113 S2432 PCS: Bank on Students Emergency Loan Refinancing Act
U.S. Senate
2014-06-04
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.
This Act may be cited as
the Bank on Students Emergency Loan Refinancing Act
.
<enum>I</enum><header>Refinancing Programs</header><section id="id009E3900758F4890B747FB9A2996D776">
<enum>101.</enum>
<header>Refinancing
programs</header>
<subsection id="id9CE52551528B41C5B20A5DF55ED401A3">
<enum>(a)</enum>
<header>Program
authority</header>
<text>Section 451(a) of the Higher Education Act of 1965 (20
U.S.C. 1087a(a)) is amended—</text>
<paragraph id="id1E08AB2873D149508B643AA01DC13DB0">
<enum>(1)</enum>
<text>by striking
<quote>and (2)</quote> and inserting <quote>(2)</quote>;
and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id6FE22E3F67E64A649A16447F509F9C20">
<enum>(2)</enum>
<text>by inserting
<quote>; and (3) to make loans under
section 460A and section 460B</quote> after <quote>section
459A</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idD7A059390E6C4C3C9AF804F567E74DA1">
<enum>(b)</enum>
<header>Refinancing Program</header>
<text>Part D of title IV of the Higher Education Act of 1965
(<external-xref legal-doc="usc" parsable-cite="usc/20/1087a">20 U.S.C. 1087a et seq.</external-xref>) is amended by adding at the end the
following:</text>
<quoted-block display-inline="no-display-inline" id="id9F0E1E3AB9494FCD89EE6A55E348912D" style="OLC">
<section id="id1769E8A587B2428C90B49090A7C200C1">
<enum>460A.</enum>
<header>Refinancing FFEL and Federal Direct Loans</header>
<subsection id="id1F27C605B8E844E29CFE2C8422216584">
<enum>(a)</enum>
<header>In
general</header>
<text>Beginning not later than 180 days after
the date of enactment of the <short-title>Bank on Students Emergency Loan Refinancing Act</short-title>, the Secretary shall establish a program under
which the Secretary, upon the receipt of an application from a
qualified
borrower, makes a loan
under this part, in accordance with the provisions of this section,
in order to
permit the borrower to obtain the interest rate provided under
subsection
(c).</text>
</subsection><subsection id="id321219ADE5FB49CB8ADAA9D5579F0B64">
<enum>(b)</enum>
<header>Refinancing Direct
Loans</header>
<paragraph id="idBE79D639C2234D8B80B0348277FF18BE">
<enum>(1)</enum>
<header>Federal Direct
Loans</header>
<text>Upon application of a qualified borrower, the Secretary
shall repay a Federal Direct Stafford Loan, a Federal Direct
Unsubsidized
Stafford Loan, a Federal Direct PLUS Loan, or a Federal Direct
Consolidation
Loan of the qualified borrower, for which the first disbursement
was made, or
the application for the consolidation loan was received, before
July
1, 2013, with the proceeds of a refinanced Federal Direct Stafford Loan, a
Federal Direct
Unsubsidized
Stafford Loan, a Federal Direct PLUS Loan, or a Federal Direct
Consolidation
Loan, respectively, issued to the borrower in an amount equal to
the sum of the unpaid
principal, accrued unpaid interest, and late charges of the
original loan.</text>
</paragraph><paragraph id="id3267ec808a364ffb8f88857324eca845">
<enum>(2)</enum>
<header>Refinancing FFEL program loans as refinanced Federal Direct Loans</header>
<text>Upon application of a qualified borrower for any loan that
was made, insured, or guaranteed under part B and for which the
first
disbursement was made, or the application for the consolidation
loan was
received, before July 1, 2010, the
Secretary shall
make a loan under this part, in an amount equal to
the sum of
the unpaid principal, accrued unpaid interest, and late charges
of the original loan to the borrower in accordance with the
following:</text>
<subparagraph id="idB5B154AFE8C743E19FFF077245EBE4B1">
<enum>(A)</enum>
<text>The Secretary
shall pay the proceeds of such loan to the eligible lender
of the loan
made, insured, or guaranteed under part B, in order to discharge
the borrower
from any remaining obligation to the lender with
respect
to the
original loan.</text>
</subparagraph><subparagraph id="idDD1BC46CE3C34E24839ED2ADBA02A6AE">
<enum>(B)</enum>
<text>A loan made under this section that was originally—</text>
<clause id="id240AF6DC3F0747849A4E64B5A147FAEF">
<enum>(i)</enum>
<text>a loan originally
made, insured, or guaranteed under section 428 shall be a Federal
Direct
Stafford
Loan;</text>
</clause><clause id="idB01C31E51719423F96162B2FFAB47BE9">
<enum>(ii)</enum>
<text>a loan
originally made, insured, or guaranteed under section 428B shall be
a
Federal Direct
PLUS Loan;</text>
</clause><clause id="id7896AB7AC33F441894F72A50F53586B2">
<enum>(iii)</enum>
<text>a loan
originally made, insured, or guaranteed under section 428H shall be
a
Federal Direct
Unsubsidized Stafford Loan; and</text>
</clause><clause id="idEE8B25F2B99F4AB294141DC7869B0F7D">
<enum>(iv)</enum>
<text>a loan
originally made, insured, or guaranteed under section 428C shall be
a
Federal Direct
Consolidation Loan.</text>
</clause></subparagraph><subparagraph id="idA335C028E2EC455CAAA680F345539F8A">
<enum>(C)</enum>
<text>The interest
rate for each loan made by the Secretary under this paragraph shall
be the
rate provided
under subsection (c).</text>
</subparagraph></paragraph></subsection><subsection id="id08DFD8CA9DAC41A4BD3073246255E1AD">
<enum>(c)</enum>
<header>Interest
rates</header>
<paragraph commented="no" display-inline="no-display-inline" id="idC2F2EEDE2A2A41478A8C721EF8F1EF32">
<enum>(1)</enum>
<header display-inline="yes-display-inline">In general</header>
<text display-inline="yes-display-inline">The interest rate for the refinanced Federal
Direct Stafford Loans, Federal Direct Unsubsidized Stafford Loans,
Federal
Direct PLUS Loans, and Federal Direct Consolidation Loans,
shall be a rate equal
