[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2065 Introduced in House (IH)]
<DOC>
116th CONGRESS
1st Session
H. R. 2065
To amend the Higher Education Act of 1965 in order to increase usage of
the Federal student loan income-based repayment plan and improve
repayment options for borrowers, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 3, 2019
Ms. DeLauro introduced the following bill; which was referred to the
Committee on Education and Labor, and in addition to the Committees on
Ways and Means, and Financial Services, 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 in order to increase usage of
the Federal student loan income-based repayment plan and improve
repayment options for borrowers, 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; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Affordable Loans
for Any Student Act''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. References in Act.
TITLE I--SIMPLIFYING REPAYMENT PLANS
Sec. 101. Income-based repayment plan.
Sec. 102. Fixed repayment plan.
Sec. 103. Termination of certain repayment plan options.
Sec. 104. Providing incentives to switch into simplified repayment
plans.
Sec. 105. Automatic recertification of income.
Sec. 106. Disclosure of tax return information to carry out certain
higher education loan programs.
Sec. 107. Study and procedures on determining family size.
TITLE II--ENDING INTEREST CAPITALIZATION AND ORIGINATION FEES
Sec. 201. Ending interest capitalization for Federal Direct Loans.
Sec. 202. Elimination of origination fees for Federal Direct Loans.
TITLE III--PROVIDING ASSISTANCE IN SITUATIONS OF BORROWER DISTRESS
Sec. 301. Limits on seizing income for debt relating to Federal student
loans.
Sec. 302. Allowing for multiple loan rehabilitations.
Sec. 303. Pause payment process.
Sec. 304. Automatic enrollment into income-based repayment for
borrowers who are delinquent on loans and
for borrowers who rehabilitate defaulted
loans.
Sec. 305. Separating joint consolidation loans.
Sec. 306. Removing the collection cost requirement.
TITLE IV--IMPROVING LOAN INFORMATION AND COUNSELING
Sec. 401. Student loan contract; simplifying loan disclosures.
Sec. 402. Annual and pre-loan information and counseling requirements.
Sec. 403. Exit counseling.
Sec. 404. Online counseling tools.
Sec. 405. Private education loan certification and information.
TITLE V--EFFECTIVE DATE; TRANSITION
Sec. 501. Effective date; rulemaking regarding termination of certain
repayment plans.
SEC. 2. REFERENCES IN ACT.
Except as otherwise expressly provided in this Act, wherever 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 that section or other provision of the Higher Education Act
of 1965 (20 U.S.C. 1001 et seq.).
TITLE I--SIMPLIFYING REPAYMENT PLANS
SEC. 101. INCOME-BASED REPAYMENT PLAN.
(a) Simplifying the Income-Based Repayment Plan.--Section 493C (20
U.S.C. 1098e) is amended--
(1) in subsection (b)--
(A) by striking ``Income-Based Repayment Program
Authorized.--'' and inserting the following: ``Income-
Based Repayment Program for Borrowers Who Enter Income-
Based Repayment Before July 1, 2020.--'';
(B) in paragraph (3)(A), by striking ``except
that'' and all that follows through ``section 435(o)'';
and
(C) in paragraph (8), by striking ``the standard
repayment plan;'' and inserting ``the fixed repayment
plan under section 493E;''; and
(2) by striking subsection (c) and inserting the following:
``(c) Income-Based Repayment Program for New Loans On and After
July 1, 2020 and for Borrowers Who Enter Income-Based Repayment After
July 1, 2020.--
``(1) In general.--Notwithstanding any other provision of
this section, the provisions of this subsection shall apply--
``(A) with respect to any loan made, insured, or
guaranteed under part B or D on or after July 1, 2020,
for which the borrower elects the income-based
repayment plan under this section; and
``(B) with respect to any loan made, insured, or
guaranteed under part B or D before July 1, 2020, if
such borrower elects to repay the loan under the
income-based repayment plan on or after July 1, 2020,
in accordance with paragraph (3) and section
428(b)(1)(D)(ii) or 455(d)(7), as applicable.
``(2) Special terms.--With respect to a loan described in
paragraph (1), the following terms shall apply to the income-
based repayment plan carried out under this section:
``(A)(i) Notwithstanding subsection (a)(3)(B), (b),
or (e)--
``(I) the annual repayment amount under
this subsection shall be an amount equal to 10
percent of the result obtained by calculating,
on at least an annual basis, the amount by
which--
``(aa) the borrower's, and the
borrower's spouse's (if applicable),
adjusted gross income; exceeds
``(bb) the applicable percentage of
the poverty line in accordance with
clause (ii) that is applicable to the
borrower's family size as determined
under section 673(2) of the Community
Services Block Grant Act (42 U.S.C.
9902(2)); and
``(II) a borrower's monthly payment shall
be determined in accordance with subclause (I)
divided by 12, which amount may exceed the
monthly repayment amount under a standard 10-
year repayment plan or a fixed repayment plan
described in section 493E.
``(ii) For purposes of clause (i), the term
`applicable percentage' means 250 percent reduced by 5
percentage points for each $1,000 by which the
borrower's adjusted gross income exceeds $120,000.
``(B) Notwithstanding subsection (e)(2), subsection
(b)(7)(B) shall be applied by substituting `20 years'
for `25 years'.
``(C) Notwithstanding subparagraph (A) of
subsection (b)(6), a borrower of such a loan shall not
be required to have a partial financial hardship and
may elect, and remain enrolled in, the income-based
repayment plan under this section regardless of income
level, with the repayment amount calculated under
subparagraph (A).
``(D) Notwithstanding subsection (b), a borrower of
an excepted PLUS loan or excepted consolidation loan
may elect the income-based repayment plan under this
subsection for the excepted PLUS loan or excepted
consolidation loan, and the Secretary shall treat such
loan for purposes only of the repayment terms as a
Federal Direct PLUS Loan issued to a student borrower.
The Secretary may issue rules and regulations, as the
Secretary determines necessary, regarding the treatment
of excepted PLUS loans or excepted consolidation loans
that are to be repaid under an income-based repayment
plan under this subsection.
``(3) Rule for borrowers in income-based repayment before
july 1, 2020.--A borrower of a loan made, insured, or
guaranteed under part B or D who enrolled in the income-based
repayment plan under subsection (b), as such plan was in effect
on July 1, 2020, may choose to retain such repayment plan or
elect to enter an income-based repayment plan under this
subsection or a fixed repayment plan described in section 493E,
as provided in section 428(b)(1)(D)(ii) or 455(d)(7) (as
applicable).
``(4) Interest payments and accrual.--Notwithstanding any
other provision of this Act, if a borrower's monthly payment
for a loan under an income-based repayment plan under this
subsection is insufficient to pay the accrued interest on the
borrower's loan for such month--
``(A) in the case of a subsidized loan (including
the portion of a consolidated loan that is a subsidized
loan), any interest due and not paid under subsection
(b)(2) on the subsidized loan for that month shall be
paid or forgiven by the Secretary, except that a
borrower of a subsidized loan shall only receive the
benefits of this subparagraph for such loan for 36
months of payments under the income-based repayment
plan, excluding any period of pause payment under
section 460B; and
``(B) in the case of an unsubsidized loan or a
subsidized loan that no longer qualifies under
subparagraph (A), 50 percent of the interest not
covered by the borrower's monthly payment shall be paid
or forgiven by the Secretary and the amount of the
remaining interest shall be added to the balance of
interest due on the loan, but shall not be capitalized.
``(5) Written, electronic, or verbal enrollment in income-
based repayment.--
``(A) In general.--A borrower of a loan made under
this part may elect to repay such loan under the
income-based repayment plan under this subsection by
providing written, electronic, or verbal notice to the
Secretary of the borrower's desire to make such
election, subject to subparagraph (C).
``(B) Use of information.--
``(i) In general.--The estimated monthly
payment amount under this section for a loan
for a borrower who makes an election described
in subparagraph (A) shall be immediately
calculated using the income and family size
information provided through the borrower's
written, electronic, or verbal statement.
``(ii) Verification.--The information
described in clause (i) shall be verified by
the Secretary not later than 90 days after the
date the borrower states such income and family
size information. If the Secretary is unable to
verify the information by the end of the 90-day
period, the borrower's payment after such 90-
day period will be the amount applicable under
the fixed repayment plan under section 493E.
``(iii) Adjustment if necessary.--Upon
verification by the Secretary under clause
(ii), the Secretary shall adjust the estimated
monthly payment described in clause (i) based
on the verified income and family size
information of the borrower, if necessary. Any
adjusted monthly payment shall take effect
beginning with the payment due not less than 60
days after the Secretary notifies the borrower
of the adjusted amount. The Secretary shall
consider any payments made prior to the
adjusted monthly payment as having satisfied
the amount due to qualify toward loan
cancellation or forgiveness options under this
title.
``(C) Limitation.--The Secretary shall permit a
borrower to make an election of income-based repayment
in the written, electronic, or verbal manner described
in subparagraph (A) only in connection with the first
instance of each of the following:
``(i) The borrower's selection of a
repayment plan during the grace period for such
loan.
``(ii) The borrower changing from the fixed
repayment plan under section 493E to income-
based repayment.
``(iii) The borrower's failure to complete
the verification process described in
subparagraph (B)(ii).
``(iv) The borrower's failure to recertify
enrollment in income-based repayment under this
subsection.''.
(b) Including Income of Spouses.--Subsection (d) of section 493C
(20 U.S.C. 1098e(d)) is amended to read as follows:
``(d) Calculation of Adjusted Gross Income for Married Borrowers.--
The Secretary shall calculate the adjusted gross income of a married
borrower under this section--
``(1) in the case of a married borrower and spouse who
jointly file a Federal income tax return, based on the adjusted
gross income of the borrower and spouse as reported on the
Federal income tax return; and
``(2) in the case of a married borrower who files a Federal
income tax return separately from the borrower's spouse, based
on the sum of the adjusted gross income of the borrower and the
spouse, as reported on the applicable Federal income tax
returns, unless the borrower certifies, on a form approved by
the Secretary, that the borrower is--
``(A) separated from the borrower's spouse; or
``(B) unable to reasonably access the income
information of the borrower's spouse.''.
SEC. 102. FIXED REPAYMENT PLAN.
Part G of title IV (20 U.S.C. 1088 et seq.) is amended by adding at
the end the following:
``SEC. 493E. FIXED REPAYMENT PLAN.
``(a) In General.--A borrower of a loan made under part D on or
after July 1, 2020, and a borrower who is in repayment on a loan made,
insured, or guaranteed under part B or D before July 1, 2020, may elect
to repay such loan under the fixed repayment plan described in this
section.
``(b) Fixed Repayment Plan.--Under the fixed repayment plan, a
borrower shall repay each loan described in subsection (a) with a fixed
monthly repayment amount paid over a period of 10 years, subject to
subsection (c).
