Parent PLUS Loan Improvement Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 3353 To amend the Higher Education Act of 1965 to include Parent PLUS loans in income-contingent and income-based repayment plans, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JUNE 19, 2019 Ms. FUDGE introduced the following bill; which was referred to the Committee on Education and Labor A BILL To amend the Higher Education Act of 1965 to include Parent PLUS loans in income-contingent and income- based repayment plans, 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 ‘‘Parent PLUS Loan 4 Improvement Act of 2019’’. 5 SEC. 2. APPLICABLE RATE OF INTEREST FOR PLUS LOANS. 6 Section 455(b)(8) of the Higher Education Act of 7 1965 (20 U.S.C. 1087e(b)(8)) is amended— 8 VerDate Sep 11 2014 03:25 Jun 22, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3353.IH H3353 kjohnson on DSK79L0C42 with BILLS 2 •HR 3353 IH (1) in subparagraph (C), by inserting ‘‘and be- 1 fore July 1, 2019,’’ after ‘‘, 2013,’’; and 2 (2) by adding at the end the following: 3 ‘‘(G) REDUCED RATE FOR PARENT PLUS 4 LOANS.—Notwithstanding the preceding para- 5 graphs of this subsection, for Federal Direct 6 PLUS Loans made on behalf of a dependent 7 student for which the first disbursement is 8 made on or after July 1, 2019, the applicable 9 rate of interest shall be determined under sub- 10 paragraph (C) of this paragraph— 11 ‘‘(i) by substituting ‘3.6 percent’ for 12 ‘4.6 percent’; and 13 ‘‘(ii) by substituting ‘9.5 percent’ for 14 ‘10.5 percent’.’’. 15 SEC. 3. ELIMINATION OF ORIGINATION FEE FOR PARENT 16 PLUS LOANS. 17 Section 455(c) of the Higher Education Act of 1965 18 (20 U.S.C. 1087e(c)) is amended by adding at the end 19 the following new paragraph: 20 ‘‘(3) PLUS LOANS.—With respect to Federal 21 Direct PLUS loans made on behalf of a dependent 22 student for which the first disbursement of principal 23 is made on or after July 1, 2019, paragraph (1) 24 VerDate Sep 11 2014 03:25 Jun 22, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3353.IH H3353 kjohnson on DSK79L0C42 with BILLS 3 •HR 3353 IH shall be applied by substituting ‘0.0 percent’ for ‘4.0 1 percent’.’’. 2 SEC. 4. COUNSELING FOR PARENT PLUS BORROWERS. 3 Section 485 of the Higher Education Act of 1965 (20 4 U.S.C. 1092) is amended by adding at the end the fol- 5 lowing: 6 ‘‘(n) COUNSELING FOR PARENT PLUS BOR- 7 ROWERS.— 8 ‘‘(1) IN GENERAL.—The Secretary, prior to dis- 9 bursement of a Federal Direct PLUS loan made on 10 behalf of a dependent student, shall ensure that the 11 borrower receives comprehensive information on the 12 terms and conditions of the loan and the responsibil- 13 ities the borrower has with respect to such loan. 14 Such information— 15 ‘‘(A) shall be provided through the use of 16 interactive programs that use mechanisms to 17 check the borrower’s understanding of the 18 terms and conditions of the borrower’s loan, 19 using simple and understandable language and 20 clear formatting; and 21 ‘‘(B) shall be provided— 22 ‘‘(i) during a counseling session con- 23 ducted in person; or 24 ‘‘(ii) online. 25 VerDate Sep 11 2014 03:25 Jun 22, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3353.IH H3353 kjohnson on DSK79L0C42 with BILLS 4 •HR 3353 IH ‘‘(2) INFORMATION TO BE PROVIDED.—The in- 1 formation to be provided to the borrower under 2 paragraph (1) shall include the following: 3 ‘‘(A) Information on how interest accrues 4 and is capitalized during periods when the in- 5 terest is not paid by the borrower. 6 ‘‘(B) An explanation of when loan repay- 7 ment begins, of the options available for a bor- 8 rower who may need a deferment, and that in- 9 terest accrues during a deferment. 