to—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="idA3EB9F6293F14095A27DD8F8F9E070AD">
<enum>(A)</enum>
<text display-inline="yes-display-inline">in any case where the original loan was a
loan under section 428 or 428H, a Federal Direct Stafford loan, or
a Federal
Direct Unsubsidized Stafford Loan, that was issued to an
undergraduate student,
a rate equal to the rate for Federal Direct Stafford Loans and
Federal Direct Unsubsidized Stafford Loans issued to undergraduate
students for the 12-month period beginning on July 1, 2013, and ending on
June 30, 2014;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idE85C44977ACE4324AF949AD9B8D6FF8F">
<enum>(B)</enum>
<text display-inline="yes-display-inline">in any case where the original loan was a
loan under section 428 or 428H, a Federal Direct Stafford Loan, or
a Federal
Direct Unsubsidized Stafford Loan, that was issued to a graduate or
professional student, a rate equal to the rate for Federal Direct
Unsubsidized Stafford Loans issued to graduate or professional students
for the 12-month period beginning on July 1, 2013, and ending on June 30,
2014;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id0EBA4933EF2C49EE9C1CD355BE857C5D">
<enum>(C)</enum>
<text>in any case where
the original loan was a loan under section 428B or a Federal Direct
PLUS Loan,
a rate equal to the rate for Federal Direct PLUS Loans for the
12-month period beginning on July 1, 2013, and ending on June 30, 2014;
and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id7259FE8B3E964F52B291B6822D0C58EF">
<enum>(D)</enum>
<text>in any case where
the original loan was a loan under section 428C or a Federal Direct
Consolidation Loan, a rate calculated in accordance with paragraph
(2).</text>
</subparagraph></paragraph><paragraph id="idFC5564409C5742A5B1FC7547AAD84F60">
<enum>(2)</enum>
<header>Interest Rates for Consolidation Loans</header>
<subparagraph id="idBA65FD47FD3F4298B58C3C40AEEA1B2A">
<enum>(A)</enum>
<header>Method of calculation</header>
<text>In order to determine the interest rate for any refinanced Federal Direct Consolidation Loan under
paragraph (1)(D), the Secretary shall—</text>
<clause id="idB14F4597B86B4695B58AB485531C7404">
<enum>(i)</enum>
<text>determine each of the component loans that were originally consolidated in the loan under section
428C or the Federal Direct
Consolidation Loan, and calculate the proportion of the unpaid principal
balance of the loan under section 428C or the Federal Direct Consolidation
Loan that each component loan represents;</text>
</clause><clause id="id80844AF5CA904A118AE907DAAE2DAEE2">
<enum>(ii)</enum>
<text>use the proportions determined in accordance with clause (i) and the interest rate applicable for
each component loan, as determined under subparagraph (B), to calculate
the weighted average of the interest rates on the loans consolidated into
the loan under section 428C or the Federal Direct Consolidation Loan; and</text>
</clause><clause id="idB7F9C8769B77409E9CA4C3DCB6A9E913">
<enum>(iii)</enum>
<text>apply the weighted average calculated under clause (ii) as the interest rate for the refinanced
Federal Direct Consolidation Loan.</text>
</clause></subparagraph><subparagraph id="id1B07877000054F14BFF0F7671B3F2CD5">
<enum>(B)</enum>
<header>Interest rates for component loans</header>
<text>The interest rates for the component loans of a loan made under section 428C or a Federal Direct
Consolidation Loan shall be the following:</text>
<clause id="id4203089974E44894BC6C6DA513ACF78C">
<enum>(i)</enum>
<text>The interest rate for any loan under section 428 or 428H, Federal Direct Stafford Loan, or Federal
Direct Unsubsidized Stafford Loan issued to an undergraduate student shall
be a rate equal to the lesser of—</text>
<subclause id="id5FCDD7C07B274C048AE7295B3BEE108A">
<enum>(I)</enum>
<text>the rate for Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans issued to
undergraduate students for the 12-month period beginning on July 1, 2013,
and ending on June 30, 2014; or</text>
</subclause><subclause id="id66E289BA772B4C27BE36316503B31ECF">
<enum>(II)</enum>
<text>the original interest rate of the component loan.</text>
</subclause></clause><clause id="id1DCC97127D6C4714A7E6CC35B399AEFA">
<enum>(ii)</enum>
<text>The interest rate for any loan under section 428 or 428H, Federal Direct Stafford Loan, or Federal
Direct Unsubsidized Stafford Loan issued to a graduate or professional
student shall be a rate equal to the lesser of—</text>
<subclause id="id7AEFBAFC81E74A878A5406295019405D">
<enum>(I)</enum>
<text>the rate for Federal Direct Unsubsidized Stafford Loans issued to graduate or professional students
for the 12-month period beginning on July 1, 2013, and ending on June 30,
2014; or</text>
</subclause><subclause id="id43DF2DE4CA5545B9BC2F3BD49604EC78">
<enum>(II)</enum>
<text>the original interest rate of the component loan.</text>
</subclause></clause><clause id="id882A50C818944DF5A08CD4429B14F831">
<enum>(iii)</enum>
<text>The interest rate for any loan under section 428B or Federal Direct PLUS Loan shall be a rate equal
to the lesser of—</text>
<subclause id="id1205819978644749BF8DC8A40F5B5F33">
<enum>(I)</enum>
<text>the rate for Federal Direct PLUS Loans for the 12-month period beginning on July 1, 2013, and
ending on June 30, 2014; or</text>
</subclause><subclause id="idC5DD0B38D5284D0280A5B251868C3975">
<enum>(II)</enum>
<text>the original interest rate of the component loan.</text>
</subclause></clause><clause id="id6215B2E387B547FE8B2BB2B5AD9C684A">
<enum>(iv)</enum>
<text>The interest rate for any component loan that is a loan under section 428C or a Federal Direct
Consolidation Loan shall be the weighted average of the interest rates
that would apply under this subparagraph for each loan comprising the
