrower's aggregate monthly payment under this section repays
an amount due on an individual loan that is less than twice the
total amount of interest that accrues on such loan for the
month, the amount of the total principal due on such loan shall
be reduced by an amount equal to half of the monthly payment
under this section on such loan for the month.
``(3) Application to borrowers with certain adjusted gross
incomes.--With respect to any borrower whose adjusted gross
income exceeds 300 percent of the poverty line applicable to
the borrower's family size as determined under section 673(2)
of the Community Services Block Grant Act (42 U.S.C. 9902(2)),
paragraph (1) or (2) may only apply to such borrower for any
month in which the borrower's aggregate monthly payment under
this section is equal to or greater than the amount obtained by
applying subsection (e)(2) by substituting `15 percent' for `10
percent' with respect to such borrower.
``(d) Prohibition.--In carrying out the requirements of subsection
(a)(7), the Secretary may not--
``(1) revoke the rights to a special allowance under
section 438 of the holder (or, if the holder acts as an
eligible lender trustee for the beneficial owner of the loan,
the beneficial owner of the loan) of the loans being repaid by
the Secretary under subsection (a)(7);
``(2) prepay any such loan ahead of the loan's repayment
schedule referenced in subsection (a)(7)(B); or
``(3) use any authority or take any actions beyond what is
authorized explicitly in subsection (a)(7).
``(e) Definitions.--In this section:
``(1) Adjusted gross income.--The term `adjusted gross
income' has the meaning given the term in section 62 of the
Internal Revenue Code of 1986.
``(2) Applicable monthly payment.--The term `applicable
monthly payment' means, when used with respect to a borrower,
the amount obtained by dividing by 12, 10 percent of the result
obtained by calculating, on at least an annual basis, the
amount by which--
``(A) the adjusted gross income of the borrower or,
if the borrower is married and files a Federal income
tax return jointly with or separately from the
borrower's spouse, the adjusted gross income of the
borrower and the borrower's spouse; exceeds
``(B) 150 percent of the poverty line applicable to
the borrower's family size as determined under section
673(2) of the Community Services Block Grant Act (42
U.S.C. 9902(2)).
``(3) Excepted consolidation loan.--The term `excepted
Consolidation Loan' means a Federal Direct Consolidation Loan,
if the proceeds of such loan were used to the discharge the
liability on--
``(A) an excepted PLUS loan; or
``(B) a Federal Direct Consolidation loan, if the
proceeds of such loan were used to discharge the
liability on an excepted PLUS loan.
``(4) Excepted plus loan.--The term `excepted PLUS Loan'
has the meaning given the term in section 493C.''.
(b) Procedure and Requirements for Requesting Tax Return
Information From the IRS.--Section 494(a) (20 U.S.C. 1098h(a)) is
amended by adding at the end the following:
``(4) Income-driven repayment assistance for loans in
repayment on or after july 1, 2023.--
``(A) New applicants.--In the case of any written
or electronic application by an individual for an
income-driven repayment plan under section 494A for a
loan made under part B or D, the Secretary, with
respect to such individual and any spouse of such
individual, shall--
``(i) provide to such individuals the
notification described in paragraph (1)(A)(i);
and
``(ii) require, as a condition of
eligibility for such repayment plan, that such
individuals--
``(I) affirmatively approve the
disclosures described in subclauses (I)
and (II) of paragraph (1)(A)(i), to the
extent applicable, and agree that such
approval shall serve as an ongoing
approval of such disclosures until the
date on which the individual elects to
opt out of such disclosures under
section 494A(b)(3); or
``(II) provide such information as
the Secretary may require to confirm
the eligibility of such individual for
such repayment plan.
``(B) Recertifications.--In the case of an
individual whom the Secretary enrolls, pursuant to
section 494A(b)(1), in an income-driven repayment
assistance plan under section 494A, the Secretary shall
meet the requirements of clauses (i) and (ii) of
subparagraph (A), with respect to such individual and
any spouse of such individual, for the first written or
electronic recertification of such individual's income
or family size for purposes of such income-driven
repayment assistance plan.''.
SEC. 6. DEFERMENT ON LOANS MADE ON OR AFTER JULY 1, 2024.
(a) In General.--Part D of title IV (20 U.S.C. 1087e et seq.) is
amended by adding at the end the following:
``SEC. 460A. DEFERMENT ON LOANS MADE ON OR AFTER JULY 1, 2024.
