HIGHER ED Act

I 116TH CONGRESS 1ST SESSION H. R. 3102 To amend the Higher Education Act of 1965 to improve loans, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JUNE 5, 2019 Mr. DEFAZIO introduced the following bill; which was referred to the Com- mittee on Education and Labor, and in addition to the Committees on the Judiciary, and Ways and Means, for a period to be subsequently de- termined by the Speaker, 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 1965 to improve loans, 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; TABLE OF CONTENTS. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Helping Individuals Get a Higher Education while Re- 5 ducing Education Debt Act’’ or the ‘‘HIGHER ED Act’’. 6 (b) TABLE OF CONTENTS.—The table of contents of 7 this Act is as follows: 8 VerDate Sep 11 2014 21:08 Jun 17, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3102.IH H3102 pamtmann on DSKBFK8HB2PROD with BILLS 2 •HR 3102 IH Sec. 1. Short title; table of contents. TITLE I—REINSTATEMENT OF AUTHORITY TO MAKE FEDERAL DIRECT STAFFORD LOANS TO GRADUATE AND PROFESSIONAL STUDENTS; DISCHARGING STUDENT LOANS IN BANKRUPTCY Sec. 101. Reinstatement of authority to make Federal Direct Stafford Loans to graduate and professional students. Sec. 102. Discharge student loans in bankruptcy. TITLE II—REFINANCING PROGRAMS Sec. 201. Program authority. Sec. 202. Refinancing program. Sec. 203. Income-based repayment. TITLE III—LOAN FORGIVENESS Sec. 301. Loan forgiveness for adjunct faculty. Sec. 302. Amendments to the public service loan forgiveness program. Sec. 303. Transition to improved public service loan forgiveness program. TITLE IV—INCOME-DRIVEN REPAYMENT PLANS Sec. 401. Income-based repayment plan. Sec. 402. Termination of certain repayment plan options. Sec. 403. Notification and automatic enrollment procedures. Sec. 404. Automatic recertification of income. Sec. 405. Study and procedures on determining family size. Sec. 406. Disclosure of tax return information to carry out certain higher edu- cation loan programs. VerDate Sep 11 2014 21:08 Jun 17, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6211 E:\BILLS\H3102.IH H3102 pamtmann on DSKBFK8HB2PROD with BILLS 3 •HR 3102 IH TITLE I—REINSTATEMENT OF 1 AUTHORITY TO MAKE FED- 2 ERAL DIRECT STAFFORD 3 LOANS TO GRADUATE AND 4 PROFESSIONAL STUDENTS; 5 DISCHARGING STUDENT 6 LOANS IN BANKRUPTCY 7 SEC. 101. REINSTATEMENT OF AUTHORITY TO MAKE FED- 8 ERAL DIRECT STAFFORD LOANS TO GRAD- 9 UATE AND PROFESSIONAL STUDENTS. 10 (a) AMENDMENTS.—Section 455(a)(3) of the Higher 11 Education Act of 1965 (20 U.S.C. 1087e(a)(3)) is amend- 12 ed— 13 (1) in the paragraph heading, by inserting 14 ‘‘TEMPORARY’’ before ‘‘TERMINATION’’; and 15 (2) in subparagraph (A), in the matter pre- 16 ceding clause (i), by inserting ‘‘, and ending on or 17 before June 30, 2019’’ after ‘‘2012’’. 18 (b) INAPPLICABILITY OF RULEMAKING REQUIRE- 19 MENTS.—Sections 482(c) and 492 of the Higher Edu- 20 cation Act of 1965 (20 U.S.C. 1089(c); 1098a) shall not 21 apply to the regulations under this section. 22 SEC. 102. DISCHARGE STUDENT LOANS IN BANKRUPTCY. 23 (a) EXCEPTION TO DISCHARGE.—Section 523(a) of 24 title 11, United States Code, is amended— 25 VerDate Sep 11 2014 21:08 Jun 17, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3102.IH H3102 pamtmann on DSKBFK8HB2PROD with BILLS 4 •HR 3102 IH (1) by striking paragraph (8); and 1 (2) by redesignating paragraphs (9) through 2 (14B) as paragraphs (8) through (14A), respec- 3 tively. 4 (b) CONFORMING AMENDMENTS.