component consolidation loan.</text>
</clause><clause id="idD966185DC7E2438D9C2BA56292186E65">
<enum>(v)</enum>
<text>The interest rate for any eligible loan that is a component of a loan made under section 428C or a
Federal Direct Consolidation Loan and is not described in clauses (i)
through (iv) shall be the interest rate on the original component loan.</text>
</clause></subparagraph></paragraph><paragraph id="id07751B22C31C455EB3606EBA3EDC7A59">
<enum>(3)</enum>
<header>Fixed Rate</header>
<text>The
applicable rate of interest determined under paragraph (1) for a
refinanced loan
under this section shall be fixed for the period of the
loan.</text>
</paragraph></subsection><subsection id="idD8A968DC4B9E4295A7151DA25E2EBF18">
<enum>(d)</enum>
<header>Terms and
conditions of loans</header>
<paragraph id="idFB7729B815CA49CBAC7AE6981A659A5A">
<enum>(1)</enum>
<header>In
general</header>
<text>A loan that is refinanced under this section shall have the
same terms and conditions as the original loan, except as otherwise
provided in
this section.</text>
</paragraph><paragraph id="id1707DA42776F4B7F9BCDCFDDB888547E">
<enum>(2)</enum>
<header>No automatic
extension of repayment period</header>
<text>Refinancing a loan under this section
shall not result in the extension of the duration of the repayment
period of
the loan, and the borrower shall retain the same repayment term
that was in
effect on the original loan. Nothing in this paragraph shall be
construed to
prevent a borrower from electing a different repayment plan at any
time in
accordance with section 455(d)(3).</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id5DC802D2E50649C3BCC7EFF09ACA09F9">
<enum>(e)</enum>
<header>Definition of
qualified borrower</header>
<paragraph commented="no" display-inline="no-display-inline" id="id33BD51F67D634380A893DD0BA0C7F90B">
<enum>(1)</enum>
<header>In General</header>
<text>For purposes of this section, the term
<quote>qualified borrower</quote> means a borrower—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="idDF816BFF1B464333A87293B2553F9C66">
<enum>(A)</enum>
<text>of a loan under this part or
part B for which the first disbursement was made, or the
application for a
consolidation loan was received,
before July 1,
2013; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idCEA424B2DEAF441C9C116D67C07AB380">
<enum>(B)</enum>
<text>who meets the eligibility requirements based on income or debt-to-income ratio established by the
Secretary.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id576C6F6CF1F748D984E67A0A2B84D923">
<enum>(2)</enum>
<header>Income requirements</header>
<text>Not later than 180 days after the date of enactment of the <short-title>Bank on Students Emergency Loan Refinancing Act</short-title>, the
Secretary shall establish eligibility requirements based on income or
debt-to-income
ratio that take into consideration providing access to refinancing under
this section for borrowers with the greatest financial need.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id72FF45925C144B2594E9A3C138E65E9E">
<enum>(f)</enum>
<header>Notification to borrowers</header>
<text>The Secretary, in coordination with the Director of the Bureau of Consumer Financial Protection,
shall undertake a campaign to alert borrowers of loans that are eligible
for refinancing under this section that the borrowers are eligible to
apply for such refinancing. The campaign shall include the following
activities:</text>
<paragraph commented="no" display-inline="no-display-inline" id="id0B4164CE9F674CCCACFC270F0D68BBF8">
<enum>(1)</enum>
<text>Developing consumer information materials about the availability of Federal student loan
refinancing.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id491DD8D21F08466AB3D077E214796B34">
<enum>(2)</enum>
<text>Requiring servicers of loans under this part or part B to provide such consumer information to
borrowers in a manner determined appropriate by the Secretary, in
consultation with the Director of the Bureau of Consumer Financial
Protection.</text>
</paragraph></subsection></section><section id="id437957CB9EF34C8C8E7CF1714F2E1C9E">
<enum>460B.</enum>
<header>Federal Direct Refinanced Private Loan program</header>
<subsection id="id5CF7D659D1354AAC9FC7AA4338C99FC4">
<enum>(a)</enum>
<header>Definitions</header>
<text display-inline="yes-display-inline">In this section:</text>
<paragraph id="idF635C7AF90394BF79CB98CA48EB9CF91">
<enum>(1)</enum>
<header>Eligible private education loan</header>
<text display-inline="yes-display-inline">The term <term>eligible private education loan</term> means a private education loan, as defined in section 140(a) of the Truth in Lending Act (15
U.S.C.
1650(a)), that—</text>
<subparagraph id="id7684F792D471421DB6D0A6BC97D08D84">
<enum>(A)</enum>
<text display-inline="yes-display-inline">was disbursed to the borrower before July 1, 2013; and</text>
</subparagraph><subparagraph id="idFA16C66A48BF4305983703EBAB68EEA5">
<enum>(B)</enum>
<text display-inline="yes-display-inline">was for the borrower’s own postsecondary educational expenses for an eligible program at an
institution of higher
education participating in the
loan program under this part, as of the date that the loan was disbursed.</text>
</subparagraph></paragraph><paragraph id="id5483149037874D38A8F3E7E288CA6954">
<enum>(2)</enum>
<header>Federal Direct Refinanced Private Loan</header>
<text>The term <term>Federal Direct Refinanced Private Loan</term> means a loan issued under subsection (b)(1).</text>
</paragraph><paragraph id="id04B1C64913034C2486FD765C6CC94E85"><enum>(3)</enum><header>Private educational lender</header><text>The term <term>private educational lender</term> has the meaning given the term in section 140(a) of the Truth in Lending Act (15
U.S.C.