``(a) Effect on Principal and Interest.--
``(1) In general.--
``(A) Requirements for borrowers.--Subject to
subparagraph (B), a borrower of a loan made under this
part on or after July 1, 2024--
``(i) who meets the requirements described
in subsection (b) shall be eligible for a
deferment on such loan during which
installments of principal need not be paid and,
as specified in paragraph (2), interest shall
not accrue, or shall accrue and be paid by the
borrower; and
``(ii) may not be eligible for a deferment
or forbearance under section 455(f) or any
other provision of this Act (other than a
forbearance under section 455(l), a forbearance
under section 685.205(a) of title 34, Code of
Federal Regulations (or successor regulations),
or a deferment under section 493D).
``(B) Exceptions for borrowers enrolled in certain
programs of study.--Any borrower who is student who is
enrolled in a program of study at an institution of
higher education as of June 30, 2024, or any loans made
to (or on behalf of) such borrower, during the period
required for the completion of such program) shall not
be subject to this section
``(2) Effect on interest.--
``(A) No accrual of interest on subsidized loans.--
With respect to a deferment period described in
subparagraphs (A) through (D) of subsection (b)(1), or
(b)(6) interest--
``(i) shall not accrue, in the case of a--
``(I) Federal Direct Stafford Loan;
or
``(II) a Federal Direct
Consolidation Loan that consolidated
only Federal Direct Stafford Loans, or
a combination of such loans and Federal
Stafford Loans for which the student
borrower received an interest subsidy
under section 428; or
``(ii) shall accrue or be paid by the
borrower, in the case of a Federal Direct PLUS
Loan, a Federal Direct Unsubsidized Stafford
Loan, or a Federal Direct Consolidation Loan
not described in clause (i)(II).
``(B) Interest accrual on all loans.--With respect
to a deferment period described in subparagraph (E) or
(F) of subsection (b)(1), or paragraph (2), (3)(A), or
(4), interest shall accrue or be paid by the borrower,
in the case of any loan made under this part.
``(C) No accrual of interest on any loan.--With
respect to a deferment period described in paragraph
(3)(B) or paragraph (5), interest shall not accrue, in
the case of any loan made under this part.
``(b) Eligibility.--Any borrower described in subsection (a) shall
be eligible for a deferment on a loan made under this part on or after
July 1, 2024--
``(1) during any period during which the borrower--
``(A) is carrying at least one-half the normal
full-time work load for the course of study that the
borrower is pursuing, as determined by the eligible
institution the borrower is attending;
``(B) is pursuing a course of study pursuant to--
``(i) an eligible graduate fellowship
program in accordance with subsection (g); or
``(ii) an eligible rehabilitation training
program for individuals with disabilities in
accordance with subsection (i);
``(C) is serving on active duty during a war or
other military operation or national emergency, and for
the 180-day period following the demobilization date
for such service;
``(D) is performing qualifying National Guard duty
during a war or other military operation or national
emergency, and for the 180-day period following the
demobilization date for such service;
``(E) is a member of the National Guard who is not
eligible for a post-active duty deferment under section
493D and is engaged in active State duty for a period
of more than 30 consecutive days beginning--
``(i) the day after 6 months after the date
the student ceases to carry at least one-half
the normal full-time academic workload (as
determined by the institution); or
``(ii) the day after the borrower ceases
enrollment on at least a half-time basis, for a
loan in repayment; or
``(F) is serving in a medical or dental internship
or residency program, the successful completion of
which is required to begin professional practice or
service, or is serving in a medical or dental
internship or residency program leading to a degree or
certificate awarded by an institution of higher
education, a hospital, or a health care facility that
offers postgraduate training;
``(2) during a period sufficient to enable the borrower to
resume honoring the agreement to repay the outstanding balance
of principal and interest on the loan after default, if--
``(A) the borrower signs a new agreement to repay
such outstanding balance;
``(B) the deferment period is limited to 120 days;
and
``(C) such deferment is not granted for consecutive
periods;
``(3) during a period of administrative deferment--
``(A) described in paragraphs (1) through (4) of
subsection (j); or
``(B) described in subsection (j)(5);
``(4) in the case of a borrower of an excepted PLUS Loan or
an excepted Consolidation Loan, during a period described in
subsection (k);
``(5) during a period in which such borrower is receiving
treatment for cancer (in this paragraph referred to as the
`treatment period'), and the 6-month period after such
treatment period (in this paragraph referred to as the `post-
treatment period'), except that, notwithstanding subsection
(a), interest shall not accrue during any such treatment period
or post-treatment period; or
``(6) during a period, not to exceed an aggregate of 180
days, in which the borrower--
``(A) is the spouse of a member of the Armed Forces
serving on active duty; and
``(B) has experienced a loss of employment as a
result of relocation to accommodate a permanent change
in duty station of such member.
