[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2073 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 2073

  To establish a higher education loan program in which a borrower's 
 annual repayment obligation is dependent upon both postschool income 
          level and borrowing history, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 11, 1993

Mr. Petri (for himself, Mr. Gejdenson, Mr. Ackerman, Mr. Gunderson, Mr. 
 Sundquist, Mr. Taylor of North Carolina, Mr. Cunningham, Mr. Inhofe, 
   and Mr. Durbin) introduced the following bill; which was referred 
  jointly to the Committees on Education and Labor and Ways and Means

_______________________________________________________________________

                                 A BILL


 
  To establish a higher education loan program in which a borrower's 
 annual repayment obligation is dependent upon both postschool income 
          level and borrowing history, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Income-Dependent Education 
Assistance Act of 1993''.

 TITLE I--SYSTEM FOR MAKING INCOME-DEPENDENT EDUCATION ASSISTANCE LOANS

SEC. 101. PROGRAM AUTHORITY.

    The Secretary of the Treasury shall, in accordance with the 
provisions of this title--
            (1) make loans to eligible students in accordance with this 
        title, and
            (2) establish an account for each borrower of such a loan, 
        and collect repayments on such loans, in accordance with 
        section 6306 of the Internal Revenue Code of 1986.

SEC. 102. AGREEMENTS BY ELIGIBLE INSTITUTIONS.

    (a) Terms of Agreement.--In order to qualify its students for loans 
under this title, an eligible institution shall enter into an agreement 
with the Secretary of Education which--
            (1) provides that the institution will collect applications 
        for loans under this title from its students that are in such 
        form and contain or are accompanied by such information as the 
        Secretary of the Treasury may require by regulation;
            (2) contains assurances that the institution will, on the 
        basis of such applications, provide to the Secretary of the 
        Treasury the information required by section 104 and will 
        certify to the Secretary of the Treasury--
                    (A) the cost of attendance determination for each 
                student; and
                    (B) the amount of any outstanding loans to such 
                student under title IV of the Higher Education Act of 
                1965 or title VII of the Public Health Service Act;
            (3) provides that the institution will provide to each 
        student applying for a loan under this title a notice provided 
        by the Secretary of Education of the student's obligations and 
        responsibilities under the loan;
            (4) provides that, if a student withdraws after receiving a 
        loan under this title and is owed a refund--
                    (A) the institution will pay to the Secretary of 
                the Treasury a portion of such refund, in accordance 
                with regulations prescribed by the Secretary of the 
                Treasury to ensure receipt of an amount which bears the 
                same ratio to such refund as such loan bore to the cost 
                of attendance of such student; and
                    (B) the Secretary of the Treasury will credit the 
                amount of such refund to the student's account; and
            (5) contains such additional terms and conditions as the 
        Secretary of the Treasury or Secretary of Education prescribes 
        by regulation to protect the fiscal interest of the United 
        States and to ensure effective administration of the program 
        under this Act.
    (b) Enforcement of Agreement.--The Secretary of Education may, 
after notice and opportunity for a hearing to the institution 
concerned, suspend or revoke, in whole or in part, the agreement of any 
eligible institution if the Secretary of Education finds that such 
institution has failed to comply with this title or any regulation 
prescribed under this title or has failed to comply with any term or 
condition of its agreement under subsection (a). No funds shall be 
loaned under this title to any student at any institution while its 
agreement is suspended or revoked, and the Secretary of Education may 
institute proceedings to recover any funds held by such an institution. 
The Secretary of Education shall have the same authority with respect 
to his functions under this Act as the Secretary of Education has with 
respect to his functions under part B of title IV of the Higher 
Education Act of 1965.
    (c) Notice to Secretary.--The Secretary of Education shall annually 
submit to the Secretary of the Treasury a list of the eligible 
institutions having effective agreements under this section, and shall 
promptly notify the Secretary of the Treasury of any action taken under 
subsection (b) to suspend, revoke, or reinstate any such agreement.

