Federal

Modern GI Bill Act

Source: Congress.gov · 789 words in original text

What This Bill Does

This bill allows certain military veterans and service members to use their Post-9/11 educational benefits to pay back federal student loans instead of using those benefits for tuition or other school costs. The bill sets limits on how much money can be used this way each year and establishes rules for how the payments work.

Who It Affects

Individuals who are entitled to Post-9/11 educational assistance. Federal student loan lenders who receive payments on behalf of borrowers. The Secretary of Veterans Affairs (the official who runs veterans benefits programs).

Key Provisions

- Eligible individuals can apply their educational assistance benefits to repay federal student loan principal and interest, meaning the outstanding balance owed on loans made under the Higher Education Act of 1965 (Sec. 2, subsection (g)) - In fiscal year 2024, the maximum annual amount someone can use is $15,900, and the amount increases each year by the same percentage that Social Security benefits increase (Sec. 2, subsection (b)) - The Secretary makes monthly payments directly to the loan lender in amounts the individual chooses, but no single monthly payment can exceed one-twelfth of the yearly maximum, and total payments cannot exceed 36 months (Sec. 2, subsections (c) and (e)) - Individuals cannot transfer these educational assistance benefits to another person (Sec. 2, subsection (d))

What Changes

Veterans with Post-9/11 educational benefits will have a new option to use those benefits for federal student loan repayment instead of only using them for tuition and fees. The Secretary of Veterans Affairs will need to create regulations and make payment arrangements with loan lenders to carry out this new program.

Important Definitions

Federal student loan: Any loan made, insured (backed by a government guarantee), or guaranteed under title IV of the Higher Education Act of 1965. (Sec. 2, subsection (g))

Effective Date

The amendments apply to educational assistance paid for months beginning on or after the date this act becomes law. (Sec. 2, subsection (c))

I 118TH CONGRESS 1ST SESSION H. R. 393 To amend title 38, United States Code, to allow individuals who are entitled to Post-9/11 educational assistance to use such assistance to repay Fed- eral student loans. IN THE HOUSE OF REPRESENTATIVES JANUARY 17, 2023 Mr. STEUBE (for himself and Mr. RESCHENTHALER) introduced the following bill; which was referred to the Committee on Veterans’ Affairs A BILL To amend title 38, United States Code, to allow individuals who are entitled to Post-9/11 educational assistance to use such assistance to repay Federal student loans. 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 ‘‘Modern GI Bill Act’’. 4 SEC. 2. USE OF POST-9/11 EDUCATIONAL ASSISTANCE TO 5 REPAY FEDERAL STUDENT LOANS. 6 (a) AUTHORITY.—Subchapter II of chapter 33 of title 7 38, United States Code, is amended by inserting after sec- 8 tion 3320 the following new section: 9 VerDate Sep 11 2014 03:41 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H393.IH H393 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 393 IH ‘‘§ 3320A. Use of educational assistance benefits for 1 the repayment of Federal student loans 2 ‘‘(a) USE OF BENEFITS.—Notwithstanding any other 3 provision of this chapter, an individual who is entitled to 4 educational assistance for tuition or fees under this sub- 5 chapter may apply amounts of such educational assistance 6 to repay some or all of the outstanding balance of prin- 7 cipal and interest due on a Federal student loan to the 8 individual. 9 ‘‘(b) MAXIMUM ANNUAL AMOUNT; ANNUAL ADJUST- 10 MENT.—(1) Payment of educational assistance under this 11 section to an individual during fiscal year 2024 may not 12 exceed $15,900. 13 ‘‘(2) In each fiscal year after fiscal year 2024, the 14 dollar amount in paragraph (1) shall be increased by the 15 same percentage as the percentage by which benefit 16 amounts payable under title II of the Social Security Act 17 (42 U.S.C. 401 et seq.) are increased effective December 18 1 of that year as a result of a determination under section 19 215(i) of such Act (42 U.S.C. 415(i)). 20 ‘‘(c) MONTHLY PAYMENTS: MAXIMUM AMOUNT; 21 MAXIMUM NUMBER.—(1) The Secretary shall make 22 monthly payments under this section in such amounts as 23 an individual who is entitled to educational assistance for 24 tuition or fees under this subchapter may elect for the re- 25 payment of a Federal student loan to that individual. No 26 VerDate Sep 11 2014 03:41 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H393.IH H393 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 393 IH such amount may exceed one-twelfth of the maximum an- 1 nual amount calculated under subsection (b)(1). 2 ‘‘(2) The total number of months of payments for the 3 repayment of a Federal student loan to an individual 4 under this section may not exceed 36 months. 5 ‘‘(d) BENEFIT NON-TRANSFERABLE.—Notwith- 6 standing section 3319 of this title, an individual who is 7 entitled to educational assistance under this section may 8 not transfer such assistance to another individual. 9 ‘‘(e) ELIGIBLE PAYEES.—The Secretary shall make 10 payments of educational assistance under this section di- 11 rectly to the lender of the Federal student loan of the indi- 12 vidual who is entitled to educational assistance under this 13 section. 14 ‘‘(f) ARRANGEMENTS TO MAKE PAYMENTS; REGULA- 15 TIONS.—The Secretary shall enter into such arrange- 16 ments, and shall prescribe such regulations, that the Sec- 17 retary determines necessary to carry out this section. 18 ‘‘(g) FEDERAL STUDENT LOAN DEFINED.—In this 19 section, the term ‘Federal student loan’ means any loan 20 made, insured, or guaranteed under title IV of the Higher 21 Education Act of 1965 (20 U.S.C. 1070 et seq.).’’. 22 (b) CLERICAL AMENDMENT.—The table of sections 23 at the beginning of such chapter is amended by inserting 24 VerDate Sep 11 2014 03:41 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H393.IH H393 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 393 IH after the item relating to section 3320 the following new 1 item: 2 ‘‘3320A. Use of educational assistance benefits for the repayment of Federal student loans.’’. (c) EFFECTIVE DATE.—The amendments made by 3 this section shall apply to educational assistance paid for 4 months beginning on or after the date of the enactment 5 of this Act. 6 Æ VerDate Sep 11 2014 03:41 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\H393.IH H393 kjohnson on DSK79L0C42PROD with BILLS

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