Sec. 483B. Loan repayment rate and speed-based repayment rate
1,778 words·~8 min read·
/bill/113/s/2954/is/section-483bA research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Part G of title IV ( 20 U.S.C. 1088 et seq. ) is further amended by inserting after section 483C, as added by section 484, the following: In this section: The term amount paid , when used with respect to a covered Federal student loan, means the amount paid of the outstanding balance, calculated by determining the difference between the original outstanding balance on the loan and the current loan balance on the loan. The term cohort loan , when used with respect to an institution, means a covered Federal student loan in the 2-year loan repayment cohort identified for the institution under subsection (b)(2) for a fiscal year.
The term covered Federal student loan means— a loan made, insured, or guaranteed under part B or D that is issued to a student borrower; or the portion of a loan made under section 428C or a Federal Direct Consolidation Loan that is used to repay a loan described in subparagraph (A). The term current loan balance means the sum of the current outstanding balance due on a covered Federal student loan, as of the date on which a rate determination under this section is being made, plus the accrued and unpaid interest balance on the loan as of such date.
The term original outstanding balance , when used with respect to a covered Federal student loan, means the total amount of the outstanding balance of the loan, including capitalized interest and any unpaid accrued interest that has not been capitalized, as of the date that the loan entered repayment. The term payments-made loan means a covered Federal student loan that has never been in default (or, in the case of a loan described in paragraph (3)(B), neither the consolidation loan nor any underlying loan have ever been in default), where— payments made by a borrower during the most recently completed fiscal year reduce the outstanding balance of the loan (which, in the case of a loan described in paragraph (3)(B), shall be deemed to mean reducing the outstanding balance of the entire consolidation loan) to an amount that is less than the outstanding balance of the loan at the beginning of that fiscal year; or the borrower of the loan is in the process of qualifying for public service loan forgiveness under section 455(m) and submits an employment certification to the Secretary that demonstrates the borrower is engaged in a public service job and the borrower made qualifying payments, as determined under such section, on the loan during the most recently completed fiscal year.
Each fiscal year, the Secretary shall determine the loan repayment rate for each institution of higher education that is participating in a program under this title or seeking to regain eligibility to participate in a program under this title by using the loan cohort identified under paragraph
(2)to calculate the loan repayment rate, in accordance with paragraph (3). For purposes of calculating the loan repayment rate for a fiscal year under this subsection, the 2-year loan repayment cohort for an institution of higher education shall consist of all covered Federal student loans of the institution that are in their third year of repayment or in their fourth year of repayment, except as provided in subparagraph (B). Notwithstanding subparagraph (A), a covered Federal student loan for any borrower who is a professional or graduate student enrolled in a program of study that requires a medical internship or residency shall be included in the loan cohort when the loan is in its sixth and seventh years of repayment. The Secretary shall exclude from a loan cohort for a fiscal year any covered Federal student loan that would otherwise qualify, if the loan— was discharged under subsection (a)(1) or
(d)of section 437 as a result of the death of the borrower; or was assigned or transferred to the Secretary and is being considered for discharge as a result of the total and permanent disability of the borrower, or was discharged by the Secretary on that basis, under section 437(a). The Secretary shall treat any period during which a covered Federal student loan is in deferment or forbearance under this title as a period of repayment for purposes of this subsection, except as provided in subclause (II). The Secretary shall not include any period during which payments on a covered Federal student loan are deferred under section 428(b)(1)(M)(i), 428B(d)(1)(A)(i), or 455(f)(2)(A) in determining the borrower's period of repayment for purposes of paragraph (1), subject to subclause (III). Subclause
(II)shall not apply in any case where a deferral described in such subclause is due to a borrower's enrollment, after completion of the program for which the loan was made, in a program of study of less than 6 months in duration. For each covered Federal student loan that is a loan described in subsection (a)(3)(B), the Secretary shall— determine the original outstanding balance for each original covered Federal student loan that comprises the consolidation loan; determine the date that the repayment period began, in accordance with this subparagraph, for each such original loan; include, in determining the duration of the repayment period under this paragraph for the underlying loan, the period during which the original loan was in repayment and the period during which the consolidation loan was in repayment; and include the amount determined under subclause