``(c) Length of Deferment.--A deferment granted by the Secretary
under subparagraph (F) of subsection (b)(1) shall--
``(1) be renewable at 12 month intervals; and
``(2) equal the length of time remaining in the borrower's
medical or dental internship or residency program.
``(d) Request and Documentation.--The Secretary shall determine the
eligibility of a borrower for a deferment--
``(1) under paragraph (1), (2), or (4) of subsection (b),
based on--
``(A) the receipt of a request for a deferment from
the borrower, and documentation of the borrower's
eligibility for the deferment;
``(B) receipt of a completed loan application that
documents the borrower's eligibility for a deferment;
``(C) receipt of a student status information
documenting that the borrower is enrolled on at least a
half-time basis; or
``(D) the Secretary's confirmation of the
borrower's half-time enrollment status, if the
confirmation is requested by the institution of higher
education; and
``(2) under paragraph (6) based on--
``(A)(i) evidence that the borrower is the spouse
of a member of the Armed Forces serving on active duty;
``(ii) evidence that a military permanent change of
station order was issued to such member; and
``(iii)(I) evidence that the borrower is eligible
for unemployment benefits due to a loss of employment
resulting from relocation to accommodate such permanent
change in duty station; or
``(II) a written certification, or an equivalent as
approved by the Secretary, that the borrower is
registered with a public or private employment agency
due to a loss of employment resulting from relocation
to accommodate such permanent change in duty station;
or
``(B) such other documentation as the Secretary
determines appropriate.
``(e) Notification.--The Secretary shall--
``(1) notify a borrower of a loan made under this part--
``(A) the granting of a deferment under this
subsection on such loan; and
``(B) the option of the borrower to continue making
payments on the outstanding balance of principal and
interest on such loan in accordance with subsection
(f);
``(2) at the time the Secretary grants a deferment to a
borrower of a loan made under this part, and not less
frequently than once every 180 days during the period of such
deferment, provide information to the borrower to assist the
borrower in understanding--
``(A) the effect of granting a deferment on the
total amount to be paid under the income-driven
repayment plan under 494A;
``(B) interest shall not accrue, or shall accrue or
be paid by the borrower, as specified in subsection
(a)(2);
``(C) the amount of unpaid principal and the amount
of interest that has accrued since the last statement
of such amounts provided to the borrower; and
``(D) the borrower's option to discontinue the
deferment at any time.
``(f) Payments by Borrowers Authorized.--A borrower may make
payments on the outstanding balance of principal and interest on a loan
made under this part during any period of deferment granted under this
subsection.
``(g) Graduate Fellowship Deferment.--
``(1) In general.--A borrower of a loan under this part is
eligible for a deferment under subsection (b)(1)(B)(i) during
any period for which an authorized official of the borrower's
graduate fellowship program certifies that the borrower meets
the requirements of paragraph (2) and is pursuing a course of
study pursuant to an eligible graduate fellowship program.
``(2) Borrower requirements.--A borrower meets the
requirements of this subparagraph if the borrower--
``(A) holds at least a baccalaureate degree
conferred by an institution of higher education;
``(B) has been accepted or recommended by an
institution of higher education for acceptance on a
full-time basis into an eligible graduate fellowship
program; and
``(C) is not serving in a medical internship or
residency program, except for a residency program in
dentistry.
``(h) Treatment of Study Outside the United States.--
``(1) In general.--The Secretary shall treat, in the same
manner as required under section 428(b)(4), any course of study
at a foreign university that is accepted for the completion of
a recognized international fellowship program by the
administrator of such a program as an eligible graduate
fellowship program.
``(2) Requests for deferment.--Requests for deferment of
repayment of loans under this subsection by students engaged in
graduate or postgraduate fellowship-supported study (such as
pursuant to a Fulbright grant) outside the United States shall
be approved until completion of the period of the fellowship,
in the same manner as required under section 428(b)(4).
