[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5962 Introduced in House (IH)]

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114th CONGRESS
  2d Session
                                H. R. 5962

To amend the Higher Education Act of 1965 to provide for the automatic 
 recertification of income for income-driven repayment plans, and for 
                            other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 8, 2016

Ms. Bonamici (for herself and Mr. Costello of Pennsylvania) introduced 
 the following bill; which was referred to the Committee on Education 
and the Workforce, and in addition to the Committee on Ways and Means, 
for a period to be subsequently determined by the Speaker, in each case 
for consideration of such provisions as fall within the jurisdiction of 
                        the committee concerned

_______________________________________________________________________

                                 A BILL


 
To amend the Higher Education Act of 1965 to provide for the automatic 
 recertification of income for income-driven repayment plans, 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 ``Streamlining Income-driven, 
Manageable Payments on Loans for Education Act'' or the ``SIMPLE Act''.

SEC. 2. NOTIFICATION PROCEDURES FOR BORROWERS WHO ARE DELINQUENT ON 
              LOANS.

    (a) Amendments.--
            (1) Notification procedures.--Section 455(d) of the Higher 
        Education Act of 1965 (20 U.S.C. 1087e(d)) is amended by adding 
        at the end the following:
            ``(6) Notification procedures for borrowers who are 
        delinquent on loans.--
                    ``(A) Authority to obtain income information.--The 
                Secretary may obtain such information as is reasonably 
                necessary regarding the income and family size of a 
                borrower described in this paragraph (and the 
                borrower's spouse, if applicable). Returns and return 
                information (as defined in section 6103 of the Internal 
                Revenue Code of 1986) may be obtained under this 
                subparagraph only to the extent authorized by section 
                6103(l)(13) of such Code, except that nothing in this 
                subparagraph or such Code shall be construed to 
                authorize the Secretary to obtain such returns and 
                return information for a borrower who is not at least 
                60 days delinquent on a loan made under this part. The 
                Secretary shall establish procedures as are necessary 
                to effectively implement this paragraph.
                    ``(B) Borrower notification.--With respect to each 
                borrower of a loan made under this part who is 60 days 
                delinquent on such loan, the Secretary shall, at a 
                minimum and as soon as practicable after such 60-day 
                delinquency, provide to the borrower the following:
                            ``(i) Notification that the borrower is at 
                        least 60 days delinquent on the loan, including 
                        a description of the loan.
                            ``(ii) A description of the repayment plans 
                        under which the borrower is eligible to repay 
                        the loan.
                            ``(iii) Clear and simple instructions on 
                        how to select the repayment plans described in 
                        clause (ii) for the loan.
                            ``(iv) If the income information of the 
                        borrower is available to the Secretary under 
                        subparagraph (A), based on such income 
                        information, the amount of the monthly payments 
                        under each such repayment plan for the loan.
                            ``(v) An explanation that in the case of a 
                        borrower for whom adjusted gross income is 
                        unavailable or does not reasonably reflect the 
                        borrower's current income--
                                    ``(I) if the borrower selects to 
                                repay such loan pursuant to an income-
                                driven repayment plan that defines 
                                discretionary income in such a manner 
                                that an individual not required under 
                                section 6012(a)(1) of the Internal 
                                Revenue Code of 1986 to file a return 
                                with respect to income taxes imposed by 
                                subtitle A of such Code may have a 
                                calculated monthly payment greater than 
                                $0, the borrower will be required to 
                                provide the Secretary with other 
                                documentation of income satisfactory to 
                                the Secretary, which documentation the 
                                Secretary may use to determine an 
                                appropriate repayment schedule; or
                                    ``(II) if the borrower selects to 
                                repay such loan pursuant to an income-
                                driven repayment plan that is not 
                                described in subclause (I), the 
                                borrower will not be required to 
                                provide the Secretary with such other 
                                documentation of income, and the 
                                borrower will have a calculated monthly 
                                payment of $0.
                            ``(vi) An explanation that the Secretary 
                        shall take the actions under subparagraph (D) 
