[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 2235 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  1st Session
                                S. 2235

  To discharge the qualified loan amounts of each individual, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 23, 2019

  Ms. Warren introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To discharge the qualified loan amounts of each individual, and for 
                            other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Student Loan Debt Relief Act of 
2019''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
                TITLE I--LOAN DISCHARGE AND FORBEARANCE

Sec. 101. Loan discharge.
Sec. 102. Automatic administrative forbearance; halting of wage 
                            garnishment.
Sec. 103. Staying and prohibition on commencement of actions for 
                            collection.
Sec. 104. Ineligibility for Treasury Offset.
                     TITLE II--REFINANCING PROGRAMS

Sec. 201. Refinancing programs.
       TITLE III--DISCHARGEABILITY OF STUDENT LOANS IN BANKRUPTCY

Sec. 301. Dischargeability of student loans in bankruptcy.
                      TITLE IV--GENERAL PROVISIONS

Sec. 401. Report on progress of implementation.
Sec. 402. Notification to borrowers.
Sec. 403. Inapplicability of title IV negotiated rulemaking and master 
                            calendar exception.
Sec. 404. Definitions.

                TITLE I--LOAN DISCHARGE AND FORBEARANCE

SEC. 101. LOAN DISCHARGE.

    (a) In General.--Subject to subsection (f), not later than the date 
that is 12 months after the date of enactment of this Act, the 
Secretary of Education shall discharge the qualified loan amount of 
each individual, without regard to the repayment status of the loan or 
whether the loan is in default.
    (b) Qualified Loan Amount.--
            (1) In general.--The qualified loan amount of an individual 
        is an amount equal to the lesser of--
                    (A) $50,000; and
                    (B) the aggregate loan obligation on the eligible 
                Federal loans of the taxpayer that is outstanding on 
                the date of enactment of this Act or, in the case of 
                such loans issued under section 460B of the Higher 
                Education Act of 1965, as added by title II of this 
                Act, on the date on which such loans are issued under 
                such section 460B.
            (2) Limitation based on adjusted gross income.--The amount 
        discharged under subsection (a) with respect to an individual 
        shall be reduced (but not below zero) by $1 for each $3 (or 
        fraction thereof) by which the taxpayer's adjusted gross income 
        exceeds $100,000 (twice such amount in the case of a joint 
        return) for the most recent taxable year ending before the date 
        of the enactment of this Act.
    (c) Method of Loan Discharge.--
            (1) In general.--To provide the loan discharge required 
        under subsection (a), the Secretary is authorized to carry out 
        a program--
                    (A) through the holder of the loan, to assume the 
                obligation to repay the qualified loan amount for a 
                loan made, insured, or guaranteed under part B of title 
                IV of the Higher Education Act of 1965 (20 U.S.C. 1071 
                et seq.);
                    (B) to cancel the qualified loan amount for a loan 
                made under part D of title IV of the Higher Education 
                Act of 1965 (20 U.S.C. 1087a et seq.), or assigned, 
                referred, or transferred to, or purchased by, the 
                Secretary under such title IV (20 U.S.C. 1070 et seq.), 
                including a Federal Direct Stafford Loan issued under 
                section 460B of the Higher Education Act of 1965, as 
                added by title II of this Act; and
                    (C) through the institution of higher education 
                that made the loan from its student loan fund 
                established under part E of such title (20 U.S.C. 
                1087aa et seq.), to assume the obligation to repay the 
                qualified loan amount for such loan.
            (2) Order of loan discharge.--With respect to an individual 
        with at least 2 eligible Federal loans, the Secretary shall 
        discharge the loans of the individual as follows (except as 
        otherwise indicated by the individual):
                    (A) In the case in which the individual has loans 
                with different rates of interest, the loans should be 
                discharged in descending order by rate of interest.
                    (B) In the case in which the individual has loans 
                with the same rates of interest, the loans should be 
                discharged in descending order by amount of outstanding 
                principal.
    (d) Exclusion From Taxable Income.--For purposes of the Internal 
Revenue Code of 1986, in the case of an individual, gross income does 
