[Congressional Record Volume 167, Number 139 (Wednesday, August 4, 2021)]
[Senate]
[Page S5835]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTION

      By Mr. DURBIN (for himself and Mr. Cornyn):
  S. 2598. A bill to amend title 11, United States Code, to improve the 
treatment of student loans in bankruptcy, and for other purposes; to 
the Committee on the Judiciary.
  Mr. DURBIN. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2598

       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 ``Fostering Responsible 
     Education Starts with Helping Students Through 
     Accountability, Relief, and Taxpayer Protection Through 
     Bankruptcy Act of 2021'' or the ``FRESH START Through 
     Bankruptcy Act''.

     SEC. 2. EXCEPTIONS TO DISCHARGE.

       Section 523(a) of title 11, United States code, is amended 
     by striking paragraph (8) and inserting the following:
       ``(8) for an educational benefit overpayment or loan made, 
     insured, or guaranteed by a governmental unit, or made under 
     any program funded in whole or in part by a governmental unit 
     or nonprofit institution, or for an obligation to repay funds 
     received as an educational benefit, scholarship, or stipend 
     received from a governmental unit or nonprofit institution, 
     unless--
       ``(A) excepting such debt from discharge under this 
     paragraph would impose an undue hardship on the debtor and 
     the debtor's dependents; or
       ``(B) the first payment on such debt became due before the 
     10-year period (exclusive of any applicable suspension of the 
     repayment period) ending on the date of the filing of the 
     petition;
       ``(8A) unless excepting such debt from discharge under this 
     paragraph would impose an undue hardship on the debtor and 
     the debtor's dependents, for--
       ``(A) an obligation to repay funds received as an 
     educational benefit, scholarship, or stipend, other than an 
     obligation described in paragraph (8); or
       ``(B) any educational loan, other than a loan described in 
     paragraph (8), that is a qualified education loan, as defined 
     in section 221(d)(1) of the Internal Revenue Code of 1986, 
     incurred by a debtor who is an individual;''.

     SEC. 3. EFFECT OF DISCHARGE OF CERTAIN STUDENT LOANS.

       Section 524 of title 11, United States Code, is amended by 
     adding at the end the following:
       ``(n)(1) In this subsection:
       ``(A) The term `cohort repayment rate', with respect to a 
     covered institution of higher education, means the percentage 
     of student borrowers who are making at least some progress 
     paying down their student loans within 3 years of entering 
     repayment.
       ``(B) The term `covered institution of higher education' 
     means an institution of higher education (as defined in 
     section 102 of the Higher Education Act of 1965 (20 U.SC. 
     1002)) that--
       ``(i) is a participant in the Federal Direct Loan Program 
     under part D of title IV of the Higher Education Act of 1965 
     (20 U.S.C. 1087a et seq.); and
       ``(ii) has an enrollment of students that is not less than 
     33 percent students who have received a loan made, insured, 
     or guaranteed under title IV of the Higher Education Act of 
     1965 (20 U.S.C. 1070 et seq.)).
       ``(C) The term `covered student loan' means the original 
     principal of a loan--
       ``(i) the first payment on which became due before the 10-
     year period (exclusive of any applicable suspension of the 
     repayment period) ending on the date of the filing of the 
     petition; and
       ``(ii) used by the debtor to make a payment to a covered 
     institution of higher education on behalf of the debtor for 
     the purpose of attaining an educational benefit.
       ``(D) The term `Federal Direct PLUS Loan' means a Federal 
     Direct PLUS Loan under part D of title IV of the Higher 
     Education Act of 1965 (20 U.S.C. 1087a et seq.)
       ``(2) If a covered student loan is discharged in a 
     bankruptcy case under this title, the covered institution of 
     higher education to which the debtor of the bankruptcy case 
     made a payment with the covered student loan shall pay to the 
     Department of Education an amount determined in accordance 
     with the following:
       ``(A) An amount equal to 50 percent of the amount of the 
     covered student loan that is discharged, if the covered 
     institution of higher education, on the date on which the 
     first payment on the covered student loan became due--
       ``(i) had a cohort default rate (as determined under 
     section 435(m) of the Higher Education Act of 1965 (20 U.S.C. 
     1085(m)) for each of the 3 fiscal years preceding that date 
     that was equal to or more than 25 percent; and
       ``(ii) had a cohort repayment rate--
       ``(I) except for borrowers described in subclause (II), 
     that was equal to or less than 20 percent; and
       ``(II) with respect to borrowers who were graduate or 
     professional students who received a Federal Direct PLUS Loan 
     for enrollment at the institution, that was equal to or less 
     than 35 percent.
       ``(B) An amount equal to 30 percent of the amount of the 
     covered student loan that is discharged, if the covered 
     institution of higher education, on the date on which the 
     first payment on the covered student loan became due--
       ``(i) had a cohort default rate (as determined under 
     section 435(m) of the Higher Education Act of 1965 (20 U.S.C. 
     1085(m)) for each of the 3 fiscal years preceding that date 
     that was equal to or more than 20 percent and less than 25 
     percent; and
       ``(ii) had a cohort repayment rate--
       ``(I) except for borrowers described in subclause (II), 
     that was equal to or less than 25 percent and more than 20 
     percent; and
       ``(II) with respect to borrowers who were graduate or 
     professional students who received a Federal Direct PLUS Loan 
     for enrollment at the institution, that was equal to or less 
     than 40 percent and more than 35 percent.
       ``(C) An amount equal to 20 percent of the amount of the 
     covered student loan that is discharged, if the covered 
     institution of higher education, on the date on which the 
     first payment on the covered student loan became due--
       ``(i) had a cohort default rate (as determined under 
     section 435(m) of the Higher Education Act of 1965 (20 U.S.C. 
     1085(m)) for each of the 3 fiscal years preceding that date 
     that was equal to or more than 15 percent and less than 20 
     percent; and
       ``(ii) had a cohort repayment rate--
       ``(I) except for borrowers described in subclause (II), 
     that was equal to or less than 30 percent and more than 25 
     percent; and
       ``(II) with respect to borrowers who were graduate or 
     professional students who received a Federal Direct PLUS Loan 
     for enrollment at the institution, that was equal to or less 
     than 45 percent and more than 40 percent.''.

     SEC. 4. EFFECTIVE DATE; APPLICABILITY.

       This Act and the amendments made by this Act shall--
       (1) take effect on the date that is 180 days after the date 
     of enactment of this Act; and
       (2) apply to a petition filed or amended under this title 
     on or after the effective date under paragraph (1) with 
     respect to a debt for an educational benefit, overpayment, 
     loan, scholarship, or stipend of a debtor.

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