                        with respect to such borrower if the borrower 
                        is 120 days delinquent on the loan and has not 
                        selected a new repayment plan for the loan.
                            ``(vii) Instructions on updating the 
                        information of the borrower obtained under 
                        subparagraph (A).
                    ``(C) Initial selection of plan.--With respect to 
                each borrower of a loan made under this part who does 
                not select a new repayment plan for the loan in 
                accordance with the notice received under subparagraph 
                (B), and who is 120 days delinquent on the loan, the 
                Secretary, as soon as practicable after such 120-day 
                delinquency, shall--
                            ``(i) in a case in which the loan is 
                        eligible for an income-driven repayment plan--
                                    ``(I) provide the borrower with the 
                                income-driven repayment plan for which 
                                the loan is eligible and which requires 
                                the lowest monthly payment amount for 
                                such loan, compared to the other such 
                                plans for which the loan is eligible, 
                                or if the loan is eligible for more 
                                than one income-driven repayment plan 
                                that has the same such lowest monthly 
                                payment amount, provide the borrower 
                                with such income-driven repayment plan 
                                that has the most favorable terms for 
                                the borrower;
                                    ``(II) if the plan described in 
                                subclause (I) is not the income-driven 
                                plan that would have the lowest monthly 
                                payment amount for the loan if the loan 
                                were eligible for such plan, notify the 
                                borrower of the actions, if any, the 
                                borrower may take for such loan to 
                                become eligible for such income-driven 
                                repayment plan; and
                                    ``(III) authorize the borrower to 
                                change the Secretary's selection of a 
                                plan under this clause to any plan 
                                described in paragraph (1) for which 
                                the borrower is eligible; and
                            ``(ii) in a case in which the loan is 
                        ineligible for an income-driven repayment plan, 
                        the Secretary shall notify the borrower of any 
                        actions, if any, the borrower may take for such 
                        loan to become eligible for such a plan.
                    ``(D) Additional selection of plan.--With respect 
                to each borrower of a loan made under this part who 
                selects a new repayment plan in accordance with the 
                notice received under subparagraph (B), and who 
                continues to be delinquent on such loan for a period 
                after such selection that the Secretary determines is 
                sufficient to indicate that the borrower may benefit 
                from repaying such loan under a new repayment plan, but 
                such period is not less than a 60-day period, the 
                Secretary, as soon as practicable after such period, 
                shall carry out the procedures under this paragraph for 
                such loan.
                    ``(E) Opt-out.--The Secretary shall authorize a 
                borrower to opt-out of the procedures under this 
                paragraph.''.
            (2) Definition of income-driven repayment plan.--Section 
        455(d) of the Higher Education Act of 1965 (20 U.S.C. 1087e(d)) 
        is further amended by adding at the end the following:
            ``(7) Definition.--In this section, the term `income-driven 
        repayment plan' means a plan described in subparagraph (D) or 
        (E) of paragraph (1).''.
            (3) Changing plans.--Section 493C of the Higher Education 
        Act of 1965 (20 U.S.C. 1098e) is amended by adding at the end 
        the following:
    ``(f) Changing Plans.--A borrower changing from income-based 
repayment under this section to a different repayment plan shall not be 
required to pay the one monthly payment under the standard repayment 
plan described in section 682.215(d)(3) or 685.221(d)(2) of title 34, 
Code of Federal Regulations (or successor regulations) or any other 
amount.''.
    (b) Effective Date; Application.--
            (1) Automatic enrollment.--The amendments made by 
        paragraphs (1) and (2) of subsection (a) shall--
                    (A) take effect as soon as practicable after the 
                Secretary of Education finalizes the procedures under 
                section 4 of this Act, but not later than 2 years after 
                the date of enactment of such Act; and
                    (B) apply with respect to any loan made under part 
                D of title IV of the Higher Education Act of 1965 (20 
                U.S.C. 1087a et seq.) to a new borrower (defined in 
                section 103 of the Higher Education Act of 1965 (20 
                U.S.C. 1003)) on or after the date on which such 
                amendments take effect.
            (2) Changing plans.--The amendment made by subsection 
        (a)(3) shall take effect on the date of enactment of this Act.

SEC. 3. AUTOMATIC RECERTIFICATION OF INCOME.

