Sec. 401. Income-based repayment plan
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Section 493C of the Higher Education Act of 1965 ( 20 U.S.C. 1098e ) is amended— in subsection (b)— in paragraph (8), by striking and after the semicolon; in paragraph (9), by striking the period at the end and inserting ; and ; and by adding at the end the following: a borrower who is repaying a loan made under part B or D pursuant to this section may repay such loan in full at any time without penalty. ; and by adding at the end the following: The income-based repayment plan shall be carried out in accordance with this section, except as otherwise specified in this subsection (including through the special terms described in paragraph (2))— with respect to any loan issued on or after July 1, 2019, if such borrower elects the income-based repayment plan for that loan; and with respect to any borrower who is repaying a loan made, insured, or guaranteed under part B or D, if such borrower elects to repay the loan under the income-based repayment plan on or after July 1, 2019.
Notwithstanding any other provision of this section, with respect to a loan described under paragraph (1), the following terms shall apply to the income-based repayment plan: Notwithstanding subsection (a)(3)(B), the repayment amount under this subsection shall be an amount equal to 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 (if applicable), adjusted gross income; exceeds the applicable percentage of the poverty line in accordance with clause
(ii)that is 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) ). For purposes of clause (i), the term applicable percentage means 150 percent reduced by 1 percentage point for each $1,000 by which the borrower’s adjusted gross income exceeds $100,000. A borrower may elect— during any period during which the borrower’s (and the borrower’s spouse, if applicable) adjusted gross income is equal to or less than 225 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) ), to have the borrower’s aggregate monthly payment for all such loans equal to $0; and during any period during which the borrower’s (and the borrower’s spouse, if applicable) adjusted gross income exceeds 225 percent of such poverty line, to have the borrower’s aggregate monthly payment for all such loans not exceed, the lesser of— the result described in subparagraph
(A)divided by 12; or the monthly amount calculated under section 455(d)(1)(A), based on a 10-year repayment period, when the borrower first made the election described in this subsection. With respect to any loan for which payments may be made under subparagraph (B), be paid, or be treated as if no interest has accrued, by the Secretary— for any period described in subparagraph (B)(i); and for the 6-month period after the date the borrower ceases to carry at least one-half the normal full-time academic workload at an institution of higher education, as determined by the institution, and during which the borrower is not earning any income. Subsection (b)(7)(B) shall be applied by substituting 20 years for 25 years . A borrower of such a loan shall not be required to have a partial financial hardship and may elect, and remain enrolled in, the income-based repayment plan under this subsection regardless of income level. Subparagraph
(A)of subsection (b)(6) shall not apply and a borrower's monthly payment shall be determined in accordance with subparagraph
(A)divided by 12, which may exceed the monthly repayment amount under a standard 10-year repayment plan. Subparagraph
(B)of subsection (b)(3) shall not apply. A borrower described in paragraph (1)(B)— may choose to retain the repayment plan in which the borrower is enrolled on June 30, 2019; may elect to— leave the repayment plan described in subparagraph
(A)and enter the income-based repayment plan under this subsection; leave the repayment plan described in subparagraph
(A)and enter a standard 10-year repayment plan under section 455(d)(A)(A); or not more than once per calendar year, switch between the repayment plans described in clauses
(i)and (ii); after electing to leave a repayment plan other than an income-based repayment plan described under this subsection or a standard 10-year repayment plan under section 455(d)(A)(A), shall not be permitted to re-elect a repayment plan that is not an income-based repayment plan under this subsection or such standard 10-year repayment plan; and shall retain, for purposes of repayment or cancellation of any outstanding balance of principal and interest due on a loan (as described in subsection (b)(7)) any years of repayment under another income-based or income-contingent repayment plan under this title. Notwithstanding any other provision of this Act, the total amount of interest that accrues during a borrower's grace period and the time that a borrower is in repayment under this subsection shall not exceed 50 percent of the original principal amount of the loan. .
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