not include any amount which (but for this subsection) would be 
includible in gross income by reason of the discharge (in whole or in 
part) of any loan if such discharge was pursuant to this title.
    (e) Taxpayer Information.--
            (1) In general.--The Secretary of the Treasury may, upon 
        written request from the Secretary of Education, disclose to 
        officers and employees of the Department of Education return 
        information with respect to a taxpayer who has received 
        eligible Federal loans that are outstanding on the date 
        described in subsection (b)(1)(B). Such return information 
        shall be limited to--
                    (A) taxpayer identity information with respect to 
                such taxpayer;
                    (B) the filing status of such taxpayer; and
                    (C) the adjusted gross income of such taxpayer.
            (2) Restriction on use of disclosed information.--Return 
        information disclosed under paragraph (1) may be used by 
        officers and employees of the Department of Education only for 
        the purposes of, and to the extent necessary in, establishing 
        the appropriate qualified loan amount of a taxpayer.
    (f) Long-Term Settle and Compromise Discharge Authority.--Not later 
than the date that is 24 months after the date of enactment of this 
Act, the Secretary of Education may use the authority under sections 
432(a)(6) and 468(2) of the Higher Education Act of 1965 (20 U.S.C. 
1082(a)(6); 1087hh(2)) to discharge loans under this section beyond the 
period described in subsection (a) for--
            (1) an individual who, through an appeals process 
        established by the Secretary, successfully appeals a loan 
        discharge determination by the Secretary under this section;
            (2) an individual who, due to special circumstances, misses 
        a deadline established by the Secretary in the administration 
        of loan discharges under this section; or
            (3) an individual (or a group of individuals) who the 
        Secretary determines should have received a loan discharge or a 
        discharge amount that is different from the amount of loan 
        discharge received under this section, except that a loan 
        discharge amount received under this subsection may not exceed 
        the qualified loan amount determined for the individual (or the 
        group of individuals) under subsection (b).
    (g) Private Student Loan Discharge.--Not later than the date that 
is 3 months after the date of enactment of this Act, the Secretary of 
Education, in coordination with the Secretary of the Treasury and the 
Director of the Bureau of Consumer Financial Protection, shall 
undertake a campaign to alert borrowers of private education loans--
            (1) that such borrowers may be eligible to refinance such 
        private loans as Federal Direct Stafford Loans under section 
        460B of the Higher Education Act of 1965, as added by title II 
        of this Act; and
            (2) such Federal Direct Stafford Loans may be eligible for 
        loan discharge under this section.
    (h) Credit Reporting.--In the case of a borrower of an eligible 
Federal loan that was in default prior to being discharged under this 
section and on which, as a result of such loan discharge, there is no 
outstanding balance of principal or interest, the Secretary, guaranty 
agency or other holder of the loan shall request any consumer reporting 
agency to which the Secretary, guaranty agency or holder, as 
applicable, reported the default of the loan, to remove the record of 
the default from the borrower's credit history.
    (i) Members of Congress.--In this section, the terms ``individual'' 
and ``taxpayer'' do not include a Member of Congress.

SEC. 102. AUTOMATIC ADMINISTRATIVE FORBEARANCE; HALTING OF WAGE 
              GARNISHMENT.

    During the period beginning on the date of enactment of this Act 
and ending on the date that is 12 months after such date of enactment, 
the Secretary of Education--
            (1) shall place each borrower of an eligible Federal loan 
        with an outstanding balance, without any further action 
        required by the borrower (except that the borrower may opt-out 
        of this section), on an administrative forbearance during which 
        periodic installments of principal need not be paid, and 
        interest shall not accrue, on such loan; and
            (2) may not issue an order for wage garnishment or 
        withholding under section 488A of the Higher Education Act of 
        1965 (20 U.S.C. 1095a) or section 3720D of title 31, United 
        States Code, initiate proceedings to collect debt through 
        deductions from pay under such section 488A or 3720D, or 
        enforce or otherwise require compliance with a wage garnishment 
        or withholding order issued under such section 488A or 3720D 
        before the date of enactment of this Act (which shall include 
        staying any related proceedings).

