Sec. 451. Elimination of origination fees and other amendments to terms and conditions of loans
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Section 455 ( 20 U.S.C. 1087e ) is amended— by repealing subsection (c); in subsection (d)— in paragraph (1)(D), by inserting or to any borrower who has not selected the income contingent repayment plan before the date that is 1 year after the date of enactment of the before the semicolon at the end; and Higher Education Affordability Act in paragraph (5)— by striking subparagraph
(A)and inserting the following: pay collection costs in an amount that is reasonable and that does not exceed the bona fide collection costs associated with such student loan that are actually incurred in collecting the debt against the borrower; and ; and in subparagraph (B), by striking income contingent repayment plan and inserting income-based repayment plan, as provided in 493C ; in subsection (e)— in paragraph (1), by striking The Secretary may and inserting With respect to borrowers who have selected, or been required to use, an income contingent repayment plan before the date that is 1 year after the date of enactment of the ; Higher Education Affordability Act , the Secretary may in paragraph (3), by inserting before the date that is 1 year after the date of enactment of the after Higher Education Affordability Act income contingent repayment ; by striking paragraph (6); and by redesignating paragraph
(7)as paragraph (6); in subsection (f)(2)— in subparagraph (C), by striking the borrower— and all that follows through described in clause
(i)or (ii); or and inserting the borrower is performing eligible military service, and for the 180-day period following the demobilization date for such eligible military service; ; by redesignating subparagraph
(D)as subparagraph (E); and by inserting after subparagraph
(C)the following: any period not in excess of 180 days after the effective movement date listed on the military orders of a borrower's spouse if that spouse is a member of the Armed Forces who has received military orders for a permanent change of station; or ; by striking subsection
(h)and inserting the following: Notwithstanding any other provision of State or Federal law, a borrower, regardless of the account status of the borrower's loan, may assert as an affirmative claim or defense against repayment, any act or omission of an institution of higher education attended by the borrower that would give rise to a cause of action against the institution under this Act, other Federal law, or applicable State law, except that in no event may a borrower recover from the Secretary, in any action arising from or relating to a loan made under this part, an amount in excess of the amount such borrower has repaid on such loan. The Secretary may elect to carry out the authority under this subsection on behalf of a group of multiple borrowers if the Secretary determines that the group has been harmed by the same act, omission, or practice. ; in subsection (m)— by redesignating paragraphs
(3)and
(4)as paragraphs
(4)and (5), respectively; and by inserting after paragraph
(2)the following: For purposes of this subsection, if a borrower has enrolled in a repayment plan described in paragraph (1)(A) and makes a lump sum payment through a student loan repayment program under section 2171 of title 10, United States Code, or a similarly structured eligible repayment program (as determined by the Secretary), the Secretary will treat the borrower as having made a number of qualifying payments equal to the lesser of— the number, rounded to the nearest whole number, equal to the quotient of— such lump sum payment; divided by the monthly payment amount that the borrower would have otherwise made under the repayment plan described in paragraph (1)(A) selected by the borrower; or 12 payments. ; and in subsection (o)— by striking paragraph
(1)and inserting the following: Notwithstanding any other provision of this part and in accordance with paragraphs
(2)and (4), the Secretary shall not charge interest on a loan made to a borrower under this part for which the first disbursement is made on or after October 1, 2008, during the period in which a borrower who is performing eligible military service is serving in an area of hostilities in which service qualifies for special pay under section 310 of title 37, United States Code. ; by striking paragraph
(3)and inserting the following: The Secretary of Education shall enter into any necessary agreements, including agreements with the Commissioner of the Internal Revenue Service and the Secretary of Defense— to ensure that interest does not accrue for eligible military borrowers, in accordance with this subsection; and to obtain or provide any information necessary to implement clause
(i)without requiring a request from the borrower. Not later than 90 days after the date of enactment of the Higher Education Affordability Act , the Secretary shall submit to the appropriate committees of Congress a report that includes a plan to implement the accrual of interest provision described in subparagraph (A). If the Secretary has not implemented the accrual of interest provision described in subparagraph
(A)by the date that is 1 year after the date of enactment of the Higher Education Affordability Act , the Secretary shall submit, by such date, a report that includes an explanation of why such provision has not been implemented. ; and in paragraph (4), by striking who qualifies as an eligible military borrower under this subsection and inserting described in paragraph
(1). The amendment made by subsection (a)(1) shall apply with respect to loans made under part D of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1087a et seq. ) for which the first disbursement of principal is made, or, in the case of a Federal Direct Consolidation Loan made under such part, the application is received, on or after July 1, 2014. The amendments made by subparagraphs
(A)and (B)(ii) of paragraph (2), and paragraph (3), of subsection
(a)shall take effect on the date that is 1 year after the date of enactment of this Act.
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Sec. 451
Elimination of origination fees and other amendments to terms and conditions of loans
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