``(c) Special Rules.--
``(1) Minimum.--If a borrower's monthly payment under this
section (except for the final payment on the loan) is less than
$25, the Secretary shall establish the borrower's monthly
payment as $25.
``(2) Alternative minimum payments.--Notwithstanding
paragraph (1), the Secretary may accept an alternative minimum
payment amount, which may include an amount of less than $25,
to account for a borrower's exceptional circumstances.''.
SEC. 103. TERMINATION OF CERTAIN REPAYMENT PLAN OPTIONS.
(a) FFEL Program Repayment Plan Options.--Section 428(b) (20 U.S.C.
1078(b)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (D)--
(i) in clause (ii), by striking ``may
annually change the selection of a repayment
plan under this part,'' and inserting ``may at
any time after July 1, 2020, change the
selection of a repayment plan under this part
or part G to one of the 2 repayment plans
described in paragraph (9)(C),''; and
(ii) in clause (iii), by inserting ``or, in
the case of a default that occurs after July 1,
2020, be subject to income-based repayment in
accordance with section 493C(c)'' before the
semicolon at the end;
(B) in subparagraph (E)(i), by striking ``the
option of repaying the loan in accordance with a
standard, graduated, income-sensitive, or extended
repayment schedule (as described in paragraph (9))
established by the lender in accordance with
regulations of the Secretary; and'' and inserting ``the
option of repaying the loan in accordance with an
applicable repayment plan described in paragraph
(9)(C)''; and
(C) by striking subparagraph (L); and
(2) in paragraph (9)--
(A) in subparagraph (A)--
(i) in the subparagraph heading, by
inserting ``before july 1, 2020'' after
``selection''; and
(ii) in the matter preceding clause (i)--
(I) by inserting ``or subparagraph
(C), as applicable,'' after ``this
subparagraph''; and
(II) by striking ``The borrower''
and inserting ``Before July 1, 2020,
the borrower'';
(B) in subparagraph (B), by inserting before the
period at the end ``or, for a borrower entering
repayment after July 1, 2020, the lender shall provide
the borrower with the fixed repayment plan described in
section 493E''; and
(C) by adding at the end the following:
``(C) Selection of repayment plans on and after
july 1, 2020.--Notwithstanding any other provision of
law, and in accordance with regulations promulgated,
beginning on July 1, 2020, a lender shall offer a
borrower of a loan made, insured, or guaranteed under
this part the opportunity to change repayment plans at
any time after July 1, 2020, and then not more than
once per calendar year thereafter. The borrower may
choose between the following repayment plans:
``(i) A fixed repayment plan described in
section 493E.
``(ii) The income-based repayment plan
under section 493C(c).''.
(b) Federal Direct Loan Program Repayment Plan Options.--Section
455(d) (20 U.S.C. 1087e(d)) is amended--
(1) by redesignating paragraphs (2) through (5) as
paragraphs (3) through (6), respectively;
(2) in paragraph (1)--
(A) in the paragraph heading, by inserting ``before
july 1, 2020'' after ``selection''; and
(B) in the matter preceding subparagraph (A), by
inserting ``that enters repayment before July 1,
2020,'' before ``a variety'';
(3) by inserting after paragraph (1) the following:
``(2) Design and selection beginning july 1, 2020.--
``(A) In general.--Notwithstanding paragraph (1),
for any borrower of a loan made under this part that
enters repayment on or after July 1, 2020, and for any
borrower subject to paragraph (7), the Secretary shall
offer the borrower a choice between the following 2
plans for repayment of such loan, including principal
and interest on the loan. The borrower may choose--
``(i) a fixed repayment plan described in
section 493E; or
``(ii) an income-based repayment plan under
section 493C(c).
``(B) Acceleration.--A borrower in repayment shall
be entitled to accelerate, without penalty, repayment
on the borrower's loans under this part.
``(C) Selection by the secretary.--If a borrower of
a loan made under this part that enters repayment on or
after July 1, 2020, does not select a repayment plan
described in subparagraph (A) before the first payment
on such loan is due, the Secretary shall provide the
borrower with a fixed repayment plan described in
section 493E.
``(D) Changes in selections.--A borrower of a loan
made under this part that enters repayment or on after
July 1, 2020, may change the borrower's selection of a
repayment plan in accordance with subparagraphs (B) and
(C) of paragraph (7).
``(E) Borrower in default.--Beginning on July 1,
2020, in lieu of the requirements of paragraph (6), the
Secretary may require any borrower who has defaulted on
a loan made under this part on or after July 1, 2020,
to repay the loan pursuant to an income-based repayment
plan under section 493C(c).''; and
(4) by adding at the end the following:
``(7) Borrowers of loans made before july 1, 2020.--A
borrower who is in repayment on a loan made under this part
before July 1, 2020--
``(A) may choose to retain the repayment plan that
the borrower was enrolled in on the day before such
date;
``(B) may elect to--
``(i) enter an income-based repayment plan
under section 493C(c);
``(ii) enter a fixed repayment plan
described in section 493E; or
``(iii) switch between the repayment plans
described in clauses (i) and (ii);
``(C) after switching to a repayment plan described
in clause (i) or (ii) of subparagraph (B), shall not be
permitted to select a repayment plan not described in
subparagraph (B) for the loan; and
``(D) shall retain, for purposes of repayment or
cancellation of any outstanding balance of principal
and interest due on a loan (as described in section
493C(b)(7)), any payments on such loan under another
income-based or income-contingent repayment plan under
this title that would otherwise be qualifying.''.
(c) Conforming Amendment.--Section 433(b)(7)(B) (20 U.S.C.
1083(b)(7)(B)) is amended by striking ``on a standard repayment plan''
and inserting ``, in the case of a borrower who has not selected a
repayment plan, on the repayment plan designated under subparagraph (B)
of section 428(b)(9)''.
SEC. 104. PROVIDING INCENTIVES TO SWITCH INTO SIMPLIFIED REPAYMENT
PLANS.
(a) Enabling Consolidation in Order To Simplify Repayment.--Section
455(g) (20 U.S.C. 1087e(g)) is amended--
(1) by striking ``Loans.--'' and all that follows through
``A borrower of'' and inserting the following: ``Loans.--
``(1) In general.--A borrower of'';
(2) by striking the second sentence; and
(3) by adding at the end the following:
``(2) Eligibility.--To be eligible for a Federal Direct
Consolidation Loan under this part, a borrower shall meet the
eligibility criteria set forth in section 428C(a)(3), except
that, notwithstanding section 428C(a)(3)(B), a borrower may
obtain a Federal Direct Consolidation Loan if the borrower--
``(A) obtains the Federal Direct Consolidation Loan
for the purpose of--
``(i) selecting the income-based repayment
plan under section 493C(c) or fixed-income
repayment plan under section 495E; or
``(ii) participating in the pause payment
process under section 460B; and
``(B) meets the requirements of section
428C(a)(3)(A).''.
(b) Incentives for Simplified Repayment Plans.--Part G of title IV
(20 U.S.C. 1088 et seq.), as amended by section 102, is further amended
by adding at the end the following:
``SEC. 493F. INCENTIVES FOR SIMPLIFIED REPAYMENT PLANS.
``(a) In General.--To facilitate the transition of borrowers to
simplified repayment plan options, the Secretary shall reduce the
interest rate applicable under section 455(b) or 427A to a loan under
part B or D held by a borrower as of July 1, 2020, by 100 basis points
(or the equivalent), if the borrower of the loan, after the effective
date of the Affordable Loans for Any Student Act--
``(1) changes from a repayment plan described in
subparagraphs (A) through (E) of section 455(d)(1) for such
loan to an income-based repayment plan under section 493C(c) or
a fixed repayment plan under section 493E; or
``(2) consolidates 1 or more loans under this title, or
described in section 428C(a)(4), that were under a repayment
plan described in subparagraphs (A) through (E) of section
455(d)(1), or clauses (i) through (v) of section 428(b)(9),
into a Federal Direct Consolidation Loan and selects an income-
based repayment plan under section 493C(c) or a fixed repayment
plan under section 493E for the loan.
``(b) Limitation.--The interest rate for a loan eligible for the
incentive under subsection (a) may be reduced only once under this
section.
``(c) Regulations.--The Secretary shall promulgate rules carrying
out the incentive program established under this section.''.
SEC. 105. AUTOMATIC RECERTIFICATION OF INCOME.
(a) Income-Based Repayment.--Section 493C of the Higher Education
Act of 1965 (20 U.S.C. 1098e) is amended by adding at the end the
following:
``(f) Eligibility Determinations and Automatic Recertification.--
``(1) In general.--Beginning as soon as the Secretary
determines practicable after the Secretary finalizes the
procedures under section 107 of the Affordable Loans for Any
Student Act, the Secretary shall establish and implement, with
respect to any borrower described in paragraph (2), procedures
to--
``(A) obtain (for each year of 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
such section 107, subject to subparagraph (B);
``(B) allow the borrower, at any time, to opt out
of subparagraph (A) and prevent the Secretary from
obtaining information under such subparagraph without
further action by the borrower;
``(C) provide the borrower with an opportunity to
update the information obtained under subparagraph (A)
before the determination of the annual repayment
obligation of the borrower; and
``(D) in the case of a borrower for whom adjusted
gross income is unavailable (except as provided in
paragraph (2)(B)), ensure that the borrower will not be
required to provide the Secretary with other
documentation of income and provide the borrower with a
calculated monthly payment of $0.
``(2) Applicability.--
``(A) In general.--Paragraph (1) shall apply to
each borrower of a loan made under this part who, on or
after the date on which the Secretary establishes
procedures under such paragraph--
``(i) selects, or for whom the Secretary
selected under subparagraphs (C) or (D) of
paragraph (8), or paragraph (9), of subsection
(d), or section 428(m)(1), an income-based
repayment plan; or
``(ii) recertifies income and family size
under such plan.
``(B) Eligibility exception.--A borrower for whom
adjusted gross income is unavailable because the
borrower has been granted an extension on filing the
borrower's income taxes or is undergoing an audit or
examination by the Internal Revenue Service shall not
automatically be eligible for the calculated monthly
payment of $0 in accordance with paragraph (1)(D)
during such period. When the extension, audit, or
examination is completed, the Secretary shall resume
consideration of the borrower for automatic
recertification under the procedures described in
paragraph (1), including subparagraph (D) of such
paragraph (if applicable).
``(3) Availability of returns and return information.--
Returns and return information (as defined in section 6103 of
the Internal Revenue Code of 1986) may be obtained under
paragraph (1)(A) only to the extent authorized by section
6103(l)(13) of such Code.''.