SEC. 103. STAYING AND PROHIBITION ON COMMENCEMENT OF ACTIONS FOR 
              COLLECTION.

    Until 12 months after the date of enactment of this Act, no 
eligible Federal loan may be referred to the Attorney General for any 
action seeking collection of any amount owed on that loan and any 
action pending as of the date of enactment of this Act shall be stayed.

SEC. 104. INELIGIBILITY FOR TREASURY OFFSET.

    Until 12 months after the date of enactment of this Act, no claim 
pertaining to an eligible Federal loan may be certified under section 
3716(c)(1) of title 31, United States Code.

                     TITLE II--REFINANCING PROGRAMS

SEC. 201. REFINANCING PROGRAMS.

    (a) Program Authority.--Section 451(a) of the Higher Education Act 
of 1965 (20 U.S.C. 1087a(a)) is amended--
            (1) by striking ``and (2)'' and inserting ``(2)''; and
            (2) by inserting ``; and (3) to make loans under section 
        460A and section 460B'' after ``section 459A''.
    (b) Refinancing Program.--Part D of title IV of the Higher 
Education Act of 1965 (20 U.S.C. 1087a et seq.) is amended by adding at 
the end the following:

``SEC. 460A. REFINANCING FFEL AND FEDERAL DIRECT LOANS.