1650(a)).</text></paragraph><paragraph id="id6FF5C7EB33A8446D9EF78FB04144098C">
<enum>(4)</enum>
<header>Qualified borrower</header>
<text>The term <term>qualified borrower</term> means an individual who—</text>
<subparagraph id="id8DE18A50A6464FCDB788C6224DC34312">
<enum>(A)</enum>
<text>has an eligible private education loan;</text>
</subparagraph><subparagraph id="idDE888A26CC704D5AA65B17D79040E605">
<enum>(B)</enum>
<text>has been current on payments on the eligible private education loan for the 6 months prior to the
date of the qualified borrower's application for refinancing under this
section, and is in
good standing on the loan at the time of such application;</text>
</subparagraph><subparagraph id="id0A7DCF9AB69E434192A71D22D0A6797D">
<enum>(C)</enum>
<text>is not in default on the eligible private education loan or on any loan made, insured, or
guaranteed under this part or part B or E; and</text>
</subparagraph><subparagraph id="id9267A067FA9B4E619EE90847E2D4E334">
<enum>(D)</enum>
<text>meets the eligibility requirements described in subsection (b)(2).</text>
</subparagraph></paragraph></subsection><subsection id="id46F6404EF4B340099F26DB84818CC5B0">
<enum>(b)</enum>
<header>Program authorized</header>
<paragraph id="idAEAB843979B246B096924339A53A6E9B">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The Secretary, in consultation with the Secretary of Treasury, shall carry out a program under
which the
Secretary, upon application by a qualified borrower who has
an eligible private education loan, shall issue such borrower a loan
under this part in accordance with the
following:</text>
<subparagraph id="idA1BBD5091B6C4BFDA7B465F2936ED913">
<enum>(A)</enum>
<text>The loan issued under this program shall be in
an amount equal to
the sum of
the unpaid principal, accrued unpaid interest, and late charges
of the private education loan.</text>
</subparagraph><subparagraph id="id3C598897BCD7401DBE1218EAE6305F03">
<enum>(B)</enum>
<text>The Secretary
shall pay the proceeds of the loan issued under this program to the
private
educational lender
of the private education loan, in order to discharge
the qualified borrower
from any remaining obligation to the lender with respect
to the
original loan.</text>
</subparagraph><subparagraph id="idB6123BBF23AD4191BFEFA4EF5E53F59B">
<enum>(C)</enum>
<text>The Secretary shall require that the qualified borrower undergo loan counseling that provides all
of the information and counseling required under clauses (i) through
(viii) of section 485(b)(1)(A) before the loan is refinanced in accordance
with this section, and before the proceeds of such loan are paid to the
private educational lender.</text>
</subparagraph><subparagraph id="idB1CCD93F9F3E4BACB691C27C4340776B">
<enum>(D)</enum>
<text>The Secretary
shall issue the loan as a Federal Direct Refinanced Private Loan,
which shall have the same terms, conditions, and benefits as a Federal
Direct
Unsubsidized Stafford Loan, except as otherwise provided in this section.</text>
</subparagraph></paragraph><paragraph id="id8F5CFEB3A9A643EF879806ECAC903134">
<enum>(2)</enum>
<header>Borrower eligibility</header>
<text>Not later than 180 days after the date of enactment of the <short-title>Bank on Students Emergency Loan Refinancing Act</short-title>, the
Secretary, in consultation with the Secretary of the Treasury and the
Director of the Bureau of Consumer Financial Protection, shall establish
eligibility requirements—</text>
<subparagraph id="id1AF272ADE3DE4D9AB99BB3ECD36F3440">
<enum>(A)</enum>
<text>based on income or
debt-to-income
ratio that take into consideration providing access to refinancing under
this section for borrowers with the greatest financial need;</text>
</subparagraph><subparagraph id="id29FE922C8ADE4E5B8E8F5AEB4C8D81EE">
<enum>(B)</enum>
<text>to ensure eligibility only for borrowers in good standing;</text>
</subparagraph><subparagraph id="id13EC218D52854D1A9FFEC264B02A80A0">
<enum>(C)</enum>
<text>to minimize inequities between Federal Direct Refinanced Private Loans and other Federal student
loans;</text>
</subparagraph><subparagraph id="id28DDD7C9724D43FC8CAF37220829A33F">
<enum>(D)</enum>
<text>to preclude windfall profits for private educational lenders; and</text>
</subparagraph><subparagraph id="id40F1BCCE048140E58E2BBB0A0A86314B">
<enum>(E)</enum>
<text>to ensure full access to the program authorized in
this subsection for borrowers with private
loans who otherwise meet the criteria established in accordance with
subparagraphs (A) and
(B).</text>
</subparagraph></paragraph></subsection><subsection id="id2D9A0CF1F6424E259B1580F558F5FB59">
<enum>(c)</enum>
<header>Interest rate</header>
<paragraph id="idF369D67EE04E465EBD57D98FA50C2903">
<enum>(1)</enum>
<header>In general</header>
<text>The interest rate for a Federal Direct Refinanced Private Loan is—</text>
<subparagraph commented="no" id="id9C4936E1B8994BE48A6531D5A66665D7">
<enum>(A)</enum>
<text>in the case of a Federal Direct Refinanced Private Loan for a private education loan originally
issued for undergraduate postsecondary educational expenses, a rate equal
to the rate for Federal Direct Stafford Loans and Federal Direct
Unsubsidized Stafford Loans issued to undergraduate students for the
12-month period beginning on July 1, 2013, and ending on June 30, 2014;
and</text>
</subparagraph><subparagraph commented="no" id="id23E8EE3082C64C8587E7025F96725F68">
<enum>(B)</enum>
<text>in the case of a Federal Direct Refinanced Private Loan for a private education loan originally
issued for graduate or professional degree postsecondary educational