—Title 11, United 5 States Code, is amended— 6 (1) in section 704(c)(1)(C)(iv)(I) by striking 7 ‘‘(14A)’’ and inserting ‘‘(14)’’; 8 (2) in section 1106(c)(1)(C)(iv)(I) by striking 9 ‘‘(14A)’’ and inserting ‘‘(14)’’; 10 (3) in section 1202(c)(1)(C)(iv)(I) by striking 11 ‘‘(14A)’’ and inserting ‘‘(14)’’; and 12 (4) in section 1328(a)(2) by striking ‘‘(8), or 13 (9)’’ and inserting ‘‘or (8)’’. 14 (c) EFFECTIVE DATE; APPLICATION OF AMEND- 15 MENTS.— 16 (1) EFFECTIVE DATE.—Except as provided in 17 subsection (b), this section and the amendments 18 made by this section shall take effect on the date of 19 the enactment of this Act. 20 (2) APPLICATION OF AMENDMENTS.—The 21 amendments made by this section shall apply only 22 with respect to cases commenced under title 11 of 23 the United States Code on or after the date of the 24 enactment of this Act. 25 VerDate Sep 11 2014 21:08 Jun 17, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3102.IH H3102 pamtmann on DSKBFK8HB2PROD with BILLS 5 •HR 3102 IH TITLE II—REFINANCING 1 PROGRAMS 2 SEC. 201. PROGRAM AUTHORITY. 3 Section 451(a) of the Higher Education Act of 1965 4 (20 U.S.C. 1087a(a)) is amended— 5 (1) by striking ‘‘and (2)’’ and inserting ‘‘(2)’’; 6 and 7 (2) by inserting ‘‘; and (3) to make loans under 8 section 460A and section 460B’’ after ‘‘section 9 459A’’. 10 SEC. 202. REFINANCING PROGRAM. 11 Part D of title IV of the Higher Education Act of 12 1965 (20 U.S.C. 1087a et seq.) is amended by adding at 13 the end the following: 14 ‘‘SEC. 460A. REFINANCING FFEL AND FEDERAL DIRECT 15 LOANS. 16 ‘‘(a) IN GENERAL.—Beginning not later than 180 17 days after the date of enactment of the Helping Individ- 18 uals Get a Higher Education while Reducing Education 19 Debt Act, the Secretary shall establish a program under 20 which the Secretary, upon the receipt of an application 21 from a qualified borrower, makes a loan under this part, 22 in accordance with the provisions of this section, in order 23 to permit the borrower to obtain the interest rate provided 24 under subsection (c). 25 VerDate Sep 11 2014 21:08 Jun 17, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3102.IH H3102 pamtmann on DSKBFK8HB2PROD with BILLS 6 •HR 3102 IH ‘‘(b) REFINANCING DIRECT LOANS.— 1 ‘‘(1) FEDERAL DIRECT LOANS.—Upon applica- 2 tion of a qualified borrower, the Secretary shall 3 repay a Federal Direct Stafford Loan, a Federal Di- 4 rect Unsubsidized Stafford Loan, a Federal Direct 5 PLUS Loan, or a Federal Direct Consolidation 6 Loan of the qualified borrower, for which the first 7 disbursement was made, or the application for the 8 consolidation loan was received, before July 1, 2019, 9 with the proceeds of a refinanced Federal Direct 10 Stafford Loan, a Federal Direct Unsubsidized Staf- 11 ford Loan, a Federal Direct PLUS Loan, or a Fed- 12 eral Direct Consolidation Loan, respectively, issued 13 to the borrower in an amount equal to the sum of 14 the unpaid principal, accrued unpaid interest, and 15 late charges of the original loan. 16 ‘‘(2) REFINANCING FFEL PROGRAM LOANS AS 17 REFINANCED FEDERAL DIRECT LOANS.—Upon ap- 18 plication of a qualified borrower for any loan that 19 was made, insured, or guaranteed under part B and 20 for which the first disbursement was made, or the 21 application for the consolidation loan was received, 22 before July 1, 2010, the Secretary shall make a loan 23 under this part, in an amount equal to the sum of 24 the unpaid principal, accrued unpaid interest, and 25 VerDate Sep 11 2014 21:08 Jun 17, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3102.IH H3102 pamtmann on DSKBFK8HB2PROD with BILLS 7 •HR 3102 IH late charges of the original loan to the borrower