10 ‘‘(C) The repayment plans that are avail- 11 able to the borrower, including personalized in- 12 formation showing— 13 ‘‘(i) estimates of the borrower’s antici- 14 pated monthly payments under each repay- 15 ment plan that is available; and 16 ‘‘(ii) the difference in interest paid 17 and total payments under each repayment 18 plan. 19 ‘‘(D) The obligation of the borrower to 20 repay the full amount of the loan, regardless of 21 whether the student on whose behalf the loan 22 was made completes the program in which the 23 student is enrolled. 24 VerDate Sep 11 2014 03:25 Jun 22, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3353.IH H3353 kjohnson on DSK79L0C42 with BILLS 5 •HR 3353 IH ‘‘(E) The likely consequences of default on 1 the loan, including adverse credit reports, delin- 2 quent debt collection procedures under Federal 3 law, and litigation. 4 ‘‘(F) The name and contact information of 5 the individual the borrower may contact if the 6 borrower has any questions about the bor- 7 rower’s rights and responsibilities or the terms 8 and conditions of the loan.’’. 9 SEC. 5. INCLUSION OF PARENT PLUS LOANS IN INCOME- 10 CONTINGENT AND INCOME-BASED REPAY- 11 MENT PLANS. 12 (a) INCOME-CONTINGENT REPAYMENT PLAN.—Sec- 13 tion 455(d)(1)(D) of the Higher Education Act of 1965 14 (20 U.S.C. 1087e(d)(1)(D)) is amended by striking ‘‘, ex- 15 cept that the plan described in this subparagraph shall 16 not be available to the borrower of a Federal Direct PLUS 17 loan made on behalf of a dependent student;’’. 18 (b) INCOME-BASED REPAYMENT.— 19 (1) SECTION 493C.—Section 493C of the High- 20 er Education Act of 1965 (20 U.S.C. 1098e) is 21 amended— 22 (A) in subsection (a)— 23 (i) by striking ‘‘this section’’ and all 24 that follows through ‘‘hardship’’ and in- 25 VerDate Sep 11 2014 03:25 Jun 22, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3353.IH H3353 kjohnson on DSK79L0C42 with BILLS 6 •HR 3353 IH serting ‘‘In this section, the term ‘partial 1 financial hardship’ ’’; and 2 (ii) by striking, ‘‘(other than an ex- 3 cepted PLUS loan or excepted consolida- 4 tion loan)’’; 5 (B) in subsection (b)— 6 (i) in paragraph (1), by striking 7 ‘‘(other than an excepted PLUS loan or 8 excepted consolidation loan)’’; 9 (ii) in paragraph (6)(A), by striking 10 ‘‘(other than an excepted PLUS loan or 11 excepted consolidation loan)’’; and 12 (iii) in paragraph (7), by striking 13 ‘‘(other than a loan under section 428B or 14 a Federal Direct PLUS Loan)’’; and 15 (C) in subsection (c), by striking ‘‘(other 16 than an excepted PLUS loan or excepted con- 17 solidation loan),’’. 18 (2) SECTION 455(d)(1)(E).—Section 19 455(d)(1)(E) of such Act (20 U.S.C. 20 1087e(d)(1)(D)) is amended by striking ‘‘, except 21 that the plan described in this subparagraph shall 22 not be available to the borrower of a Federal Direct 23 PLUS Loan made on behalf of a dependent student 24 or a Federal Direct Consolidation Loan, if the pro- 25 VerDate Sep 11 2014 03:25 Jun 22, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3353.IH H3353 kjohnson on DSK79L0C42 with BILLS 7 •HR 3353 IH ceeds of such loan were used to discharge the liabil- 1 ity on such Federal Direct PLUS Loan or a loan 2 under section 428B made on behalf of a dependent 3 student’’. 4 (c) APPLICATION TO REGULATIONS.—The Secretary 5 shall ensure that any Federal Direct PLUS Loan and any 6 loan under section 428B of the Higher Education Act of 7 1965 (20 U.S.C. 1078–2) made on behalf of a dependent 8 student are eligible for any repayment plan available 9 under the Higher Education Act of 1965 (20 U.S.C. 1001 10 et seq.) or regulations authorized under such Act (20 11 U.S.C. 1001 et seq.). 12 Æ VerDate Sep 11 2014 03:25 Jun 22, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\H3353.IH H3353 kjohnson on DSK79L0C42 with BILLS