(b) Income-Contingent Repayment.--Section 455(e) of the Higher
Education Act of 1965 (20 U.S.C. 1087e(e)) is amended--
(1) in paragraph (3), by inserting ``, consistent with the
procedures established under paragraph (8)(B)(iv)'' before the
period at the end; and
(2) by adding at the end the following:
``(8) Automatic recertification.--
``(A) In general.--Beginning as soon as the
Secretary determines practicable after the Secretary
finalizes the procedures under section 107 of the
Affordable Loans for Any Student Act, the Secretary
shall establish and implement procedures that allow the
automatic recertification of income with respect to
borrowers described in subparagraph (B). Such
procedures shall, to the extent practicable, be the
same procedures described in section 493C(f).
``(B) Applicability.--Subparagraph (A) shall apply
to each borrower of a loan made under this part--
``(i) who, on or after the date on which
the Secretary establishes procedures under such
subparagraph, applies to recertify income and
family size under such plan; or
``(ii) for whom the Secretary selected an
income-contingent repayment plan under section
428(m)(1).
``(C) Availability of 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) only to
the extent authorized by section 6103(l)(13) of such
Code.
``(D) 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.''.
SEC. 106. DISCLOSURE OF TAX RETURN INFORMATION TO CARRY OUT CERTAIN
HIGHER EDUCATION LOAN PROGRAMS.
(a) In General.--Paragraph (13) of section 6103(l) of the Internal
Revenue Code of 1986 is amended to read as follows:
``(13) Disclosure of return information to carry out the
higher education act of 1965.--
``(A) Income-contingent or income-based repayment
and total and permanent disability discharge.--The
Secretary shall, upon written request from the
Secretary of Education, disclose to officers,
employees, and contractors of the Department of
Education, as specifically authorized and designated by
the Secretary of Education, only for the purpose of
(and to the extent necessary in) establishing,
renewing, administering, and conducting analyses and
forecasts for estimating costs related to income-
contingent or income-based repayment programs, and the
discharge of loans based on a total and permanent
disability (within the meaning of section 437(a) of the
Higher Education Act of 1965), under title IV of the
Higher Education Act of 1965, the following return
information (as defined in subsection (b)(2)) with
respect to taxpayers identified by the Secretary of
Education as participating in the loan programs under
title IV of such Act, for taxable years specified by
such Secretary:
``(i) Taxpayer identity information with
respect to such taxpayer.
``(ii) The filing status of such taxpayer.
``(iii) Type of tax return from which the
return information is provided.
``(iv) The adjusted gross income of such
taxpayer.
``(v) Total number of exemptions claimed,
or total number of individuals and dependents
claimed, as applicable, on the return.
``(vi) Number of children with respect to
which tax credits under section 24 are claimed
on the return.
``(vii) Other information determined to be
necessary by agreement between the Secretary
and the Secretary of Education to administer
the Federal financial aid programs as required
by the Higher Education Act of 1965.
``(B) Federal student financial aid.--The Secretary
shall, upon written request from the Secretary of
Education, disclose to officers, employees, and
contractors of the Department of Education, as
specifically authorized and designated by the Secretary
of Education, only for the purpose of (and to the
extent necessary in) determining eligibility for, and
amount of, Federal student financial aid under programs
authorized by title IV of the Higher Education Act of
1965 and conducting analyses and forecasts for
estimating costs related to such programs, the
following return information (as defined in subsection
(b)(2)) with respect to taxpayers identified by the
Secretary of Education as applicants for Federal
student financial aid under title IV of such Act, for
taxable years specified by such Secretary:
``(i) Taxpayer identity information with
respect to such taxpayer.
``(ii) The filing status of such taxpayer.
``(iii) Type of tax return from which the
return information is provided.
``(iv) The adjusted gross income of such
taxpayer.
``(v) The amount of any net earnings from
self-employment (as defined in section 1402),
wages (as defined in section 3121(a) or
3401(a)), and taxable income from a farming
business (as defined in section 236A(e)(4)) for
the period reported on the return.
``(vi) The total income tax of such
taxpayer.
``(vii) Total number of exemptions claimed,
or total number of individuals and dependents
claimed, as applicable, on the return.
``(viii) Number of children with respect to
which tax credits under section 24 are claimed
on the return.
``(ix) Amount of any credit claimed under
section 25A for the taxable year.
``(x) Amount of individual retirement
account distributions not included in adjusted
gross income for the taxable year.
``(xi) Amount of individual retirement
account contributions and payments to self-
employed SEP, Keogh, and other qualified plans
which were deducted from income for the taxable
year.
``(xii) The amount of tax-exempt interest.
``(xiii) Amounts from retirement pensions
and annuities not included in adjusted gross
income for the taxable year.
``(xiv) If applicable, the fact that there
is no return filed for such taxpayer for the
applicable year.
``(xv) Other information determined to be
necessary by agreement between the Secretary
and the Secretary of Education to administer
the Federal financial aid programs as required
by the Higher Education Act of 1965.
``(C) Restriction on use of disclosed
information.--
``(i) In general.--Return information
disclosed under subparagraphs (A) and (B) may
be used by officers, employees, and contractors
of the Department of Education, as specifically
authorized and designated by the Secretary of
Education, only for the purposes and to the
extent necessary described in such
subparagraphs and for mitigating risks (as
defined in clause (ii)) relating to the
programs described in such subparagraphs.
``(ii) Mitigating risks.--For purposes of
this subparagraph, the term `mitigating risks'
means, with respect to the programs described
in subparagraphs (A) and (B)--
``(I) analyzing or estimating costs
associated with potential changes to
the need-analysis formula,
``(II) oversight activities by the
Office of Inspector General of the
Department of Education as authorized
by the Inspector General Act of 1978,
as amended,
``(III) developing or administering
statistical models that inform support
to populations of Federal student loan
borrowers who are at risk of default or
delinquency,
``(IV) reducing the net cost of
improper payments to Federal financial
aid recipients, and
``(V) producing aggregate
statistics for reporting, research, or
consumer information on the performance
of programs or institutions of higher
education participating in the programs
under title IV of the Higher Education
Act of 1965.
Such term does not include the conduct of
criminal investigations or prosecutions.
``(iii) Redisclosure to institutions of
higher education, state higher education
agencies, and designated scholarship
organizations.--The Secretary of Education, and
officers, employees, and contractors of the
Department of Education, may disclose return
information received under subparagraph (B),
solely for the use in the application, award,
and administration of Federal student financial
aid, State aid, or aid awarded by eligible
institutions or such entities as the Secretary
of Education may designate, to the following
persons:
``(I) An institution of higher
education with which the Secretary of
Education has an agreement under
subpart 1 of part A, or part D or E, of
title IV of the Higher Education Act of
1965.
``(II) A State higher education
agency.
``(III) A scholarship organization
which is designated by the Secretary of
Education as of the effective date of
the Affordable Loans for Any Student
Act as an organization eligible to
receive the information provided under
this clause.
The preceding sentence shall only apply to the
extent that the taxpayer with respect to whom
the return information relates provides consent
for such disclosure to the Secretary of
Education as part of the application for
Federal student financial aid under title IV of
the Higher Education Act of 1965.
``(D) Required notification periods.--
``(i) Notification to congress.--The
Secretary and the Secretary of Education shall
issue joint notifications to the Committees on
Finance and Health, Education, Labor, and
Pensions of the Senate and the Committees on
Ways and Means and Education and Labor of the
House of Representatives not less than 120 days
prior to the first disclosure of any type of
return information under subparagraph (A)(vii)
or (B)(xv) with respect to which such a
notification has not been previously made.
``(ii) Public notice and comment.--There
shall be a public notice and comment period
beginning not less than 60 days prior to the
first disclosure of any type of return
information under subparagraph (A)(vii) or
(B)(xv) with respect to which such a
notification has not been previously made,
subsequent to the period allotted for
Congressional comment under clause (i).''.
(b) Confidentiality of Return Information.--Section 6103(a)(3) of
such Code is amended by inserting ``, (13)(A), (13)(B)'' after
``(12)''.
(c) Conforming Amendments.--Section 6103(p)(4) of such Code is
amended--
(1) by inserting ``(A), (13)(B)'' after ``(13)'' each place
it occurs, and
(2) by inserting ``, (13)(A), (13)(B)'' after ``(l)(10)''
each place it occurs.
(d) Effective Date.--The amendments made by this section shall
apply to disclosures made under section 6103(l)(13) of the Internal
Revenue Code of 1986 (as amended by this section) after the date of the
enactment of this Act.
(e) In General.--Part G of title IV of the Higher Education Act of
1965 (20 U.S.C. 1088 et seq.) is amended by adding at the end the
following:
``SEC. 494. NOTIFICATION OF REQUEST FOR TAX RETURN INFORMATION.
``The Secretary shall advise students and borrowers who submit an
application for Federal student financial aid under this title or for
the discharge of a loan based on permanent and total disability, as
described in section 437(a), or who request an income-contingent or
income-based repayment plan on their loan (as well as parents and
spouses who sign such an application or request or a Master Promissory
Note on behalf of those students and borrowers) that the Secretary has
the authority to request that the Internal Revenue Service disclose
their tax return information (as well as that of parents and spouses
who sign such an application or request or a Master Promissory Note on
behalf of those students and borrowers) to officers, employees, and
contractors of the Department of Education as authorized under section
6103(1)(13) of the Internal Revenue Code of 1986, to the extent
necessary for the Secretary to carry out this title.''.
(f) Conforming Amendment.--Section 484(q) of the Higher Education
Act of 1965 (20 U.S.C. 1091(q)) is amended to read as follows:
[``(q) reserved''.]
(g) Effective Date.--The amendments made by this section shall
apply to disclosures made after the date of enactment of this Act.
SEC. 107. STUDY AND PROCEDURES ON DETERMINING FAMILY SIZE.
(a) In General.--The Secretary of Education, acting jointly with
the Secretary of the Treasury, shall--
(1) not later than 1 year after the date of enactment of
this Act, publish, in the Federal Register, notice of the
Secretary's intent to conduct a study on the effect of using
data from the Internal Revenue Service such as personal
exemptions, filing status, or child tax credits, as proxies for
family size in an income-driven repayment plan, and invite
public comment regarding the study;
(2) after reviewing any public comments provided under
paragraph (1), conduct the study and publish the results of the
study in the Federal Register;
(3) 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;
(4) publish the procedures developed under paragraph (3) in
the Federal Register; and
(5) after a notice and comment period on such procedures,
use such comments to finalize the procedures.
(b) Specifications.--The study conducted under subsection (a)
shall--
(1) be completed, with the results published pursuant to
subsection (a)(2), not later than 3 years after the date of
enactment of this Act;
(2) determine how closely personal exemptions, filing
status, or child tax credits match the family size that
borrowers report on their income-driven repayment plan request
form;
(3) compare the borrower's actual monthly payment amount
with the monthly payment amount borrowers would have using
family size information derived from tax returns;
(4) include data from tax year 2018 or later tax years; and
(5) 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 6103(l)(13)(F) of the Internal
Revenue Code of 1986, as amended by section 106.
