I
118THCONGRESS
1
STSESSION H. R. 4144
To streamline and improve the Federal student loan repayment system to
protect borrowers and taxpayers.
IN THE HOUSE OF REPRESENTATIVES
JUNE15, 2023
Mr. O
WENS(for himself, Mrs. MCCLAIN, and Ms. FOXX) introduced the fol-
lowing bill; which was referred to the Committee on Education and the
Workforce
A BILL
To streamline and improve the Federal student loan
repayment system to protect borrowers and taxpayers.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 3
(a) S
HORTTITLE.—This Act may be cited as the 4
‘‘Federal Assistance to Initiate Repayment Act’’ or the 5
‘‘FAIR Act’’. 6
(b) T
ABLE OFCONTENTS.—The table of contents for 7
this Act is as follows: 8
Sec. 1. Short title; table of contents.
Sec. 2. References.
Sec. 3. Return to repayment requirements.
Sec. 4. Repayment plans.
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Sec. 5. Income-driven repayment assistance plan.
Sec. 6. Deferment on loans made on or after July 1, 2024.
Sec. 7. Loan rehabilitation.
Sec. 8. Limitation on authority of Secretary to propose or issue regulations and
executive actions.
SEC. 2. REFERENCES.
1
Except as otherwise expressly provided, whenever in 2
this Act an amendment or repeal is expressed in terms 3
of an amendment to, or repeal of, a section or other provi-4
sion, the reference shall be considered to be made to a 5
section or other provision of the Higher Education Act of 6
1965 (20 U.S.C. 1001 et seq.). 7
SEC. 3. RETURN TO REPAYMENT REQUIREMENTS. 8
(a) B
ORROWERNOTIFICATION.— 9
(1) N
OTICE TO FEDERAL STUDENT LOAN BOR -10
ROWERS WHO RECEIVED TEMPORARY RELIEF .— 11
During the period beginning on the date of the en-12
actment of this Act and ending on August 31, 2023, 13
the Secretary of Education shall provide, through 2 14
or more methods of communication (including postal 15
mail, telephone, and electronic communication), a 16
total of not fewer than 12 notices to each borrower 17
of any loan made, insured, or guaranteed under title 18
IV of the Higher Education Act of 1965 (20 U.S.C. 19
1070 et seq.) indicating— 20
(A) the date on which such borrower is re-21
quired to make monthly payments on such a 22
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loan pursuant to section 271 of the Fiscal Re-1
sponsibility Act (Public Law 118–5); 2
(B) indicating the borrower’s options for 3
repayment, including that such borrower may 4
be eligible to enroll, or may be automatically en-5
rolled, as applicable, in an income driven repay-6
ment assistance plan under section 494A of the 7
Higher Education Act of 1965 (as added by 8
section 5 of this Act), including a brief descrip-9
tion of the plan and its associated benefits; and 10
(C) the options available to such a bor-11
rower who is in default, including— 12
(i) the option to consolidate or reha-13
bilitate the loans under section 428F(a)(5) 14
(as amended by section 7 of this Act); and 15
(ii) a brief description of the benefits 16
and consequences of each option. 17
(2) A
DDITIONAL NOTIFICATION.— 18
(A) I
N GENERAL.—During the period de-19
scribed in paragraph (1), and in addition to the 20
notices required under such subsection, the Sec-21
retary of Education shall provide the informa-22
tion described in subparagraph (B) to each at- 23
risk borrower. 24
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(B) AT-RISK BORROWER OUTREACH .—In 1
carrying out subparagraph (A), the Secretary of 2
Education shall provide, in the manner de-3
scribed in paragraph (1), a total of not fewer 4
than 6 notices to each at-risk borrower indi-5
cating— 6
(i) the information described in sub-7
paragraphs (A) through (C) of paragraph 8
(1); and 9
(ii) information specific to such bor-10
rower detailing— 11
(I) why such borrower is receiv-12
ing the notice; and 13
(II) the steps such borrower may 14
take to avoid delinquency and default. 15
(3) R
ETURN TO REPAYMENT PORTAL .—Not 16
later than 30 days after the date of the enactment 17
of this Act, the Secretary of Education shall— 18
(A) publish, on a publicly accessible 19
website of the Department, an electronic re-20
source portal; and 21
(B) through the use of such portal— 22
(i) disclose, in an easily searchable 23
format, the date or dates upon which the 24
Secretary carried out the borrower notifi-25
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cations required under paragraphs (1) and 1
(2); 2
(ii) disclose copies of any final con-3
tract modifications (as such term is de-4
fined in section 2.101 of title 48, Code of 5
Federal Regulations) the Secretary pro-6
vided to Federal student loan servicers 7
under contract during the period beginning 8
March 1, 2020 and ending September 30, 9
2024, except that proprietary or confiden-10
tial information related to such contracts 11
or contract modifications, including source 12
selection information (as such term is de-13
fined in section 2.101 of title 48, Code of 14
Federal Regulations) and any information 15
treated as confidential by such a loan 16
servicer and obtained by the Secretary for 17
purposes of such a final contract modifica-18
tion, shall be deemed confidential and ex-19
empt from disclosure under this clause and 20
section 552 of title 5, United States Code, 21
relating to freedom of information; 22
(iii) provide template examples of the 23
language the Secretary used to carry out 24
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the borrower notifications required under 1
paragraphs (1) and (2); and 2
(iv) provide examples of social media 3
posts for public stakeholders who wish to 4
amplify the Secretary’s communications 5
and provide borrowers with accurate infor-6
mation. 7
(4) A
T-RISK BORROWER DEFINED .—In this 8
subsection, the term ‘‘at-risk borrower’’ means a 9
borrower of a loan described in paragraph (1) that 10
is held by the Secretary of Education who, with re-11
spect to any such loan— 12
(A) on or after March 1, 2020, was as-13
signed a new student loan servicer; 14
(B) on or after March 1, 2020, entered re-15
payment for the first time; 16
(C) on or after March 1, 2020, was in de-17
fault; 18
(D) during the 2-year period preceding 19
March 1, 2020, missed a payment or payments 20
for a period of not less than 60 days; 21
(E) submitted an application for one-time 22
student debt cancellation (as described by the 23
Department of Education in the Federal Reg-24
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ister on October 12, 2022 (87 Fed. Reg. 61513 1
et seq.)); or 2
(F) received a refund from the Department 3
of Education for any payment made during the 4
period beginning on March 1, 2020, and ending 5
on August 31, 2023, that, pursuant to a waiver 6
or modification described by the Department of 7
Education in the Federal Register on October 8
12, 2022 (87 Fed. Reg. 61513 et seq.), was not 9
required. 10
(b) F
EDERALPREEMPTION.—Section 456 (20 U.S.C. 11
1087f) is amended by adding at the end the following: 12
‘‘(c) F
EDERALPREEMPTION.— 13
‘‘(1) I
N GENERAL.—Covered activities shall not 14
be subject to any law or other requirement of any 15
State or political subdivision of a State with respect 16
to— 17
‘‘(A) disclosure requirements; 18
‘‘(B) requirements or restrictions on the 19
content, time, quantity, or frequency of commu-20
nications with borrowers, endorsers, or ref-21
erences with respect to such loans; or 22
‘‘(C) any other requirement relating to the 23
servicing or collection of a loan made under this 24
title. 25
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‘‘(2) COVERED ACTIVITIES DEFINED .—In this 1
subsection, the term ‘covered activities’ means any 2
of the following activities, as carried out by a quali-3
fied entity: 4
‘‘(A) Origination of a loan made under this 5
title. 6
‘‘(B) Servicing of a loan made under this 7
title. 8
‘‘(C) Collection of a loan made under this 9
title. 10
‘‘(D) Any other activity related to the ac-11
tivities described in subparagraphs (A) through 12
(C).’’. 13
(c) P
ROCUREMENT FLEXIBILITY.—Section 142 (20 14