SEC. 103. AMOUNT AND TERMS OF LOANS.

    (a) Eligible Amounts.--
            (1) Annual limits.--Any individual who is determined by an 
        eligible institution to be an eligible student for any academic 
        year shall be eligible to receive an IDEA loan for such 
        academic year in an amount which is not less than $500 or more 
        than the cost of attendance at such institution, determined in 
        accordance with section 484 of the Higher Education Act of 
        1965. The amount of such loan shall not exceed--
                    (A) $6,500 in the case of any student who has not 
                completed his or her first year of undergraduate study;
                    (B) $7,000 in the case of any student who has not 
                completed his or her second year of undergraduate 
                study;
                    (C) $10,000 in the case of any student who has 
                completed such second year but who has not completed 
                his or her course of undergraduate study;
                    (D) $30,000 in the case of any student who is 
                enrolled in a graduate degree program in medicine, 
                dentistry, veterinary medicine, podiatry, optometry, or 
                osteopathic medicine; or
                    (E) $22,500 in the case of any student who is 
                enrolled in a graduate degree program in pharmacy, 
                chiropractic, public health, health administration, 
                clinical psychology, or allied health fields, or in an 
                undergraduate degree program in pharmacy; or
                    (F) $18,500 in the case of any other student.
            (2) Limitation on borrowing capacity.--No individual may 
        receive any amount in an additional IDEA loan if the sum of the 
        original principal amounts of all IDEA loans to such individual 
        (including the pending additional loan) would equal or exceed--
                    (A) $100,000, minus
                    (B) the product of (i) the number of years by which 
                the borrower's age (as of the close of the preceding 
                calendar year) exceeds 35, and (ii) one-twentieth of 
                the amount specified in subparagraph (A), as adjusted 
                pursuant to paragraph (3).
            (3) Exceptions to borrowing capacity limits for certain 
        graduate students.--For a student who is--
                    (A) a student described in paragraph (1)(C), 
                paragraph (2) shall be applied by substituting 
                ``$148,870'' for ``$100,000''; or
                    (B) a student described in paragraph (1)(D), 
                paragraph (2) shall be applied by substituting 
                ``$120,270'' for ``$100,000''.
            (4) Adjustment of limits for inflation.--Each of the dollar 
        amounts specified in paragraphs (1), (2), and (3) shall be 
        adjusted for any academic year after calendar year 1994 by the 
        cost-of-living adjustment for the calendar year preceding such 
        academic year determined under section 6306(h)(3)(C) of the 
        Internal Revenue Code of 1986, rounded to the nearest multiple 
        of $100 (or, if such adjustment is a multiple of $50 and not a 
        multiple of $100, such adjustment shall be increased to the 
        next higher multiple of $100).
            (5) Computation of outstanding loan obligations.--For the 
        purposes of this subsection, any loan obligations of an 
        individual under student loan programs under title IV of the 
        Higher Education Act of 1965 or title VII of the Public Health 
        Service Act shall be counted toward IDEA annual and aggregate 
        borrowing capacity limits. For purposes of annual and aggregate 
        loan limits under any such student loan program, IDEA loans 
        shall be counted as loans under such program.
            (6) Adjustments of annual limits for less than full-time 
        students.--For any student who is enrolled on a less than full-
        time basis, loan amounts for which such student shall be 
        eligible for any academic year under this subsection shall be 
        reduced in accordance with regulations prescribed by the 
        Secretary of Education.
    (b) Duration of Eligibility.--An eligible student shall not be 
eligible to receive a loan under this title for more than a total of 
the full-time equivalent of 9 academic years, of which not more than 
the full-time equivalent of 5 academic years shall be as an 
undergraduate student and not more than the full-time equivalent of 5 
academic years shall be as a graduate student.
    (c) Terms of Loans.--Each eligible student applying for a loan 
under this title shall sign a written agreement which--
            (1) is made without security and without endorsement, 
        except that if the borrower is a minor and such note or other 
        written agreement executed by him would not, under the 
        applicable law, create a binding obligation, endorsement may be 
        required;
            (2) provides that such student will repay the principal 
        amount of the loan and any interest or additional charges 
        thereon in accordance with section 6306 of the Internal Revenue 
        Code of 1954;
            (3) provides that the interest on the loan will accrue in 
        accordance with section 105;
            (4) certifies that the student has received and read the 
        notice required by section 102(a)(3); and
            (5) contains such additional terms and conditions as the 
        Secretary of the Treasury may prescribe by regulation.
    (d) Disbursement of Proceeds of Loans.--The Secretary of the 
Treasury shall, by regulation, provide for the distribution of loans to 
eligible students and for the appropriate notification of eligible 
institutions of the amounts of loans which are approved for any 
eligible student, and for the allocation of the proceeds of such loan 
by semester or other portion of an academic year. The Secretary of the 
Treasury shall distribute the proceeds of loans under this title by 
disbursing to the institution a check or other instrument that is 
payable to and requires the endorsement or other certification by the 
student. Such proceeds shall be credited to any obligations of the 
eligible student to the institution related to the cost of attendance 
at such institution, with any excess being paid to the student. The 
first installment of the proceeds of any loan under this title that is 
made to a student borrower who is entering the first year of a program 
of undergraduate education, and who has not previously obtained a loan 
under this title, shall not be presented by the institution to the 
student for endorsement until 30 days after the borrower begins a 
course of study, but may be delivered to the eligible institution prior 
to the end of that 30-day period.

