Relief for borrowers of Federal direct PLUS loans made on behalf of students

(a)

Expansion of repayment plan options

(1)

In general

The Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) is amended—(A)in section 428(b)(9)(A)—(i)in clause (iv), by striking and after the semicolon;(ii)in clause (v), by striking , except that the plan described in this clause shall not be available to a borrower for a loan under section 428B made on behalf of a dependent student or for a consolidation loan under section 428C, if the proceeds of such loan were used to discharge the liability of a loan under section 428B made on behalf of a dependent student. and inserting ; and; and(iii)by adding at the end the following:

(vi)beginning July 1, 2024, an income contingent repayment plan (as described in section 455(d)(1)(D), which plan shall include a Pay as You Earn Repayment plan and a Saving on a Valuable Education plan as described in section 685.209 of title 34, Code of Federal Regulations (or any similar successor regulation), except such plans shall be available to the borrower of any loan made, insured, or guaranteed under this part).

;

(B)in section 428C(c)—(i)in paragraph (2)(A)—(I)in the first sentence by striking , or income-based repayment schedules and inserting , income-based, or, beginning July 1, 2024, income contingent (as described in section 455(d)(1)(D)), repayment schedules; and(II)in the second sentence, by striking or income-based and inserting , income-based, or income contingent;(ii)in paragraph (3)— (I)in subparagraph (A)—(aa)by inserting , or, beginning July 1, 2024, an income contingent (as described in section 455(d)(1)(D)) repayment schedule after an income-based repayment schedule under section 493C; and(bb)by inserting and after the semicolon;(II)in subparagraph (B), by striking ; and and inserting a period; and (III)by striking subparagraph (C);(C)in section 455(d)(1)—(i)in subparagraph (D), by striking , except that the plan described in this subparagraph shall not be available to the borrower of a Federal Direct PLUS loan made on behalf of a dependent student and inserting , which plan shall include, beginning July 1, 2024, a Pay as You Earn Repayment plan and a Saving on a Valuable Education plan as described in section 685.209 of title 34, Code of Federal Regulations (or any similar successor regulation), except that such plans shall be available to the borrower of any loan made under this part; and (ii)in subparagraph (E), by striking , except that the plan described in this subparagraph shall not be available to the borrower of a Federal Direct PLUS Loan made on behalf of a dependent student or a Federal Direct Consolidation Loan, if the proceeds of such loan were used to discharge the liability on such Federal Direct PLUS Loan or a loan under section 428B made on behalf of a dependent student; and(D)in section 493C—(i)by striking subsection (a) and inserting the following:

(a)

Definition of partial financial hardship

In this section, the term partial financial hardship, when used with respect to a borrower, means that for such borrower—(1)the annual amount due on the total amount of loans made, insured, or guaranteed under part B or D to a borrower as calculated under the standard repayment plan under section 428(b)(9)(A)(i) or 455(d)(1)(A), based on a 10-year repayment period; exceeds(2)15 percent of the result obtained by calculating, on at least an annual basis, the amount by which—(A)the borrower's, and the borrower's spouse's (if applicable), adjusted gross income; exceeds(B)150 percent of the poverty line 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)).

;

(ii)in subsection (b)—(I)in paragraph (1), by striking (other than an excepted PLUS loan or excepted consolidation loan); (II)in paragraph (6)(A), by striking (other than an excepted PLUS loan or excepted consolidation loan); and(III)in paragraph (7), by striking (other than a loan under section 428B or a Federal Direct PLUS Loan); and(iii)in subsection (c)—(I)in paragraph (1), by striking (other than an excepted PLUS loan or excepted consolidation loan); and (II)in paragraph (2)(B), by striking (other than an excepted PLUS loan or excepted consolidation loan); and(iv)in subsection (e), by striking 2014— and all that follows through the period at the end and inserting 2014, subsection (a)(3)(B) shall be applied by substituting 10 percent for 15 percent..(2)

Rule of construction

Nothing in the amendments made under paragraph (1) shall be construed to authorize any refunding of any repayment of a loan. (b)

Discharge for total and permanent disability

(1)

In general

(A)

Part B

Section 437(a) of the Higher Education Act of 1965 (20 U.S.C. 1087(a)) is amended by adding at the end the following:

(4)

Discharge of parent plus loans for total and permanent disability of student

Notwithstanding any other provision of this Act, the Secretary shall discharge the liability on a loan made under section 428B on behalf of a student by repaying the amount owed on the loan, if the student becomes permanently and totally disabled (as determined in accordance with regulations of the Secretary).