U.S.C. 1018a) is amended— 15
(1) by redesignating subsection (l) as subsection 16
(m); and 17
(2) by inserting after subsection (k) the fol-18
lowing: 19
‘‘(l) G
UIDANCE TOSTUDENTLOANSERVICERS.— 20
‘‘(1) I
N GENERAL.—In notifying a student loan 21
servicer of a final contract modification (as such 22
term is defined in section 2.101 of title 48, Code of 23
Federal Regulations) that instructs such loan 24
servicer to perform a function that is new or dif-25
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ferent from a function such servicer performs pursu-1
ant to an existing contract, the PBO shall, not later 2
than 30 days before such contract change takes ef-3
fect, provide such servicers with written guidance in 4
the form of— 5
‘‘(A) a change order (as such term is de-6
fined in section 2.101 of title 48, Code of Fed-7
eral Regulations); 8
‘‘(B) a dear colleague letter; or 9
‘‘(C) an electronic announcement. 10
‘‘(2) N
ON-BINDING DIRECTIVES .—A student 11
loan servicer that is notified of a final contract 12
modification described in paragraph (1) and receives 13
guidance in a form other than a form described in 14
paragraph (1) (including through emails or phone 15
calls) shall not be subject to such contract modifica-16
tion.’’. 17
(d) R
EQUIREMENTS RELATING TO ANNUALBO-18
NUSES OFPERFORMANCE-BASEDORGANIZATIONOFFI-19
CERS.—Section 141 (20 U.S.C. 1018) is amended— 20
(1) in subsection (c)(4)— 21
(A) in subparagraph (A), by striking 22
‘‘and’’ at the end; 23
(B) in subparagraph (B), by striking the 24
period at the end and inserting ‘‘; and’’; and 25
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(C) by adding at the end the following: 1
‘‘(C) that the Department has carried out 2
the borrower notifications required under sec-3
tion 3(a) of the FAIR Act.’’; 4
(2) by amending subsection (d)(5)(B) to read 5
as follows: 6
‘‘(B) B
ONUS.— 7
‘‘(i) I
N GENERAL.—In addition, sub-8
ject to clause (ii), the Chief Operating Of-9
ficer may receive a bonus in an amount 10
that does not exceed 50 percent of such 11
annual rate of basic pay, based upon the 12
Secretary’s evaluation of the Chief Oper-13
ating Officer’s performance in relation to 14
the goals set forth in the performance 15
agreement described in paragraph (4). 16
‘‘(ii) E
XCEPTION.—In the case of a 17
year in which the Department does not 18
carry out the activities required under sec-19
tion 3(a) of the FAIR Act or comply with 20
the requirements of sections 142(l) or 21
456(c), the Chief Operating Officer may 22
not receive a bonus described in clause 23
(i).’’; and 24
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(3) by amending subsection (e)(3)(B) to read as 1
follows: 2
‘‘(B) B
ONUS.— 3
‘‘(i) I
N GENERAL.—In addition, sub-4
ject to clause (ii), a senior manager may 5
receive a bonus in an amount such that the 6
manager’s total annual compensation does 7
not exceed 125 percent of the maximum 8
rate of basic pay for the Senior Executive 9
Service, including any applicable locality- 10
based comparability payment, based upon 11
the Chief Operating Officer’s evaluation of 12
the manager’s performance in relation to 13
the goals set forth in the performance 14
agreement described in paragraph (2). 15
‘‘(ii) E
XCEPTION.—In the case of a 16
year in which the Department does not 17
carry out the activities required under sec-18
tion 3(a) of the FAIR Act or comply with 19
the requirements of sections 142(l) or 20
456(c), the senior manager may not re-21
ceive a bonus described in clause (i).’’. 22
SEC. 4. REPAYMENT PLANS. 23
(a) D
IRECTLOANS.—Section 455(d) (20 U.S.C. 24
1087e(d)) is amended by adding at the end the following: 25
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‘‘(6) REPAYMENT PLANS FOR LOANS IN REPAY -1
MENT ON OR AFTER JULY 1 , 2023.— 2
‘‘(A) D
ESIGN AND SELECTION .—Notwith-3
standing paragraph (1), and subject to sub-4
paragraph (E), beginning on July 1, 2023, the 5
Secretary shall offer a borrower of a loan made 6
under this part two plans for repayment of such 7
loan, including principal and interest on the 8
loan. The borrower shall be entitled to accel-9
erate, without penalty, repayment on such 10
loans. The borrower may choose— 11
‘‘(i) a standard repayment plan with a 12
fixed monthly repayment amount paid over 13
a fixed period of time, not to exceed 10 14
years; or 15
‘‘(ii) an income-driven repayment as-16
sistance plan under section 494A. 17
‘‘(B) S
ELECTION BY SECRETARY .—If such 18
borrower does not select a repayment plan de-19
scribed in subparagraph (A), the Secretary shall 20
provide the borrower with the repayment plan 21
described in subparagraph (A)(i). 22
‘‘(C) C
HANGES IN SELECTION.— 23
‘‘(i) I
N GENERAL.—Subject to clause 24
(ii), a borrower may change the borrower’s 25
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selection of a repayment plan under sub-1
paragraph (A), or the Secretary’s selection 2
of a plan for the borrower under subpara-3
graph (B), as the case may be. Nothing in 4
this subsection shall prohibit the Secretary 5
from encouraging distressed borrowers 6
from enrolling in the income-driven repay-7
ment assistance plan under section 494A. 8
‘‘(ii) S
AME REPAYMENT PLAN RE -9
QUIRED.—All loans made under this part 10
on or after July 1, 2023, to a borrower 11
shall be repaid under the same repayment 12
plan under subparagraph (A), except that 13
the borrower may repay an excepted PLUS 14
loan or an excepted consolidation loan (as 15
such terms are defined in section 494A) 16
separately from other loans made under 17
this part to the borrower. 18
‘‘(D) R
EPAYMENT AFTER DEFAULT .—The 19
Secretary may require a borrower who has de-20
faulted on a loan made under this part to— 21
‘‘(i) pay all reasonable collection costs 22
associated with such loan; and 23
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‘‘(ii) repay the loan pursuant to the 1
income-driven repayment assistance plan 2
under section 494A. 3
‘‘(E) R
ULES FOR EXISTING BORROWERS .— 4
‘‘(i) E
XISTING BORROWERS IN STAND -5
ARD OR GRADUATED PLANS .—A borrower 6
who, as of the day before the date of en-7
actment of FAIR Act, was repaying a loan 8
made under this part pursuant to a plan 9
described in subparagraph (A), (B), or (C) 10
of paragraph (1) may— 11
‘‘(I) continue to repay such loan 12
pursuant to such plan; or 13
‘‘(II) choose to repay such loan 14
pursuant to a plan described in clause 15
(i) or (ii) of subparagraph (A). 16
‘‘(ii) O
THER EXISTING BORROWERS .— 17
With respect to a borrower who, as of the 18
day before the date of enactment of FAIR 19
Act, was repaying a loan made under this 20
part pursuant to a plan described in sub-21
paragraph (D) or (E) of paragraph (1), 22
the Secretary shall, pursuant to section 23
494A(b), enroll such borrower into the in-24
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come-driven repayment assistance plan 1
under section 494A. 2
‘‘(F) P
ROHIBITION.—Except as provided 3
in subparagraph (E), the Secretary may not— 4
‘‘(i) authorize a borrower of a loan 5
made under this part to repay such loan 6
pursuant to a repayment plan that is not 7
described in clause (i) or (ii) of subpara-8
graph (A); or 9
‘‘(ii) carry out or modify a repayment 10
plan that is not described in such clause (i) 11
or (ii).’’. 12
(b) FFEL L
OANS.—Section 428(b)(9) is amended— 13
(1) in subparagraph (A)— 14
(A) in clause (iv), by striking ‘‘and’’ at the 15
end; 16
(B) in clause (v), by striking the period at 17
the end and inserting ‘‘; and’’; 18
(C) by adding at the end the following: 19
‘‘(vi) for any borrower repaying, on or 20
after July 1, 2023, a loan made, insured, 21
or guaranteed under this part— 22
‘‘(I) in the case of a borrower 23
who, as of the day before the date of 24
enactment of FAIR Act, was repaying 25
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such loan pursuant to a plan de-1
scribed in clause (i), (ii), (iii), or (iv), 2
continuing to repay such loan pursu-3
ant to such plan; or 4
