Sec. 3. 10/10 Loan Repayment and Forgiveness
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Part G of title IV of the Higher Education Act of 1965 is amended by adding at the end the following: Notwithstanding any other provision of this Act, the Secretary shall carry out a program (to be known as the 10/10 Loan Repayment Plan ) under which— a borrower of an eligible loan who is eligible under paragraph
(3)may elect to have the borrower's aggregate monthly payment for all such loans not exceed the monthly payment amount described in paragraph (2); any interest due and not paid under a monthly payment under this subsection— shall continue to accrue; and shall be capitalized up to an amount equal to 10 percent of the original principal amount of all the eligible loans that the borrower is repaying under this subsection; any principal due and not paid under a monthly payment under this subsection shall be deferred, and shall be forgiven in accordance with subsection
(b)if the borrower meets the requirements for forgiveness under such subsection; the amount of time the borrower makes monthly payments under this subsection may exceed 10 years; a borrower who is repaying an eligible loan pursuant to 10/10 Loan Repayment under this subsection may elect, at any time, to terminate repayment pursuant to 10/10 Loan Repayment and repay such loan under the standard repayment plan, in which case the amount of time the borrower is permitted to repay such loans may exceed 10 years; and the special allowance payment to a lender calculated under section 438(b)(2)(I), when calculated for a loan in repayment under this section, shall be calculated on the principal balance of the loan and on any accrued interest unpaid by the borrower in accordance with this section. A borrower who has elected to participate in the 10/10 Loan Repayment Plan under this subsection shall, during each month the borrower is participating in such Plan, make a monthly payment in an amount equal to— one-twelfth of the amount that is 10 percent of the result obtained by calculating, on at least an annual basis, the amount by which— the borrower’s, and the borrower’s spouse’s (if applicable), adjusted gross income; exceeds 150 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) ); or in the case of a borrower who is in deferment due to an economic hardship described in section 435(o), $0. The Secretary shall establish procedures for annually determining the borrower's eligibility for 10/10 Loan Repayment, including verification of a borrower's annual adjusted gross income and the annual amount due on the total amount of eligible loans, and such other procedures as are necessary to effectively implement 10/10 Loan Repayment under this subsection. In the case of a married borrower who files a separate Federal income tax return, the Secretary shall calculate the amount of the borrower's 10/10 Loan Repayment under this subsection solely on the basis of the borrower's student loan debt and adjusted gross income. The Secretary shall carry out a program (to be known as the 10/10 Loan Forgiveness Program ) to forgive a qualified loan amount, in accordance with paragraph
(3), on an eligible loan for a borrower who, after the date that is 10 years prior to the date of enactment of the Student Loan Fairness Act , has made 120 monthly payments on the eligible loan pursuant to any one or a combination of the following: Monthly payment under the 10/10 Loan Repayment Plan under subsection
(a). Monthly payment under any other repayment plan authorized under part B or D of an amount that, for a given month, is not less than the monthly payment amount calculated under subsection
(a)that the borrower would have owed in the year in which such payment was made, based on the borrower’s adjusted gross income and eligible loan balance for such year. For any month after such date during which the borrower is in deferment due to an economic hardship described in section 435(o), monthly payment of $0. To provide loan forgiveness under paragraph
(1), the Secretary is authorized to carry out a program— through the holder of the loan, to assume the obligation to repay a qualified loan amount for a loan made, insured, or guaranteed under part B of this title; and to cancel a qualified loan amount for a loan made under part D of this title. After the borrower has made 120 monthly payments described in paragraph
(1), the Secretary shall forgive— with respect to new borrowers on or after the date of enactment of the Student Loan Fairness Act , the sum of— the balance of principal and fees due on the borrower’s eligible loans as of the time of such forgiveness, not to exceed $45,520; and the amount of interest that has accrued on the balance described in clause
(i)as of the time of such forgiveness; or with respect to any other eligible borrower, the balance of principal, interest, and fees due on the borrower’s eligible loans as of the time of such forgiveness. The amount of a borrower’s eligible loans forgiven under this section shall not be included in the gross income of the borrower for purposes of the Internal Revenue Code of 1986. A borrower who has elected to participate in the 10/10 Loan Repayment Plan under subsection (a), or who is requesting forgiveness under the 10/10 Loan Forgiveness Program under subsection
(b), shall provide to the Secretary such information and documentation as the Secretary determines, by regulation, to be necessary to verify the borrower’s adjusted gross income and payment amounts made on eligible loans of the borrower for the purposes of such Plan or Program. In this section the term eligible loan means any loan made, insured, or guaranteed under part B or D. .
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Sec. 3
10/10 Loan Repayment and Forgiveness
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