    ``(a) In General.--Beginning not later than 12 months after the 
date of enactment of the Student Loan Debt Relief Act of 2019, the 
Secretary shall establish a program under which the Secretary 
automatically refinances loans made under this part in accordance with 
the provisions of this section, in order to lower the rate of interest 
on such loans.
    ``(b) Refinancing Direct Loans.--
            ``(1) Federal direct loans.--With respect to each Federal 
        Direct Stafford Loan, Federal Direct Unsubsidized Stafford 
        Loan, Federal Direct PLUS Loan, and Federal Direct 
        Consolidation Loan, for which the first disbursement was made 
        to a borrower, or the application for the consolidation loan 
        was received from a borrower, on or before the date of 
        enactment of the Student Loan Debt Relief Act of 2019, the 
        Secretary shall, without any further action by the borrower 
        (other than under subparagraph (C))--
                    ``(A) discharge the liability on such Federal 
                Direct Stafford Loan, Federal Direct Unsubsidized 
                Stafford Loan, Federal Direct PLUS Loan, or Federal 
                Direct Consolidation Loan;
                    ``(B) issue to the borrower a new Federal Direct 
                Stafford Loan, Federal Direct Unsubsidized Stafford 
                Loan, Federal Direct PLUS Loan, or Federal Direct 
                Consolidation Loan, respectively--
                            ``(i) in an amount equal to the sum of the 
                        unpaid principal, accrued unpaid interest, and 
                        late charges of the loan for which the 
                        liability is being discharged under 
                        subparagraph (A); and
                            ``(ii) which has the same terms and 
                        conditions as the original loan, except that 
                        the rate of interest shall be determined under 
                        subsection (c); and
                    ``(C) provide the borrower an opportunity to opt-
                out of the refinancing under this paragraph.
            ``(2) Refinancing ffel program loans as refinanced federal 
        direct loans.--
                    ``(A) In general.--With respect to each loan that 
                was made, insured, or guaranteed under part B and for 
                which the first disbursement was made to a borrower, or 
                the application for the consolidation loan was received 
                from a borrower, before July 1, 2010, the Secretary 
                shall, without any further action by the borrower 
                (other than to provide the borrower an opportunity to 
                opt-out of the refinancing under this paragraph), issue 
                to the borrower a loan made under this part--
                            ``(i) in an amount equal to the sum of the 
                        unpaid principal, accrued unpaid interest, and 
                        late charges of the loan selected to be so 
                        refinanced;
                            ``(ii) the proceeds of which shall be paid 
                        to the holder of the loan selected to be so 
                        refinanced to discharge the liability on such 
                        loan; and
                            ``(iii) which has a rate of interest 
                        determined under subsection (c).
                    ``(B) Designation of loans.--A loan issued under 
                this section the proceeds of which is discharging the 
                liability on a loan made, insured, or guaranteed--
                            ``(i) under section 428 shall be a Federal 
                        Direct Stafford Loan;
                            ``(ii) under section 428B shall be a 
                        Federal Direct PLUS Loan;
                            ``(iii) under section 428H shall be a 
                        Federal Direct Unsubsidized Stafford Loan; and
                            ``(iv) under section 428C shall be a 
                        Federal Direct Consolidation Loan.
    ``(c) Interest Rates.--
            ``(1) In general.--The interest rate for Federal Direct 
        Stafford Loans, Federal Direct Unsubsidized Stafford Loans, 
        Federal Direct PLUS Loans, and Federal Direct Consolidation 
        Loans issued under this section, shall be a rate equal to--
                    ``(A) in a case in which the original loan is a 
                loan under section 428 or 428H, a Federal Direct 
                Stafford loan, or a Federal Direct Unsubsidized 
                Stafford Loan, that was issued to an undergraduate 
                student, the rate for Federal Direct Stafford Loans and 
                Federal Direct Unsubsidized Stafford Loans issued to 
                undergraduate students for the 12-month period 
                beginning on July 1, 2016, and ending on June 30, 2017;
                    ``(B) in a case in which the original loan is a 
                loan under section 428 or 428H, a Federal Direct 
                Stafford Loan, or a Federal Direct Unsubsidized 
                Stafford Loan, that was issued to a graduate or 
                professional student, the rate for Federal Direct 
                Unsubsidized Stafford Loans issued to graduate or 
                professional students for the 12-month period beginning 
                on July 1, 2016, and ending on June 30, 2017;
                    ``(C) in an case in which the original loan is a 
                loan under section 428B or a Federal Direct PLUS Loan, 
                the rate for Federal Direct PLUS Loans for the 12-month 
                period beginning on July 1, 2016, and ending on June 
                30, 2017; and
                    ``(D) in a case in which the original loan is a 
                loan under section 428C or a Federal Direct 
                Consolidation Loan, a rate calculated in accordance 
                with paragraph (2).
            ``(2) Interest rates for consolidation loans.--
                    ``(A) Method of calculation.--To determine the 