‘‘(II)(aa) an income-driven repay-5
ment assistance plan under section 6
494A; or 7
‘‘(bb) the standard repayment 8
plan described in clause (i).’’; 9
(2) by adding at the end the following: 10
‘‘(C) R
EPAYMENT PLANS FOR LOANS IN 11
REPAYMENT ON OR AFTER JULY 1 , 2023.— 12
‘‘(i) C
HANGES IN SELECTION .—In the 13
case of any borrower not described in sub-14
paragraph (A)(vi)(I), the borrower may 15
change the borrower’s selection of a repay-16
ment plan under subparagraph (A)(vi)(II). 17
Nothing in this subsection shall prohibit 18
the lender from encouraging distressed 19
borrowers from enrolling in the income- 20
driven repayment assistance plan under 21
section 494A. 22
‘‘(ii) T
REATMENT OF CERTAIN BOR -23
ROWERS.—With respect to a borrower who, 24
as of the day before the date of enactment 25
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of the FAIR Act was repaying a loan 1
made, insured, or guaranteed under this 2
part pursuant to a plan described in sub-3
paragraph (A)(v), the Secretary shall, pur-4
suant to section 494A(b), enroll such bor-5
rower into an income-driven repayment as-6
sistance plan under section 494A. 7
‘‘(iii) R
EPAYMENT AFTER DEFAULT .— 8
The Secretary may require a borrower who 9
has defaulted on a loan made, insured, or 10
guaranteed under this part to— 11
‘‘(I) pay all reasonable collection 12
costs associated with such loan; and 13
‘‘(II) repay the loan pursuant to 14
the income-driven repayment assist-15
ance plan under section 494A. 16
‘‘(iv) P
ROHIBITION.—The Secretary 17
may not— 18
‘‘(I) authorize a borrower of a 19
loan made, insured, or guaranteed 20
under this part to repay such loan 21
pursuant to a repayment plan that is 22
not described in subparagraph (A)(vi); 23
or 24
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‘‘(II) carry out or modify a re-1
payment plan that is not described in 2
subparagraph (A)(vi).’’. 3
(c) F
EDERALDIRECTCONSOLIDATIONLOANS.—Sec-4
tion 428C (20 U.S.C. 1078–3) is amended— 5
(1) in subsection (a)(3)(B)(i)(V)(aa), by strik-6
ing ‘‘or income-based repayment’’ and inserting ‘‘, 7
income-based repayment, or income-driven repay-8
ment assistance under section 494A’’; and 9
(2) in subsection (c)— 10
(A) in paragraph (2)(A)— 11
(i) in the first sentence, by inserting 12
‘‘, or a schedule for income-driven repay-13
ment assistance under section 494A,’’ after 14
‘‘schedules’’; and 15
(ii) in the second sentence, by insert-16
ing ‘‘or by the terms of repayment pursu-17
ant to income-driven repayment assistance 18
under section 494A,’’ after ‘‘subsection 19
(b)(5)’’; and 20
(B) in paragraph (3)— 21
(i) in subparagraph (A), by inserting 22
‘‘or an income-driven repayment assistance 23
schedule under section 494A’’ after ‘‘sec-24
tion 493C’’; and 25
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(ii) in subparagraph (C), by inserting 1
‘‘or an income-based repayment assistance 2
schedule under section 494A’’ after ‘‘sec-3
tion 493C’’. 4
(d) R
EPAYMENTINCENTIVES.— 5
(1) A
MENDMENT.—Section 455(b)(9)(C) (20 6
U.S.C. 1087e(b)(9)(C)) is amended by inserting 7
‘‘(which in the case of a loan for which the first dis-8
bursement of principal is made on or after July 1, 9
2023, may not exceed than 0.25 percentage points)’’ 10
after ‘‘interest rate reduction’’. 11
(2) A
PPLICATION OF AMENDMENT .—The 12
amendment made by this section shall not apply to 13
any borrower who is a student enrolled in a program 14
of study at an institution of higher education (as de-15
fined in section 102 of the Higher Education Act of 16
1965 (20 U.S.C. 1002)) as of June 30, 2023, or any 17
loans made under part D of title IV of the Higher 18
Education Act of 1965 (20 U.S.C. 1087a et seq.) to 19
(or on behalf of) such student, during the period re-20
quired for the completion of such program. 21
(e) O
THERCONFORMINGAMENDMENTS.— 22
(1) D
EPARTMENTAL PUBLICATION OF DESCRIP -23
TIONS OF ASSISTANCE PROGRAMS .—The third sen-24
tence of section 485(d)(1) is amended— 25
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(A) by striking ‘‘income-sensitive and in-1
come-based repayment plans for loans made, in-2
sured or guaranteed under part B’’ and insert-3
ing ‘‘income-sensitive repayment plans and an 4
income-driven repayment plan under section 5
494A for loans made, insured or guaranteed 6
under part B’’; and 7
(B) by striking ‘‘and income-contingent’’ 8
and all that follows through ‘‘under part D’’ 9
and inserting ‘‘and an income-driven repayment 10
assistance plan under section 494A for loans 11
made under part D’’. 12
(2) PSLF.—Section 455(m)(1)(A) (20 U.S.C. 13
1087e(m)(1)(A)) is amended— 14
(A) by striking ‘‘or’’ at the end of clause 15
(iii); 16
(B) in clause (iv), by striking ‘‘and’’ and 17
inserting ‘‘or’’; and 18
(C) by inserting at the end the following: 19
‘‘(v) payments under an income-driven 20
repayment assistance plan under section 21
494A; and’’. 22
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SEC. 5. INCOME-DRIVEN REPAYMENT ASSISTANCE PLAN. 1
(a) E
STABLISHMENT OF NEWPLAN.—Part G of title 2
IV (20 U.S.C. 1088 et seq.) is amended by adding at the 3
end the following: 4
‘‘SEC. 494A. INCOME-DRIVEN REPAYMENT ASSISTANCE 5
PROGRAM. 6
‘‘(a) I
NGENERAL.—Notwithstanding any other pro-7
vision of this Act, the Secretary shall carry out a program 8
under which— 9
‘‘(1) a borrower of any loan made, insured, or 10
guaranteed under part B or D (other than an ex-11
cepted PLUS loan or excepted consolidation loan), 12
may elect to have the borrower’s aggregate monthly 13
payment for all such loans not exceed the applicable 14
monthly payment for the borrower, except that a 15
borrower may not be precluded from repaying an 16
amount that exceeds such applicable monthly pay-17
ment for any month; 18
‘‘(2) the Secretary shall apply the borrower’s 19
monthly payment under this section first toward in-20
terest due on such a loan, next toward any fees due 21
on the loan, and then toward the principal of the 22
loan; 23
‘‘(3) any principal due and not paid under 24
paragraph (2) shall be deferred; 25
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‘‘(4) the amount of time the borrower makes 1
monthly payments under paragraph (1) may exceed 2
10 years; 3
‘‘(5) the Secretary provides the repayment as-4
sistance for distressed borrowers described in sub-5
section (c); 6
‘‘(6) the Secretary shall repay or cancel any 7
outstanding balance of principal and interest due on 8
all loans made under part B or D (other than ex-9
cepted PLUS loans or excepted consolidation loans) 10
to a borrower— 11
‘‘(A) who, at any time, elected to partici-12
pate in income-driven repayment assistance 13
under paragraph (1); 14
‘‘(B) whose final monthly payment for 15
such loans prior to the loan cancellation under 16
this paragraph was made under such income- 17
driven repayment assistance; and 18
‘‘(C) who has repaid on such loans (pursu-19
ant to income-driven repayment assistance 20
under paragraph (1), a standard repayment 21
plan under section 428(b)(9)(A)(i) or 22
455(d)(6)(A)(i), or a combination of any such 23
plan or any of the repayment plans listed in 24
clauses (i) through (iv) of section 25
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493C(b)(7)(B), or in the case of a consolidation 1
loan, pursuant to a repayment schedule de-2
scribed clause (i)(II) of this subparagraph) an 3
amount that is equal to— 4
‘‘(i)(I) the total amount of principal 5
and interest that the borrower would have 6
repaid under a standard repayment plan 7
under section 428(b)(9)(A)(i), or para-8
graph (1)(A) or (6)(A)(i) of section 9
455(d), based on a 10-year repayment pe-10
riod, when the borrower entered repayment 11
on such loans; or 12
‘‘(II) in the case of a Federal Direct 13
Consolidation Loan or loans made under 14
section 428C, the total amount of principal 15
and interest that the borrower would have 16
repaid under the repayment schedule es-17
tablished for the loan under section 18
428C(c)(2) on the date on which such loan 19
was made; plus 20