    (a) Income-Contingent Repayment.--Section 455(e) of the Higher 
Education Act of 1965 (20 U.S.C. 1087e(e)) is amended by adding at the 
end the following:
            ``(8) Automatic recertification.--
                    ``(A) In general.--Beginning as soon as practicable 
                after the Secretary finalizes the procedures under 
                section 4 of the Streamlining Income-driven, Manageable 
                Payments on Loans for Education Act, but not later than 
                2 years after the date of enactment of such Act, the 
                Secretary shall establish and implement procedures for 
                the following:
                            ``(i) With respect to any borrower who, on 
                        or after the date on which the Secretary 
                        establishes procedures for this subparagraph, 
                        selects (or for whom the Secretary selects) 
                        income contingent repayment for repayment of a 
                        loan made under this part--
                                    ``(I) obtain (for each year of such 
                                repayment and without further action by 
                                the borrower) such information as is 
                                reasonably necessary regarding the 
                                income of such borrower (and the 
                                borrower's spouse, if applicable), for 
                                the purpose of determining the 
                                repayment obligation of the borrower 
                                for such year, including information 
                                with respect to the borrower's family 
                                size in accordance with the procedures 
                                under section 4 of the Streamlining 
                                Income-driven, Manageable Payments on 
                                Loans for Education Act;
                                    ``(II) allow the borrower to opt-
                                out, at anytime, of the Secretary being 
                                able to obtain information under 
                                subclause (I) without further action by 
                                the borrower; and
                                    ``(III) provide the borrower with 
                                an opportunity to update the 
                                information obtained under subclause 
                                (I) before the determination of the 
                                annual repayment obligation of the 
                                borrower; and
                                    ``(IV) in the case of a borrower 
                                for whom adjusted gross income is 
                                unavailable or does not reasonably 
                                reflect the borrower's current income--
                                            ``(aa) if the borrower 
                                        selects to repay such loan 
                                        pursuant to an income-driven 
                                        repayment plan that defines 
                                        discretionary income in such a 
                                        manner that an individual not 
                                        required under section 
                                        6012(a)(1) of the Internal 
                                        Revenue Code of 1986 to file a 
                                        return with respect to income 
                                        taxes imposed by subtitle A of 
                                        such Code may have a calculated 
                                        monthly payment greater than 
                                        $0, such borrower will be 
                                        required to provide the 
                                        Secretary with other 
                                        documentation of income 
                                        satisfactory to the Secretary, 
                                        which documentation the 
                                        Secretary may use to determine 
                                        an appropriate repayment 
                                        schedule; or
                                            ``(bb) if the borrower 
                                        selects to repay such loan 
                                        pursuant to an income-driven 
                                        repayment plan that is not 
                                        described in item (aa), the 
                                        borrower will not be required 
                                        to provide the Secretary with 
                                        such other documentation of 
                                        income, and the borrower will 
                                        have a calculated monthly 
                                        payment of $0.
                            ``(ii) With respect to any borrower who 
                        selects income contingent repayment for 
                        repayment of a loan made under this part before 
                        the date on which the Secretary establishes 
                        procedures for this subparagraph, the 
                        Secretary--
                                    ``(I) shall provide such borrower 
                                with the ability to opt into the 
                                procedures described in clause (i); and
                                    ``(II) until the borrower has opted 
                                into such procedures, shall not be able 
                                to obtain information under clause 
                                (i)(I) without further action by the 
                                borrower.
                    ``(B) Returns and return information.--Returns and 
                return information (as defined in section 6103 of the 
                Internal Revenue Code of 1986) may be obtained under 
                subparagraph (A)(i)(I) only to the extent authorized by 
                section 6103(l)(13) of such Code.
                    ``(C) Other requirements.--The procedures 
                established by the Secretary under this paragraph shall 
                be consistent with the requirements of paragraphs (1) 
                through (7), except as otherwise provided in this 
                paragraph.
            ``(9) Outreach.--Beginning as soon as practicable after the 
        Secretary finalizes the procedures under section 4 of the 
        Streamlining Income-driven, Manageable Payments on Loans for 
        Education Act, but not later than 2 years after the date of 
        enactment of such Act, the Secretary shall--
                    ``(A) inform borrowers repaying a loan made under 
                this part pursuant to an income-driven repayment plan 
                (defined in section 455(d)(7)) of the benefits of 
                automatic recertification procedures under paragraph 
                (8)(A)(i); and
                    ``(B) encourage such borrowers to opt into such 
                automatic recertification.''.
    (b) Income-Based Repayment.--Section 493C(c) of the Higher 
Education Act of 1965 (20 U.S.C. 1098e(c)) is amended by adding at the 
end the following: ``Beginning as soon as practicable after the 
Secretary finalizes the procedures under section 4 of the Streamlining 
Income-driven, Manageable Payments on Loans for Education Act, but not 
later than 2 years after the date of enactment of such Act, the 
Secretary shall carry out the procedures under 455(e)(8) with respect 
to income-based repayment under this section.''.

SEC. 4. STUDY AND PROCEDURES ON DETERMINING FAMILY SIZE.