SEC. 104. INFORMATION REQUIREMENTS FOR LOAN PROGRAM.

    (a) Responsibilities of Eligible Institutions.--Each eligible 
institution which receives funds under this title shall--
            (1) submit to the Secretary of the Treasury, at such time 
        and in such form as the Secretary may require by regulation, a 
        machine-readable list of applicants and the amounts for which 
        they are qualified under section 103;
            (2) promptly notify the Secretary of the Treasury, on 
        request, of any change in enrollment status of any recipient of 
        a loan under this title; and
            (3) submit to the Secretary of the Treasury, at such time 
        and in such forms as the Secretary of the Treasury may require 
        by regulation for use in determining the repayment status of 
        borrowers, a machine-readable list of eligible students who 
        have previously received loans under this title but who are not 
        included as current applicants in the list required by 
        paragraph (1).
    (b) Responsibilities of the Secretary of the Treasury.--The 
Secretary of the Treasury shall, on the basis of the lists received 
under subsection (a)(2), establish an obligation account, by name and 
taxpayer identification number, with respect to each recipient of a 
loan under this title. The Secretary of the Treasury shall provide for 
the increase in the total amount stated for each such account by any 
amounts subsequently loaned to that recipient under this title and by 
the amount of any interest charges imposed pursuant to section 105. The 
Secretary of the Treasury shall, with the notice required by section 
6306(a)(1) of the Internal Revenue Code of 1986, transmit to each 
recipient of a loan under this title a statement of the total amount of 
the obligation of such recipient as of the close of the preceding 
calendar year.

SEC. 105. INTEREST CHARGES.

    Interest charges on loans made under this title shall be added to 
the recipient's obligation account at the end of each calendar year. 
Such interest charges shall be based upon an interest rate equal to the 
lesser of--
            (1) the sum of the average bond equivalent rates of 91-day 
        Treasury bills auctioned during that calendar year, plus 2 
        percentage points, rounded to the next higher one-eighth of 1 
        percent; or
            (2) 9 percent.

SEC. 106. CONVERSION AND CONSOLIDATION OF OTHER LOANS.