                interest rate for a Federal Direct Federal 
                Consolidation Loan issued under this section, the 
                Secretary shall--
                            ``(i) determine each original loan for 
                        which the liability was discharged by the 
                        proceeds of a loan under section 428C or a 
                        Federal Direct Consolidation Loan, and 
                        calculate the proportion of the unpaid 
                        principal balance of the loan under section 
                        428C or the Federal Direct Consolidation Loan 
                        that is applicable to each such original loan;
                            ``(ii) use the proportions determined in 
                        accordance with clause (i) and the interest 
                        rate applicable for each original loan, as 
                        determined under subparagraph (B), to calculate 
                        the weighted average of the interest rates on 
                        the loans consolidated into the loan under 
                        section 428C or the Federal Direct 
                        Consolidation Loan; and
                            ``(iii) apply the weighted average 
                        calculated under clause (ii) as the interest 
                        rate for the Federal Direct Consolidation Loan 
                        made under this section and for which the 
                        interest rate is being determined under this 
                        paragraph.
                    ``(B) Interest rates for component loans.--The 
                interest rate for each original loan for which the 
                liability is discharged by the proceeds of loan made 
                under section 428C or a Federal Direct Consolidation 
                Loan shall be the following:
                            ``(i) The interest rate for any such 
                        original loan made, insured or guaranteed under 
                        section 428 or 428H, or that is a Federal 
                        Direct Stafford Loan or Federal Direct 
                        Unsubsidized Stafford Loan, issued to an 
                        undergraduate student shall be a rate equal to 
                        the lesser of--
                                    ``(I) the rate for Federal Direct 
                                Stafford Loans and Federal Direct 
                                Unsubsidized Stafford Loans issued to 
                                undergraduate students for the 12-month 
                                period beginning on July 1, 2016, and 
                                ending on June 30, 2017; or
                                    ``(II) the interest rate on such 
                                original loan.
                            ``(ii) The interest rate for any such 
                        original loan made, insured or guaranteed under 
                        section 428 or 428H, or that is a Federal 
                        Direct Stafford Loan, or Federal Direct 
                        Unsubsidized Stafford Loan, issued to a 
                        graduate or professional student shall be a 
                        rate equal to the lesser of--
                                    ``(I) the rate for Federal Direct 
                                Unsubsidized Stafford Loans issued to 
                                graduate or professional students for 
                                the 12-month period beginning on July 
                                1, 2016, and ending on June 30, 2017; 
                                or
                                    ``(II) the interest rate on the 
                                original loan.
                            ``(iii) The interest rate for any such 
                        original loan made, insured or guaranteed under 
                        section 428B or that is a Federal Direct PLUS 
                        Loan shall be a rate equal to the lesser of--
                                    ``(I) the rate for Federal Direct 
                                PLUS Loans for the 12-month period 
                                beginning on July 1, 2016, and ending 
                                on June 30, 2017; or
                                    ``(II) the interest rate on the 
                                original loan.
                            ``(iv) The interest rate for any such 
                        original loan that is a loan under section 428C 
                        or a Federal Direct Consolidation Loan shall be 
                        the weighted average of the interest rates 
                        determined under this subparagraph for each 
                        loan for which the liability is discharged by 
                        the proceeds of such consolidation loan.
                            ``(v) The interest rate for any original 
                        loan for which the liability was discharged 
                        with the proceeds of a loan made under section 
                        428C or a Federal Direct Consolidation Loan and 
                        is not described in clauses (i) through (iv) 
                        shall be the interest rate on such original 
                        loan.
            ``(3) Fixed rate.--The applicable rate of interest 
        determined under paragraph (1) for a loan issued under this 
        section shall be fixed for the period of the loan.
    ``(d) Repayment Periods.--A loan issued under this section shall 
not result in the extension of the duration of the repayment period of 
the original loan, and the borrower shall retain the same repayment 
term that was in effect on the original loan. Nothing in this paragraph 
shall be construed to prevent a borrower from electing a different 
repayment plan at any time in accordance with section 455(d)(3).
    ``(e) Original Loan Defined.--In this section, the term `original 
loan' means a loan for which the liability is discharged with the 
proceeds of a loan issued under this section.