expenses, a rate equal to the rate for Federal Direct Unsubsidized
Stafford Loans issued to graduate or professional students for the
12-month period beginning on July 1, 2013, and ending on June 30, 2014.</text>
</subparagraph></paragraph><paragraph commented="no" id="id50EF8DADA8E64AC48B123B2DED27DC7D">
<enum>(2)</enum>
<header>Combined undergraduate and graduate study loans</header>
<text>If a Federal Direct Refinanced Private Loan is for a private education loan originally issued for
both undergraduate and graduate or professional postsecondary educational
expenses, the interest rate shall be a rate equal to the rate for Federal
Direct PLUS Loans for the
12-month period beginning on July 1, 2013, and ending on June 30, 2014.</text>
</paragraph><paragraph id="ID144FA11F83D1431996074A39FC90DB4D">
<enum>(3)</enum>
<header>Fixed Rate</header>
<text>The applicable rate of interest determined under this subsection for a Federal Direct Refinanced
Private Loan shall be fixed for the period of the loan.</text>
</paragraph></subsection><subsection id="idF2C59762E4274BFCAB2D18DEBDEEB8C1">
<enum>(d)</enum>
<header>No inclusion in aggregate limits</header>
<text>The amount of a Federal Direct Refinanced Private Loan, or a Federal Direct Consolidated Loan to
the extent such loan was used to repay a Federal Direct Refinanced Private
Loan, shall not be included in calculating a borrower's annual or
aggregate loan limits under section 428 or 428H.</text>
</subsection><subsection id="id7F214382BFC6411D81B86A4C3738B316">
<enum>(e)</enum>
<header>No eligibility for service-related repayment</header>
<text>Notwithstanding sections 428K(a)(2)(A), 428L(b)(2), 455(m)(3)(A), and 460(b), a Federal Direct
Refinanced Private Loan, or any Federal Direct Consolidation Loan to the
extent such loan was used to repay a Federal Direct Refinanced Private
Loan, shall not be eligible for any loan repayment or loan forgiveness
program under section 428K, 428L, or 460 or for the repayment plan for
public service employees under section 455(m).</text>
</subsection><subsection id="id7A382164427349B7B13C1B8E97C537D6">
<enum>(f)</enum>
<header>Private educational lender reporting requirement</header>
<paragraph id="idE3B3DC943E68460B8409099B7195829C">
<enum>(1)</enum>
<header>Reporting required</header>
<text>Not later than 180 days after the date of enactment of the <short-title>Bank on Students Emergency Loan Refinancing Act</short-title>, the Secretary, in consultation with the Secretary of the Treasury and the Director of the Bureau
of Consumer Financial Protection, shall establish a requirement that
private educational lenders report the data described in paragraph (2) to
the Secretary, to Congress, to the Secretary of the Treasury, and to the
Director of the Bureau of Consumer Financial Protection, in order to allow
for an assessment of the private education loan market.</text>
</paragraph><paragraph id="id24000E58725040AABFBF87D76B0FA322">
<enum>(2)</enum>
<header>Contents of reporting</header>
<text>The data that private educational lenders shall report in accordance with paragraph (1) shall
include each of the following about private education loans (as defined
in section 140(a) of the Truth in Lending Act (15 U.S.C.
1650(a)):</text>
<subparagraph id="idF45BB4E4EDAF4655BDC35457B50F7FB8">
<enum>(A)</enum>
<text>The total amount of private education loan debt the lender holds.</text>
</subparagraph><subparagraph id="id7ED04C4772BA4BAE9A7B5BD43AF9BCF4">
<enum>(B)</enum>
<text>The total number of private education loan borrowers the lender serves.</text>
</subparagraph><subparagraph id="id3F3B8D1332104FC49C52385F2144CBAC">
<enum>(C)</enum>
<text>The average interest rate on the outstanding private education loan debt held by the lender.</text>
</subparagraph><subparagraph id="id3A78B61CAA31441D8E2BAD94A7E6421F">
<enum>(D)</enum>
<text>The proportion of private education loan borrowers who are in default on a loan held by the lender.</text>
</subparagraph><subparagraph id="idEC47687D60564F1FB65A898EF11B596C">
<enum>(E)</enum>
<text>The proportion of the outstanding private education loan volume held by the lender that is in
default.</text>
</subparagraph><subparagraph id="idAC05A41B1F0C4F00A82B08E13F2D0A25">
<enum>(F)</enum>
<text>The proportions of outstanding private education loan borrowers who are 30, 60, and 90 days
delinquent.</text>
</subparagraph><subparagraph id="id799F11B5A8664A59B032317DA71E640B">
<enum>(G)</enum>
<text>The proportions of outstanding private education loan volume that is 30, 60, and 90 days
delinquent.</text>
</subparagraph></paragraph></subsection><subsection id="id526BA4E9BCDD4AE7B45110919168DFF8">
<enum>(g)</enum>
<header>Notification to borrowers</header>
<text>The Secretary, in coordination with the Secretary of the Treasury and the Director of the Bureau of
Consumer Financial Protection, shall undertake a campaign to alert
borrowers about the availability of private student loan refinancing under
this section.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id744E83C864BE4CD9BA021F700D6D619F">
<enum>(c)</enum>
<header>Amendments to
public service repayment plan provisions</header>
<text>Section 455(m) of the
Higher Education Act of 1965 (<external-xref legal-doc="usc" parsable-cite="usc/20/1087e">20 U.S.C. 1087e(m)</external-xref>) is
amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="id28CBCD69810C474C8E132FB8B45E68B0">
<enum>(1)</enum>
<text>by redesignating
paragraphs (3) and (4) as paragraphs (4) and (5), respectively;