TITLE II--ENDING INTEREST CAPITALIZATION AND ORIGINATION FEES
SEC. 201. ENDING INTEREST CAPITALIZATION FOR FEDERAL DIRECT LOANS.
(a) In General.--Section 455 (20 U.S.C. 1087e) is amended--
(1) in subsection (b)--
(A) in the subsection heading, by inserting ``and
Practices'' after ``Rate''; and
(B) by adding at the end the following:
``(11) Interest practices.--
``(A) In general.--Beginning on the effective date
of the Affordable Loans for Any Student Act, interest
on a loan made under this part shall accrue and only be
added to the balance of interest due on the loan, and
shall not ever be capitalized.
``(B) No capitalization of interest during in-
school or grace periods.--
``(i) In general.--Beginning on the
effective date of the Affordable Loans for Any
Student Act, interest on loans made under this
part for which payments of principal are not
required during the in-school and grace periods
or for which payments are deferred in
accordance with sections 427(a)(2)(C) and
428(b)(1)(M) shall accrue and be added to the
balance of interest due from the borrower when
the loan enters repayment, but shall not ever
be capitalized.
``(ii) Notice requirement.--The Secretary
shall adjust any forbearance notice required in
accordance with section 428(a)(3)(A)(iii) to
reflect the availability of the pause payment
process pursuant to section 460B and the
treatment of interest under such section.
``(C) Limited retroactivity.--For a borrower of a
loan made under this part on or before the effective
date of the Affordable Loans for Any Student Act that
is in a status, on the day before such effective date,
that involves interest capitalization, such loan shall
have capitalization pro-rated to the effective date of
such Act, but shall not be subject to further
capitalization after the effective date of such Act.'';
(2) in subsection (e)(5)--
(A) by inserting ``(which, beginning after the
effective date of the Affordable Loans for Any Student
Act, shall not be capitalized)'' after ``accrued
interest''; and
(B) by striking the second sentence; and
(3) in subsection (q)(2), by striking the second sentence
and inserting the following: ``Such interest shall be paid or
shall accrue but not be capitalized in accordance with
subsection (b)(11)(B).''.
(b) Income-Based Repayment Plans.--Paragraph (3)(B) of section
493C(b) (20 U.S.C. 1098e(b)(3)(B)) is amended to read as follows:
``(B)(i) beginning on the effective date of the
Affordable Loans for Any Student Act, for an eligible
loan issued under part D or not otherwise described in
clause (ii), shall not be capitalized and shall be
added to the balance of interest due for the loan; and
``(ii) for an eligible loan made, insured, or
guaranteed under part B and held by a private lender,
shall be added to the principal amount and capitalized
at the time the borrower--
``(I) ends the election to make income-
based repayment under this subsection; or
``(II) begins making payments of not less
than the amount specified in paragraph
(6)(A);''.
SEC. 202. ELIMINATION OF ORIGINATION FEES FOR FEDERAL DIRECT LOANS.
(a) Repeal of Origination Fees.--Subsection (c) of section 455 (20
U.S.C. 1087e(c)) is repealed.
(b) Effective Date.--The amendment made by subsection (a) shall
apply with respect to loans made under part D of title IV of the Higher
Education Act of 1965 (20 U.S.C. 1087a et seq.) for which the first
disbursement of principal is made, or, in the case of a Federal Direct
Consolidation Loan, the application is received, on or after July 1,
2020.
TITLE III--PROVIDING ASSISTANCE IN SITUATIONS OF BORROWER DISTRESS
SEC. 301. LIMITS ON SEIZING INCOME FOR DEBT RELATING TO FEDERAL STUDENT
LOANS.
Part D of title IV (20 U.S.C. 1087a et seq.) is amended by adding
at the end the following:
``SEC. 460A. LIMITS ON SEIZING INCOME FOR DEBT RELATING TO FEDERAL
STUDENT LOANS.
``(a) Definitions.--In this section--
``(1) the term `adjusted gross income' has the meaning
given the term in section 62 of the Internal Revenue Code of
1986; and
``(2) the term `poverty line' means the poverty line (as
defined by the Office of Management and Budget and revised
annually in accordance with section 673(2) of the Community
Services Block Grant Act (42 U.S.C. 9902(2))) applicable to a
family of the size involved.
``(b) Limitation on Collection.--
``(1) In general.--Notwithstanding any other provision of
law, any entity engaged in the collection of debts relating to
loans made under this title may not take any action to cause,
or seek to cause, the collection of such a debt that is taken
from the wages, Federal benefits, or other amounts due to a
borrower through garnishment, deduction, offset, or seizure in
an amount on a monthly basis that is more than the amount
described in paragraph (2).
``(2) Calculation.--The amount described in this paragraph
is the amount obtained by calculating what the monthly
repayment amount would be for loans made under this title, with
respect to the borrower, under the income-based repayment plan
under section 493C(c).
``(3) Presumption.--For purposes of this section, if an
entity described in paragraph (1) is unable to determine the
family size of a borrower after taking reasonable steps to
collect the information necessary to do so, that person shall
presume that the family size of the borrower is 1 individual.
``(c) Communications.--Any communication by an entity described in
subsection (b)(1) that is for the purpose of seizing income of a
consumer for debt that relates to a loan made under this title shall--
``(1) be considered--
``(A) an attempt to collect a debt; and
``(B) conduct in connection with the collection of
a debt for the purposes of this title; and
``(2) contain a notice to the borrower that, consistent
with the procedures for rehabilitating a loan pursuant to
section 428F(a) or consolidating loans out of default as
described in section 428C(a)(3)(B)(i)(V), the borrower may exit
default and reenter current repayment status (as defined in
section 428(l)(2)(C)) with a similar monthly payment amount on
an income-based repayment plan under section 493C(c) and
thereby obtain the full flexibility and benefits of such
status, including the ability to adjust family size and make
qualifying payments for purposes of repayment or cancellation
of any outstanding balance of principal and interest due on a
loan (as described in section 493C(b)(7)).
``(d) Remedies.--
``(1) First tier.--The Secretary may impose a civil penalty
on an entity for a violation of this section not to exceed
$5,000 for each day during which such violation continues.
``(2) Second tier.--Notwithstanding paragraph (1), the
Secretary may impose a civil penalty on an entity that
recklessly engages in a violation of this section not to exceed
$25,000 for each day during which such violation continues.
``(3) Third tier.--Notwithstanding paragraphs (1) and (2),
the Secretary may impose a civil penalty on an entity that
knowingly violates this section not to exceed $1,000,000 for
each day during which such violation continues.
``(4) No exemplary or punitive damages.--Nothing in this
subsection shall be construed as authorizing the imposition of
exemplary or punitive damages.
``(5) Entities subject to penalty.--An entity subject to a
penalty under this subsection may include a contractor or agent
of the Department.''.
SEC. 302. ALLOWING FOR MULTIPLE LOAN REHABILITATIONS.
(a) FFEL Loans.--Section 428F(a)(5) (20 U.S.C. 1078-6(a)(5)) is
amended by striking ``one time per loan'' and inserting ``2 times per
loan''.
(b) Direct Loans.--Section 455(d) (20 U.S.C. 1087e(d)), as amended
by section 103, is further amended by adding at the end the following:
``(8) Loan rehabilitation.--In carrying out the process for
loan rehabilitation described in section 428F(a)(5) with
respect to loans made under this part and in accordance with
subsection (a), the Secretary shall allow a borrower to obtain
the benefits available under such section not more than 2 times
per loan.''.
SEC. 303. PAUSE PAYMENT PROCESS.
(a) Establishment of Pause Payment Process.--Part D of title IV (20
U.S.C. 1087a et seq.), as amended by section 301, is further amended by
adding at the end the following:
``SEC. 460B. PAUSE PAYMENT PROCESS.
``(a) In General.--The Secretary shall establish a single,
streamlined pause payment process available in a single application
with respect to loans made under this part that replaces the deferment
and forbearance options and their respective applications that are
available to borrowers before the effective date of the Affordable
Loans for Any Student Act and provides temporary relief from repayment
of such loans in accordance with this section.
``(b) Application for Relief.--Notwithstanding any other provision
of this Act, a borrower of a loan made under this part that desires to
receive temporary relief from repayment with respect to such loan shall
request relief in accordance with the pause payment process established
by the Secretary under subsection (a), which shall include the options
to select a temporary cessation of payments and to make smaller
payments than the monthly payments required under the borrower's
repayment plan.
``(c) Pause Payment.--
``(1) In general.--A borrower of a loan made under this
part who meets the requirements described in paragraph (2)
shall be eligible for a pause payment, during which periodic
installments of principal need not be paid, and interest--
``(A) shall not accrue, in the case of a--
``(i) Federal Direct Stafford Loan; or
``(ii) a Federal Direct Consolidation Loan
that consolidated only Federal Direct Stafford
Loans, or a combination of such loans and
Federal Stafford Loans for which the student
borrower received an interest subsidy under
section 428; or
``(B) shall accrue and be added to the balance of
interest due but not be capitalized, or be paid by the
borrower, in the case of a Federal Direct PLUS Loan, a
Federal Direct Unsubsidized Stafford Loan, or a Federal
Direct Consolidation Loan not described in subparagraph
(A)(ii).
``(2) Eligibility.--A borrower of a loan made under this
part shall be eligible for a pause payment during any period--
``(A) during which--
``(i) the borrower is carrying at least
one-half the normal full-time work load for the
course of study that the borrower is pursuing,
as determined by the eligible institution (as
such term is defined in section 435(a)) the
student is attending; or
``(ii) in the case of a parent borrower,
the borrower or the student on whose behalf the
loan was borrowed is carrying at least one-half
the normal full-time work load, in accordance
with clause (i);
``(B) during which the borrower is pursuing a
course of study pursuant to a graduate fellowship
program approved by the Secretary;
``(C) during which the borrower is serving in a
medical or dental internship or residency program;
``(D) during which the borrower is in a
rehabilitation training program for individuals with
disabilities approved by the Secretary;
``(E) during which the borrower--
``(i) is serving on active duty during a
war or other military operation or national
emergency and for the 180-day period following
the demobilization date for the service; or
``(ii) qualifies for partial repayment of
the borrower's loans under a provision of
chapter 109 or 1609 of title 10, United States
Code;
``(F) during which the borrower is performing
qualifying National Guard duty during a war or other
military operation or national emergency and for the
180-day period following the demobilization date for
the service;
``(G) during which the borrower is serving in--
``(i) an approved national service position
(as defined in section 101 of the National and
Community Service Act of 1990 (42 U.S.C.