``SEC. 460B. REFINANCING OF PRIVATE EDUCATION LOANS.

    ``(a) Program Authorized.--
            ``(1) In general.--During the period beginning on the date 
        that is 6 months after the date of enactment of the Student 
        Loan Debt Relief Act of 2019, and ending on the date that is 9 
        months after such date of enactment, the Secretary, in 
        consultation with the Secretary of the Treasury, shall carry 
        out a program under which the Secretary, upon receiving an 
        application from a borrower who has a loan obligation on an 
        eligible private education loan, shall issue such borrower a 
        loan under this section in accordance with the following:
                    ``(A) The loan issued under this section shall be 
                in an amount equal to the sum of the unpaid principal, 
                accrued unpaid interest, and late charges of the 
                private education loan.
                    ``(B) The Secretary shall pay the proceeds of the 
                loan issued under this section to the private 
                educational lender (or subsequent holder) of the 
                private education loan, in order to discharge the 
                borrower and any cosigners from any remaining 
                obligation to the lender with respect to the private 
                education loan.
                    ``(C) The Secretary shall require that the borrower 
                undergo loan counseling that provides all of the 
                information and counseling required under clauses (i) 
                through (viii) of section 485(b)(1)(A) before the 
                carrying out subparagraphs (A) and (B) with respect to 
                such borrower.
                    ``(D) The Secretary shall issue the loan as a 
                Federal Direct Stafford Loan with a rate of interest 
                determined under subsection (b).
    ``(b) Interest Rate.--
            ``(1) In general.--The interest rate for a Federal Direct 
        Stafford Loan issued under this section shall be--
                    ``(A) in the case of a Federal Direct Stafford Loan 
                discharging the liability on a private education loan 
                issued for undergraduate postsecondary educational 
                expenses, a rate equal to the rate for Federal Direct 
                Stafford Loans and Federal Direct Unsubsidized Stafford 
                Loans issued to undergraduate students for the 12-month 
                period beginning on July 1, 2016, and ending on June 
                30, 2017; and
                    ``(B) in the case of a Federal Direct Stafford Loan 
                discharging the liability on a private education loan 
                issued for graduate or professional degree 
                postsecondary educational expenses, a rate equal to the 
                rate for Federal Direct Unsubsidized Stafford Loans 
                issued to graduate or professional students for the 12-
                month period beginning on July 1, 2016, and ending on 
                June 30, 2017.
            ``(2) Combined undergraduate and graduate study loans.--In 
        the case of a Federal Direct Stafford Loan discharging the 
        liability on a private education loan issued for both 
        undergraduate and graduate or professional postsecondary 
        educational expenses, the interest rate shall be a rate equal 
        to the rate for Federal Direct PLUS Loans for the 12-month 
        period beginning on July 1, 2016, and ending on June 30, 2017.
            ``(3) Fixed rate.--The applicable rate of interest 
        determined under this subsection for a Federal Direct Stafford 
        Loan issued under this section shall be fixed for the period of 
        the loan.
    ``(c) No Inclusion in Aggregate Limits.--The amount of a Federal 
Direct Stafford Loan issued under this section, or a Federal Direct 
Consolidated Loan to the extent such loan is used to repay such a 
Federal Direct Stafford Loan, shall not be included in calculating a 
borrower's annual or aggregate loan limits under section 428 or 428H.
    ``(d) Private Educational Lender Reporting Requirement.--
            ``(1) Reporting required.--Not later than 6 months after 
        the date of enactment of the Student Loan Debt Relief Act of 
        2019, the Secretary, in consultation with the Secretary of the 
        Treasury and the Director of the Bureau of Consumer Financial 
        Protection, shall establish a requirement that private 
        educational lenders report the data described in paragraph (2) 
        to the Secretary, to Congress, to the Secretary of the 