and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id77EF6797F91E44D794E0B655478FC62B">
<enum>(2)</enum>
<text>by inserting
after paragraph (2) the following:</text>
<quoted-block display-inline="no-display-inline" id="id94C359972C2542F0AF941CAEE5781C73" style="OLC">
<paragraph id="id5AD4F8FCF38C47DCA8A618D7EECD408E">
<enum>(3)</enum>
<header>Special rules
for section 460A loans</header>
<subparagraph id="id096C981A717143F3B64B33D8BF1C944B">
<enum>(A)</enum>
<header>Refinanced
Federal Direct loans</header>
<text>Notwithstanding paragraph (1), in
determining the number of monthly payments that meet the
requirements of such
paragraph for an eligible Federal Direct Loan refinanced under
section 460A that
was originally a loan under this part, the Secretary shall include
all monthly
payments made on the original loan that meet the requirements of
such
paragraph.</text>
</subparagraph><subparagraph id="id8D2C73F3140644FC97CB0DA56D2B9237">
<enum>(B)</enum>
<header>Refinanced FFEL
loans</header>
<text>In the case of an eligible Federal Direct Loan refinanced
under section 460A that was originally a loan under part B, only
monthly
payments made after the date on which the loan was refinanced may
be
included for
purposes of paragraph (1).</text>
</subparagraph></paragraph><after-quoted-block>;
and</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id264347205A2D44EBA5C692ED66C425C8">
<enum>(3)</enum>
<text>in paragraph
(4)(A) (as redesignated by paragraph (1)), by inserting <quote>(including any
Federal Direct Stafford Loan, Federal Direct PLUS Loan, Federal Direct
Unsubsidized Stafford Loan, or Federal Direct Consolidation Loan
refinanced
under
section
460A)</quote> before the period at the end.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id163E9F9629F246FEBC133D28B6ED8183">
<enum>(d)</enum>
<header>Income-based
repayment</header>
<text>Section 493C of the Higher Education Act of 1965 (20
U.S.C. 1098e) is amended by adding at the end the
following:</text>
<quoted-block display-inline="no-display-inline" id="idCB4D47AB47954A0EA89D99505896D934" style="OLC">
<subsection id="idAA46F5C673A84330B6A819181301318D">
<enum>(f)</enum>
<header> Special rule
for refinanced loans</header>
<paragraph id="idAB1B02C159C8413386F033956B915010">
<enum>(1)</enum>
<header>Refinanced Federal Direct and FFEL loans</header>
<text>In calculating the period
of time during which a borrower of a loan that is refinanced under
section 460A
has made monthly payments for purposes of subsection (b)(7), the
Secretary
shall deem the period to include all monthly payments made for the
original
loan, and all monthly payments made for the refinanced loan, that
otherwise meet
the requirements of this
section.</text>
</paragraph><paragraph id="id93EABF4B33884DDE8BDCC8F03B08DE2A">
<enum>(2)</enum>
<header>Federal Direct Refinanced Private Loans</header>
<text>In calculating the period of time during which a borrower of a Federal Direct Refinanced Private
Loan under section 460B has made monthly payments for purposes of
subsection (b)(7), the Secretary shall include only payments—</text>
<subparagraph id="id32AF0B0FA85447898DF84CAD853409DE">
<enum>(A)</enum>
<text>that are made after
the date of the issuance of the Federal Direct Refinanced Private Loan;
and</text>
</subparagraph><subparagraph id="id95E8C808334F4B85B0C09A6655648F2B">
<enum>(B)</enum>
<text>that otherwise meet the requirements of this section.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><enum>II</enum><header>Fair share tax</header><section id="id1B97D87D04F44686B55C8BF6605F6973"><enum>201.</enum><header>Amendment of 1986 Code</header><text display-inline="no-display-inline">Except as otherwise expressly provided, whenever in this title an amendment or repeal is expressed
in
terms of an amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or other provision
of the Internal Revenue Code of 1986.</text></section><section id="idE4C6167CED204B33B03BBCCD1BA271AE"><enum>202.</enum><header>Fair share tax
on high-income taxpayers</header>
<subsection id="id4A7DACA854E64B18BC6E118CB451922E"><enum>(a)</enum><header>In
general</header><text>Subchapter A of chapter 1 is amended by adding at the end the following new part:</text>
<quoted-block display-inline="no-display-inline" id="idA3664925393543A2BFFC591868B88028" style="OLC">
<part id="id9266375A2A244E028D6D91B6A54CDF59"><enum>VII</enum><header>Fair share tax
on high-income taxpayers</header>
<toc>
<toc-entry level="section">Sec. 59B. Fair share tax.</toc-entry>
</toc>
<section id="id07AD8A3165EC49EE9E65AAE259FE412B"><enum>59B.<?LEXA-Enum 59B.?></enum><header>Fair share tax</header>
<subsection id="idB878F7533CA8435B8454B7665A24DFA2"><enum>(a)</enum><header>General
rule</header>
<paragraph id="id19DD7476752847F691539E939CAF75F1"><enum>(1)</enum><header>Phase-in of
tax</header><text>In the case of any high-income taxpayer, there is hereby
imposed for a taxable year (in addition to any other tax imposed by
this
subtitle) a tax equal to the product of—</text>
<subparagraph id="id79172BE88AA0492BAF60255EAE10209A"><enum>(A)</enum><text>the amount
determined under paragraph (2), and</text>
</subparagraph><subparagraph id="id71D733C82495416F8D554FAC8D8287DA"><enum>(B)</enum><text>a fraction (not
to exceed 1)—</text>
<clause id="id2AF50546CB5F45CD9E043583BEF8AE0D"><enum>(i)</enum><text>the numerator of
which is the excess of—</text>
<subclause id="id93010419412E48F5B377537E41F5FAD2"><enum>(I)</enum><text>the taxpayer's
adjusted gross income, over</text>
</subclause><subclause id="id79974F5233594E0FA3A7C6E65383BE17"><enum>(II)</enum><text>the dollar