‘‘(ii) an amount equal to the amount 21
of any unpaid interest that has accrued, 22
but was not included in the calculation of 23
the total amount of principal and interest 24
that would have been repaid under the 25
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standard repayment plan or schedule de-1
scribed in clause (i)— 2
‘‘(I) during any deferment period 3
described in clause (i) or (ii) of sec-4
tion 455(f)(2)(A) or during any period 5
of deferment under subparagraph (A) 6
or (B) of section 460A(b)(1); and 7
‘‘(II) during any forbearance pe-8
riod while serving in a medical or den-9
tal internship or residency program as 10
described in section 428(c)(3)(A)(i)(I) 11
or subparagraph (F) of section 12
460A(b)(1); 13
‘‘(7) in repaying under paragraph (6) the out-14
standing balance of principal and interest due on a 15
loan made under part B to a borrower who meets 16
the requirements of paragraph (6), the Secretary 17
shall— 18
‘‘(A) enter into an agreement with the 19
holder of such loan (or, if the holder acts as an 20
eligible lender trustee for the beneficial owner 21
of the loan, the beneficial owner of the loan) for 22
the purpose of assuming the repayment obliga-23
tions of the borrower in accordance with sub-24
paragraph (B), except that the Secretary shall 25
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not assign to the United States the right to 1
such loan; 2
‘‘(B) assume the obligation of the borrower 3
to repay the holder of such loan (or, if the hold-4
er acts as an eligible lender trustee for the ben-5
eficial owner of the loan, the beneficial owner of 6
the loan) the total amount of principal and in-7
terest remaining to be repaid on such loan 8
(after taking into account the amounts repaid 9
by the borrower pursuant to paragraph (6) and 10
the Secretary under subsection (c), if applica-11
ble) according to the terms and conditions, in-12
cluding the repayment schedule, that were in ef-13
fect with respect to such loan on the day before 14
the Secretary assumes such obligation; and 15
‘‘(C) ensure that the holder of such loan 16
(or, if the holder acts as an eligible lender 17
trustee for the beneficial owner of the loan, the 18
beneficial owner of the loan) shall, upon enter-19
ing into an agreement described in subpara-20
graph (A) with respect to a loan of a borrower, 21
reports to consumer reporting agencies that the 22
borrower’s liability on such loan has been dis-23
charged; 24
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‘‘(8) a borrower who is repaying a loan pursu-1
ant to income-driven repayment under paragraph (1) 2
may elect, at any time, to terminate repayment pur-3
suant to such income-driven repayment assistance 4
and repay such loan under the standard repayment 5
plan under section 455(d)(6)(A)(i); 6
‘‘(9) in the case of a borrower who, as of the 7
date before the date of enactment of the FAIR Act, 8
was repaying any loan made, insured, or guaranteed 9
under part B or D (other than an excepted PLUS 10
loan or excepted consolidation loan) pursuant to an 11
income-based repayment plan described in section 12
493C or an income-contingent repayment plan de-13
scribed in section 455(d)(1)(D), which has a term or 14
condition (including a term or condition related to 15
loan forgiveness or cancellation, required monthly 16
payments, or interest subsidies) that is more favor-17
able for such borrower than a similar term or condi-18
tion under the income-driven repayment assistance 19
plan under paragraph (1), the Secretary shall apply 20
the more favorable term or condition to the income- 21
driven repayment assistance plan under paragraph 22
(1) pursuant to which the borrower is repaying such 23
loan, in lieu of the similar, less favorable term or 24
condition; and 25
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‘‘(10) the special allowance payment to a lender 1
calculated under section 438, when calculated for a 2
loan in repayment under this section, shall be cal-3
culated on the principal balance of the loan and on 4
any accrued interest unpaid by the borrower in ac-5
cordance with this section. 6
‘‘(b) E
LIGIBILITYDETERMINATIONS AND NOTIFICA-7
TIONREQUIREMENT.—The Secretary shall establish and 8
implement with respect to any borrower who is (or will 9
be) repaying a loan pursuant to income-driven repayment 10
assistance under this section, procedures to— 11
‘‘(1) enroll into such income-driven repayment 12
assistance plan, any borrower who, as of the date be-13
fore the date of enactment of the FAIR Act, was re-14
paying a loan pursuant to an income-based repay-15
ment plan described in section 493C or an income- 16
contingent repayment plan described in section 17
455(d)(1)(D), without further action from the bor-18
rower, other than any action related to compliance 19
with the recertification requirements applicable to 20
the borrower under section 494(a)(4)(B); 21
‘‘(2) notify the borrower of the terms and con-22
ditions of such plan; 23
‘‘(3) use return information disclosed under sec-24
tion 6103(l)(13) of the Internal Revenue Code of 25
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1986, pursuant to approval provided under section 1
494, to determine the repayment obligation of the 2
borrower without further action by the borrower; 3
‘‘(4) allow the borrower (or the spouse of the 4
borrower), at any time, to opt out of disclosure 5
under such section 6103(l)(13) and instead provide 6
such information as the Secretary may require to de-7
termine the repayment obligation of the borrower (or 8
withdraw from the repayment plan under this sec-9
tion); and 10
‘‘(5) provide the borrower with an opportunity 11
to update the return information so disclosed before 12
the determination of the repayment obligation of the 13
borrower. 14
‘‘(c) R
EPAYMENT ASSISTANCE FOR DISTRESSED 15
B
ORROWERS.— 16
‘‘(1) E
XCESSIVE INTEREST.—For each month 17
for which a borrower’s aggregate monthly payment 18
under this section is insufficient to pay the total 19
amount of interest that accrues on a loan for the 20
month, the amount of interest accrued and not paid 21
for the month shall be subtracted from the total 22
amount of interest due on such loan for the month. 23
‘‘(2) R
EPAYMENT CREDIT .—For each month 24
for which a borrower’s aggregate monthly payment 25
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under this section repays an amount due on an indi-1
vidual loan that is less than twice the total amount 2
of interest that accrues on such loan for the month, 3
the amount of the total principal due on such loan 4
shall be reduced by an amount equal to half of the 5
monthly payment under this section on such loan for 6
the month. 7
‘‘(3) A
PPLICATION TO BORROWERS WITH CER -8
TAIN ADJUSTED GROSS INCOMES .—With respect to 9
any borrower whose adjusted gross income exceeds 10
300 percent of the poverty line applicable to the bor-11
rower’s family size as determined under section 12
673(2) of the Community Services Block Grant Act 13
(42 U.S.C. 9902(2)), paragraph (1) or (2) may only 14
apply to such borrower for any month in which the 15
borrower’s aggregate monthly payment under this 16
section is equal to or greater than the amount ob-17
tained by applying subsection (e)(2) by substituting 18
‘15 percent’ for ‘10 percent’ with respect to such 19
borrower. 20
‘‘(d) P
ROHIBITION.—In carrying out the require-21
ments of subsection (a)(7), the Secretary may not— 22
‘‘(1) revoke the rights to a special allowance 23
under section 438 of the holder (or, if the holder 24
acts as an eligible lender trustee for the beneficial 25
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owner of the loan, the beneficial owner of the loan) 1
of the loans being repaid by the Secretary under 2
subsection (a)(7); 3
‘‘(2) prepay any such loan ahead of the loan’s 4
repayment schedule referenced in subsection 5
(a)(7)(B); or 6
‘‘(3) use any authority or take any actions be-7
yond what is authorized explicitly in subsection 8