12511)) in an Americorps program (defined for
purposes of this subparagraph as a program
carried out under subtitle C or E of title I of
the National and Community Service Act of 1990
(42 U.S.C. 12571 et seq., 12611 et seq.) or
title I of the Domestic Volunteer Service Act
of 1973 (42 U.S.C. 4951 et seq.));
``(ii) in the Peace Corps; or
``(iii) in a teaching position that would
qualify for teacher loan forgiveness under
section 428J;
``(H) not in excess of 3 years during which the
Secretary determines, in accordance with regulations
prescribed under section 435(o), that the borrower has
experienced or will experience an economic hardship,
such as experiencing financial difficulties, having
unexpected or significant medical expenses, or being
unable to find full-time employment;
``(I) during which a borrower's ability to make
payments, as determined by the Secretary, has been
adversely affected by--
``(i) any major disaster or emergency
declared by the President under section 401 or
501, respectively, of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act
(42 U.S.C. 5170, 5191);
``(ii) a local emergency, as declared by
the appropriate government agency; or
``(iii) a military mobilization;
``(J) during which the borrower is awaiting a
determination by the Secretary of the borrower's
request for a pause payment, change in repayment plan,
loan forgiveness or cancellation, or consolidation
loan; or
``(K) during which the borrower is experiencing
other exceptional circumstances for which pause payment
under this section is in the best interest of the
borrower, as determined by the Secretary through
regulation.''.
(b) Conforming Amendments.--Section 455 (20 U.S.C. 1087e) is
amended--
(1) in subsection (e)(7)(B)(i), by striking ``is in
deferment'' and inserting ``is under pause payment pursuant to
section 460B'';
(2) by striking subsection (f) and inserting the following:
``(f) [reserved]''; and
(3) in subsection (l)--
(A) by striking ``Program.--'' and all that follows
through ``Using funds'' and inserting the following:
``Program.--Using funds''; and
(B) by striking paragraph (2).
SEC. 304. AUTOMATIC ENROLLMENT INTO INCOME-BASED REPAYMENT FOR
BORROWERS WHO ARE DELINQUENT ON LOANS AND FOR BORROWERS
WHO REHABILITATE DEFAULTED LOANS.
(a) Notification and Automatic Enrollment Procedures.--Section
455(d) (20 U.S.C. 1087e(d)), as amended by sections 103 and 302, is
further amended by adding at the end the following:
``(9) Notification and automatic enrollment procedures for
borrowers who are delinquent on loans.--
``(A) Authority to obtain income information.--
``(i) In general.--In the case of any
borrower who is at least 60 days delinquent on
a loan made under this part, the Secretary may
obtain such information as is reasonably
necessary regarding the income and family size
of the borrower (and the borrower's spouse, if
applicable).
``(ii) Availability of returns and return
information.--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.
``(B) Borrower notification.--With respect to each
borrower of a loan made under this part who is at least
60 days delinquent on such loan and who has not been
subject to the procedures under this paragraph for such
loan in the preceding 120 days, the Secretary shall, 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 at least 1 loan
under this part, and a description of all
delinquent loans under this part, and
nondelinquent loans under this part, of the
borrower.
``(ii) A brief description of the repayment
plans for which the borrower is eligible and
the borrower's loans made under this part, and
loans made, insured, or guaranteed under part B
or E, that may be eligible for such plans,
based on information available to the
Secretary.
``(iii) Clear and simple instructions on
how to select the repayment plans.
``(iv) The amount of monthly payments for
the loans made under this part, and any loans
made, insured, or guaranteed under part B or E,
under the repayment plans for which the
borrower is eligible, based on information
available to the Secretary, including, if the
income information of the borrower is available
to the Secretary under subparagraph (A)--
``(I) the amount of the monthly
payment under the income-based
repayment plan under section 493C(c)
for which the borrower is eligible for
the borrower's loans made under this
part, based on such income information;
and
``(II) the income, family size, tax
filing status, and tax year information
on which each the monthly payment is
based.
``(v) An explanation that the Secretary
shall take the actions under subparagraph (C)
with respect to such borrower, if--
``(I) the borrower is 120 days
delinquent on one or more loans under
this part and has not selected a new
repayment plan for the borrower's loans
under this part; and
``(II) in the case of such a
borrower whose repayment plan for any
loans made under this part is not an
income-based repayment plan under
section 493C(c), the monthly payments
under such repayment plan are higher
than such monthly payments would be
under an income-based repayment plan
for such loans.
``(vi) Instructions on updating the
information of the borrower obtained under
subparagraph (A).
``(C) Secretary's initial selection of plan.--With
respect to each borrower described in subparagraph (B)
who has a repayment plan for loans made under this part
that meets the requirements of clause (v)(II) of
subparagraph (B), who has not selected a new repayment
plan for such loans in accordance with the notice
received under such subparagraph, and who is at least
120 days delinquent on such a loan, the Secretary
shall, as soon as practicable--
``(i) in a case in which any of the
borrower's loans made under part B or E are
eligible for an income-based repayment plan
under section 493C(c), provide the borrower
with the income-based repayment plan; and
``(ii) in a case in which none of the
borrower's loans made under part B or E are
eligible for an income-based repayment plan
under section 493C(c), notify the borrower of
the actions, if any, the borrower may take for
such loans to become eligible for such a plan.
``(D) Secretary's additional selection of plan.--
``(i) In general.--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 described in clause (ii), the
Secretary shall, as soon as practicable after
such period, carry out the procedures described
in subparagraph (C) for the borrower's loans
made under this part, if such procedures would
result in lower monthly repayment amounts on
such loan.
``(ii) Description of period.--The duration
of the period described in clause (i) shall be
the amount of time that the Secretary
determines is sufficient to indicate that the
borrower may benefit from repaying such loan
under a new repayment plan, but in no case
shall such period be less than 60 days.
``(E) Opt-out.--A borrower of a loan made under
this part shall have the right to opt out of the
procedures under this paragraph.
``(F) Procedures.--The Secretary shall establish
procedures as are necessary to effectively implement
this paragraph.
``(10) Notification and automatic enrollment procedures for
borrowers who are rehabilitating defaulted loans.--
``(A) Authority to obtain income information.--
``(i) In general.--In the case of any
borrower who is rehabilitating a loan made
under this part pursuant to section 428F(a),
the Secretary may obtain such information as is
reasonably necessary regarding the income and
family size of the borrower (and the borrower's
spouse, if applicable).
``(ii) Availability of returns and return
information.--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.
``(B) Borrower notification.--Not later than 30
days after a borrower makes the 6th payment required
for the loan rehabilitation described in subparagraph
(A), the Secretary shall notify the borrower of the
process under subparagraph (C) with respect to such
loan.
``(C) Secretary's automatic enrollment.--With
respect to each borrower who has made the 9th payment
required for the loan rehabilitation described in
subparagraph (A) and is eligible for the income-based
repayment plan under section 493C(c), the Secretary
shall, as soon as practicable after such payment,
provide the borrower with the income-based repayment
plan.
``(D) Opt-out.--A borrower of a loan made under
this part shall have the right to opt out of the
procedures under this paragraph.
``(E) Procedures.--The Secretary shall establish
procedures as are necessary to effectively implement
this paragraph.''.
(b) Effective Date.--The amendments made by subsection (a) shall--
(1) take effect as soon as the Secretary of Education
determines practicable after the Secretary finalizes the
procedures under section 107; and
(2) apply to all borrowers of loans made under part D of
title IV of the Higher Education Act of 1965 (20 U.S.C. 1087a
et seq.).
SEC. 305. SEPARATING JOINT CONSOLIDATION LOANS.
(a) In General.--Section 455(g) (20 U.S.C. 1087e(g)), as amended by
section 104, is further amended by adding at the end the following:
``(3) Separating joint consolidation loans.--
``(A) In general.--A married couple, or 2
individuals who were previously a married couple, and
who received a joint consolidation loan as such married
couple under subparagraph (C) of section 428C(a)(3) (as
such subparagraph was in effect on or before June 30,
2006), may apply to the Secretary for each individual
borrower in the married couple (or previously married
couple) to receive a separate Federal Direct
Consolidation Loan under this part--
``(i) that shall--
``(I) unless the Secretary receives
notice of an agreement described in
subclause (II)(aa), be equal to the sum
of--
``(aa) the unpaid principal
and accrued unpaid interest of
the percentage of the joint
consolidation loan that, as of
the day before such joint
consolidation loan was made,
was attributable to the loans
of the individual borrower for
whom such separate
consolidation loan is being
made; and
``(bb) any other loans
described in section 428C(a)(4)
that such individual borrower
selects for consolidation under
this part; or
``(II) be equal to the sum of--
``(aa) the unpaid principal
and accrued unpaid interest of
the percentage of the joint
consolidation loan that, as of
the date of application under
this paragraph, the married
couple (or previously married
couple) agrees shall be
considered attributable to the
loans of the individual
borrower for whom such separate
consolidation loan is being
made; and
``(bb) any other loans
described in section 428C(a)(4)
that such individual borrower
selects for consolidation under
this part;
``(ii) the proceeds of which shall be paid
by the Secretary to the holder or holders--
``(I) of the joint consolidation
loan for the purpose of discharging the
liability on the percentage of such
joint consolidation loan described in
subclause (I)(aa) or (II)(aa) of clause
(i); and
``(II) of the loans selected for
consolidation under subclause (I)(bb)
or (II)(bb) of clause (i) for the
purpose of discharging the liability on
such loans;
``(iii) except as otherwise provided in
this paragraph, that has the same terms and
conditions, and rate of interest as the joint
consolidation loan;
``(iv) for which any payment made under
subsection (m)(1)(A) on the joint consolidation
loan during a period in which the individual
borrower for whom such separate consolidation
loan is being made was employed in a public
service job described in subsection (m)(1)(B)
shall be treated as if such payment were made
on such separate consolidation loan; and
``(v) for which any payment made under an
income-contingent repayment plan under
subsection (d)(1)(D), or an income-based
repayment plan under paragraph (1)(E) or
(2)(A)(ii) of subsection (d), on the joint
consolidation loan shall be treated as if such
payment were made on such separate
consolidation loan.
``(B) Application for separate direct consolidation
loans.--
``(i) Joint application.--Except as
provided in clause (ii), to receive separate
consolidation loans under subparagraph (A),
both individual borrowers in a married couple
(or previously married couple) shall jointly
apply under such subparagraph.
``(ii) Separate application.--An individual
borrower in a married couple (or previously
married couple) may apply for a separate
consolidation loan under subparagraph (A)
separately and without regard to whether or
when the other individual borrower in the
married couple (or previously married couple)
applies under such subparagraph, in a case in
which--
``(I) the individual borrower has
experienced from the other individual
borrower--
``(aa) domestic violence
(as defined in section 40002(a)
of the Violence Against Women
Act of 1994 (42 U.S.C.