amount in effect under subsection (c)(1), and</text>
</subclause></clause><clause id="id9D2B5E7A7CDC4EEA9D19E7038450C01A"><enum>(ii)</enum><text>the denominator
of which is the dollar amount in effect under subsection (c)(1).</text>
</clause></subparagraph></paragraph><paragraph id="idC34004F4E83348508E6B6327542281D0"><enum>(2)</enum><header>Amount of
tax</header><text>The amount of tax determined under this paragraph is an
amount equal to the excess (if any) of—</text>
<subparagraph id="idB64311A41A394E9BA91570968825CC18"><enum>(A)</enum><text>the tentative
fair share tax for the taxable year, over</text>
</subparagraph><subparagraph id="idDB1953A94B6E449385D4B67B892960E4"><enum>(B)</enum><text>the excess
of—</text>
<clause id="idBD094C44D0C2470D94D2F493B4585E0E"><enum>(i)</enum><text>the sum
of—</text>
<subclause id="idC8C457CE8A054EFD9628E325329DC939"><enum>(I)</enum><text>the regular tax
liability (as defined in section 26(b)) for the taxable year,</text>
</subclause><subclause id="id05E03B214A3042E09850825CEAED33A6"><enum>(II)</enum><text>the tax imposed
by section 55 for the taxable year, plus</text>
</subclause><subclause id="idCA1440FD53A74D2391FC6723C721C13D"><enum>(III)</enum><text>the payroll tax
for the taxable year, over</text>
</subclause></clause><clause id="id7464B27706BA4CF2926326F3CDFB3044"><enum>(ii)</enum><text>the credits
allowable under part IV of subchapter A (other than sections 27(a),
31, and
34).</text>
</clause></subparagraph></paragraph></subsection><subsection id="id4EE4E798CA9E42D7926B5C2CE7BB99D3"><enum>(b)</enum><header>Tentative fair
share tax</header><text>For purposes of this section—</text>
<paragraph id="idC41DD860015E4FF89B93BFC501FC134A"><enum>(1)</enum><header>In
general</header><text>The tentative fair share tax for the taxable year is 30
percent of the excess of—</text>
<subparagraph id="id2275420E483F44A094BCDD6A5FAB3B5E"><enum>(A)</enum><text>the adjusted
gross income of the taxpayer, over</text>
</subparagraph><subparagraph id="idC78658682DC94FF0A47203CB19FD9983"><enum>(B)</enum><text>the modified
charitable contribution deduction for the taxable year.</text>
</subparagraph></paragraph><paragraph id="idE0A3699544D5422D94C2367D509633B2"><enum>(2)</enum><header>Modified
charitable contribution deduction</header><text>For purposes of paragraph
(1)—</text>
<subparagraph id="id79CB27E480EA4919B5A4A6263162995D"><enum>(A)</enum><header>In
general</header><text>The modified charitable contribution deduction for any
taxable year is an amount equal to the amount which bears the same
ratio to the
deduction allowable under section 170 (section 642(c) in the case
of a trust or
estate) for such taxable year as—</text>
<clause id="idD2322E9372B34DE9A708A918FF5D0A8D"><enum>(i)</enum><text>the amount of
itemized deductions allowable under the regular tax (as defined in
section 55)
for such taxable year, determined after the application of section
68, bears
to</text>
</clause><clause id="id3E4200E2D7374CAAB9A9F817A7CB58D0"><enum>(ii)</enum><text>such amount,
determined before the application of section 68.</text>
</clause></subparagraph><subparagraph id="id9D43F4A299ED47469BCA554E7D01C267"><enum>(B)</enum><header>Taxpayer must
itemize</header><text>In the case of any individual who does not elect to
itemize deductions for the taxable year, the modified charitable
contribution
deduction shall be zero.</text>
</subparagraph></paragraph></subsection><subsection id="id1AB76FECE7B746F1873CC6B95D8A09D6"><enum>(c)</enum><header>High-Income
taxpayer</header><text>For purposes of this section—</text>
<paragraph id="id9E19577041A846BDAF4C4021E2F20A26"><enum>(1)</enum><header>In
general</header><text>The term <term>high-income taxpayer</term> means, with
respect to any taxable year, any taxpayer (other than a
corporation) with an
adjusted gross income for such taxable year in excess of $1,000,000
(50 percent
of such amount in the case of a married individual who files a
separate
return).</text>
</paragraph><paragraph id="id66B94111FCC94DAE93C10AD76B38F58C"><enum>(2)</enum><header>Inflation
adjustment</header>
<subparagraph id="id5ED2D14766E6426095BBA277BCF81E5B"><enum>(A)</enum><header>In
general</header><text>In the case of a taxable year beginning after 2015, the
$1,000,000 amount under paragraph (1) shall be increased by an
amount equal
to—</text>
<clause id="id1AB5B41335AB4B20BE94D319C5803F70"><enum>(i)</enum><text>such dollar
amount, multiplied by</text>
</clause><clause id="id614A802CC9004B7AA0DC3D37DDCCBD10"><enum>(ii)</enum><text>the
cost-of-living adjustment determined under section 1(f)(3) for the
calendar
year in which the taxable year begins, determined by substituting
<quote>calendar year 2014</quote> for <quote>calendar year 1992</quote> in
subparagraph (B) thereof.</text>
</clause></subparagraph><subparagraph id="idF0177BCD23B54948A181827EC713AD1A"><enum>(B)</enum><header>Rounding</header><text>If
any amount as adjusted under subparagraph (A) is not a multiple of
$10,000,
such amount shall be rounded to the next lowest multiple of
$10,000.</text>
</subparagraph></paragraph></subsection><subsection id="id949C2BEEA3964467912848A37D1BD15E"><enum>(d)</enum><header>Payroll
tax</header><text>For purposes of this section, the payroll tax for any taxable
year is an amount equal to the excess of—</text>
<paragraph id="idAA3F024F50794520B0C3BD6D379DBBE3"><enum>(1)</enum><text>the taxes imposed
on the taxpayer under sections 1401, 1411, 3101, 3201, and 3211(a)
(to the
extent such taxes are attributable to the rate of tax in effect
under section