``(i) Rehabilitation Training Program Deferment.--A borrower of a
loan under this part is eligible for a deferment under subsection
(b)(1)(B)(ii) during any period for which an authorized official of the
borrower's rehabilitation training program certifies that the borrower
is pursuing an eligible rehabilitation training program for individuals
with disabilities.
``(j) Administrative Deferments.--The Secretary may grant a
deferment to a borrower without requiring a request and documentation
from the borrower under subsection (d) for--
``(1) a period during which the borrower was delinquent at
the time a deferment is granted, including a period for which
scheduled payments of principal and interest were overdue at
the time such deferment is granted;
``(2) a period during which the borrower was granted a
deferment under this subsection but for which the Secretary
determines the borrower should not have qualified;
``(3) a period necessary for the Secretary to determine the
borrower's eligibility for the cancellation of the obligation
of the borrower to repay the loan under section 437;
``(4) a period during which the Secretary has authorized
deferment due to a national military mobilization or other
local or national emergency; or
``(5) a period not to exceed 60 days, during which interest
shall accrue but not be capitalized, if the Secretary
reasonably determines that a suspension of collection activity
is warranted to enable the Secretary to process supporting
documentation relating to a borrower's request--
``(A) for a deferment under this subsection;
``(B) for a change in repayment plan under section
455(d)(6); or
``(C) to consolidate loans under this part.
``(k) Deferments for Excepted PLUS Loans or Excepted Consolidation
Loans.--
``(1) In general.--A qualified borrower shall be eligible
for deferments under paragraphs (3) through (5).
``(2) Qualified borrower defined.--In this subsection, the
term `qualified borrower' means a borrower of an excepted PLUS
Loan or an excepted consolidation loan.
``(3) Economic hardship deferment.--
``(A) In general.--A qualified borrower shall be
eligible for a deferment during periods, not to exceed
3 years in total, during which the qualified borrower
experiences an economic hardship described in
subparagraph (B).
``(B) Economic hardship.--An economic hardship
described in this clause is a period during which the
qualified borrower--
``(i) is receiving payment under a means-
tested benefit program;
``(ii) is employed full-time and the
monthly gross income of the qualified borrower
does not exceed the greater of--
``(I) the minimum wage rate
described in section 6 of the Fair
Labor Standards Act of 1938 (29 U.S.C.
206); or
``(II) an amount equal to 150
percent of the poverty line; or
``(iii) demonstrates that the sum of the
qualified borrower's monthly payments on the
qualified borrower's excepted PLUS Loan or an
excepted consolidation loan is not less than 20
percent of the qualified borrower's monthly
gross income.
``(C) Eligibility.--To be eligible to receive a
deferment under this subparagraph, a qualified borrower
shall submit to the Secretary--
``(i) for the first period of deferment
under this subparagraph, evidence showing the
monthly gross income of the qualified borrower;
and
``(ii) for a subsequent period of deferment
that begins less than one year after the end of
a period of deferment granted under this
subparagraph--
``(I) evidence showing the monthly
gross income of the qualified borrower;
or
``(II) the qualified borrower's
most recently filed Federal income tax
return, if such a return was filed in
either of the two tax years preceding
the year in which the qualified
borrower requests the subsequent period
of deferment.
``(4) Unemployment deferment.--
``(A) In general.--A qualified borrower shall be
eligible for a deferment for periods during which the
qualified borrower is seeking, and is unable to find,
full-time employment.
``(B) Eligibility.--To be eligible to receive an
deferment under this subparagraph, a qualified borrower
shall submit to the Secretary--
``(i) evidence of the qualified borrower's
eligibility for unemployment benefits; or
``(ii) for requests submitted after the
initial request, written confirmation, or an
equivalent as approved by the Secretary, that
the qualified borrower has made at least six
diligent attempts during the preceding six-
month period to secure full-time employment.
``(C) Terms of deferment.--The following terms
shall apply to a deferment under this subparagraph:
``(i) Initial period.--The first deferment
granted to a qualified borrower under this
subparagraph may be for a period of
unemployment beginning not more than 6 months
before the date on which the Secretary receives
the qualified borrower's request for deferment
and may be granted for a period of up to 6
months after that date.
``(ii) Renewals.--Deferments under this
subparagraph shall be renewable at 6-month
intervals beginning after the expiration of the
first period of deferment under clause (i). To
be eligible to renew a deferment under this
subparagraph, a qualified borrower shall submit
to the Secretary the information described in
subparagraph (B)(i).