13925(a)));
``(bb) economic abuse
(including behaviors that
control such borrower's ability
to acquire, use, and maintain
access to money, credit, or the
joint financial obligations of
both borrowers); or
``(cc) other exceptional
circumstances, as determined by
the Secretary; and
``(II) the Secretary determines
that authorizing each individual
borrower to apply separately under
subparagraph (A) would be in the best
fiscal interests of the Federal
Government, including by reducing the
risk of delinquency or default.
``(C) Borrower eligibility.--Notwithstanding
section 428C(a)(3)(A), the Secretary shall provide a
consolidation loan under this part to each borrower
who--
``(i) applies for such loan under
subparagraph (A); and
``(ii) meets the requirements of
subparagraphs (A) and (B).
``(D) Special rule.--Notwithstanding any other
provision of this title, an individual who has a joint
consolidation loan and wishes for the Secretary to
discharge the loans due to total and permanent
disability pursuant to section 437(a), shall first
separate the joint consolidation loan in accordance
with this section before the Secretary may discharge
any portion of the loan.''.
(b) Conforming Amendment.--Section 428C(a)(3)(B)(i)(V) (20 U.S.C.
1078-3(3)(B)(i)(V)) is amended--
(1) by striking ``or'' at the end of item (bb);
(2) by striking the period at the end of item (cc) and
inserting ``; or''; and
(3) by adding at the end the following:
``(dd) for the purpose of
separating a joint consolidation loan
into 2 separate Federal Direct
Consolidation Loans under section
455(g)(3).''.
SEC. 306. REMOVING THE COLLECTION COST REQUIREMENT.
(a) Removal of Requirement.--Section 484A(b)(1) (20 U.S.C.
1091a(b)(1)) is amended by striking ``shall be required to pay, in
addition to other charges specified in this title, reasonable
collection costs'' and inserting ``shall not be required to pay
collection costs''.
(b) Repayment After Default.--Section 455(d)(6) (20 U.S.C.
1087e(d)(6)), as redesignated under section 103(b), is amended by
striking ``to--'' and all that follows through the period at the end
and inserting ``to repay the loan pursuant to an income-based repayment
plan under section 493C(c).''.
TITLE IV--IMPROVING LOAN INFORMATION AND COUNSELING
SEC. 401. STUDENT LOAN CONTRACT; SIMPLIFYING LOAN DISCLOSURES.
(a) Student Loan Contract.--Section 455 (20 U.S.C. 1087e), as
amended by section 202, is further amended by inserting after
subsection (b) the following:
``(c) Student Loan Contract; Simplifying Loan Disclosures.--
``(1) Student loan contract.--
``(A) In general.--Any master promissory note form
described in section 432(m)(1)(D) that is developed or
used for covered loans shall be referred to as a
`student loan contract'.
``(B) Clarification on use.--Notwithstanding
section 432(m)(1)(D)(i), each student loan contract for
a covered loan shall--
``(i) not be entered into by a student
unless the student has completed all required
counseling related to such loan, including
counseling required under section 485(l);
``(ii) be signed by the student entering
such student loan contract after completion of
such counseling;
``(iii) be used only for the academic year
for which the initial loans are made under the
contract and shall be valid for additional
loans within an academic year; and
``(iv) include options for the student to
enter both the student's current contact
information and permanent contact information
that is likely to remain valid upon the
student's exit from the institution.
``(C) Covered loan.--
``(i) In general.--In this subsection, the
term `covered loan' means a loan made under
this part on or after the effective date of the
Affordable Loans for Any Student Act, except
with respect to a borrower described in clause
(ii).
``(ii) Exception.--A borrower is described
in this clause if the loan made under this part
on or after the effective date of the
Affordable Loans for Any Student Act with
respect to such borrower is for the 2020-2021
academic year and the borrower has already
taken out a loan under this part (other than a
Federal Direct Consolidation Loan) for such
academic year (including any such loan for
attendance at another institution from which
the student transferred or in which the student
had previously enrolled).
``(2) Loan disclosures.--For loans made under this part for
periods of enrollment beginning on or after the effective date
of the Affordable Loans for Any Student Act, the Secretary
shall take such steps as are necessary to streamline the
student loan disclosure requirements under this Act. The
Secretary shall ensure that information required to be
disclosed to a student who is applying for, receiving, or
preparing to repay a loan under this part shall be consumer-
tested and delivered in a manner that--
``(A) reduces and simplifies the paperwork students
are required to complete;
``(B) limits the number of times a student is
presented with disclosures by incorporating the
streamlined disclosures into required student loan
counseling under section 485(l), the student loan
contract under this subsection, or both; and
``(C) is effective in helping the student
understand the student's rights and obligations as a
Federal student loan borrower.
``(3) Annual loan acceptance.--Prior to making the first
disbursement of a covered loan (other than a Federal Direct
Consolidation Loan) to a borrower for an academic year, the
eligible institution shall ensure that the borrower--
``(A) has completed the applicable counseling under
paragraph (2) or (3) of section 485(l); and
``(B) after completing such counseling, accepts the
loan for such academic year by--
``(i) signing and returning to the
institution the student loan contract described
in section 455(c)(1) that affirmatively states
that the borrower accepts the loan; or
``(ii) electronically signing an electronic
version of such student loan contract, which
may be done through the online counseling tool
in accordance with section 485(n)(1)(B).''.
(b) Conforming Amendment.--Section 487(a)(7) (20 U.S.C. 1094(a)(7))
is amended by striking ``section 485'' and inserting ``sections
455(c)(3) and 485''.
SEC. 402. ANNUAL AND PRE-LOAN INFORMATION AND COUNSELING REQUIREMENTS.
Section 485(l) (20 U.S.C. 1092(l)) is amended to read as follows:
``(l) Annual Student Loan Counseling for Borrowers.--
``(1) Annual counseling requirement for institutions.--
``(A) In general.--Each eligible institution shall
ensure that each individual for whom the institution
has knowledge that the student has accepted, or will
accept, 1 or more student loans under part D (including
any such loans for attendance at another institution
from which the student transferred or in which the
student had previously enrolled, other than a Federal
Direct Consolidation Loan) for an academic year,
receives comprehensive information on the terms and
conditions of such loans and the responsibilities the
individual has with respect to such loans. Such
information shall be provided, for each academic year
for which the individual receives such loans, in a
simple, understandable, and consumer-friendly manner--
``(i) during a counseling session conducted
in person;
``(ii) online, with the individual
acknowledging receipt of the information; or
``(iii) through the use of the online
counseling tool described in subsection
(n)(1)(B).
``(B) Use of interactive programs.--In the case of
institutions not using the online counseling tool
described in subsection (n)(1)(B), the Secretary shall
require such institutions to carry out the requirements
of subparagraph (A) through the use of interactive
programs, during an annual counseling session that is
in-person or online, that test the individual's
understanding of the terms and conditions of the loan
awarded to the individual, using simple and
understandable language and clear formatting.
``(2) Annual loan counseling for borrowers receiving loans
made under part d (other than parent plus loans).--The
information to be provided under paragraph (1)(A) to a borrower
of a loan made under part D (other than a Federal Direct PLUS
Loan made on behalf of a dependent student) shall include the
following:
``(A) A notification that some students may qualify
for other financial aid that does not need to be
repaid, and an explanation that the borrower should
consider accepting any such grant, scholarship,
military tuition assistance, veterans benefits, Federal
or State work-study jobs, or other programs for which
the borrower is eligible, prior to accepting student
loans.
``(B) Information on the total outstanding student
loan debt that the institution is aware that the
student has borrowed, disaggregated by type of loan,
including loans issued under this title, private
education loans (as defined in section 140 of the Truth
in Lending Act (15 U.S.C. 1650)) that the institution
has certified in accordance with section 487(a)(28),
and education loans from the institution, as
applicable.
``(C) The student's estimated monthly payment
amounts for loans made, insured, or guaranteed under
this title based on--
``(i) the fixed repayment plan described
under section 493E for loans issued under part
B or D; and
``(ii) the income-based repayment plan
under section 493C(c), utilizing individualized
data applicable to the borrower as described in
paragraph (4).
``(D) A statement that the monthly amount described
in subparagraph (C) does not include any amounts that
the student may be required to repay for non-Federal
education loans, including private education loans or
institutional education loans.
``(E) An explanation of the use of the student loan
contract referred to in section 455(c).
``(F) A recommendation to the borrower to exhaust
the borrower's Federal student loan options prior to
taking out private education loans, an explanation that
Federal student loans typically offer better terms and
conditions than private education loans, an explanation
that Federal student loans offer consumer protections
typically not available in the private education loan
market, an explanation of treatment of loans made under
part D and private education loans in bankruptcy, and
an explanation that if a borrower decides to take out a
private education loan--
``(i) the borrower has the ability to
select a private educational lender of the
borrower's choice;
``(ii) the proposed private education loan
may impact the borrower's potential eligibility
for other financial assistance, including
Federal financial assistance under this title;
and
``(iii) the borrower has a right--
``(I) to accept the terms of the
private education loan within 30
calendar days following the date on
which the application for such loan is
approved and the borrower receives the
required disclosure documents, pursuant
to section 128(e) of the Truth in
Lending Act (15 U.S.C. 1638(e)); and
``(II) to cancel such loan within 3
business days of the date on which the
loan is consummated, pursuant to
section 128(e)(7) of such Act (15
U.S.C. 1638(e)(7)).
``(G) An explanation of the importance of
contacting the appropriate offices at the institution
of higher education if the borrower withdraws prior to
completing the borrower's program of study so that the
institution can provide exit counseling, including
information regarding the borrower's repayment options
and loan consolidation.
``(H) An explanation of the obligation of the
borrower to repay the full amount of the loan,
regardless of whether the borrower completes or does
not complete the program in which the borrower is
enrolled within the regular time for program
completion.
``(I) A general description of the terms and
conditions under which the student may obtain
forgiveness or cancellation of any principal and
interest of a loan issued under this title.
``(J) Information as to how the student can access
the loan records of the student and the contact
information for inquiries regarding repaying the loan.
``(K) The contact information for the financial aid
office, or other appropriate office, at the institution
that the borrower may contact if the borrower has any
questions about the borrower's rights and
responsibilities or the terms and conditions of the
loan.
``(L) An explanation that the student has the right
to annually request a copy of the credit report of the
student from a consumer reporting agency pursuant to
section 612(a) of the Fair Credit Reporting Act (15
U.S.C. 1681j(a)).