(a)(7). 9
‘‘(e) D
EFINITIONS.—In this section: 10
‘‘(1) A
DJUSTED GROSS INCOME .—The term ‘ad-11
justed gross income’ has the meaning given the term 12
in section 62 of the Internal Revenue Code of 1986. 13
‘‘(2) A
PPLICABLE MONTHLY PAYMENT .—The 14
term ‘applicable monthly payment’ means, when 15
used with respect to a borrower, the amount ob-16
tained by dividing by 12, 10 percent of the result ob-17
tained by calculating, on at least an annual basis, 18
the amount by which— 19
‘‘(A) the adjusted gross income of the bor-20
rower or, if the borrower is married and files a 21
Federal income tax return jointly with or sepa-22
rately from the borrower’s spouse, the adjusted 23
gross income of the borrower and the bor-24
rower’s spouse; exceeds 25
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‘‘(B) 150 percent of the poverty line appli-1
cable to the borrower’s family size as deter-2
mined under section 673(2) of the Community 3
Services Block Grant Act (42 U.S.C. 9902(2)). 4
‘‘(3) E
XCEPTED CONSOLIDATION LOAN .—The 5
term ‘excepted Consolidation Loan’ means a Federal 6
Direct Consolidation Loan, if the proceeds of such 7
loan were used to the discharge the liability on— 8
‘‘(A) an excepted PLUS loan; or 9
‘‘(B) a Federal Direct Consolidation loan, 10
if the proceeds of such loan were used to dis-11
charge the liability on an excepted PLUS loan. 12
‘‘(4) E
XCEPTED PLUS LOAN .—The term ‘ex-13
cepted PLUS Loan’ has the meaning given the term 14
in section 493C.’’. 15
(b) P
ROCEDURE ANDREQUIREMENTS FOR REQUEST-16
INGTAXRETURNINFORMATIONFROM THEIRS.—Sec-17
tion 494(a) (20 U.S.C. 1098h(a)) is amended by adding 18
at the end the following: 19
‘‘(4) I
NCOME-DRIVEN REPAYMENT ASSISTANCE 20
FOR LOANS IN REPAYMENT ON OR AFTER JULY 1 , 21
2023.— 22
‘‘(A) N
EW APPLICANTS.—In the case of 23
any written or electronic application by an indi-24
vidual for an income-driven repayment plan 25
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under section 494A for a loan made under part 1
B or D, the Secretary, with respect to such in-2
dividual and any spouse of such individual, 3
shall— 4
‘‘(i) provide to such individuals the 5
notification described in paragraph 6
(1)(A)(i); and 7
‘‘(ii) require, as a condition of eligi-8
bility for such repayment plan, that such 9
individuals— 10
‘‘(I) affirmatively approve the 11
disclosures described in subclauses (I) 12
and (II) of paragraph (1)(A)(i), to the 13
extent applicable, and agree that such 14
approval shall serve as an ongoing ap-15
proval of such disclosures until the 16
date on which the individual elects to 17
opt out of such disclosures under sec-18
tion 494A(b)(3); or 19
‘‘(II) provide such information as 20
the Secretary may require to confirm 21
the eligibility of such individual for 22
such repayment plan. 23
‘‘(B) R
ECERTIFICATIONS.—In the case of 24
an individual whom the Secretary enrolls, pur-25
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suant to section 494A(b)(1), in an income-driv-1
en repayment assistance plan under section 2
494A, the Secretary shall meet the require-3
ments of clauses (i) and (ii) of subparagraph 4
(A), with respect to such individual and any 5
spouse of such individual, for the first written 6
or electronic recertification of such individual’s 7
income or family size for purposes of such in-8
come-driven repayment assistance plan.’’. 9
SEC. 6. DEFERMENT ON LOANS MADE ON OR AFTER JULY 10
1, 2024. 11
(a) I
NGENERAL.—Part D of title IV (20 U.S.C. 12
1087e et seq.) is amended by adding at the end the fol-13
lowing: 14
‘‘SEC. 460A. DEFERMENT ON LOANS MADE ON OR AFTER 15
JULY 1, 2024. 16
‘‘(a) E
FFECT ONPRINCIPAL ANDINTEREST.— 17
‘‘(1) I
N GENERAL.— 18
‘‘(A) R
EQUIREMENTS FOR BORROWERS .— 19
Subject to subparagraph (B), a borrower of a 20
loan made under this part on or after July 1, 21
2024— 22
‘‘(i) who meets the requirements de-23
scribed in subsection (b) shall be eligible 24
for a deferment on such loan during which 25
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installments of principal need not be paid 1
and, as specified in paragraph (2), interest 2
shall not accrue, or shall accrue and be 3
paid by the borrower; and 4
‘‘(ii) may not be eligible for a 5
deferment or forbearance under section 6
455(f) or any other provision of this Act 7
(other than a forbearance under section 8
455(l), a forbearance under section 9
685.205(a) of title 34, Code of Federal 10
Regulations (or successor regulations), or a 11
deferment under section 493D). 12
‘‘(B) E
XCEPTIONS FOR BORROWERS EN -13
ROLLED IN CERTAIN PROGRAMS OF STUDY .— 14
Any borrower who is student who is enrolled in 15
a program of study at an institution of higher 16
education as of June 30, 2024, or any loans 17
made to (or on behalf of) such borrower, during 18
the period required for the completion of such 19
program) shall not be subject to this section 20
‘‘(2) E
FFECT ON INTEREST.— 21
‘‘(A) N
O ACCRUAL OF INTEREST ON SUB -22
SIDIZED LOANS.—With respect to a deferment 23
period described in subparagraphs (A) through 24
(D) of subsection (b)(1), or (b)(6) interest— 25
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‘‘(i) shall not accrue, in the case of 1
a— 2
‘‘(I) Federal Direct Stafford 3
Loan; or 4
‘‘(II) a Federal Direct Consolida-5
tion Loan that consolidated only Fed-6
eral Direct Stafford Loans, or a com-7
bination of such loans and Federal 8
Stafford Loans for which the student 9
borrower received an interest subsidy 10
under section 428; or 11
‘‘(ii) shall accrue or be paid by the 12
borrower, in the case of a Federal Direct 13
PLUS Loan, a Federal Direct Unsub-14
sidized Stafford Loan, or a Federal Direct 15
Consolidation Loan not described in clause 16
(i)(II). 17
‘‘(B) I
NTEREST ACCRUAL ON ALL 18
LOANS.—With respect to a deferment period de-19
scribed in subparagraph (E) or (F) of sub-20
section (b)(1), or paragraph (2), (3)(A), or (4), 21
interest shall accrue or be paid by the borrower, 22
in the case of any loan made under this part. 23
‘‘(C) N
O ACCRUAL OF INTEREST ON ANY 24
LOAN.—With respect to a deferment period de-25
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scribed in paragraph (3)(B) or paragraph (5), 1
interest shall not accrue, in the case of any loan 2
made under this part. 3
‘‘(b) E
LIGIBILITY.—Any borrower described in sub-4
section (a) shall be eligible for a deferment on a loan made 5
under this part on or after July 1, 2024— 6
‘‘(1) during any period during which the bor-7
rower— 8
‘‘(A) is carrying at least one-half the nor-9
mal full-time work load for the course of study 10
that the borrower is pursuing, as determined by 11
the eligible institution the borrower is attend-12
ing; 13
‘‘(B) is pursuing a course of study pursu-14
ant to— 15
‘‘(i) an eligible graduate fellowship 16
program in accordance with subsection (g); 17
or 18
‘‘(ii) an eligible rehabilitation training 19
program for individuals with disabilities in 20
accordance with subsection (i); 21
‘‘(C) is serving on active duty during a war 22
or other military operation or national emer-23
gency, and for the 180-day period following the 24
demobilization date for such service; 25
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‘‘(D) is performing qualifying National 1
Guard duty during a war or other military op-2
eration or national emergency, and for the 180- 3
day period following the demobilization date for 4
such service; 5
‘‘(E) is a member of the National Guard 6
who is not eligible for a post-active duty 7
deferment under section 493D and is engaged 8
in active State duty for a period of more than 9
30 consecutive days beginning— 10
‘‘(i) the day after 6 months after the 11
date the student ceases to carry at least 12
one-half the normal full-time academic 13
workload (as determined by the institu-14
tion); or 15
‘‘(ii) the day after the borrower ceases 16
enrollment on at least a half-time basis, for 17
a loan in repayment; or 18
‘‘(F) is serving in a medical or dental in-19
