SIMPLE Act

I 116TH CONGRESS 1ST SESSION H. R. 3833 To amend the Higher Education Act of 1965 to provide for the automatic recertification of income for income-driven repayment plans, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JULY 18, 2019 Ms. BONAMICI (for herself, Mr. MITCHELL, Mr. MOULTON, and Mr. FITZPATRICK) introduced the following bill; which was referred to the Committee on Education and Labor, and in addition to the Committee 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 amend the Higher Education Act of 1965 to provide for the automatic recertification of income for income- driven 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 ‘‘Streamlining Income- 4 driven, Manageable Payments on Loans for Education 5 Act’’ or the ‘‘SIMPLE Act’’. 6 VerDate Sep 11 2014 04:29 Aug 01, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3833.IH H3833 kjohnson on DSK79L0C42 with BILLS 2 •HR 3833 IH SEC. 2. AUTOMATIC INCOME MONITORING PROCEDURES 1 AFTER A TOTAL AND PERMANENT DIS- 2 ABILITY DISCHARGE. 3 Section 437(a) of the Higher Education Act of 1965 4 (20 U.S.C. 1087(a)) is amended by adding at the end the 5 following: 6 ‘‘(3) AUTOMATIC INCOME MONITORING.— 7 ‘‘(A) IN GENERAL.—Not later than 2 years 8 after the date of enactment of the Streamlining 9 Income-driven, Manageable Payments on Loans 10 for Education Act, the Secretary shall, with re- 11 spect to each borrower and each income-moni- 12 toring period described in subparagraph (B)— 13 ‘‘(i) offer an opportunity for such bor- 14 rower to opt out of clause (ii) and prevent 15 the Secretary from obtaining information 16 under such clause; 17 ‘‘(ii) submit a written request to the 18 Secretary of the Treasury under section 19 6103(l)(13) of the Internal Revenue Code 20 of 1986 for disclosure of information relat- 21 ing to income, tax filing status, and num- 22 ber of dependents with respect to such bor- 23 rower (and such borrower’s spouse, if ap- 24 plicable) and such income-monitoring pe- 25 riod, for the purpose of determining the 26 VerDate Sep 11 2014 04:29 Aug 01, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3833.IH H3833 kjohnson on DSK79L0C42 with BILLS 3 •HR 3833 IH borrower’s continued eligibility for the loan 1 discharge described in subparagraph (B) 2 for such year; and 3 ‘‘(iii) provide the borrower with an op- 4 portunity to update the information ob- 5 tained under clause (ii) before the deter- 6 mination of the borrower’s continued eligi- 7 bility for such loan discharge for such 8 year. 9 ‘‘(B) APPLICABILITY.—Subparagraph (A) 10 shall apply— 11 ‘‘(i) to each borrower who is a bor- 12 rower of a covered loan (defined in section 13 455(d)(8)) that is discharged under this 14 subsection or section 464(c)(1)(F) due to 15 the permanent and total disability of the 16 borrower; and 17 ‘‘(ii) during the income-monitoring pe- 18 riod under this subsection, defined in this 19 paragraph as the period— 20 ‘‘(I) beginning on the date on 21 which such loan is so discharged; and 22 ‘‘(II) during which the Secretary 23 determines whether a reinstatement of 24 the obligation of, and resumption of 25 VerDate Sep 11 2014 04:29 Aug 01, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3833.IH H3833 kjohnson on DSK79L0C42 with BILLS 4 •HR 3833 IH collection on, such loan may be nec- 1 essary. 2 ‘‘(C) BORROWER WITH NO EARNED IN- 3 COME.—In the case of a borrower whose infor- 4 mation received under subparagraph (A) indi- 5 cates that the borrower has no earned income 6 for any year of such income-monitoring period, 7 such borrower shall be treated as not having 8 earned income in excess of the poverty line for 9 such year.’’. 10 SEC. 3. NOTIFICATION AND AUTOMATIC ENROLLMENT 11 PROCEDURES FOR BORROWERS WHO ARE 12 DELINQUENT ON LOANS AND FOR BOR- 13 ROWERS WHO REHABILITATED DEFAULTED 14 LOANS. 15 (a) AMENDMENTS.— 16 (1) NOTIFICATION AND AUTOMATIC ENROLL- 17 MENT PROCEDURES.—Section 455(d) of the Higher 18 Education Act of 1965 (20 U.S.C. 1087e(d)) is 19 amended by adding at the end the following: 20 ‘‘(6) NOTIFICATION AND AUTOMATIC ENROLL- 21 MENT PROCEDURES FOR BORROWERS WHO ARE DE- 22 LINQUENT ON LOANS.— 23 ‘‘(A) AUTHORITY TO OBTAIN INCOME IN- 24 FORMATION.—In the case of any borrower who 25 VerDate Sep 11 2014 04:29 Aug 01, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3833.IH H3833 kjohnson on DSK79L0C42 with BILLS 5 •HR 3833 IH is at least 60 days delinquent on a covered loan, 1 the Secretary shall submit a written request to 2 the Secretary of the Treasury under section 3 6103(l)(13) of the Internal Revenue Code of 4 1986 for disclosure of information relating to 5 income, tax filing status, and number of de- 6 pendents of such borrower (and such borrower’s 7 spouse, if applicable). 8 ‘‘(B) BORROWER NOTIFICATION.