    (a) In General.--The Secretary of the Treasury may, upon request of 
a borrower who has received a federally insured or guaranteed loan or 
loans under title IV of the Higher Education Act of 1965 or under title 
VII of the Public Health Service Act, make a new loan to such borrower 
in an amount equal to the sum of the unpaid principal on the title IV 
or title VII loans. The proceeds of the new loan shall be used to 
discharge the liability on such title IV or title VII loans. Except as 
provided in subsection (b), any loan made under this subsection shall 
be made on the same terms and conditions as any other loan under this 
Act and shall be considered a new IDEA loan for purposes of this title 
and section 6306 of the Internal Revenue Code of 1986.
    (b) Conversion Regulations.--The Secretary of the Treasury shall 
prescribe regulations concerning the methods and calculations required 
for conversion to IDEA loans under subsection (a). Such regulations 
shall provide appropriate adjustments in the determination of the 
principal and interest owed on the IDEA loan in order to--
            (1) secure payments to the Government commensurate with the 
        amounts the Government would have received had the original 
        loans been IDEA loans;
            (2) fairly credit the borrower for principal and interest 
        payments made on such original loans and for origination fees 
        deducted from such original loans; and
            (3) prevent borrowers from evading their obligations or 
        otherwise taking unfair advantage of the conversion option 
        provided under this section.
    (c) Mandatory Conversion of Defaulted Loans.--
            (1) Conversion in accordance with regulations.--Any loan 
        which is--
                    (A) made, insured, or guaranteed under title IV of 
                the Higher Education Act of 1965 or title VII of the 
                Public Health Service Act after the date of enactment 
                of this Act, and
                    (B) assigned to the Secretary of Education or 
                Health and Human Services for collection after a 
                default by the borrower in repayment of such loan,
        shall, in accordance with regulations prescribed by the 
        Secretaries of Education and Health and Human Services, be 
        treated for purposes of collection, under section 6306 of the 
        Internal Revenue Code of 1986, as if such loan had been 
        converted to an IDEA loan under subsections (a) and (b) of this 
        section.
            (2) Notices.--The Secretaries of Education and Health and 
        Human Services shall notify--
                    (A) the Secretary of the Treasury of the need to 
                establish or adjust an account balance of any borrower 
                by reason of the provisions of this subsection; and
                    (B) the borrower of the conversion of the defaulted 
                loans to an IDEA loan and of the procedures for 
                collection under section 6306 of the Internal Revenue 
                Code of 1986.

SEC. 107. TERMINATION OF OTHER STUDENT LOAN PROGRAMS.

    The authority to make additional loans under part B of title IV of 
the Higher Education Act of 1965 (20 U.S.C. 1071), other than loans 
made pursuant to section 428B of such title, is terminated for any 
academic year beginning after the date that regulations are prescribed 
by the Secretaries of the Treasury and Education to carry out this 
title. This section shall not affect the administration of such section 
and part with respect to loans made prior to that date.

SEC. 108. AUTHORIZATION OF APPROPRIATIONS.

    (a) Loan Funds.--There are authorized to be appropriated to make 
distributions of loan funds under section 102 such sums as may be 
necessary.
    (b) Administrative Expenses.--There are authorized to be 
appropriated such sums as may be necessary to administer and carry out 
this title.

SEC. 109. DEFINITIONS.

    For purposes of this title--
            (1) the term ``eligible institution'' has the meaning given 
        it by section 435(a) (1) or (2) of the Higher Education Act of 
        1965;
            (2) the term ``eligible student'' means a student who is 
        eligible for assistance under title IV of the Higher Education 
        Act of 1965 as required by section 484 of such Act (relating to 
        eligibility for student assistance) and who is carrying at 
        least one-half the normal full-time academic workload (as 
        determined by the institution); and
            (3) the term ``IDEA loan'' means a loan made under this 
        title.

  TITLE II--COLLECTION OF INCOME-DEPENDENT EDUCATION ASSISTANCE LOANS

SEC. 201. REPAYMENTS USING INCOME TAX COLLECTION SYSTEM.

