Establishment of veteran student loan repayment program

(a)

Establishment

Chapter 36 of title 38, United States Code, is amended by adding at the end the following:

3699.

Student loan repayment program for totally disabled veterans

(a)

In general

The Secretary shall establish a student loan repayment program in which the Secretary repays the undergraduate student loans of covered veterans. (b)

Monthly payment

In carrying out subsection (a), the Secretary, on a monthly basis, shall pay directly to the holder of an undergraduate student loan of a covered veteran an amount that is equal to the monthly amount computed under subsection (c)(1). (c)

Amounts

(1)The monthly amount paid by the Secretary under subsection (b) for a covered veteran enrolled in the program established under subsection (a) is the amount that equals the monthly amount that the covered veteran owes the holder of the loan. (2)Except as provided by paragraph (3), the total amount that the Secretary may pay for a covered veteran enrolled in the program established under subsection (a) is the amount that the veteran owes to the holder of any undergraduate student loan of the veteran as of the date on which the veteran became totally service-connected disabled. (3)In addition to the total amount paid pursuant to paragraph (2), with respect to a covered veteran enrolled in the program established under subsection (a) who, as of the date on which the veteran applies for such enrollment, owes to the holder of an undergraduate student loan of the veteran an amount that is less than the total amount that the veteran owed as of the date on which the veteran became totally service-connected disabled, the Secretary shall pay to the covered veteran an amount equal to— (A)the difference of— (i)the amount the veteran owed to such holder as of the date of such disability; and (ii)the amount the veteran owes to such holder as of the date of such application; plus (B)any interest to the amount calculated under subparagraph (A), as determined by the Secretary based on the percentage by which there was a social security increase (as defined in section 1104(b) of this title) during each year occurring during the period beginning on the date of such disability and ending on the date of such application. (d)

Effect on other programs

Enrollment in the program established under subsection (a) shall not affect any other educational assistance that a veteran may be entitled to by reason of the service of the veteran in the Armed Forces. (e)

Definitions

In this section: (1)The term covered veteran means a veteran who— (A)served in the Armed Forces on or after September 11, 2001; and (B)has a service-connected disability rated as total. (2)The term undergraduate student loan means a loan, whether Federal, State, or private— (A)to assist an individual to attend an institution of higher learning (as such term is defined in section 3452(f) of this title), including a loan made, insured, or guaranteed under part B, D, or E of title IV of the Higher Education Act of 1965 (20 U.S.C. 1077 et seq., 1087a et seq., 1087aa et seq.) or a private education loan (as defined in section 140 of the Truth in Lending Act); (B)that was made to a covered veteran before the date on which the veteran entered into the Armed Forces; and (C)for which the veteran used to pursue an undergraduate degree at such an institution.

(b)

Clerical amendment

The table of sections at the beginning of such chapter is amended by adding at the end the following new item:

3699. Student loan repayment program for totally disabled veterans.