(B)

Part D

Section 455 of the Higher Education Act of 1965 (20 U.S.C. 1087e) is amended by adding at the end the following:

(q)

Discharge of parent plus loans for total and permanent disability of student

Notwithstanding any other provision of this Act, the Secretary shall discharge the liability on a Federal Direct PLUS loan made on behalf of a student, if the student becomes permanently and totally disabled (as determined in accordance with regulations of the Secretary).

(2)

Rule of construction

Nothing in the amendments made under paragraph (1) shall be construed to authorize any refunding of any repayment of a loan. (c)

Eligibility for public service loan forgiveness for parent plus loans

Section 455(m) of the Higher Education Act of 1965 (20 U.S.C. 1087e(m)) is amended by adding at the end the following:

(5)

Parent PLUS loan

The Secretary shall cancel the balance of interest and principal due on a Federal Direct PLUS loan made on behalf of a student after the date of enactment of the Parent Plus Parity Act, if the student is a borrower for whom the Secretary has cancelled the obligation to repay the balance of principal and interest due on an eligible Federal Direct Loan under this subsection.

(d)

Automatic discharge

(1)

In general

(A)

Part B

Section 437(c) of the Higher Education Act of 1965 (20 U.S.C. 1087(c)) is amended by adding at the end the following:

(6)

Automatic discharge for parent plus loans

If a student on whose behalf a parent has received a loan described in section 428B is a borrower for whom a loan has been discharged pursuant to this subsection, then the Secretary shall automatically discharge the parent borrower's liability on the loan described in section 428B by repaying the amount owed on the loan.

(B)

Part D

Section 455(h) of the Higher Education Act of 1965 (20 U.S.C. 1087e(h)) is amended—(i)by striking Notwithstanding and inserting the following:

(1)

In general

Notwithstanding

; and

(ii)by adding at the end the following:

(2)

Automatic discharge for parent plus loans

If a student on whose behalf a parent has received a Federal Direct PLUS Loan is a borrower for whom a loan made under this part has been discharged pursuant to a defense to repayment, then the Secretary shall automatically discharge the parent borrower's liability on the Federal Direct PLUS Loan.

(2)

Rule of construction

Nothing in the amendments made under paragraph (1) shall be construed to authorize any refunding of any repayment of a loan. (e)

Discharge for hardship

(1)

Part B

Section 437 of the Higher Education Act of 1965 (20 U.S.C. 1087) is amended by adding at the end the following:

(e)

Discharge of parent plus loans for hardship

(1)

In general

Notwithstanding any other provision of this Act, the Secretary shall discharge the liability on a loan made under section 428B on behalf of a student by repaying the amount owed on the loan, if the Secretary determines that the parent borrower has experienced hardship or may experience future hardship as a result of such a loan.(2)

Factors that substantiate hardship

The Secretary shall establish factors that demonstrate hardship for the purpose of a discharge under paragraph (1), including any of the following: (A)Income.(B)Borrower-loan-debt-to-income ratio.(C)Potential future earnings.(D)Age of a borrower.(E)Age of a loan.(F)Receipt of public benefits.(G)Receipt of Social Security.(H)Borrower disability.(I)Any other indicators of hardship identified by the Secretary.(3)

Application

The Secretary shall create guidelines and an application through which a borrower may submit records or other evidence of hardship or a statement that attests to present or future hardship.

(2)

Part D

Section 455 of the Higher Education Act of 1965 (20 U.S.C. 1087e), as amended by subsection (b), is further amended by adding at the end the following:

(r)

Discharge of parent plus loans for hardship

(1)

In general

Notwithstanding any other provision of this Act, the Secretary shall discharge the liability on a Federal Direct PLUS loan made on behalf of a student, if the Secretary determines that the parent borrower has experienced hardship or may experience future hardship as a result of such a loan.(2)

Factors that substantiate hardship

Application

The Secretary shall create guidelines and an application through which a borrower may submit records or other evidence of hardship or a statement that attests to present or future hardship.

(f)

Delegation to the secretary

Congress delegates to the Secretary of Education the authority, in issuing regulations to carry out the amendments made by this section, to interpret the provisions of the amendments made by this section, taking into consideration cost and public health. A court engaged in judicial review of those provisions, including judicial review under section 706 of title 5, United States Code, shall determine whether the agency's interpretation is based on a permissible construction of the amendments made by this section.