in 1 accordance with the following: 2 ‘‘(A) The Secretary shall pay the proceeds 3 of such loan to the eligible lender of the loan 4 made, insured, or guaranteed under part B, in 5 order to discharge the borrower from any re- 6 maining obligation to the lender with respect to 7 the original loan. 8 ‘‘(B) A loan made under this section that 9 was originally— 10 ‘‘(i) a loan originally made, insured, 11 or guaranteed under section 428 shall be a 12 Federal Direct Stafford Loan; 13 ‘‘(ii) a loan originally made, insured, 14 or guaranteed under section 428B shall be 15 a Federal Direct PLUS Loan; 16 ‘‘(iii) a loan originally made, insured, 17 or guaranteed under section 428H shall be 18 a Federal Direct Unsubsidized Stafford 19 Loan; and 20 ‘‘(iv) a loan originally made, insured, 21 or guaranteed under section 428C shall be 22 a Federal Direct Consolidation Loan. 23 VerDate Sep 11 2014 21:08 Jun 17, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3102.IH H3102 pamtmann on DSKBFK8HB2PROD with BILLS 8 •HR 3102 IH ‘‘(C) The interest rate for each loan made 1 by the Secretary under this paragraph shall be 2 the rate provided under subsection (c). 3 ‘‘(c) INTEREST RATES.— 4 ‘‘(1) IN GENERAL.—The interest rate for the 5 refinanced Federal Direct Stafford Loans, Federal 6 Direct Unsubsidized Stafford Loans, Federal Direct 7 PLUS Loans, and Federal Direct Consolidation 8 Loans, shall be a rate equal to— 9 ‘‘(A) in any case where the original loan 10 was a loan under section 428 or 428H, a Fed- 11 eral Direct Stafford loan, or a Federal Direct 12 Unsubsidized Stafford Loan, that was issued to 13 an undergraduate student, a rate equal to the 14 rate for Federal Direct Stafford Loans and 15 Federal Direct Unsubsidized Stafford Loans 16 issued to undergraduate students for the 12- 17 month period beginning on July 1, 2016, and 18 ending on June 30, 2017; 19 ‘‘(B) in any case where the original loan 20 was a loan under section 428 or 428H, a Fed- 21 eral Direct Stafford Loan, or a Federal Direct 22 Unsubsidized Stafford Loan, that was issued to 23 a graduate or professional student, a rate equal 24 to the rate for Federal Direct Unsubsidized 25 VerDate Sep 11 2014 21:08 Jun 17, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3102.IH H3102 pamtmann on DSKBFK8HB2PROD with BILLS 9 •HR 3102 IH Stafford Loans issued to graduate or profes- 1 sional students for the 12-month period begin- 2 ning on July 1, 2016, and ending on June 30, 3 2017; 4 ‘‘(C) in any case where the original loan 5 was a loan under section 428B or a Federal Di- 6 rect PLUS Loan, a rate equal to the rate for 7 Federal Direct PLUS Loans for the 12-month 8 period beginning on July 1, 2016, and ending 9 on June 30, 2017; and 10 ‘‘(D) in any case where the original loan 11 was a loan under section 428C or a Federal Di- 12 rect Consolidation Loan, a rate calculated in ac- 13 cordance with paragraph (2). 14 ‘‘(2) INTEREST RATES FOR CONSOLIDATION 15 LOANS.— 16 ‘‘(A) METHOD OF CALCULATION.—In 17 order to determine the interest rate for any re- 18 financed Federal Direct Consolidation Loan 19 under paragraph (1)(D), the Secretary shall— 20 ‘‘(i) determine each of the component 21 loans that were originally consolidated in 22 the loan under section 428C or the Federal 23 Direct Consolidation Loan, and calculate 24 the proportion of the unpaid principal bal- 25 VerDate Sep 11 2014 21:08 Jun 17, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3102.IH H3102 pamtmann on DSKBFK8HB2PROD with BILLS 10 •HR 3102 IH ance of the loan under section 428C or the 1 Federal Direct Consolidation Loan that 2 each