(I)for each underlying loan in the calculations under this paragraph for the appropriate fiscal year based on the repayment period for the underlying loan. For purposes of this section, the loan repayment rate for an institution for a fiscal year shall be equal to the proportion that— the sum of— the total original outstanding balance of all covered Federal student loans in the loan cohort of the institution for such fiscal year that are paid in full in accordance with subparagraph (B); and the total original outstanding balance of all payments-made loans in the loan cohort for such year; bears to the total original outstanding balance of all loans in the loan cohort for such year. For purposes of paragraph (1)(A), a loan paid in full is a covered Federal student loan in the loan cohort that— has never been in default (or in the case of a loan described in subsection (a)(3)(B), neither the consolidation loan nor any original loan comprising the consolidation loan has ever been in default); and has been paid in full by a borrower. A covered Federal student loan described in subsection (a)(3)(B) or consolidated under another refinancing process provided for under this Act, is not counted as a loan paid in full for purposes of this subparagraph until the consolidation loan or other financial instrument is paid in full by the borrower. The Secretary shall make the loan repayment rate for each institution of higher education participating in a program under this title or seeking to regain eligibility to participate in a program under this title publicly available on the College Navigator website of the Department, or any successor website, and the website for the National Center for Education Statistics. The purpose of the speed-based repayment rate under this subsection is to provide an estimate of— the annual rate at which student borrowers at an institution of higher education are repaying their loans under part B and D; and the total expected time it takes student borrowers to repay their loans. In order to provide additional information regarding loan repayment, the Secretary shall, for each fiscal year— determine the speed-based repayment rate for each institution of higher education that is participating in a program under this title or seeking to regain eligibility to participate in a program under this title; determine the information required for the comparison methodology established by the Secretary under paragraph (4); and publish the most recently available speed-based repayment rate and the comparison information under paragraph
(4)for each such institution on the College Scorecard, in accordance with section 133(d)(3), and on the College Affordability and Transparency Center website, or any successor website, of the Department. In order to provide additional information regarding loan repayment and determine the speed-based repayment rate required under paragraph (2)(A) for an institution of higher education, the Secretary shall, for each fiscal year— determine the percentage paid of the total original outstanding balance of all cohort loans of the institution for the fiscal year (including, for purposes of calculating the speed-based repayment rate only, all loans that would be cohort loans for such fiscal year if the loans were not in delinquency, forbearance, deferment, or default) for which the determination is being made, by dividing— the amount paid of all such cohort loans of the institution for such year; by the total original outstanding balance of all such cohort loans of the institution for such year; and divide such percentage by the average number of years in repayment for the cohort loans of the institution, rounded to the nearest month and weighted based on the dollar amount of the current loan balance of each cohort loan. The Secretary shall establish a methodology for comparing similar institutions of higher education based on the speed-based repayment rate. The methodology shall— use clear and understandable terms, such as quickly and slowly , to indicate the relative significance of the speed-based repayment rate of an institution of higher education; include a projection of the expected time for the average borrower in the loan cohort described in paragraph (3)(A) of each institution to complete repayment at each institution, based on the speed-based repayment rate; include a comparison of each institution's expected time of repayment under clause
(ii)with the expected times of repayment for similar institutions; not disaggregate the comparisons based on status as a public, private nonprofit, or proprietary institution of higher education; distinguish the overall speed-based repayment rate of an institution from the speed-based repayment rate of all professional degree programs of the institution; and calculate a separate speed-based repayment rate for each program at an institution that is subject to gainful employment regulations under section 668.7 of title 34, Code of Federal Regulations. The Secretary shall submit the methodology described in subparagraph
(A)for consumer testing in accordance with section 483C. The Secretary may issue guidance and promulgate rules for the purposes of determining the speed-based repayment rate. Notwithstanding any other provision of this section, the Secretary may adjust the formula for calculating the speed-based repayment rate under paragraphs
(2)and
(3)to provide a more informative and accurate measure of the speed of repayment. Each year, the Secretary shall publish the student default risk for each institution for the most recent fiscal year on the website of the National Center for Education Statistics. .
Connectionstraces to 1
Traces to 1 document
U.S. Code
Citation graph
cites case law
Sec. 483B
Loan repayment rate and speed-based repayment rate
Cites 1Cited by 0 across 0 sources