ternship or residency program, the successful 20
completion of which is required to begin profes-21
sional practice or service, or is serving in a 22
medical or dental internship or residency pro-23
gram leading to a degree or certificate awarded 24
by an institution of higher education, a hos-25
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pital, or a health care facility that offers post-1
graduate training; 2
‘‘(2) during a period sufficient to enable the 3
borrower to resume honoring the agreement to repay 4
the outstanding balance of principal and interest on 5
the loan after default, if— 6
‘‘(A) the borrower signs a new agreement 7
to repay such outstanding balance; 8
‘‘(B) the deferment period is limited to 9
120 days; and 10
‘‘(C) such deferment is not granted for 11
consecutive periods; 12
‘‘(3) during a period of administrative 13
deferment— 14
‘‘(A) described in paragraphs (1) through 15
(4) of subsection (j); or 16
‘‘(B) described in subsection (j)(5); 17
‘‘(4) in the case of a borrower of an excepted 18
PLUS Loan or an excepted Consolidation Loan, 19
during a period described in subsection (k); 20
‘‘(5) during a period in which such borrower is 21
receiving treatment for cancer (in this paragraph re-22
ferred to as the ‘treatment period’), and the 6- 23
month period after such treatment period (in this 24
paragraph referred to as the ‘post-treatment pe-25
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riod’), except that, notwithstanding subsection (a), 1
interest shall not accrue during any such treatment 2
period or post-treatment period; or 3
‘‘(6) during a period, not to exceed an aggre-4
gate of 180 days, in which the borrower— 5
‘‘(A) is the spouse of a member of the 6
Armed Forces serving on active duty; and 7
‘‘(B) has experienced a loss of employment 8
as a result of relocation to accommodate a per-9
manent change in duty station of such member. 10
‘‘(c) L
ENGTH OFDEFERMENT.—A deferment grant-11
ed by the Secretary under subparagraph (F) of subsection 12
(b)(1) shall— 13
‘‘(1) be renewable at 12 month intervals; and 14
‘‘(2) equal the length of time remaining in the 15
borrower’s medical or dental internship or residency 16
program. 17
‘‘(d) R
EQUEST AND DOCUMENTATION.—The Sec-18
retary shall determine the eligibility of a borrower for a 19
deferment— 20
‘‘(1) under paragraph (1), (2), or (4) of sub-21
section (b), based on— 22
‘‘(A) the receipt of a request for a 23
deferment from the borrower, and documenta-24
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tion of the borrower’s eligibility for the 1
deferment; 2
‘‘(B) receipt of a completed loan applica-3
tion that documents the borrower’s eligibility 4
for a deferment; 5
‘‘(C) receipt of a student status informa-6
tion documenting that the borrower is enrolled 7
on at least a half-time basis; or 8
‘‘(D) the Secretary’s confirmation of the 9
borrower’s half-time enrollment status, if the 10
confirmation is requested by the institution of 11
higher education; and 12
‘‘(2) under paragraph (6) based on— 13
‘‘(A)(i) evidence that the borrower is the 14
spouse of a member of the Armed Forces serv-15
ing on active duty; 16
‘‘(ii) evidence that a military permanent 17
change of station order was issued to such 18
member; and 19
‘‘(iii)(I) evidence that the borrower is eligi-20
ble for unemployment benefits due to a loss of 21
employment resulting from relocation to accom-22
modate such permanent change in duty station; 23
or 24
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‘‘(II) a written certification, or an equiva-1
lent as approved by the Secretary, that the bor-2
rower is registered with a public or private em-3
ployment agency due to a loss of employment 4
resulting from relocation to accommodate such 5
permanent change in duty station; or 6
‘‘(B) such other documentation as the Sec-7
retary determines appropriate. 8
‘‘(e) N
OTIFICATION.—The Secretary shall— 9
‘‘(1) notify a borrower of a loan made under 10
this part— 11
‘‘(A) the granting of a deferment under 12
this subsection on such loan; and 13
‘‘(B) the option of the borrower to con-14
tinue making payments on the outstanding bal-15
ance of principal and interest on such loan in 16
accordance with subsection (f); 17
‘‘(2) at the time the Secretary grants a 18
deferment to a borrower of a loan made under this 19
part, and not less frequently than once every 180 20
days during the period of such deferment, provide 21
information to the borrower to assist the borrower in 22
understanding— 23
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‘‘(A) the effect of granting a deferment on 1
the total amount to be paid under the income- 2
driven repayment plan under 494A; 3
‘‘(B) interest shall not accrue, or shall ac-4
crue or be paid by the borrower, as specified in 5
subsection (a)(2); 6
‘‘(C) the amount of unpaid principal and 7
the amount of interest that has accrued since 8
the last statement of such amounts provided to 9
the borrower; and 10
‘‘(D) the borrower’s option to discontinue 11
the deferment at any time. 12
‘‘(f) P
AYMENTS BY BORROWERSAUTHORIZED.—A 13
borrower may make payments on the outstanding balance 14
of principal and interest on a loan made under this part 15
during any period of deferment granted under this sub-16
section. 17
‘‘(g) G
RADUATEFELLOWSHIPDEFERMENT.— 18
‘‘(1) I
N GENERAL.—A borrower of a loan under 19
this part is eligible for a deferment under subsection 20
(b)(1)(B)(i) during any period for which an author-21
ized official of the borrower’s graduate fellowship 22
program certifies that the borrower meets the re-23
quirements of paragraph (2) and is pursuing a 24
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course of study pursuant to an eligible graduate fel-1
lowship program. 2
‘‘(2) B
ORROWER REQUIREMENTS .—A borrower 3
meets the requirements of this subparagraph if the 4
borrower— 5
‘‘(A) holds at least a baccalaureate degree 6
conferred by an institution of higher education; 7
‘‘(B) has been accepted or recommended 8
by an institution of higher education for accept-9
ance on a full-time basis into an eligible grad-10
uate fellowship program; and 11
‘‘(C) is not serving in a medical internship 12
or residency program, except for a residency 13
program in dentistry. 14
‘‘(h) T
REATMENT OFSTUDYOUTSIDE THEUNITED 15
S
TATES.— 16
‘‘(1) I
N GENERAL.—The Secretary shall treat, 17
in the same manner as required under section 18
428(b)(4), any course of study at a foreign univer-19
sity that is accepted for the completion of a recog-20
nized international fellowship program by the admin-21
istrator of such a program as an eligible graduate 22
fellowship program. 23
‘‘(2) R
EQUESTS FOR DEFERMENT .—Requests 24
for deferment of repayment of loans under this sub-25
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section by students engaged in graduate or post-1
graduate fellowship-supported study (such as pursu-2
ant to a Fulbright grant) outside the United States 3
shall be approved until completion of the period of 4
the fellowship, in the same manner as required 5
under section 428(b)(4). 6
‘‘(i) R
EHABILITATION TRAINING PROGRAM 7
D
EFERMENT.—A borrower of a loan under this part is 8
eligible for a deferment under subsection (b)(1)(B)(ii) dur-9
ing any period for which an authorized official of the bor-10
rower’s rehabilitation training program certifies that the 11
borrower is pursuing an eligible rehabilitation training 12
program for individuals with disabilities. 13
‘‘(j) A
DMINISTRATIVEDEFERMENTS.—The Secretary 14
may grant a deferment to a borrower without requiring 15
a request and documentation from the borrower under 16
subsection (d) for— 17
‘‘(1) a period during which the borrower was 18
delinquent at the time a deferment is granted, in-19
cluding a period for which scheduled payments of 20
principal and interest were overdue at the time such 21
deferment is granted; 22
‘‘(2) a period during which the borrower was 23
granted a deferment under this subsection but for 24
