Income-Driven Student Loan Forgiveness Act

I 117TH CONGRESS 1ST SESSION H. R. 2034 To direct the Secretary of Education to forgive the Federal student loans of borrowers meeting certain income requirements, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MARCH 18, 2021 Mr. LAWSON of Florida introduced the following bill; which was referred to the Committee on Education and Labor, and in addition to the Com- mittee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To direct the Secretary of Education to forgive the Federal student loans of borrowers meeting certain income re- quirements, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Income-Driven Student 4 Loan Forgiveness Act’’. 5 VerDate Sep 11 2014 06:19 May 18, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2034.IH H2034 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 2034 IH SEC. 2. FEDERAL STUDENT LOAN FORGIVENESS FOR BOR- 1 ROWERS MEETING CERTAIN INCOME RE- 2 QUIREMENTS. 3 (a) FORGIVENESS REQUIRED.—Notwithstanding any 4 other provision of law, the Secretary of Education shall 5 forgive the outstanding balance of principal, interest, and 6 fees due on the eligible Federal student loans of borrowers 7 who meet the requirements of subsection (b). 8 (b) ELIGIBILITY.— 9 (1) IN GENERAL.—A borrower is eligible to re- 10 ceive forgiveness under this section if, at the time of 11 application for forgiveness, such borrower— 12 (A) has an eligible Federal student loan in 13 repayment; 14 (B) filed a Federal income tax return for 15 the most recently ended tax year; 16 (C)(i) is employed; or 17 (ii) if not employed, was employed during 18 the period of three years immediately preceding 19 March 1, 2020; and 20 (D) meets the income requirements speci- 21 fied in paragraph (2). 22 (2) INCOME REQUIREMENTS.—The income re- 23 quirements specified in this subsection are the fol- 24 lowing: 25 VerDate Sep 11 2014 06:19 May 18, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2034.IH H2034 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 2034 IH (A) In the case of borrower who is not 1 married, the adjusted gross income of the bor- 2 rower does not exceed $100,000. 3 (B) In the case of a borrower who is mar- 4 ried and files a Federal income tax return joint- 5 ly with the borrower’s spouse, the adjusted 6 gross income of the borrower and the bor- 7 rower’s spouse does not exceed $200,000. 8 (C) In the case of a borrower who is mar- 9 ried and files a Federal income tax return sepa- 10 rately from the borrower’s spouse, the adjusted 11 gross income of the borrower does not exceed 12 $100,000. The income of a borrower’s spouse 13 shall not be considered in making the deter- 14 mination under this subparagraph. 15 (3) RETURN INFORMATION.—The determina- 16 tions under paragraph (2) shall be based on the 17 Federal income tax return filed by the borrower for 18 the most recent tax year ending before the date of 19 the borrower’s application for forgiveness under this 20 section. 21 (c) METHOD OF LOAN FORGIVENESS.—As soon as 22 practicable after the Secretary of Education confirms that 23 an applicant meets the requirements of subsection (b), the 24 Secretary of Education shall— 25 VerDate Sep 11 2014 06:19 May 18, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2034.IH H2034 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 2034 IH (1) for each eligible Federal student loan of the 1 borrower that is held by the Department of Edu- 2 cation, cancel the outstanding balance of principal, 3 interest, and fees due on the loan; and 4 (2) for each eligible Federal student loan of the 5 borrower that is not held by the Department of Edu- 6 cation— 7 (A) through the holder of a loan, assume 8 the obligation to repay the outstanding balance 9 of principal, interest, and fees due on the loan; 10 and 11 (B) upon assuming such obligation, cancel 12 the outstanding balance of such principal, inter- 13 est, and fees. 14 (d) APPLICATION.—To be eligible to receive forgive- 15 ness under this section a borrower shall submit to the Sec- 16 retary of Education an application at such time, in such 17 manner, and containing such information as the Secretary 18 may require. 19 (e) REPAYMENT REFUNDS PROHIBITED.—Nothing 20 in this section shall be construed to authorize the refund 21 of any payments made by a borrower on an eligible Fed- 22 eral student before the date on which the borrower’s loans 23 are forgiven in accordance with this section. 24 VerDate Sep 11 2014 06:19 May 18, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2034.IH H2034 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 2034 IH (f) EXCLUSION FROM TAXABLE INCOME.—The 1 amount of a borrower’s eligible Federal student loans for- 2 given under this section shall not be included in the gross 3 income of the borrower for purposes of the Internal Rev- 4 enue Code of 1986. 5 (g) DETERMINATION OF INELIGIBILITY.—If the Sec- 6 retary of Education denies a borrower’s application for 7 forgiveness under this section, the Secretary shall notify 8 the borrower that the borrower’s application was denied 9 and indicate the specific reasons for such denial. 10 SEC. 3. NOTICE TO THE PUBLIC. 11 Not later than 15 days after the date of enactment 12 of this Act, the Secretary of Education, in consultation 13 with institutions of higher education and lenders and hold- 14 ers of Federal student loans, shall take such actions as 15 may be necessary to ensure that borrowers who have out- 16 standing eligible Federal student loans are aware of the 17 loan forgiveness program authorized by this Act. Such in- 18 formation shall— 19 (1) be presented in a form that is widely avail- 20 able to the public, especially to borrowers with eligi- 21 ble Federal student loans; 22 (2) be easily understandable; and 23 (3) clearly notify borrowers that to be consid- 24 ered for loan forgiveness under this Act, borrowers 25 VerDate Sep 11 2014 06:19 May 18, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2034.IH H2034 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 2034 IH must submit an application to the Secretary of Edu- 1 cation. 2 SEC. 4. DEFINITIONS. 3 In this Act: 4 (1) ADJUSTED GROSS INCOME.—The term ‘‘ad- 5 justed gross income’’ has the meaning given that 6 term in section 62 of the Internal Revenue Code of 7 1986 (26 U.S.C. 62). 8 (2) ELIGIBLE FEDERAL STUDENT LOAN.—The 9 term ‘‘eligible Federal student loan’’ means a loan— 10 (A) received by a borrower before the date 11 of enactment of this Act; 12 (B) used to pay for— 13 (i) the undergraduate education of the 14 borrower; or 15 (ii) in the case of a loan made to a 16 parent on behalf a dependent student, the 17 undergraduate education of such depend- 18 ent student; and 19 (C) made, insured, or guaranteed under— 20 (i) part B, part D, or part E of title 21 IV of the Higher Education Act of 1965 22 (20 U.S.C. 1070 et seq.), including a con- 23 solidation loan (to the extent that such 24 VerDate Sep 11 2014 06:19 May 18, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2034.IH H2034 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 2034 IH consolidation loan was used to repay loans 1 for undergraduate education); or 2 (ii) part E of title VIII of the Public 3 Health Service Act. 4 (3) FEES.—The term ‘‘fees’’ means any 5 amounts owed by a borrower, other than principal 6 and interest, on an eligible Federal student loan, in- 7 cluding the amounts of any outstanding administra- 8 tive fees, late charges, and collection costs. 9 (4) INSTITUTION OF HIGHER EDUCATION.—The 10 term ‘‘institution of higher education’’ has the 11 meaning given that term in section 102 of the High- 12 er Education Act of 1965 (20 U.S.C. 1002). 13 (5) UNDERGRADUATE EDUCATION.—The term 14 ‘‘undergraduate education’’ means a postsecondary 15 program of study at an institution of higher edu- 16 cation that leads to an associate or baccalaureate de- 17 gree. 18 Æ VerDate Sep 11 2014 06:19 May 18, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\H2034.IH H2034 kjohnson on DSK79L0C42PROD with BILLS