        Treasury, and to the Director of the Bureau of Consumer 
        Financial Protection, in order to allow for an assessment of 
        the private education loan market.
            ``(2) Contents of reporting.--The data that private 
        educational lenders shall report in accordance with paragraph 
        (1) shall include each of the following about private education 
        loans (as defined in section 140(a) of the Truth in Lending Act 
        (15 U.S.C. 1650(a))):
                    ``(A) The total amount of private education loan 
                debt the lender holds.
                    ``(B) The total number of private education loan 
                borrowers the lender serves.
                    ``(C) The average interest rate on the outstanding 
                private education loan debt held by the lender.
                    ``(D) The proportion of private education loan 
                borrowers who are in default on a loan held by the 
                lender.
                    ``(E) The proportion of the outstanding private 
                education loan volume held by the lender that is in 
                default.
                    ``(F) The proportions of outstanding private 
                education loan borrowers who are 30, 60, and 90 days 
                delinquent.
                    ``(G) The proportions of outstanding private 
                education loan volume that is 30, 60, and 90 days 
                delinquent.
    ``(e) Sunset.--The authority to issue loans under this section 
shall expire on the date that is 8 months after the date of enactment 
of the Student Loan Debt Relief Act of 2019.
    ``(f) Definitions.--In this section:
            ``(1) Private educational lender.--The term `private 
        educational lender' has the meaning given the term in section 
        140(a) of the Truth in Lending Act (15 U.S.C. 1650(a)).
            ``(2) Eligible private education loan.--The term `eligible 
        private education loan' means a private education loan, as 
        defined in section 140(a) of the Truth in Lending Act (15 
        U.S.C. 1650(a)), that--
                    ``(A) was disbursed to the borrower on or before 
                the date of enactment of the Student Loan Debt Relief 
                Act of 2019; and
                    ``(B) was for the borrower's own postsecondary 
                educational expenses for an eligible program at an 
                institution of higher education participating in the 
                loan program under this part, as of the date that the 
                loan was disbursed.''.
    (c) Income-Contingent Repayment.--Section 455(d)(1)(D) of the 
Higher Education Act of 1965 (20 U.S.C. 1087e(d)(1)(D)) is amended by 
inserting before the semicolon at the end the following: ``, and in 
calculating the period of time during which a borrower of a loan issued 
under section 460A has made monthly payments on such loan for purposes 
of the plan described in this subparagraph, the Secretary shall treat 
each monthly payment that otherwise meets the requirements of such plan 
and that was made on a loan for which the liability is discharged by 
the proceeds of such loan issued under section 460A, as a monthly 
payment made on such loan issued under section 460A''.
    (d) Public Service Loan Forgiveness.--Section 455(m) of the Higher 
Education Act of 1965 (20 U.S.C. 1087e(m)) is amended--
            (1) by redesignating paragraphs (3) and (4) as paragraphs 
        (4) and (5), respectively; and
            (2) by inserting after paragraph (2) the following:
            ``(3) Treatment of loans issued under section 460a.--
        Notwithstanding paragraph (1), in determining the number of 
        monthly payments made under paragraph (1) on an eligible 
        Federal Direct Loan issued under section 460A the proceeds of 
        which discharges the liability on a loan made under this part, 
        the Secretary shall treat each monthly payment made under 
        paragraph (1) on the loan before the liability on such loan was 
        so discharged as a monthly payment made on such eligible 
        Federal Direct Loan.'';
    (e) 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) Treatment of Refinanced Loans.--In calculating the period of 
time during which a borrower of a loan issued under section 460A has 
made monthly payments on such loan for purposes of subsection (b)(7), 
the Secretary shall treat each monthly payment that otherwise meets the 
requirements of this section and that was made on a loan for which the 
liability is discharged by the proceeds of such loan issued under 
section 460A, as a monthly payment made on such loan issued under 
section 460A.''.