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which the Secretary determines the borrower should 1
not have qualified; 2
‘‘(3) a period necessary for the Secretary to de-3
termine the borrower’s eligibility for the cancellation 4
of the obligation of the borrower to repay the loan 5
under section 437; 6
‘‘(4) a period during which the Secretary has 7
authorized deferment due to a national military mo-8
bilization or other local or national emergency; or 9
‘‘(5) a period not to exceed 60 days, during 10
which interest shall accrue but not be capitalized, if 11
the Secretary reasonably determines that a suspen-12
sion of collection activity is warranted to enable the 13
Secretary to process supporting documentation relat-14
ing to a borrower’s request— 15
‘‘(A) for a deferment under this sub-16
section; 17
‘‘(B) for a change in repayment plan under 18
section 455(d)(6); or 19
‘‘(C) to consolidate loans under this part. 20
‘‘(k) D
EFERMENTS FOR EXCEPTEDPLUS LOANS OR 21
E
XCEPTEDCONSOLIDATIONLOANS.— 22
‘‘(1) I
N GENERAL.—A qualified borrower shall 23
be eligible for deferments under paragraphs (3) 24
through (5). 25
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‘‘(2) QUALIFIED BORROWER DEFINED .—In this 1
subsection, the term ‘qualified borrower’ means a 2
borrower of an excepted PLUS Loan or an excepted 3
consolidation loan. 4
‘‘(3) E
CONOMIC HARDSHIP DEFERMENT .— 5
‘‘(A) I
N GENERAL.—A qualified borrower 6
shall be eligible for a deferment during periods, 7
not to exceed 3 years in total, during which the 8
qualified borrower experiences an economic 9
hardship described in subparagraph (B). 10
‘‘(B) E
CONOMIC HARDSHIP.—An economic 11
hardship described in this clause is a period 12
during which the qualified borrower— 13
‘‘(i) is receiving payment under a 14
means-tested benefit program; 15
‘‘(ii) is employed full-time and the 16
monthly gross income of the qualified bor-17
rower does not exceed the greater of— 18
‘‘(I) the minimum wage rate de-19
scribed in section 6 of the Fair Labor 20
Standards Act of 1938 (29 U.S.C. 21
206); or 22
‘‘(II) an amount equal to 150 23
percent of the poverty line; or 24
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‘‘(iii) demonstrates that the sum of 1
the qualified borrower’s monthly payments 2
on the qualified borrower’s excepted PLUS 3
Loan or an excepted consolidation loan is 4
not less than 20 percent of the qualified 5
borrower’s monthly gross income. 6
‘‘(C) E
LIGIBILITY.—To be eligible to re-7
ceive a deferment under this subparagraph, a 8
qualified borrower shall submit to the Sec-9
retary— 10
‘‘(i) for the first period of deferment 11
under this subparagraph, evidence showing 12
the monthly gross income of the qualified 13
borrower; and 14
‘‘(ii) for a subsequent period of 15
deferment that begins less than one year 16
after the end of a period of deferment 17
granted under this subparagraph— 18
‘‘(I) evidence showing the month-19
ly gross income of the qualified bor-20
rower; or 21
‘‘(II) the qualified borrower’s 22
most recently filed Federal income tax 23
return, if such a return was filed in 24
either of the two tax years preceding 25
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the year in which the qualified bor-1
rower requests the subsequent period 2
of deferment. 3
‘‘(4) U
NEMPLOYMENT DEFERMENT .— 4
‘‘(A) I
N GENERAL.—A qualified borrower 5
shall be eligible for a deferment for periods dur-6
ing which the qualified borrower is seeking, and 7
is unable to find, full-time employment. 8
‘‘(B) E
LIGIBILITY.—To be eligible to re-9
ceive an deferment under this subparagraph, a 10
qualified borrower shall submit to the Sec-11
retary— 12
‘‘(i) evidence of the qualified bor-13
rower’s eligibility for unemployment bene-14
fits; or 15
‘‘(ii) for requests submitted after the 16
initial request, written confirmation, or an 17
equivalent as approved by the Secretary, 18
that the qualified borrower has made at 19
least six diligent attempts during the pre-20
ceding six-month period to secure full-time 21
employment. 22
‘‘(C) T
ERMS OF DEFERMENT .—The fol-23
lowing terms shall apply to a deferment under 24
this subparagraph: 25
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‘‘(i) INITIAL PERIOD.—The first 1
deferment granted to a qualified borrower 2
under this subparagraph may be for a pe-3
riod of unemployment beginning not more 4
than 6 months before the date on which 5
the Secretary receives the qualified bor-6
rower’s request for deferment and may be 7
granted for a period of up to 6 months 8
after that date. 9
‘‘(ii) R
ENEWALS.—Deferments under 10
this subparagraph shall be renewable at 6- 11
month intervals beginning after the expira-12
tion of the first period of deferment under 13
clause (i). To be eligible to renew a 14
deferment under this subparagraph, a 15
qualified borrower shall submit to the Sec-16
retary the information described in sub-17
paragraph (B)(i). 18
‘‘(iii) A
GGREGATE LIMIT.—The period 19
of all deferments granted to a borrower 20
under this subparagraph may not exceed 3 21
years in aggregate. 22
‘‘(5) H
EALTH DEFERMENT .— 23
‘‘(A) I
N GENERAL.—A qualified borrower 24
shall be eligible for a deferment during periods 25
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in which the qualified borrower is unable to 1
make scheduled loan payments due to high 2
medical expenses, as determined by the Sec-3
retary. 4
‘‘(B) E
LIGIBILITY.—To be eligible to re-5
ceive a deferment under this subparagraph, a 6
qualified borrower shall— 7
‘‘(i) submit to the Secretary docu-8
mentation demonstrating that making 9
scheduled loan payments would be an ex-10
treme economic hardship to the borrower 11
due to high medical expenses, as deter-12
mined by the Secretary; and 13
‘‘(ii) resubmit such documentation to 14
the Secretary not less frequently than once 15
every 3 months. 16
‘‘(l) P
ROHIBITIONS.— 17
‘‘(1) P
ROHIBITION ON FEES .—No administra-18
tive fee or other fee may be charged to the borrower 19
in connection with the granting of a deferment 20
under this section. 21
‘‘(2) P
ROHIBITION ON ADVERSE CREDIT RE -22
PORTING.—No adverse information relating to a bor-23
rower may be reported to a consumer reporting 24
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agency solely because of the granting of a deferment 1
under this section. 2
‘‘(3) L
IMITATION ON AUTHORITY .—The Sec-3
retary shall not, through regulation or otherwise, au-4
thorize additional deferment options or periods of 5
deferment other than the deferment options and pe-6
riods of deferment authorized under this section. 7
‘‘(m) D
EFINITIONS.—In this section: 8
‘‘(1) E
LIGIBLE GRADUATE FELLOWSHIP PRO -9
GRAM.—The term ‘eligible graduate fellowship pro-10
gram’, when used with respect to a course of study 11
pursued by the borrower of a loan under this part, 12
means a fellowship program that— 13
‘‘(A) provides sufficient financial support 14
to graduate fellows to allow for full-time study 15
for at least six months; 16
‘‘(B) requires a written statement from 17
each applicant explaining the applicant’s objec-18
tives before the award of that financial support; 19
‘‘(C) requires a graduate fellow to submit 20
periodic reports, projects, or evidence of the fel-21
low’s progress; and 22
‘‘(D) in the case of a course of study at an 23
institution of higher education outside the 24
United States described in section 102, accepts 25
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the course of study for completion of the fellow-1
ship program. 2
‘‘(2) E
LIGIBLE REHABILITATION TRAINING 3
PROGRAM FOR INDIVIDUALS WITH DISABILITIES .— 4
The term ‘eligible rehabilitation training program 5
for individuals with disabilities’, when used with re-6
spect a course of study pursued by the borrower of 7
a loan under this part, means a program that— 8
‘‘(A) is necessary to assist an individual 9
with a disability in preparing for, securing, re-10
taining, or regaining employment; 11
‘‘(B) is licensed, approved, certified, or 12