``(M) For a first-time borrower, in addition to all
the information described in subparagraphs (A) through
(L)--
``(i) the anticipated balance on the loan
for which the borrower is receiving counseling
under this subsection; and
``(ii) information on the annual and
aggregate loan limits for Federal Direct
Stafford Loans and Federal Direct Unsubsidized
Stafford Loans as it pertains to the loan for
which the borrower is receiving counseling, and
a statement that such aggregate borrowing limit
may change based on the borrower's student
status (whether undergraduate or graduate) or
if there is a change in the borrower's
dependency status.
``(N) For a borrower with an outstanding balance of
principal or interest due on a loan made under this
title, including loans made under part B, in addition
to all the information described in subparagraphs (A)
through (L), the percentage of the total aggregate
borrowing limit that the student has reached, as of the
date of the counseling, and a statement that such
aggregate borrowing limit may change based on the
borrower's student status (whether undergraduate or
graduate) or if there is a change in the borrower's
dependency status.
``(3) Borrowers receiving parent plus loans for dependent
students.--The information to be provided under paragraph
(1)(A) to a borrower of a Federal Direct PLUS Loan made on
behalf of a dependent student shall include the following:
``(A) A notification that some students may qualify
for other financial aid and an explanation that the
student for whom the borrower is taking out the loan
should consider accepting any such grant, scholarship,
military tuition assistance, veterans benefits, Federal
or State work-study jobs, or other programs for which
the student for whom the borrower is taking out the
loan is eligible, prior to borrowing any Federal Direct
PLUS Loan on behalf of a dependent student.
``(B) The information described in subparagraphs
(B) through (L) of paragraph (2), as applicable.
``(C) The option of the borrower to pay the
interest on the loan while the loan is under pause
payment.
``(D) An explanation that the borrower has the
options to prepay each loan, pay each loan on a shorter
schedule, and change repayment plans.
``(E) For each Federal Direct PLUS Loan made on
behalf of a dependent student for which the borrower is
receiving counseling under this subsection, the contact
information for the loan servicer of the loan and a
link to such servicer's website.
``(F) For a first-time borrower of such loan--
``(i) the anticipated balance on the loan
for which the borrower is receiving counseling
under this paragraph; and
``(ii) the estimated monthly payment
amounts for such loan based on--
``(I) the fixed repayment plan
described in section 493E for the loan;
and
``(II) the income-based repayment
plan under section 493C(c), utilizing
individualized data applicable to the
borrower as described in paragraph (4).
``(G) For a borrower undergoing counseling that
already has an outstanding balance of principal or
interest due on a Federal Direct PLUS Loan made on
behalf of a dependent student--
``(i) the anticipated balance of all
Federal Direct PLUS Loans held by the borrower
(including the one for which counseling is
provided); and
``(ii) the estimated monthly payment
amounts for all such loans based on--
``(I) the fixed repayment plan
described in section 493E for loans
issued under part B or D; and
``(II) the income-based repayment
plan under section 493C(c), utilizing
individualized data applicable to the
borrower as described in paragraph (4).
``(4) Estimated repayment information.--In providing
estimated payments for income-based repayment plans under
section 493C(c) for purposes of this section, the Secretary
shall develop and implement a database to generate repayment
estimate for borrowers by--
``(A) enabling each institution to enter relevant
loan, program cost, and average indebtedness at
graduation information electronically;
``(B) integrating applicable data on Federal loans
made, insured, or guaranteed under this title from the
National Student Loan Data System or a successor
system;
``(C) integrating available data on occupational
earnings reasonably related to the student's program of
study;
``(D) using a hypothetical family size of 1; and
``(E) providing a borrower the option to adjust
these data elements and observe the corresponding
change in estimated monthly payment amounts.''.
SEC. 403. EXIT COUNSELING.
Section 485(b) (20 U.S.C. 1092(b)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (A)--
(i) in the matter preceding clause (i),
striking ``through financial aid offices or
otherwise'' and inserting ``through the use of
an interactive program, during an exit
counseling session that is in-person or online,
or through the use of the online counseling
tool described in subsection (n)(1)(A)'';
(ii) by redesignating clauses (i) through
(ix) as clauses (v) through (xiii),
respectively;
(iii) by inserting before clause (v), as
redesignated by clause (ii), the following:
``(i) a summary of the outstanding balance
of principal and interest due on the loans made
to the borrower under part B, D, or E;
``(ii) an explanation of the grace period
preceding repayment and the expected date that
the borrower will enter repayment;
``(iii) an explanation that the borrower
has the option to pay any interest that has
accrued while the borrower was in school or
that may accrue during the grace period
preceding repayment or during an authorized
period of pause payment;
``(iv) an explanation that the borrower may
be approached during the repayment process by
third-party student debt relief companies, that
the borrower should use caution in any such
dealings, and that the typical services
provided by these companies are already offered
to borrowers free of charge through the
Department or its contractors;'';
(iv) in clause (v), as redesignated by
clause (ii)--
(I) by striking ``sample
information showing the average'' and
inserting ``information, based on the
borrower's outstanding balance
described in clause (i), showing the
borrower's''; and
(II) by striking ``of each plan''
and inserting ``of the fixed repayment
plan described in section 493E and the
income-based repayment plan under
section 493C(c), and any other
repayment plan for which each loan may
be eligible'';
(v) in clause (x), as redesignated by
clause (ii)--
(I) by inserting ``decreased credit
score,'' after ``credit reports,''; and
(II) by inserting ``reduced ability
to rent or purchase a home or car,
potential difficulty in securing
employment,'' after ``Federal law,'';
(vi) in the matter preceding subclause (I)
of clause (xi), as redesignated by clause (ii),
by striking ``consolidation loan under section
428C or a'';
(vii) in each of clauses (xii) and (xiii),
as redesignated by clause (ii), by striking
``and'' at the end; and
(viii) by adding at the end the following:
``(xiv) for each of the borrower's loans
made under part B, D, or E for which the
borrower is receiving counseling under this
subsection, the contact information for the
loan servicer of the loan and a link to such
servicer's website; and
``(xv) an explanation that an individual
has a right to annually request a disclosure of
information collected by a consumer reporting
agency pursuant to section 612(a) of the Fair
Credit Reporting Act (15 U.S.C. 1681j(a)).'';
and
(B) in subparagraph (B), by striking ``in writing''
and inserting ``online or in writing, except that in
the case of an institution using the online counseling
tool described in subsection (n)(1)(A), the Secretary
shall attempt to provide such information to the
student in the manner described in subsection
(n)(3)(C)''; and
(2) in paragraph (2)(C), by inserting ``, such as the
online counseling tool described in subsection (n)(1)(A),''
after ``electronic means''.
SEC. 404. ONLINE COUNSELING TOOLS.
Section 485 (20 U.S.C. 1092) is amended by adding at the end the
following:
``(n) Online Counseling Tools.--
``(1) In general.--Beginning not later than 1 year after
the date of enactment of the Affordable Loans for Any Student
Act, the Secretary shall maintain--
``(A) an online counseling tool that provides the
exit counseling required under subsection (b) and meets
the applicable requirements of this subsection; and
``(B) an online counseling tool that provides the
annual counseling required under subsection (l),
enables a borrower to electronically sign and accept
the borrower's student loan contract for the upcoming
academic year under section 455(c)(3)(B)(ii), and meets
the applicable requirements of this subsection.
``(2) Requirements of tools.--In maintaining the online
counseling tools described in paragraph (1), the Secretary
shall ensure that each such tool, and its underlying content--
``(A) are consumer tested, in consultation with
other relevant Federal agencies, students, borrowers,
institutions of higher education, secondary school and
postsecondary counselors, and consumer advocacy
organizations, to ensure that the tool is effective in
helping individuals understand their rights and
obligations with respect to borrowing a loan made under
part D;
``(B) are understandable to borrowers of loans made
under part D;
``(C) freely available to all eligible
institutions; and
``(D) integrate applicable loan data from the
National Student Loan Data System or a successor
system, including data regarding loans made, insured,
or guaranteed under this title and data regarding
private education loans, pursuant to section 485B(i).
``(3) Record of counseling completion.--The Secretary
shall--
``(A) use each online counseling tool described in
paragraph (1) to keep a record of which individuals
have received counseling using the tool and notify the
applicable institutions of the individual's completion
of such counseling;
``(B) in the case of a borrower who receives annual
counseling for a loan made under part D using the tool
described in paragraph (1)(B)--
``(i) enable the borrower to accept and
electronically sign the student loan contract
as required under section 455(c)(3)(B)(ii) and
notify the applicable institutions that the
individual completed the counseling and
electronically signed the contract; and
``(ii) if the borrower chooses not to sign
the student loan contract through the online
counseling--
``(I) inform the borrower, through
the online counseling tool, of the date
by when the borrower should accept and
sign the student loan contract for
which the borrower has received such
counseling; and
``(II) notify the applicable
institution that the borrower completed
the counseling but did not sign the
student loan contract; and
``(C) in the case of a borrower described in
subsection (b)(1)(B) at an institution that uses the
online counseling tool described in paragraph (1)(A) of
this subsection, attempt to provide the information
described in subsection (b)(1)(A) to the borrower
through such tool.
``(o) Longitudinal Study on the Effectiveness of Student Loan
Counseling.--
``(1) In general.--Not later than 1 year after the date of
enactment of the Affordable Loans for Any Student Act, the
Secretary, acting through the Director of the Institute of
Education Sciences, shall begin conducting a rigorous,
longitudinal study of the impact and effectiveness of the
student loan counseling provided under section 485(n).
``(2) Contents.--
``(A) Borrower information.--The longitudinal study
carried out under paragraph (1) shall include borrower
information, in the aggregate and disaggregated by race
and ethnicity, gender, income quartile, and status as
an individual with a disability, on--
``(i) student persistence;
``(ii) degree attainment;
``(iii) program completion;
``(iv) successfully maintaining current
student loan repayment status following the
student's exit from the institution;
``(v) cumulative borrowing levels; and
``(vi) such other factors as the Secretary
may determine.
``(B) Exception.--The disaggregation under
subparagraph (A) shall not be required in a case in
which the number of borrowers in a category is
insufficient to yield statistically reliable
information or the results would reveal personally
identifiable information about an individual borrower.
``(3) Interim reports.--Not later than 18 months after the
commencement of the study under paragraph (1), and annually
thereafter, the Secretary shall evaluate the progress of the
study and report any short-term findings to the authorizing
committees.''.
SEC. 405. PRIVATE EDUCATION LOAN CERTIFICATION AND INFORMATION.
