Sec. 7. Refinancing private education loans for certain borrowers
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Section 455(g) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(g) ) is amended— by striking A borrower and inserting the following: A borrower ; by inserting , and any loan described in paragraph
(2)after July 1, 2010 ; and by adding at the end the following new paragraph: Notwithstanding any other provision of law, a borrower who meets the eligibility criteria described in subparagraph
(B)shall be eligible to obtain a Federal Direct Consolidation loan under this paragraph that— shall include an eligible private education loan; and may include a loan described in section 428C(a)(4). A borrower of an eligible private education loan is eligible to obtain a Federal Direct Consolidation Loan under this paragraph if the borrower— was eligible to borrow a loan under section 428H, a Federal Direct Unsubsidized Stafford Loan, a loan under section 428B, or a Federal Direct PLUS loan for a period of enrollment at an institution of higher education, or, with respect to a borrower who was enrolled at an institution of higher education on less than a half-time basis, would have been eligible to borrow such a loan for such period of enrollment if the borrower had been enrolled on at least a half-time basis; borrowed at least one eligible private education loan for a period of enrollment described in clause
(i); and has an average adjusted gross income (based on the borrower’s adjusted gross income from the 3 most recent calendar years before application for consolidation under this section) that is equal to or less than the borrower’s total education debt (determined by calculating the sum of the borrower’s loans described in section 428C(a)(4) and eligible private education loans) at the time of such application. For purposes of this paragraph, the term eligible private education loan means a private education loan (as such term is defined in section 140 of the Truth in Lending Act (15 U.S.C. 1650)) made on or before the date of enactment of the Student Loan Fairness Act , including the amount of outstanding principal, accrued interest, and related fees and costs (as determined by the Secretary) owed by a borrower on such a loan. For each eligible private education loan that a borrower is consolidating under this paragraph, the Secretary shall notify the holder that the Secretary is purchasing the loan, and the Secretary shall then purchase such loan, as described under section 140A of the Truth in Lending Act. A Federal Direct Consolidation Loan made under this paragraph shall have the same terms and conditions as a Federal Direct Consolidation loan under paragraph (1), except that the applicable rate of interest for a Federal Direct Consolidation loan made under this paragraph shall not exceed 3.4 percent. The Secretary shall take such steps as may be necessary to notify eligible borrowers of the availability of consolidation under this paragraph no later than 60 days after the date of enactment of the Student Loan Fairness Act , including notifying such borrowers of the deadline to apply for such a loan under subparagraph
(G). A borrower may apply for loans under this paragraph during the 1-year period beginning on the date of enactment of the Student Loan Fairness Act . The Secretary shall not make a Federal Direct Consolidation Loan under this paragraph to any borrower who has not submitted an application for such a loan to the Secretary before the end of such period. There are authorized to be appropriated, and there are appropriated, such sums as may be necessary to carry out this paragraph. . Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended— by redesignating section 140A as section 140B; by inserting after section 140 the following: The Bureau shall issue regulations to require a private education lender to sell an eligible private education loan to the Secretary of Education, upon request of the Secretary, for purposes of consolidating such loan, as described under section 455(g)(2) of the Higher Education Act of 1965. The price paid for a private education loan under subsection
(a)shall— include the amount of outstanding principal on the loan, the amount of accrued interest on the loan, and any fees or other costs owed by the consumer on the loan; and be adjusted to account for the time value of such amount. For purposes of this section: The term eligible private education loan means a private education loan, as defined under section 140(a), made on or before the date of enactment of the Student Loan Fairness Act. The term private education lender has the meaning given such term under section 140(a). ; and in the table of contents for such chapter— by redesignating the item relating to section 140A as item 140B; and by inserting after the item relating to section 140 the following: 140A. Sale of private education loans to the Government. . Section 428C(a)(3)(B)(i)(V) of the Higher Education Act of 1965 ( 20 U.S.C. 1078–3(a)(3)(B)(i)(V) ) is amended— by striking or at the end of item (bb); by striking the period at the end of item
(cc)and inserting ; or ; and by adding at the end the following: for the purpose of consolidating an eligible private education loan under section 455(g)(2), whether such loan is consolidated alone, with other eligible private education loans, or with loans described in paragraph (4). .
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- 20 USC 1078–3(a)(3)(B)(i)(V)
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Sec. 7
Refinancing private education loans for certain borrowers
Cite20 USC 1078–3(a)(3)(B)(i)(V)
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