—With re- 9 spect to each borrower of a covered loan who is 10 at least 60 days delinquent on such loan and 11 who has not been subject to the procedures 12 under this paragraph for such loan in the pre- 13 ceding 120 days, the Secretary shall, as soon as 14 practicable after such 60-day delinquency, pro- 15 vide to the borrower the following: 16 ‘‘(i) Notification that the borrower is 17 at least 60 days delinquent on at least 1 18 covered loan, and a description of all delin- 19 quent covered loans, nondelinquent covered 20 loans, and noncovered loans of the bor- 21 rower. 22 ‘‘(ii) A brief description of the repay- 23 ment plans for which the borrower is eligi- 24 ble and the covered loans and noncovered 25 VerDate Sep 11 2014 04:29 Aug 01, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3833.IH H3833 kjohnson on DSK79L0C42 with BILLS 6 •HR 3833 IH loans of the borrower that may be eligible 1 for such plans, based on information avail- 2 able to the Secretary. 3 ‘‘(iii) Clear and simple instructions on 4 how to select the repayment plans. 5 ‘‘(iv) The amount of monthly pay- 6 ments for the covered and noncovered 7 loans under the repayment plans for which 8 the borrower is eligible, based on informa- 9 tion available to the Secretary, including, if 10 the income information of the borrower is 11 available to the Secretary under subpara- 12 graph (A)— 13 ‘‘(I) the amount of the monthly 14 payment under each income-driven re- 15 payment plan for which the borrower 16 is eligible for the borrower’s covered 17 and noncovered loans, based on such 18 income information; and 19 ‘‘(II) the income, tax filing sta- 20 tus, number of dependents, and tax 21 year information on which each 22 monthly payment is based. 23 VerDate Sep 11 2014 04:29 Aug 01, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3833.IH H3833 kjohnson on DSK79L0C42 with BILLS 7 •HR 3833 IH ‘‘(v) An explanation that in the case 1 of a borrower for whom adjusted gross in- 2 come is unavailable— 3 ‘‘(I) if the borrower selects to 4 repay the covered loans of such bor- 5 rower pursuant to an income-driven 6 repayment plan that defines discre- 7 tionary income in such a manner that 8 an individual not required under sec- 9 tion 6012(a)(1) of the Internal Rev- 10 enue Code of 1986 to file a return 11 with respect to income taxes imposed 12 by subtitle A of such Code may have 13 a calculated monthly payment greater 14 than $0, the borrower will be required 15 to provide the Secretary with other 16 documentation of income satisfactory 17 to the Secretary, which documentation 18 the Secretary may use to determine 19 an appropriate repayment schedule; 20 and 21 ‘‘(II) if the borrower selects to 22 repay such loans pursuant to an in- 23 come-driven repayment plan that is 24 not described in subclause (I), the 25 VerDate Sep 11 2014 04:29 Aug 01, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3833.IH H3833 kjohnson on DSK79L0C42 with BILLS 8 •HR 3833 IH borrower will not be required to pro- 1 vide the Secretary with such other 2 documentation of income, and the bor- 3 rower will have a calculated monthly 4 payment of $0. 5 ‘‘(vi) An explanation that the Sec- 6 retary shall take the actions under sub- 7 paragraph (C) with respect to such bor- 8 rower, if— 9 ‘‘(I) the borrower is 120 days de- 10 linquent on one or more covered loans 11 and has not selected a new repayment 12 plan for the covered loans of the bor- 13 rower; and 14 ‘‘(II) in the case of such a bor- 15 rower whose repayment plan for the 16 covered loans of the borrower is not 17 an income-driven repayment plan, the 18 monthly payments under such repay- 19 ment plan are higher than such 20 monthly payments would be under an 21 income-driven repayment plan for 22 such loans. 23 VerDate Sep 11 2014 04:29 Aug 01, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3833.IH H3833 kjohnson on DSK79L0C42 with BILLS 9 •HR 3833 IH ‘‘(vii) Instructions on updating the in- 1 formation of the borrower obtained under 2 subparagraph (A). 3 ‘‘(C) SECRETARY’S INITIAL SELECTION OF 4 PLAN.—With respect to each borrower de- 5 scribed in subparagraph (B) who has a repay- 6 ment plan for the covered loans of the borrower 7 that meets the requirements of clause (vi)(II) of 8 subparagraph (B) and has not selected a new 9 repayment plan for such loans in accordance 10 with the notice received under such subpara- 11 graph, and who is at least 120 days delinquent 12 on such a loan, the Secretary shall, as soon as 13 practicable— 14 ‘‘(i) in a case in which any of the bor- 15 rower’s covered loans are eligible for an in- 16 come-driven repayment plan— 17 ‘‘(I)(aa) provide the borrower 18 with the income-driven repayment 19 plan that requires the lowest monthly 20 payment amount for each covered loan 21 of the