3101) with respect to such taxable year or wages or compensation
received
during the taxable year, over</text>
</paragraph><paragraph id="idACAE7A27B2C54DC59A4F2FD35630538C"><enum>(2)</enum><text>the deduction
allowable under section 164(f) for such taxable year.</text>
</paragraph></subsection><subsection id="id9EEFACE52FF345028C21FA29B09F99C7"><enum>(e)</enum><header>Special rule
for estates and trusts</header><text>For purposes of this section, in the case
of an estate or trust, adjusted gross income shall be computed in
the manner
described in section 67(e).</text>
</subsection><subsection commented="no" id="idD122F4B0469B4010941C80DAE940FC8C"><enum>(f)</enum><header>Not treated as
tax imposed by this chapter for certain purposes</header><text>The tax imposed
under this section shall not be treated as tax imposed by this
chapter for
purposes of determining the amount of any credit under this chapter
(other than
the credit allowed under section 27(a)) or for purposes of section
55.</text>
</subsection></section></part><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id87C2BB6DD07B416FAC2DC0695BC4F49E"><enum>(b)</enum><header>Conforming
amendments</header><paragraph id="id55D8600E2F4841D495B80182E079FBBA"><enum>(1)</enum><text>Section 26(b)(2)
is amended by redesignating subparagraphs (C) through (X) as subparagraphs
(D)
through (Y), respectively, and by inserting after subparagraph (B) the
following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="id278209FA88C14C8A911F8433ED0C4F0C" style="OLC">
<subparagraph id="id5E0A2397D3BD4ADBB35943C845AE4279"><enum>(C)</enum><text>section 59B
(relating to fair share
tax),</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph><paragraph id="id6ED0F957B0F6459BA3CFFFDDE3B32206"><enum>(2)</enum><text>The last sentence of section 901(a) is amended to read as follows: <quote>The credit shall not be allowed against any tax treated as a tax not imposed by this chapter under
section 26(b) (other than the tax imposed by section 59B).</quote>.</text>
</paragraph></subsection><subsection id="id90322525F0F5498594DA4E5557CA44BA"><enum>(c)</enum><header>Clerical
amendment</header><text>The table of parts for subchapter A of chapter 1 is amended by adding at the end the
following new
item:</text>
<quoted-block id="id056168E38F6F4B8C940484DF7CE29346" style="OLC">
<toc>
<toc-entry level="part">Part VII—Fair share tax on high-Income
taxpayers</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id8883093106954F378C612887ADBD7C15"><enum>(d)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after December 31, 2014.</text></subsection></section><enum>III</enum><header>Deficit Neutral Implementation of Student Loan Refinancing
Programs</header><section id="id15F4FE4D2EDC4657BB4B6E37E5F7DB3F"><enum>301.</enum><header>Deficit Neutral Implementation of Student Loan Refinancing
Programs; Budgetary Effects</header><subsection id="id92256546DA89451DBC2696A96C81F832"><enum>(a)</enum><header>Amount of revenue</header><text>The
Secretary of Education shall estimate the
amount that is equal to the amount of the
net increase in revenue received in the Treasury during the 10-year
period beginning on the date of enactment of this Act attributable to
the
amendments made by title II of this Act.</text></subsection><subsection id="id35D0ECA6E3D2420D9EDEC32354462EA7"><enum>(b)</enum><header>Deficit-Neutral Termination of the Refinancing Program</header><text>The Secretary of Education shall terminate the refinancing programs carried out under sections 460A
and 460B of the Higher Education Act of
1965 on the date that the net cost of carrying out
such refinancing programs is equal to the amount of additional revenue
estimated under
subsection (a) or on the date that is 2 years after the date of enactment
of this Act, whichever occurs first.</text></subsection><subsection id="id4181F224AFF04C7A8FE5DEFAE8AF431D"><enum>(c)</enum><header>Deficit Reduction</header><text>Any remaining increase in revenue described in subsection (a) and not used for the refinancing
programs carried out under sections 460A
and 460B of the Higher Education Act of
1965 shall be returned to the general fund of the Treasury for Federal
budget deficit reduction.</text></subsection><subsection id="id155989D6F381447AB473201D49EC1E84"><enum>(d)</enum><header>Methodology</header><text>When estimating cost and revenue under this section, the Secretary of Education shall utilize the
accounting
methods and assumptions that are used by the Congressional Budget Office,
as of the date of enactment of this Act, to make such estimations.</text></subsection></section><section id="idA29D5DF052724A5DA7BB44CEB0E50402"><enum>302.</enum><header>Budgetary Effects</header><subsection id="id2E56AF94470F4310A9246D4D3420C007"><enum>(a)</enum><header>PAYGO Scorecard</header><text display-inline="yes-display-inline">The budgetary effects of
this Act and the amendments made by this Act shall not be entered on either PAYGO scorecard
maintained pursuant to section 4(d) of the Statutory Pay-
As-You-Go Act of 2010 (<external-xref legal-doc="usc" parsable-cite="usc/2/933">2 U.S.C. 933(d)</external-xref>).</text></subsection><subsection id="id235621875DE04A8183691EA5B75B4F62"><enum>(b)</enum><header>Senate PAYGO Scorecard</header><text display-inline="yes-display-inline">The budgetary
effects of this Act and the amendments made by this Act shall not be entered on any PAYGO
scorecard maintained for purposes of section 201 of S.
Con. Res. 21 (110th Congress).</text></subsection></section>
June 5, 2014Read the second time and placed on the calendar