    (a) In General.--Not later than 1 year after the date of the 
enactment of this Act, the Secretary of Education shall--
            (1) jointly with the Secretary of the Treasury, conduct a 
        study, which meets the specifications described in subsection 
        (b), on the effect of using data from the Internal Revenue 
        Service on the deduction for personal exemptions provided by 
        section 151 of the Internal Revenue Code of 1986 for a proxy 
        for family size in an income-driven repayment plan, and publish 
        such study in the Federal Register;
            (2) use the results of the study conducted under paragraph 
        (1) to develop procedures for determining family size for the 
        automatic recertification of income for an income-driven 
        repayment plan in a manner that minimizes burdens and 
        unintended harm to borrowers;
            (3) publish the procedures developed under paragraph (2) in 
        the Federal Register; and
            (4) after a notice and comment period on such procedures, 
        use such comments to finalize the procedures.
    (b) Specifications.--The study conducted under subsection (a)(1) 
shall--
            (1) determine how closely such personal exemptions match 
        the family size that borrowers report on their income-driven 
        repayment plan request form;
            (2) compare the borrower's actual monthly payment amount 
        with the monthly payment amount borrowers would have using 
        family size information derived from tax returns; and
            (3) use data from more than one year, where possible, to 
        analyze how much family size changes over time.
    (c) Definition.--The term ``income-driven repayment plan'' has the 
meaning given the term in section 455(d)(7) of the Higher Education Act 
of 1965, as amended by this Act.

SEC. 5. DISCLOSURE OF TAX RETURN INFORMATION TO CARRY OUT INCOME 
              CONTINGENT REPAYMENT OF STUDENT LOANS.

    (a) Repeal of Termination.--Section 6103(l)(13) of the Internal 
Revenue Code of 1986 is amended by striking subparagraph (D).
    (b) Disclosure to Contractors.--
            (1) In general.--Section 6103(l)(13) of such Code, as 
        amended by subsection (a), is amended by redesignating 
        subparagraph (C) as subparagraph (D) and by inserting after 
        subparagraph (B) the following new subparagraph:
                    ``(C) Disclosure to certain contractors.--Officers 
                and employees of the Department of Education may 
                disclose the information described in subparagraph (A) 
                to contractors of the Department of Education to the 
                extent necessary for the purposes described in 
                subparagraph (B).''.
            (2) Conforming amendments.--
                    (A) Section 6103(a)(3) of such Code is amended by 
                inserting ``(13),'' after ``(12),''.
                    (B) Section 6103(p)(4) of such Code is amended by 
                inserting ``(13),'' after ``(l)(10),'' each place it 
                occurs.
    (c) Disclosure of Information Regarding Personal Exemptions.--
Section 6103(l)(13)(A) of such Code is amended by striking ``and'' at 
the end of clause (ii), by striking the period at the end of clause 
(iii) and inserting ``, and'', and by inserting after clause (iii) the 
following:
                            ``(iv) the personal exemptions of such 
                        taxpayer provided by section 151.''.
    (d) Use of Disclosed Information for Enrollment in Income-Driven 
Repayment Plan.--Section 6103(l)(13)(B) of such Code is amended--
            (1) by striking ``to the extent necessary in, 
        establishing'' and inserting ``to the extent necessary in--
                            ``(i) establishing'',
            (2) by striking the period at the end and inserting ``, 
        and'', and
            (3) by adding at the end the following new clause:
                            ``(ii) enrolling borrowers who are at least 
                        120 days delinquent on a loan in an income-
                        driven repayment plan (as defined in section 
                        455(d)(7) of the Higher Education Act of 
                        1965).''.
    (e) Use of Disclosed Information for Annual Recertifications.--
            (1) In general.--Section 6103(l)(13)(B)(i) of such Code, as 
        amended by subsection (d), is amended by inserting ``(including 
        annual recertification)'' after ``applicable student loan''.
            (2) Loans to which annual recertification applies.--Section 
        6103(l)(13)(D), as amended by subsections (a) and (b), is 
        amended by striking ``and'' at the end of clause (i), by 
        striking the period at the end of clause (ii) and inserting ``, 
        and'', and by adding at the end the following new clause:
                            ``(iii) with respect to any annual 
                        recertification referred to in subparagraph 
                        (B)(i), any loan made under part B or D of 
                        title IV of the Higher Education Act of 
                        1965.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to disclosures made after the date of the enactment of this Act.
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