otherwise recognized as providing rehabilitation 13
training to disabled individuals by— 14
‘‘(i) a State agency with responsibility 15
for vocational rehabilitation programs, 16
drug abuse treatment programs, mental 17
health services programs, or alcohol abuse 18
treatment programs; or 19
‘‘(ii) the Secretary of Veterans Af-20
fairs; and 21
‘‘(C) provides or will provide the borrower 22
with rehabilitation services under a written plan 23
that— 24
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‘‘(i) is individualized to meet the bor-1
rower’s needs; 2
‘‘(ii) specifies the date on which the 3
services to the borrower are expected to 4
end; and 5
‘‘(iii) requires a commitment of time 6
and effort from the borrower that prevents 7
the borrower from being employed at least 8
30 hours per week, either because of the 9
number of hours that must be devoted to 10
rehabilitation or because of the nature of 11
the rehabilitation. 12
‘‘(3) E
XCEPTED PLUS LOAN ; EXCEPTED CON-13
SOLIDATION LOAN.—The terms ‘excepted PLUS 14
loan’ and ‘excepted consolidation loan’ have the 15
meanings given such terms in section 494A. 16
‘‘(4) F
AMILY SIZE.—The term ‘family size’ 17
means the number that is determined by counting— 18
‘‘(A) the borrower; 19
‘‘(B) the borrower’s spouse; 20
‘‘(C) the borrower’s children, including un-21
born children who are expected to be born dur-22
ing the period covered by the deferment, if the 23
children receive more than half their support 24
from the borrower; and 25
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‘‘(D) another individual if, at the time the 1
borrower requests a deferment under this sec-2
tion, the individual— 3
‘‘(i) lives with the borrower; 4
‘‘(ii) receives more than half of the in-5
dividual’s support (which may include 6
money, gifts, loans, housing, food, clothes, 7
car, medical and dental care, and payment 8
of college costs) from the borrower; and 9
‘‘(iii) is expected to receive such sup-10
port from the borrower during the relevant 11
period of deferment. 12
‘‘(5) F
ULL-TIME.—The term ‘full-time’, when 13
used with respect to employment, means employment 14
for not less than 30 hours per week that is expected 15
to continue for not less than three months. 16
‘‘(6) M
EANS-TESTED BENEFIT PROGRAM .—The 17
term ‘means-tested benefit program’ means— 18
‘‘(A) a State public assistance program 19
under which eligibility for the program’s bene-20
fits, or the amount of such benefits, are deter-21
mined on the basis of income or resources of 22
the individual or family seeking the benefit; or 23
‘‘(B) a mandatory spending program of the 24
Federal Government, other than a program 25
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under this title, under which eligibility for the 1
program’s benefits, or the amount of such bene-2
fits, are determined on the basis of income or 3
resources of the individual or family seeking the 4
benefit, and may include such programs as— 5
‘‘(i) the supplemental security income 6
program under title XVI of the Social Se-7
curity Act (42 U.S.C. 1381 et seq.); 8
‘‘(ii) the supplemental nutrition assist-9
ance program under the Food and Nutri-10
tion Act of 2008 (7 U.S.C. 2011 et seq.); 11
‘‘(iii) the program of block grants for 12
States for temporary assistance for needy 13
families established under part A of title 14
IV of the Social Security Act (42 U.S.C. 15
601 et seq.); 16
‘‘(iv) the special supplemental nutri-17
tion program for women, infants, and chil-18
dren established by section 17 of the Child 19
Nutrition Act of 1966 (42 U.S.C. 1786); 20
and 21
‘‘(v) other programs identified by the 22
Secretary. 23
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‘‘(7) MONTHLY GROSS INCOME .—The term 1
‘monthly gross income’, when used with respect to a 2
borrower, means— 3
‘‘(A) the gross amount of income received 4
by the borrower from employment and other 5
sources for the most recent month; or 6
‘‘(B) one-twelfth of the borrower’s adjusted 7
gross income, as recorded on the borrower’s 8
most recently filed Federal income tax return. 9
‘‘(8) R
ULE OF CONSTRUCTION .—Nothing in 10
this section shall be construed to impact a bor-11
rower’s eligibility to receive the benefit of section 12
455(o).’’. 13
(b) C
ONFORMING AMENDMENT.—Section 493D(a) 14
(20 U.S.C. 1098f(a)) is amended by inserting ‘‘, or section 15
460A’’ after ‘‘464(c)(2)(A)(iii)’’. 16
SEC. 7. LOAN REHABILITATION. 17
(a) I
NGENERAL.—Section 428F(a)(5) (20 U.S.C. 18
1078–6) is amended by striking ‘‘one time’’ and inserting 19
‘‘two times’’. 20
(b) A
PPLICATION OFAMENDMENT.—The amendment 21
made by this section shall apply to any borrower of a loan 22
made, insured, or guaranteed under title IV of the Higher 23
Education Act of 1965 before, on, or after the date of 24
enactment of this Act. 25
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SEC. 8. LIMITATION ON AUTHORITY OF SECRETARY TO 1
PROPOSE OR ISSUE REGULATIONS AND EX-2
ECUTIVE ACTIONS. 3
(a) I
NGENERAL.—Part G of title IV (20 U.S.C. 4
1088 et seq.) is amended by inserting after section 492 5
the following: 6
‘‘SEC. 492A. LIMITATION ON AUTHORITY OF THE SEC-7
RETARY TO PROPOSE OR ISSUE REGULA-8
TIONS AND EXECUTIVE ACTIONS. 9
‘‘(a) D
RAFTREGULATIONS.—Beginning after the 10
date of enactment of this section, a draft regulation imple-11
menting this title (as described in section 492(b)(1)) that 12
is determined by the Secretary to be economically signifi-13
cant shall be subject to the following requirements (re-14
gardless of whether negotiated rulemaking occurs): 15
‘‘(1) The Secretary shall determine whether the 16
draft regulation, if implemented, would result in an 17
increase in a subsidy cost. 18
‘‘(2) If the Secretary determines under para-19
graph (1) that the draft regulation would result in 20
an increase in a subsidy cost, then the Secretary 21
may take no further action with respect to such reg-22
ulation. 23
‘‘(b) P
ROPOSED ORFINALREGULATIONS ANDEXEC-24
UTIVEACTIONS.—Beginning after the date of enactment 25
of this section, the Secretary may not issue a proposed 26
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rule, final regulation, or executive action implementing 1
this title if the Secretary determines that the rule, regula-2
tion, or executive action— 3
‘‘(1) is economically significant; and 4
‘‘(2) would result in an increase in a subsidy 5
cost. 6
‘‘(c) R
ELATIONSHIP TO OTHERREQUIREMENTS.— 7
The analyses required under subsections (a) and (b) shall 8
be in addition to any other cost analysis required under 9
law for a regulation implementing this title, including any 10
cost analysis that may be required pursuant to Executive 11
Order 12866 (58 Fed. Reg. 51735; relating to regulatory 12
planning and review), Executive Order 13563 (76 Fed. 13
Reg. 3821; relating to improving regulation and regu-14
latory review), or any related or successor orders. 15
‘‘(d) D
EFINITION.—In this section, the term ‘eco-16
nomically significant’, when used with respect to a draft, 17
proposed, or final regulation or executive action, means 18
that the regulation or executive action is likely, as deter-19
mined by the Secretary— 20
‘‘(1) to have an annual effect on the economy 21
of $100,000,000 or more; or 22
‘‘(2) adversely to affect in a material way the 23
economy, a sector of the economy, productivity, com-24
petition, jobs, the environment, public health or safe-25
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ty, or State, local, or tribal governments or commu-1
nities.’’. 2
(b) P
ROHIBITION ONCERTAINFINALRULE.—Ex-3
cept as expressly authorized by an Act of Congress, the 4
Secretary may not implement, administer, or enforce a 5
final rule that is substantially similar to the proposed rule 6
on ‘‘Improving Income-Driven Repayment for the William 7
D. Ford Federal Direct Loan Program’’ published by the 8
Department of Education in the Federal Register on Jan-9
uary 11, 2023 (88 Fed. Reg. 1894 et seq.). 10
Æ
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