Section 1 Short title
This Act may be cited as the “Student Loan Borrower Relief Act”.
Student Loan Borrower Relief Act
A BILL
To update the income-driven repayment plans and the public service loan forgiveness program under the Higher Education Act of 1965, and for other purposes.
Sec. 2 Income-driven repayment requirements
Income-Contingent repayment plans— Section 455 of the Higher Education Act of 1965 (20 U.S.C. 1087e) is amended—
in subsection (d)(1)(D), by striking “25 years” and inserting “15 years”; and
in subsection (e)—
in the matter preceding subparagraph (A), in paragraph (7), by striking “in effect for a borrower,” and inserting “in effect for a borrower, not to exceed 15 years,”; and
by adding at the end the following:
“(1) Monthly payment requirements—During any period a borrower is repaying a loan made under this part pursuant to an income contingent repayment plan under this subsection, the following shall apply:
“(A)
“(i) The borrower’s aggregate monthly payment for all such loans shall not exceed the result described in clause (ii) divided by 12.
“(ii) The result described in this clause shall be 10 percent of the result obtained by calculating, on at least an annual basis, the amount by which—
“(I) the borrower’s, and the borrower’s spouse’s (if applicable), adjusted gross income; exceeds
“(II) 250 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)).
“(B)
“(i) Subject to clause (ii), in a case in which the borrower’s aggregate monthly payment on such loans is not sufficient to pay the accrued interest on such loans, any such accrued interest that is not paid shall be canceled by the Secretary.
“(ii)
“(I) Notwithstanding clause (i), any interest due and not paid on such loans at a time described in subclause (II) of this clause shall accrue but not be capitalized.
“(II) This clause shall apply at each of the following times:
“(aa) The borrower no longer has a partial financial hardship, as defined by the applicable income contingent repayment plan.
“(bb) The borrower begins making payments of not less than the monthly amount calculated under 455(d)(1)(A), based on a 10-year repayment period, when the borrower first made the election described in this subsection.”
Income-Based repayment— Section 493C of the Higher Education Act of 1965 (20 U.S.C. 1098e) is amended—
in subsection (a)(3)(B)—
in the matter preceding clause (i), by striking “15 percent” and inserting “10 percent”; and
in clause (ii), by striking “150” and inserting “250”; and
in subsection (b)—
by striking paragraph (3) and inserting the following:
“(3) any interest due and not paid under paragraph (2)—
“(A) subject to subparagraph (B), shall be canceled or paid by the Secretary during the period after the date of the borrower's election under paragraph (1); and
“(B) shall accrue but not be 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);”
in paragraph (7)(B), by striking “25 years” and inserting “15 years”.
Application— The amendments made by this section shall apply to each borrower who—
as of the effective date of such amendments, is repaying loans under an income-contingent repayment plan under section 455(e) of the Higher Education Act of 1965 (20 U.S.C. 1087e(e)) or an income-based repayment plan under section 493C of such Act (20 U.S.C. 1098e); or
on or after such effective date, selects, or is required to repay such loan pursuant to such a repayment plan.
Sec. 3 Public service loan forgiveness
Section 455(m) of the Higher Education Act of 1965 (20 U.S.C. 1087e(m)) is amended—
in paragraph (1)—
in the matter preceding subparagraph (A), by striking “cancel the balance” and inserting “cancel, on an annual a basis for not more than 10 years, a portion of the balance”;
in subparagraph (A), by striking “120” and inserting “12”; and
in subparagraph (B)(ii), by striking “120” and inserting “12”; and
by amending paragraph (2) to read as follows:
“(2) Loan cancellation amount
“(A) In general—A borrower may submit an application for loan cancellation under this subsection after any employment period listed in subparagraph (B), and upon a determination that the borrower is eligible for such loan cancellation, the Secretary shall cancel the portion of the balance due on the principal and interest on the eligible Federal Direct Loans made to the borrower under this part for which the borrower is eligible under subparagraph (B).
“(B) Employment periods—The employment periods listed in this subparagraph are as follows:
“(i) First 12-month employment period—After the conclusion of the first 12-month employment period described in paragraph (1), the Secretary shall cancel 5 percent of the obligation to repay the balance of principal and interest due as of the time of such cancellation, on the eligible Federal Direct Loans made to the borrower under this part.
“(ii) Second 12-month employment period—After the conclusion of the second 12-month employment period described in paragraph (1), the Secretary shall cancel 5 percent of the obligation to repay the balance of principal and interest due as of the time of such cancellation, on the eligible Federal Direct Loans made to the borrower under this part.
“(iii) Third 12-month employment period—After the conclusion of the third 12-month employment period described in paragraph (1), the Secretary shall cancel 10 percent of the obligation to repay the balance of principal and interest due as of the time of such cancellation, on the eligible Federal Direct Loans made to the borrower under this part.
“(iv) Fourth 12-month employment period—After the conclusion of the fourth 12-month employment period described in paragraph (1), the Secretary shall cancel 10 percent of the obligation to repay the balance of principal and interest due as of the time of such cancellation, on the eligible Federal Direct Loans made to the borrower under this part.
“(v) Fifth 12-month employment period—After the conclusion of the fifth 12-month employment period described in paragraph (1), the Secretary shall cancel 15 percent of the obligation to repay the balance of principal and interest due as of the time of such cancellation, on the eligible Federal Direct Loans made to the borrower under this part.
“(vi) Sixth 12-month employment period—After the conclusion of the sixth 12-month employment period described in paragraph (1), the Secretary shall cancel 15 percent of the obligation to repay the balance of principal and interest due as of the time of such cancellation, on the eligible Federal Direct Loans made to the borrower under this part.
“(vii) Seventh 12-month employment period—After the conclusion of the seventh 12-month employment period described in paragraph (1), the Secretary shall cancel 20 percent of the obligation to repay the balance of principal and interest due as of the time of such cancellation, on the eligible Federal Direct Loans made to the borrower under this part.
“(viii) Eighth 12-month employment period—After the conclusion of the eighth 12-month employment period described in paragraph (1), the Secretary shall cancel 20 percent of the obligation to repay the balance of principal and interest due as of the time of such cancellation, on the eligible Federal Direct Loans made to the borrower under this part.
“(ix) Ninth 12-month employment period—After the conclusion of the ninth 12-month employment period described in paragraph (1), the Secretary shall cancel 30 percent of the obligation to repay the balance of principal and interest due as of the time of such cancellation, on the eligible Federal Direct Loans made to the borrower under this part.
“(x) Tenth 12-month employment period—After the conclusion of the tenth 12-month employment period described in paragraph (1), the Secretary shall cancel the remaining obligation to repay the balance of principal and interest due as of the time of such cancellation.”
Sec. 4 Effective date
In general— The amendments made by this Act shall take effect on a date that is 2 years after the date of enactment of this Act.
Early effective date permitted— The Secretary of Education may implement the amendments made by this Act before (but not later than) the date that is 2 years after the date of enactment of this Act. The Secretary shall specify in a designation on what date, and under what conditions the Secretary will implement such amendments prior to a date that is 2 years after the date of enactment of this Act. The Secretary shall publish any designation under this paragraph in the Federal Register at least 60 days before implementation.