    (a) In General.--Subchapter A of chapter 64 of the Internal Revenue 
Code of 1986 (relating to collection) is amended by adding at the end 
thereof the following new section:

``SEC. 6306. COLLECTION OF INCOME-DEPENDENT EDUCATION ASSISTANCE LOANS.

    ``(a) Notice to Borrower.--
            ``(1) In general.--During January of each calendar year, 
        the Secretary shall furnish to each borrower of an IDEA loan 
        notice as to--
                    ``(A) whether the records of the Secretary indicate 
                that such borrower is in repayment status,
                    ``(B) the maximum account balance of such borrower,
                    ``(C) the current account balance of such borrower 
                as of the close of the preceding calendar year, and
                    ``(D) the procedure for computing the amount of 
                repayment owing for the taxable year beginning in the 
                preceding calendar year.
            ``(2) Form, etc.--The notice under paragraph (1) shall be 
        in such form as the Secretary may by regulations prescribe and 
        shall be sent by mail to the individual's last known address or 
        shall be left at the dwelling or usual place of business of 
        such individual.
    ``(b) Computation of Annual Repayment Amount.--
            ``(1) In general.--The annual amount payable under this 
        section by the taxpayer for any taxable year shall be the 
        lesser of--
                    ``(A) the product of--
                            ``(i) the base amortization amount, and
                            ``(ii) the progressivity factor for the 
                        taxpayer for such taxable year, or
                    ``(B) 20 percent of the excess of--
                            ``(i) the modified adjusted gross income of 
                        the taxpayer for such taxable year, over
                            ``(ii)(I) in the case of a joint return, 
                        the sum of the standard deduction applicable to 
                        such return and twice the exemption amount for 
                        the taxable year, and
                            ``(II) in any other case, the sum of the 
                        standard deduction applicable to such 
                        individual and the exemption amount for the 
                        taxable year.
                For purposes of subparagraph (B)(ii), the term 
                `standard deduction' has the meaning given such term by 
                section 63(c), and the term `exemption amount' has the 
                meaning given such term by section 151(d).
            ``(2) Base amortization amount.--
                    ``(A) In general.--For purposes of this section, 
                the term `base amortization amount' means the amount 
                which, if paid at the close of each year for a period 
                of 12 consecutive years, would fully repay (with 
                interest) at the close of such period the maximum 
                account balance of the borrower. For purposes of the 
                preceding sentence, an 7-percent annual rate of 
                interest shall be assumed.
                    ``(B) Joint returns.--In the case of a joint return 
                where each spouse has an account balance and is in 
                repayment status, the amount determined under 
                subparagraph (A) shall be the sum of the base 
                amortization amounts of each spouse.
            ``(3) Progressivity factor.--
                    ``(A) In general.--For purposes of this section, 
                the term `progressivity factor' means the number 
                determined under tables prescribed by the Secretary 
                which is based on the following tables for the 
                circumstances specified:
                            ``(i) Joint returns; surviving spouses.--In 
                        the case of a taxpayer to whom section 1(a) 
                        applies--

``If the taxpayer's modified
                                                      The progressivity
        adjusted gross income is:
                                                             factor is:
          Not over $8,253............................             0.429
          $12,285....................................             0.500
          $17,577....................................             0.571
          $22,806....................................             0.643
          $28,224....................................             0.786
          $34,335....................................             0.893
          $41,013....................................             1.000
          $51,030....................................             1.000
          $66,654....................................             1.152
          $91,728....................................             1.272
          $122,890...................................             1.364
          $171,234...................................             1.485
          $253,000 and over..........................             2.000
                            ``(ii) Heads of households.--In the case of 
                        a taxpayer to whom section 1(b) applies--