(a) Amendment to the Higher Education Act of 1965.--
(1) In general.--Section 487(a) (20 U.S.C. 1094(a)) is
amended by striking paragraph (28) and inserting the following:
``(28)(A) The institution shall--
``(i) upon the request of a private educational
lender, acting in connection with an application
initiated by a borrower for a private education loan in
accordance with section 128(e)(3) of the Truth in
Lending Act, provide certification to such private
educational lender--
``(I) that the student who initiated the
application for the private education loan, or
on whose behalf the application was initiated,
is enrolled or is scheduled to enroll at the
institution;
``(II) of such student's cost of attendance
at the institution as determined under part F;
and
``(III) of the difference between--
``(aa) the cost of attendance at
the institution; and
``(bb) the student's estimated
financial assistance received under
this title and other assistance known
to the institution, as applicable; and
``(ii) provide the certification described in
clause (i), or notify the private educational lender
that the institution has received the request for
certification and will need additional time to comply
with the certification request--
``(I) within 15 business days of receipt of
such certification request; and
``(II) only after the institution has
completed the activities described in
subparagraph (B).
``(B) The institution shall, upon receipt of a
certification request described in subparagraph (A)(i), and
prior to providing such certification--
``(i) determine whether the student who initiated
the application for the private education loan, or on
whose behalf the application was initiated, has applied
for and exhausted the Federal financial assistance
available to such student under this title and inform
the student accordingly; and
``(ii) provide the borrower whose loan application
has prompted the certification request by a private
education lender, as described in subparagraph (A)(i),
with the following information and disclosures:
``(I) If the borrower has not yet exhausted
the financial assistance available to the
borrower under this title, the amount of
additional Federal student assistance for which
the borrower is eligible and the potential
advantages of Federal loans under this title,
including disclosure of--
``(aa) the fixed interest rates and
pause payment processes;
``(bb) the option for and terms of
income-based repayment, loan
forgiveness programs, and additional
protections; and
``(cc) the higher student loan
limits for dependent students whose
parents are not eligible for a Federal
Direct PLUS Loan.
``(II) The borrower's ability to select a
private educational lender of the borrower's
choice.
``(III) The impact of a proposed private
education loan on the borrower's potential
eligibility for other financial assistance,
including Federal financial assistance under
this title.
``(IV) The borrower's right to accept or
reject a private education loan within the 30-
day period following a private educational
lender's approval of a borrower's application
and about a borrower's 3-day right to cancel
period under section 128(e)(7) of the Truth in
Lending Act (15 U.S.C. 1650(e)(7)).
``(C) For purposes of this paragraph, the terms `private
educational lender' and `private education loan' have the
meanings given such terms in section 140 of the Truth in
Lending Act (15 U.S.C. 1650).''.
(2) National student loan data system.--Section 485B (20
U.S.C. 1092b) is amended--
(A) in subsection (a), by striking ``and loans made
under parts D and E'' and inserting ``, loans made
under parts D and E, and private education loans (in
accordance with subsection (i))'';
(B) in subsection (f), by inserting ``for Federal
Loans'' after ``Data Reporting''; and
(C) by adding at the end the following:
``(i) Private Education Loan Reporting.--The Secretary shall
include in the National Student Loan Data System the information
regarding private education loans that the Director of the Consumer
Financial Protection Bureau, in coordination with the Secretary,
determines necessary to be included pursuant to section
128(e)(9)(B)(ii) of the Truth in Lending Act (15 U.S.C.
1638(e)(9)(B)(ii)).''.
(3) Effective date.--The amendments made by paragraphs (1)
and (2) shall take effect on the effective date of the
regulations described in subsection (b)(3).
(b) Amendments to the Truth in Lending Act.--
(1) In general.--Section 128(e) of the Truth in Lending Act
(15 U.S.C. 1638(e)) is amended--
(A) by striking paragraph (3) and inserting the
following:
``(3) Institutional certification required.--
``(A) In general.--Except as provided in
subparagraph (B), before a private educational lender
may issue any funds with respect to a private education
loan, the private educational lender shall obtain, from
the relevant institution of higher education where such
loan is to be used for a student, a certification in
accordance with section 485(a)(28)(A) of the Higher
Education Act of 1965 (20 U.S.C. 1094(a)(28)(A))--
``(i) confirming that the student is
enrolled or is scheduled to enroll at the
institution; and
``(ii) stating--
``(I) the student's cost of
attendance at the institution, as
determined by the institution under
part F of title IV of the Higher
Education Act of 1965 (20 U.S.C. 1087kk
et seq.); and
``(II) the difference between--
``(aa) such cost of
attendance; and
``(bb) the student's
estimated financial assistance,
including such assistance
received under title IV of the
Higher Education Act of 1965
(20 U.S.C. 1070 et seq.) and
other financial assistance
known to the institution, as
applicable.
``(B) Timing.--Pursuant to section 485(a)(28)(A) of
the Higher Education Act of 1965 (20 U.S.C.
1094(a)(28)(A)), a private education lender shall
receive the certification described in subparagraph (A)
within 15 days of a request by the private education
lender, unless the institution of higher education
notifies the private educational lender pursuant to
section 485(a)(28)(A)(ii) of such Act that additional
time is needed.
``(C) Additional requirements.--Upon receiving the
certification described in subparagraph (A) for a
private education loan, the private educational
lender--
``(i) may proceed to issue funds with
respect to the private education loan; and
``(ii) after issuing the private education
loan, shall--
``(I) notify the institution of
higher education involved that the
private education loan has been issued
to the borrower, and the amount of such
loan; and
``(II) provide the Director of the
Consumer Financial Protection Bureau
and the Secretary of Education with the
information described in paragraph
(9)(B).'';
(B) by redesignating paragraphs (9), (10), and (11)
as paragraphs (10), (11), and (12), respectively; and
(C) by inserting after paragraph (8) the following:
``(9) Provision of information.--
``(A) Provision of information to borrowers.--
``(i) Loan statements.--A private
educational lender that issues any funds with
respect to a private education loan shall--
``(I) send loan statements, if the
loan is to be used for a student, to
borrowers of the funds not less than
once every 3 months during the time
that the student is enrolled at an
institution of higher education; and
``(II) in the case of a private
education loan that includes a
cosigner, annually send a loan
statement to the borrower's cosigner,
notifying the cosigner of the terms,
conditions, and status of such private
education loan.
``(ii) Contents of loan statement.--Each
statement described in clause (i) shall--
``(I) report the borrower's total
remaining debt to the private
educational lender, including accrued
but unpaid interest and capitalized
interest;
``(II) report any debt increases
since the last statement; and
``(III) list the current interest
rate for each loan.
``(B) Provision of information to federal
agencies.--
``(i) Information from lender.--Each
private educational lender shall--
``(I) submit to the Director of the
Consumer Financial Protection Bureau
and the Secretary of Education such
information regarding a private
education loan as may be determined
necessary by the Director and the
Secretary under clause (ii) for
inclusion in the National Student Loan
Data System under section 485B(i) of
the Higher Education Act of 1965 (20
U.S.C. 1092b(i)); and
``(II) prepare and submit an annual
report to the Consumer Financial
Protection Bureau regarding the private
education loans issued by the private
educational lender.
``(ii) Promulgation of regulations.--Not
later than 1 year after the date of enactment
of the Affordable Loans for Any Student Act,
the Director of the Consumer Financial
Protection Bureau, in coordination with the
Secretary of Education, shall promulgate
regulations regarding the private education
loan information required to be submitted under
clause (i), including the content, method, and
format for submission. The information required
for inclusion in the National Student Loan Data
System shall include, at a minimum--
``(I) information identifying the
borrower, including the borrower's name
and social security number;
``(II) the name of the institution
of higher education that has certified
the private education loan;
``(III) the name of the lender;
``(IV) the amount of the private
education loan;
``(V) the term, or other enrollment
period, for which the private education
loan is issued; and
``(VI) whether a cosigner was
required as a condition of the private
education loan.''.
(2) Definition of private education loan.--Section
140(a)(8)(A) of the Truth in Lending Act (15 U.S.C.
1650(a)(8)(A)) is amended--
(A) by redesignating clause (ii) as clause (iii);
(B) in clause (i), by striking ``and'' after the
semicolon; and
(C) by adding after clause (i) the following:
``(ii) is not made, insured, or guaranteed
under title VII or title VIII of the Public
Health Service Act (42 U.S.C. 292 et seq. and
296 et seq.); and''.
(3) Regulations.--
(A) In general.--Not later than 1 year after the
date of enactment of this Act, the Director of the
Consumer Financial Protection Bureau, in coordination
with the Secretary of Education, shall promulgate
regulations to implement paragraphs (3) and (9) of
section 128(e) of the Truth in Lending Act (15 U.S.C.
1638(e)), as amended by paragraph (1) of this
subsection.
(B) Effective date.--The regulations promulgated
under subparagraph (A) shall take effect on the date
that is 180 days after the date on which the
regulations are promulgated.
TITLE V--EFFECTIVE DATE; TRANSITION
SEC. 501. EFFECTIVE DATE; RULEMAKING REGARDING TERMINATION OF CERTAIN
REPAYMENT PLANS.
(a) Effective Date.--Except as otherwise specifically provided,
this Act, and the amendments made by this Act, shall take effect on
July 1, 2020.
(b) Applicability With Respect to Interest Capitalization.--Section
201, and the amendments made by such section, shall apply with respect
to loans made, insured, or guaranteed under part B or D of title IV of
the Higher Education Act of 1965 (20 U.S.C. 1071 et seq., 1087a et
seq.) that--
(1) as of the effective date described in subsection (a),
are not currently in a period where interest is capitalized
under such part; or
(2) in the case of a loan that, as of the effective date
described in subsection (a), is in a period where interest is
accruing and not added, but will be capitalized under such
part, the day after the interest is capitalized under such
part, as in effect before the effective date.
(c) Applicability With Respect to Forbearance and Deferment for
Direct Loan Borrowers.--With respect to any borrower of a loan under
part D of title IV of the Higher Education Act of 1965 (20 U.S.C. 1087a
et seq.) that is, or has been, in forbearance or deferment as of the
day before the effective date described in subsection (a), the
Secretary shall take such steps as are necessary--
(1) to transfer a borrower with a loan in forbearance or
deferment as of such day automatically into relief provided
under the pause payment process established under section 460B
of such Act (as amended by this Act); and
(2) to ensure that the period of time for which a borrower
is eligible for pause payment under such section 460B for a
loan is appropriately reduced to account for any time the loan
was previously in forbearance or deferment.
(d) Regulations.--Before the effective date described in subsection
(a), the Secretary of Education shall carry out a plan to end all
eligibility for repayment plans other than a fixed repayment plan
described in section 493E of the Higher Education Act of 1965 (20
U.S.C. 1098b) and an income-based repayment plan under section 493C(c)
of such Act (20 U.S.C. 1098e(f)) for loans made under part B or D of
title IV of such Act, unless the borrower is enrolled in another
repayment plan before such effective date, in accordance with the
amendments made by this Act.
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