Findings

Congress makes the following findings: (1)A unique legal and political relationship exists between the United States and Indian tribes that is reflected in article I, section 8, clause 3 of the Constitution, various treaties, Federal statutes, Supreme Court decisions, executive agreements, and course of dealing. (2)Native Americans continue to rank at the bottom of nearly every indicator of social and economic well-being in America: (A)Unemployment rates average near 50 percent in Indian country and hover well over 90 percent on many reservations. (B)While the national poverty rate is only 11 percent, over 26 percent of all Native Americans live in poverty. (C)In addition, Native Americans have some of the lowest levels of educational attainment in the United States. (3)Numerous external efforts at economic development in Indian Country have proven unsuccessful. The most successful efforts have been initiated from within the Native communities themselves. Efforts that empower the communities and give them the tools to make their own decisions should be encouraged and pursued. (4)Educational achievement continues to be a cyclical obstacle to economic development in Indian Country. Businesses are often unwilling to locate to Indian Country because of the lack of an educated workforce. Over a quarter of all Americans have a bachelors degree or higher. However, only 12 percent of all Native Americans nationwide have such a degree, and only 6 percent of those who actually live in Indian Country have a bachelors or higher. Once Natives are finally able to obtain higher education, many are not able to return to their communities because there are no jobs. There needs to be an intervening factor to help break this damaging cycle.

Loan forgiveness for employment in Indian country

Part B of title IV of the Higher Education Act of 1965 is amended by inserting after section 428K (20 U.S.C. 1078–11) the following:

428L.

Loan forgiveness for employment in Indian country

(a)

Purpose

It is the purpose of this section— (1)to dramatically increase the number of individuals with higher education degrees working within and for Indian country; (2)to facilitate economic growth and development in Indian country, and promote Tribal sovereignty; (3)to encourage members of Indian tribes with higher education degrees to return to Indian country; (4)to encourage the long-term retention of educated individuals in Indian country; and (5)to encourage public service in Indian country, and to encourage investment in Indian country through an increase in the education level of the available workforce. (b)

Program authorized

(1)

In general

From the funds appropriated under subsection (g), the Secretary is authorized to forgive, in accordance with this section, the student loan debt of any borrower, who— (A)obtains or has obtained a bachelor’s or graduate degree from an institution of higher education; and (B)obtains employment in Indian country. (2)

Method of loan forgiveness

To provide the loan forgiveness authorized in paragraph (1), the Secretary is authorized to carry out a program— (A)through the holder of the loan, to assume the obligation to repay a qualified loan amount for a loan made under this part; and (B)to cancel a qualified loan amount for a loan made under part D of this title. (3)

Award basis; priority

(A)

Award basis

Subject to subparagraph (B), loan forgiveness under this section shall be on a first-come, first-served basis, and subject to the availability of appropriations. (B)

Priorities

The Secretary shall, by regulation, establish a system for giving priority in providing loan forgiveness under this section to individuals based on the following factors: (i)The level of poverty in the locality within Indian country where the individual is employed. (ii)Whether the individual is an enrolled member of an Indian tribe. (iii)Whether such enrolled member is performing employment in the Indian country of the Indian tribe in which they are enrolled. (iv)The ratio of the individual’s student loan debt to the individual’s annual income. (v)Whether the individual’s employer will provide an additional amount or a matching percentage for student loan repayment for the individual. (4)

Outreach

The Secretary shall post a notice on a Department Internet web site regarding the availability of loan forgiveness under this section, and shall notify institutions of higher education (including Tribal Colleges and Universities) and the Bureau of Indian Affairs regarding the availability of loan forgiveness under this section. (c)

Qualified loan amounts

(1)

Percentages

Subject to paragraph (2), the Secretary shall assume or cancel the obligation to repay under this section— (A)15 percent of the amount of all loans made, insured, or guaranteed after the date of enactment of the Indian Country Educational Empowerment Zone Act to a student under part B or D, for each of the first and second years of employment in Indian country; (B)20 percent of such total amount, for each of the third and fourth years of such employment; and (C)30 percent of such total amount, for the fifth year of such employment. (2)

Maximum

The Secretary shall not repay or cancel under this section more than— (A)$20,000 in the aggregate of loans made, insured, or guaranteed under parts B and D, for any student with a bachelor’s degree, but without a graduate degree; and (B)$20,000 of such loans for each year of employment, for any student with a graduate degree. (3)

Treatment of consolidation loans

A loan amount for a loan made under section 428C may be a qualified loan amount for the purposes of this subsection only to the extent that such loan amount was used to repay a loan made, insured, or guaranteed under part B or D for a borrower who meets the requirements of subsection (b)(1), as determined in accordance with regulations prescribed by the Secretary. (d)

Additional requirements

(1)

No refunding of previous payments

Nothing in this section shall be construed to authorize the refunding of any repayment of a loan made under this part or part D. (2)

Interest

If a portion of a loan is repaid by the Secretary under this section for any year, the proportionate amount of interest on such loan which accrues for such year shall be repaid by the Secretary. (3)

Double benefits prohibited

(A)

Ineligibility of national service award recipients

No student borrower may, for the same service, receive a benefit under both this section and subtitle D of title I of the National and Community Service Act of 1990 (42 U.S.C. 12601 et seq.). (B)

Double forgiveness

No student borrower may, for the same service, receive a benefit under both this section and section 428J, 428K, or 460 of this Act or section 108 of the Indian Health Care Improvement Act (25 U.S.C. 1616a). (4)

Repayment to eligible lenders

The Secretary shall pay to each eligible lender or holder for each fiscal year an amount equal to the aggregate amount of loans which are subject to repayment pursuant to this section for such year. (e)

Application for repayment

(1)

In general

Each eligible individual desiring loan forgiveness under this section shall submit a complete and accurate application to the Secretary at such time, in such manner, and containing such information as the Secretary may require. Such application shall contain verification from the employer of the employment in Indian country. (2)

Conditions

An eligible individual may apply for loan forgiveness under this section after completing each year of employment in Indian country. The borrower shall receive forbearance while engaged in such employment unless the borrower is in deferment while so engaged. (f)

Regulations

The Secretary is authorized to issue such regulations as may be necessary to carry out the provisions of this section. (g)

Authorization of appropriations

There are authorized to be appropriated to carry out this section $20,000,000 for fiscal year 2007, and such sums as may be necessary for each of the 4 succeeding fiscal years. (h)

Definition of indian tribe

In this section, the term Indian tribe means any Indian tribe, band, nation, or other organized group or community, including any Alaska Native village, which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.