``If the taxpayer's modified
                                                      The progressivity
        adjusted gross income is:
                                                             factor is:
          Not over $6,867............................             0.429
          $10,836....................................             0.500
          $12,915....................................             0.607
          $16,884....................................             0.643
          $20,916....................................             0.714
          $26,271....................................             0.857
          $32,949....................................             1.000
          $39,627....................................             1.000
          $49,644....................................             1.094
          $66,339....................................             1.313
          $89,712....................................             1.406
          $125,466...................................             1.500
          $205,020 and over..........................             2.000
                            ``(iii) Unmarried individuals, etc.--In the 
                        case of a taxpayer to whom section 1(c) 
                        applies--

``If the taxpayer's modified
                                                      The progressivity
        adjusted gross income is:
                                                             factor is:
          Not over $6,867............................             0.467
          $9,450.....................................             0.500
          $12,159....................................             0.533
          $14,931....................................             0.600
          $17,577....................................             0.667
          $20,916....................................             0.767
          $26,271....................................             0.867
          $32,949....................................             1.000
          $39,627....................................             1.000
          $47,628....................................             1.118
          $60,984....................................             1.235
          $86,373....................................             1.412
          $99,036....................................             1.500
          $176,400 and over..........................             2.000
                            ``(iv) Married individuals filing separate 
                        returns.--In the case of a taxpayer to whom 
                        section 1(d) applies--