borrower, compared to any 22 other such plan for which the bor- 23 rower is eligible; or 24 VerDate Sep 11 2014 04:29 Aug 01, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3833.IH H3833 kjohnson on DSK79L0C42 with BILLS 10 •HR 3833 IH ‘‘(bb) if more than one income- 1 driven repayment plan would offer the 2 borrower the same lowest monthly 3 payment amount, provide the bor- 4 rower with the income-driven repay- 5 ment plan that has the most favorable 6 terms for the borrower; 7 ‘‘(II) if the plan selected under 8 subclause (I) is not the income-driven 9 repayment plan that would have the 10 lowest monthly payment amount if the 11 borrower were eligible for such plan 12 for the borrower’s covered loans and 13 noncovered loans, notify the borrower 14 of the actions, if any, the borrower 15 may take to become eligible for such 16 income-driven repayment plan; and 17 ‘‘(III) authorize the borrower to 18 change the Secretary’s selection of a 19 plan under this clause to any plan de- 20 scribed in paragraph (1) for which the 21 borrower is eligible; and 22 ‘‘(ii) in a case in which none of the 23 borrower’s covered loans are eligible for an 24 income-driven repayment plan, notify the 25 VerDate Sep 11 2014 04:29 Aug 01, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3833.IH H3833 kjohnson on DSK79L0C42 with BILLS 11 •HR 3833 IH borrower of the actions, if any, the bor- 1 rower may take for such loans to become 2 eligible for such a plan. 3 ‘‘(D) SECRETARY’S ADDITIONAL SELEC- 4 TION OF PLAN.— 5 ‘‘(i) IN GENERAL.—With respect to 6 each borrower of a covered loan who se- 7 lects a new repayment plan in accordance 8 with the notice received under subpara- 9 graph (B) and who continues to be delin- 10 quent on such loan for a period described 11 in clause (ii), the Secretary shall, as soon 12 as practicable after such period, carry out 13 the procedures described in clauses (i) and 14 (ii) of subparagraph (C) for the covered 15 loans of the borrower, if such procedures 16 would result in lower monthly repayment 17 amounts on such loan. 18 ‘‘(ii) DESCRIPTION OF PERIOD.—The 19 duration of the period described in clause 20 (i) shall be the amount of time that the 21 Secretary determines is sufficient to indi- 22 cate that the borrower may benefit from 23 repaying such loan under a new repayment 24 VerDate Sep 11 2014 04:29 Aug 01, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H3833.IH H3833 kjohnson on DSK79L0C42 with BILLS 12 •HR 3833 IH plan, but in no case shall such period be 1 less than 60 days. 2 ‘‘(E) OPT-OUT.—A borrower of a covered 3 loan shall have the right to opt out of the pro- 4 cedures under this paragraph. 5 ‘‘(F) PROCEDURES.—The Secretary shall 6 establish procedures as are necessary to effec- 7 tively implement this paragraph. 8 ‘‘(7) NOTIFICATION AND AUTOMATIC ENROLL- 9 MENT PROCEDURES FOR BORROWERS WHO ARE RE- 10 HABILITATING DEFAULTED LOANS.— 11 ‘‘(A) AUTHORITY TO OBTAIN INCOME IN- 12 FORMATION.—In the case of any borrower who 13 is rehabilitating a covered loan pursuant to sec- 14 tion 428F(a), the Secretary may submit a writ- 15 ten request to the Secretary of the Treasury 16 under section 6103(l)(13) of the Internal Rev- 17 enue Code of 1986 for disclosure of information 18 relating to income, tax filing status, and num- 19 ber of dependents of such borrower (and such 20 borrower’s spouse, if applicable). 21 ‘‘(B) BORROWER NOTIFICATION.—Not 22 later than 30 days after a borrower makes the 23 6th payment required for the loan rehabilitation 24 described in subparagraph (A), the Secretary 25 VerDate Sep 11 2014 04:29 Aug 01, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H3833.IH H3833 kjohnson on DSK79L0C42 with BILLS 13 •HR 3833 IH shall notify the borrower of the process under 1 subparagraph (C) with respect to such loan. 2 ‘‘(C) SECRETARY’S SELECTION OF PLAN.— 3 With respect to each borrower who has made 4 the 9th payment required for the loan rehabili- 5 tation described in subparagraph (A), the Sec- 6 retary shall, as soon as practicable after such 7 payment— 8 ‘‘(i) in a case in which any of the bor- 9 rower’s covered loans, without regard to 10 whether the loan has been so rehabilitated, 11 is eligible for an income-driven repayment 12 plan— 13 ‘‘(I)(aa) provide the borrower 14 with the income-driven repayment 15 plan that requires the lowest monthly 16 payment amount for each covered loan 17 of the borrower, compared to any 18 other such plan for which the bor- 19 rower is eligible; or 20 ‘‘(bb) if more than one income- 21 driven repayment plan would offer the 22 borrower the same lowest monthly 23 payment amount, provide the bor- 24 rower with the income-driven repay- 25 VerDate Sep 11 2 [Text truncated for display. 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