component loan represents; 3 ‘‘(ii) use the proportions determined 4 in accordance with clause (i) and the inter- 5 est rate applicable for each component 6 loan, as determined under subparagraph 7 (B), to calculate the weighted average of 8 the interest rates on the loans consolidated 9 into the loan under section 428C or the 10 Federal Direct Consolidation Loan; and 11 ‘‘(iii) apply the weighted average cal- 12 culated under clause (ii) as the interest 13 rate for the refinanced Federal Direct Con- 14 solidation Loan. 15 ‘‘(B) INTEREST RATES FOR COMPONENT 16 LOANS.—The interest rates for the component 17 loans of a loan made under section 428C or a 18 Federal Direct Consolidation Loan shall be the 19 following: 20 ‘‘(i) The interest rate for any loan 21 under section 428 or 428H, Federal Direct 22 Stafford Loan, or Federal Direct Unsub- 23 sidized Stafford Loan issued to an under- 24 VerDate Sep 11 2014 21:08 Jun 17, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3102.IH H3102 pamtmann on DSKBFK8HB2PROD with BILLS 11 •HR 3102 IH graduate student shall be a rate equal to 1 the lesser of— 2 ‘‘(I) the rate for Federal Direct 3 Stafford Loans and Federal Direct 4 Unsubsidized Stafford Loans issued 5 to undergraduate students for the 12- 6 month period beginning on July 1, 7 2016, and ending on June 30, 2017; 8 or 9 ‘‘(II) the original interest rate of 10 the component loan. 11 ‘‘(ii) The interest rate for any loan 12 under section 428 or 428H, Federal Direct 13 Stafford Loan, or Federal Direct Unsub- 14 sidized Stafford Loan issued to a graduate 15 or professional student shall be a rate 16 equal to the lesser of— 17 ‘‘(I) the rate for Federal Direct 18 Unsubsidized Stafford Loans issued 19 to graduate or professional students 20 for the 12-month period beginning on 21 July 1, 2016, and ending on June 30, 22 2017; or 23 ‘‘(II) the original interest rate of 24 the component loan. 25 VerDate Sep 11 2014 21:08 Jun 17, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H3102.IH H3102 pamtmann on DSKBFK8HB2PROD with BILLS 12 •HR 3102 IH ‘‘(iii) The interest rate for any loan 1 under section 428B or Federal Direct 2 PLUS Loan shall be a rate equal to the 3 lesser of— 4 ‘‘(I) the rate for Federal Direct 5 PLUS Loans for the 12-month period 6 beginning on July 1, 2016, and end- 7 ing on June 30, 2017; or 8 ‘‘(II) the original interest rate of 9 the component loan. 10 ‘‘(iv) The interest rate for any compo- 11 nent loan that is a loan under section 12 428C or a Federal Direct Consolidation 13 Loan shall be the weighted average of the 14 interest rates that would apply under this 15 subparagraph for each loan comprising the 16 component consolidation loan. 17 ‘‘(v) The interest rate for any eligible 18 loan that is a component of a loan made 19 under section 428C or a Federal Direct 20 Consolidation Loan and is not described in 21 clauses (i) through (iv) shall be the inter- 22 est rate on the original component loan. 23 ‘‘(3) FIXED RATE.—The applicable rate of in- 24 terest determined under paragraph (1) for a refi- 25 VerDate Sep 11 2014 21:08 Jun 17, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H3102.IH H3102 pamtmann on DSKBFK8HB2PROD with BILLS 13 •HR 3102 IH nanced loan under this section shall be fixed for the 1 period of the loan. 2 ‘‘(d) TERMS AND CONDITIONS OF LOANS.— 3 ‘‘(1) IN GENERAL.—A loan that is refinanced 4 under this section shall have the same terms and 5 conditions as the original loan, except as otherwise 6 provided in this section. 7 ‘‘(2) NO AUTOMA [Text truncated for display. 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