``If the taxpayer's modified
                                                      The progressivity
        adjusted gross income is:
                                                             factor is:
          Not over $4,127............................             0.483
          $6,143.....................................             0.552
          $8,789.....................................             0.655
          $11,403....................................             0.759
          $14,112....................................             0.862
          $17,168....................................             1.000
          $20,507....................................             1.000
          $25,515....................................             1.182
          $33,327....................................             1.333
          $45,864....................................             1.485
          $88,200 and over...........................             2.000
                    ``(B) Ratable changes.--The tables prescribed by 
                the Secretary under subparagraph (A) shall provide for 
                ratable increases (rounded to the nearest 1/1,000) in 
                the progressivity factors between the amounts of 
                modified adjusted gross income contained in the tables.
                    ``(C) Inflation adjustment of modified agi 
                amounts.--For inflation adjustment of amounts of 
                modified adjusted gross income, see subsection (h)(3).
            ``(4) Modified adjusted gross income.--For purposes of this 
        subsection, the term `modified adjusted gross income' means 
        adjusted gross income for the taxable year--
                    ``(A) determined without regard to section 62(b) 
                and without regard to the deductions from gross income 
                allowable under section 62(a) by reason of--
                            ``(i) paragraph (6) thereof (relating to 
                        profit-sharing, annuities, and bond-purchase 
                        plans of self-employed individuals),
                            ``(ii) paragraph (7) thereof (relating to 
                        retirement savings), and
                            ``(iii) paragraph (11) thereof (relating to 
                        reforestation expenses), and
                    ``(B) increased by--
                            ``(i) interest exempt from the tax imposed 
                        by chapter 1, and
                            ``(ii) the items of tax preference 
                        described in section 57 (other than subsection 
                        (a)(5) thereof).
    ``(c) Termination of Borrower's Repayment Obligation.--
            ``(1) In general.--The repayment obligation of a borrower 
        of an IDEA loan shall terminate only if there is repaid with 
        respect to such loan an amount equal to--
                    ``(A) in the case of any repayment during the first 
                12 years for which the borrower is in repayment status 
                with respect to any loan, the sum of--
                            ``(i) the principal amount of the loan, 
                        plus
                            ``(ii) interest computed for each year the 
                        loan is outstanding at an annual rate equal to 
                        the annual rate otherwise applicable to such 
                        loan for such year, plus 1 percent, and
                    ``(B) in the case of any repayment during any 
                subsequent year, the principal amount of the loan plus 
                interest computed at the rates applicable to the loan.
            ``(2) No repayment required after 25 years in repayment 
        status.--No amount shall be required to be repaid under this 
        section with respect to any loan for any taxable year after the 
        25th year for which the borrower is in repayment status with 
        respect to such loan.
            ``(3) Exception for de minimus loans repaid during first 12 
        years in repayment status.--In any case where the maximum 
        account balance of any borrower is $3,000 or less, subparagraph 
        (B), and not subparagraph (A), of paragraph (1) shall apply to 
        repayment of such loan.
            ``(4) Determination of years in repayment status.--For 
        purposes of paragraphs (1)(A) and (2), the number of years in 
        which a borrower is in repayment status with respect to any 
        IDEA loan shall be determined without regard to any year before 
        the most recent year in which the borrower received an IDEA 
        loan.
            ``(5) Extension of repayment years for medical interns.--
        The number of years specified in paragraphs (1)(A) and (2) 
        shall be increased by 1 year for each calendar year during any 
        5 months of which the individual is an intern in medicine, 
        dentistry, veterinary medicine, or osteopathic medicine.
    ``(d) Definitions.--For purposes of this section--
            ``(1) Maximum account balance.--The term `maximum account 
        balance' means the highest amount (as of the close of any 
        calendar year) of unpaid principal and unpaid accrued interest 
        on all IDEA loan obligations of a borrower.
            ``(2) Current account balance.--The term `current account 
        balance' means the amount (as of the close of a calendar year) 
        of unpaid principal and unpaid accrued interest on all IDEA 
        loans of a borrower.
            ``(3) Repayment status.--A borrower is in repayment status 
        for any taxable year unless--
                    ``(A) such borrower was, during at least 7 months 
                of such year, an eligible student, as that term is 
                defined in section 109(2) of the Income-Dependent 
                Education Assistance Act of 1993; or
                    ``(B) such taxable year was the first year in which 
                the borrower was such an eligible student and the 
                borrower was such an eligible student during the last 3 
                months of such taxable year.
            ``(4) IDEA loan.--The term `IDEA loan' means any loan made 
        under title I of the Income-Dependent Education Assistance Act 
        of 1993.
    ``(e) Payment of Amount Owing.--Any amount to be collected from an 
individual under this section shall be paid--
            ``(1) not later than the last date (determined without 
        regard to extensions) prescribed for filing his return of tax 
        imposed by chapter 1 for the taxable year ending before the 
        date the notice under subsection (a) is sent, and
            ``(2)(A) if such return is filed not later than such date, 
        with such return, or
            ``(B) in any case not described in subparagraph (A), in 
        such manner as the Secretary may by regulations prescribe.
    ``(f) Failure To Pay Amount Owing.--If an individual fails to pay 