``(iii) Aggregate limit.--The period of all
deferments granted to a borrower under this
subparagraph may not exceed 3 years in
aggregate.
``(5) Health deferment.--
``(A) In general.--A qualified borrower shall be
eligible for a deferment during periods in which the
qualified borrower is unable to make scheduled loan
payments due to high medical expenses, as determined by
the Secretary.
``(B) Eligibility.--To be eligible to receive a
deferment under this subparagraph, a qualified borrower
shall--
``(i) submit to the Secretary documentation
demonstrating that making scheduled loan
payments would be an extreme economic hardship
to the borrower due to high medical expenses,
as determined by the Secretary; and
``(ii) resubmit such documentation to the
Secretary not less frequently than once every 3
months.
``(l) Prohibitions.--
``(1) Prohibition on fees.--No administrative fee or other
fee may be charged to the borrower in connection with the
granting of a deferment under this section.
``(2) Prohibition on adverse credit reporting.--No adverse
information relating to a borrower may be reported to a
consumer reporting agency solely because of the granting of a
deferment under this section.
``(3) Limitation on authority.--The Secretary shall not,
through regulation or otherwise, authorize additional deferment
options or periods of deferment other than the deferment
options and periods of deferment authorized under this section.
``(m) Definitions.--In this section:
``(1) Eligible graduate fellowship program.--The term
`eligible graduate fellowship program', when used with respect
to a course of study pursued by the borrower of a loan under
this part, means a fellowship program that--
``(A) provides sufficient financial support to
graduate fellows to allow for full-time study for at
least six months;
``(B) requires a written statement from each
applicant explaining the applicant's objectives before
the award of that financial support;
``(C) requires a graduate fellow to submit periodic
reports, projects, or evidence of the fellow's
progress; and
``(D) in the case of a course of study at an
institution of higher education outside the United
States described in section 102, accepts the course of
study for completion of the fellowship program.
``(2) Eligible rehabilitation training program for
individuals with disabilities.--The term `eligible
rehabilitation training program for individuals with
disabilities', when used with respect a course of study pursued
by the borrower of a loan under this part, means a program
that--
``(A) is necessary to assist an individual with a
disability in preparing for, securing, retaining, or
regaining employment;
``(B) is licensed, approved, certified, or
otherwise recognized as providing rehabilitation
training to disabled individuals by--
``(i) a State agency with responsibility
for vocational rehabilitation programs, drug
abuse treatment programs, mental health
services programs, or alcohol abuse treatment
programs; or
``(ii) the Secretary of Veterans Affairs;
and
``(C) provides or will provide the borrower with
rehabilitation services under a written plan that--
``(i) is individualized to meet the
borrower's needs;
``(ii) specifies the date on which the
services to the borrower are expected to end;
and
``(iii) requires a commitment of time and
effort from the borrower that prevents the
borrower from being employed at least 30 hours
per week, either because of the number of hours
that must be devoted to rehabilitation or
because of the nature of the rehabilitation.
``(3) Excepted plus loan; excepted consolidation loan.--The
terms `excepted PLUS loan' and `excepted consolidation loan'
have the meanings given such terms in section 494A.
``(4) Family size.--The term `family size' means the number
that is determined by counting--
``(A) the borrower;
``(B) the borrower's spouse;
``(C) the borrower's children, including unborn
children who are expected to be born during the period
covered by the deferment, if the children receive more
than half their support from the borrower; and
``(D) another individual if, at the time the
borrower requests a deferment under this section, the
individual--
``(i) lives with the borrower;
``(ii) receives more than half of the
individual's support (which may include money,
gifts, loans, housing, food, clothes, car,
medical and dental care, and payment of college
costs) from the borrower; and
``(iii) is expected to receive such support
from the borrower during the relevant period of
deferment.
``(5) Full-time.--The term `full-time', when used with
respect to employment, means employment for not less than 30
hours per week that is expected to continue for not less than
three months.