       TITLE III--DISCHARGEABILITY OF STUDENT LOANS IN BANKRUPTCY

SEC. 301. DISCHARGEABILITY OF STUDENT LOANS IN BANKRUPTCY.

            (1) Exception to discharge.--Section 523(a) of title 11 of 
        the United States Code is amended by striking paragraph (8).
            (2) Conforming amendment.--Section 1328(a)(2) of title 11 
        of the United States Code is amended by striking ``(8),''.

                      TITLE IV--GENERAL PROVISIONS

SEC. 401. REPORT ON PROGRESS OF IMPLEMENTATION.

    Not later than the date that is 6 months after the date of 
enactment of this Act, the Secretary of Education and the Secretary of 
the Treasury shall, jointly, submit to Congress a report on the 
progress of the implementation of the provisions of titles I and II.

SEC. 402. NOTIFICATION TO BORROWERS.

    (a) In General.--Not later than the date that is 3 months after the 
date of enactment of this Act--
            (1) the Secretary of Education--
                    (A) shall take such steps as may be necessary to 
                notify borrowers of an eligible Federal loan of the 
                loan discharge available under title I, including the 
                applicable deadlines;
                    (B) in coordination with the Secretary of the 
                Treasury and the Director of the Bureau of Consumer 
                Financial Protection, shall undertake a campaign to 
                notify borrowers of loans made, insured, or guaranteed 
                under part B or D of title IV of the Higher Education 
                Act of 1965 that such borrowers may be eligible to 
                refinance such loans at a lower rate of interest under 
                section 460A of the Higher Education Act of 1965, as 
                added by title II of this Act, which campaign shall 
                include--
                            (i) developing consumer information 
                        materials about the availability of such 
                        refinancing; and
                            (ii) requiring servicers of such loans to 
                        provide such consumer information to borrowers 
                        in a manner determined appropriate by the 
                        Secretary, in consultation with the Director of 
                        the Bureau of Consumer Financial Protection; 
                        and
                    (C) in coordination with the Secretary of the 
                Treasury and the Director of the Bureau of Consumer 
                Financial Protection, shall undertake a campaign to 
                alert borrowers of private education loans--
                            (i) that such borrowers may be eligible to 
                        refinance such private loans as Federal Direct 
                        Stafford Loans under section 460B of the Higher 
                        Education Act of 1965, as added by title II of 
                        this Act; and
                            (ii) such Federal Direct Stafford Loans may 
                        be eligible for loan discharge under title I of 
                        this Act; and
            (2) the Secretary of Health and Human Services, in 
        consultation with the Secretary of Education, shall take such 
        steps as may be necessary to inform borrowers of a loan made, 
        insured, or guaranteed by the Department of Health and Human 
        Services that is eligible for consolidation under section 
        455(g) of the Higher Education Act of 1965 (20 U.S.C. 
        1087e(g)), that the--
                    (A) borrower may be eligible for a Federal Direct 
                Consolidation Loan under such section 455(g); and
                    (B) such Federal Direct Consolidation Loan may be 
                eligible for loan discharge under title I of this Act.
    (b) Notification by Private Education Loan Holders.--Each holder of 
a private education loan shall, not later than the date that is 3 
months after the date of enactment of this Act, notify the borrower of 
such private education loan that the borrower may be eligible to 
refinance the private education loan as a Federal Direct Stafford Loan 
under section 460B of the Higher Education Act of 1965, and such 
Federal Direct Stafford Loan may be eligible for loan discharge under 
title I of this Act.

SEC. 403. INAPPLICABILITY OF TITLE IV NEGOTIATED RULEMAKING AND MASTER 
              CALENDAR EXCEPTION.

    Sections 482(c) and 492 of the Higher Education Act of 1965 (20 
U.S.C. 1089(c), 1098a) shall not apply to this Act or any amendments 
made by this Act, or to any regulations promulgated under this Act or 
under such amendments.

SEC. 404. DEFINITIONS.

    In this Act:
            (1) Eligible federal loan.--The term ``eligible Federal 
        loan'' means--
                    (A) a loan made, insured, or guaranteed under title 
                IV of the Higher Education Act of 1965 (20 U.S.C. 1071 
                et seq.) (other than a loan described in subparagraph 
                (B)) on or before the date of enactment of this Act; or
                    (B) a Federal Direct Stafford Loan issued under 
                section 460B of the Higher Education Act of 1965, as 
                added by title II of this Act, on a date that is not 
                later than 9 months after the date of enactment of this 
                Act.
            (2) Private education loan.--The term ``private education 
        loan'' has the meaning given such term in section 140(a) of the 
        Truth in Lending Act (15 U.S.C. 1650(a)).
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Education.
            (4) Taxpayer.--The term ``taxpayer'' has the meaning given 
        such term in section 7701 of the Internal Revenue Code of 1986.
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