the full amount required to be paid on or before the last date 
described in subsection (e)(1), the Secretary shall assess and collect 
the unpaid amount in the same manner, with the same powers, and subject 
to the same limitations applicable to a tax imposed by subtitle C the 
collection of which would be jeopardized by delay.
    ``(g) Loans of Deceased and Permanently Disabled Borrowers; 
Discharge by Secretary.--
            ``(1) Discharge in the event of death.--If a borrower of an 
        IDEA loan dies or becomes permanently and totally disabled (as 
        determined in accordance with regulations of the Secretary), 
        then the Secretary shall discharge the borrower's liability on 
        the loan.
            ``(2) Limitation on discharge.--The discharge of the 
        liability of an individual under this subsection shall not 
        discharge the liability of any spouse with respect to any IDEA 
        loan made to such spouse.
    ``(h) Crediting of Collections; Special Rules.--
            ``(1) Crediting of amounts paid on a joint return.--Amounts 
        collected under this section on a joint return from a husband 
        and wife both of whom are in repayment status shall be credited 
        to the accounts of such spouses in the following order:
                    ``(A) first, to repayment of interest added to each 
                account at the end of the preceding calendar year in 
                proportion to the interest so added to the respective 
                accounts of the spouses, and
                    ``(B) then, to repayment of unpaid principal, and 
                unpaid interest accrued before such preceding calendar 
                year, in proportion to the respective maximum account 
                balances of the spouses.
            ``(2) Computation of alternative annual payment for 
        individuals who have attained age 55.--In the case of an 
        individual who attains age 55 before the close of the calendar 
        year ending in the taxable year, or of an individual filing a 
        joint return whose spouse attains age 55 before the close of 
        such calendar year, the progressivity factor applicable to the 
        base amortization amount of such individual for such taxable 
        year shall not be less than 1.0.
            ``(3) Inflation adjustment in computation of progressivity 
        factor.--
                    ``(A) In general.--Not later than December 15 of 
                1996 and of each 3d calendar year thereafter, the 
                Secretary shall prescribe tables which shall apply in 
                lieu of the tables contained in subsection (b)(3)(A) 
                with respect to the succeeding 3 calendar years.
                    ``(B) Method of prescribing tables.--The table 
                which under subparagraph (A) is to apply in lieu of the 
                table contained in clause (i), (ii), (iii), or (iv) of 
                subsection (b)(3)(A), as the case may be, shall be 
                prescribed--
                            ``(i) by increasing each amount of modified 
                        adjusted gross income in such table by the 
                        cost-of-living adjustment for the calendar 
                        year, and
                            ``(ii) by not changing the progressivity 
                        factor applicable to the modified adjusted 
                        gross income as adjusted under clause (i).
                If any increase under the preceding sentence is not a 
                multiple of $10, such increase shall be rounded to the 
                nearest multiple of $10 (or, if such increase is a 
                multiple of $5 and is not a multiple of $10, such 
                increase shall be increased to the next highest 
                multiple of $10).
                    ``(C) Cost-of-living adjustment.--For purposes of 
                this paragraph, the cost-of-living adjustment for any 
                calendar year is the percentage (if any) by which--
                            ``(i) the CPI for the preceding calendar 
                        year, exceeds
                            ``(ii) the CPI for the calendar year 1995.
                    ``(D) CPI for any calendar year.--For purposes of 
                subparagraph (C), the CPI for any calendar year is the 
                average of the Consumer Price Index as of the close of 
                the 12-month period ending on September 30 of such 
                calendar year.
                    ``(E) Consumer price index.--For purposes of 
                subparagraph (D), the term `Consumer Price Index' means 
                the last Consumer Price Index for all-urban consumers 
                published by the Department of Labor.
            ``(5) Rules relating to bankruptcy.--
                    ``(A) In general.--An IDEA loan shall not be 
                dischargeable in a case under title 11 of the United 
                States Code.
                    ``(B) Certain amounts may be postponed.--If any 
                individual receives a discharge in a case under title 
                11 of the United States Code, the Secretary may 
                postpone any amount of the portion of the liability of 
                such individual on any IDEA loan which is attributable 
                to amounts required to be paid on such loan for periods 
                preceding the date of such discharge.
            ``(6) Finality of assessment and collection.--The first 
        sentence of subsection (b) of section 6305 shall apply to 
        assessments and collections under subsection (f) of this 
        section.''
    (b) Application of Estimated Tax.--Subsection (f) of section 6654 
of such Code (relating to failure by individual to pay estimated income 
tax) is amended by striking ``minus'' at the end of paragraph (2) and 
inserting ``plus'', by redesignating paragraph (3) as paragraph (4), 
and by inserting after paragraph (2) the following new paragraph:
            ``(3) the amount required to be repaid under section 6306 
        (relating to collection of income-dependent education 
        assistance loans), minus.''
    (c) Filing Requirement.--Subsection (a) of section 6012 of such 
Code (relating to persons required to make returns of income) is 
amended by inserting after paragraph (9) the following new paragraph:
            ``(10) Every individual required to make a payment for the 
        taxable year under section 6306 (relating to collection of 
        income-dependent education assistance loans).''
    (d) Clerical Amendment.--The table of sections for subchapter A of 
chapter 64 of such Code is amended by adding at the end thereof the 
following new item:

                              ``Sec. 6306. Collection of income-
                                        dependent education assistance 
                                        loans.''

                                 <all>

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