``(6) Means-tested benefit program.--The term `means-tested
benefit program' means--
``(A) a State public assistance program under which
eligibility for the program's benefits, or the amount
of such benefits, are determined on the basis of income
or resources of the individual or family seeking the
benefit; or
``(B) a mandatory spending program of the Federal
Government, other than a program under this title,
under which eligibility for the program's benefits, or
the amount of such benefits, are determined on the
basis of income or resources of the individual or
family seeking the benefit, and may include such
programs as--
``(i) the supplemental security income
program under title XVI of the Social Security
Act (42 U.S.C. 1381 et seq.);
``(ii) the supplemental nutrition
assistance program under the Food and Nutrition
Act of 2008 (7 U.S.C. 2011 et seq.);
``(iii) the program of block grants for
States for temporary assistance for needy
families established under part A of title IV
of the Social Security Act (42 U.S.C. 601 et
seq.);
``(iv) the special supplemental nutrition
program for women, infants, and children
established by section 17 of the Child
Nutrition Act of 1966 (42 U.S.C. 1786); and
``(v) other programs identified by the
Secretary.
``(7) Monthly gross income.--The term `monthly gross
income', when used with respect to a borrower, means--
``(A) the gross amount of income received by the
borrower from employment and other sources for the most
recent month; or
``(B) one-twelfth of the borrower's adjusted gross
income, as recorded on the borrower's most recently
filed Federal income tax return.
``(8) Rule of construction.--Nothing in this section shall
be construed to impact a borrower's eligibility to receive the
benefit of section 455(o).''.
(b) Conforming Amendment.--Section 493D(a) (20 U.S.C. 1098f(a)) is
amended by inserting ``, or section 460A'' after ``464(c)(2)(A)(iii)''.
SEC. 7. LOAN REHABILITATION.
(a) In General.--Section 428F(a)(5) (20 U.S.C. 1078-6) is amended
by striking ``one time'' and inserting ``two times''.
(b) Application of Amendment.--The amendment made by this section
shall apply to any borrower of a loan made, insured, or guaranteed
under title IV of the Higher Education Act of 1965 before, on, or after
the date of enactment of this Act.
SEC. 8. LIMITATION ON AUTHORITY OF SECRETARY TO PROPOSE OR ISSUE
REGULATIONS AND EXECUTIVE ACTIONS.
(a) In General.--Part G of title IV (20 U.S.C. 1088 et seq.) is
amended by inserting after section 492 the following:
``SEC. 492A. LIMITATION ON AUTHORITY OF THE SECRETARY TO PROPOSE OR
ISSUE REGULATIONS AND EXECUTIVE ACTIONS.
``(a) Draft Regulations.--Beginning after the date of enactment of
this section, a draft regulation implementing this title (as described
in section 492(b)(1)) that is determined by the Secretary to be
economically significant shall be subject to the following requirements
(regardless of whether negotiated rulemaking occurs):
``(1) The Secretary shall determine whether the draft
regulation, if implemented, would result in an increase in a
subsidy cost.
``(2) If the Secretary determines under paragraph (1) that
the draft regulation would result in an increase in a subsidy
cost, then the Secretary may take no further action with
respect to such regulation.
``(b) Proposed or Final Regulations and Executive Actions.--
Beginning after the date of enactment of this section, the Secretary
may not issue a proposed rule, final regulation, or executive action
implementing this title if the Secretary determines that the rule,
regulation, or executive action--
``(1) is economically significant; and
``(2) would result in an increase in a subsidy cost.
``(c) Relationship to Other Requirements.--The analyses required
under subsections (a) and (b) shall be in addition to any other cost
analysis required under law for a regulation implementing this title,
including any cost analysis that may be required pursuant to Executive
Order 12866 (58 Fed. Reg. 51735; relating to regulatory planning and
review), Executive Order 13563 (76 Fed. Reg. 3821; relating to
improving regulation and regulatory review), or any related or
successor orders.
``(d) Definition.--In this section, the term `economically
significant', when used with respect to a draft, proposed, or final
regulation or executive action, means that the regulation or executive
action is likely, as determined by the Secretary--
``(1) to have an annual effect on the economy of
$100,000,000 or more; or
``(2) adversely to affect in a material way the economy, a
sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, or
tribal governments or communities.''.
(b) Prohibition on Certain Final Rule.--Except as expressly
authorized by an Act of Congress, the Secretary may not implement,
administer, or enforce a final rule that is substantially similar to
the proposed rule on ``Improving Income-Driven Repayment for the
William D. Ford Federal Direct Loan Program'' published by the
Department of Education in the Federal Register on January 11, 2023 (88
Fed. Reg. 1894 et seq.).
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