Sec. 101. Loan discharge
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Subject to subsection (f), not later than the date that is 12 months after the date of enactment of this Act, the Secretary of Education shall discharge the qualified loan amount of each individual, without regard to the repayment status of the loan or whether the loan is in default. The qualified loan amount of an individual is an amount equal to the lesser of— $50,000; and the aggregate loan obligation on the eligible Federal loans of the taxpayer that is outstanding on the date of enactment of this Act or, in the case of such loans issued under section 460B of the Higher Education Act of 1965, as added by title II of this Act, on the date on which such loans are issued under such section 460B.
The amount discharged under subsection
(a)with respect to an individual shall be reduced (but not below zero) by $1 for each $3 (or fraction thereof) by which the taxpayer’s adjusted gross income exceeds $100,000 (twice such amount in the case of a joint return) for the most recent taxable year ending before the date of the enactment of this Act. To provide the loan discharge required under subsection
(a), the Secretary is authorized to carry out a program— through the holder of the loan, to assume the obligation to repay the qualified loan amount for a loan made, insured, or guaranteed under part B of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1071 et seq.); to cancel the qualified loan amount for a loan made under part D of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1087a et seq.), or assigned, referred, or transferred to, or purchased by, the Secretary under such title IV ( 20 U.S.C. 1070 et seq.), including a Federal Direct Stafford Loan issued under section 460B of the Higher Education Act of 1965, as added by title II of this Act; and through the institution of higher education that made the loan from its student loan fund established under part E of such title ( 20 U.S.C. 1087aa et seq.), to assume the obligation to repay the qualified loan amount for such loan. With respect to an individual with at least 2 eligible Federal loans, the Secretary shall discharge the loans of the individual as follows (except as otherwise indicated by the individual): In the case in which the individual has loans with different rates of interest, the loans should be discharged in descending order by rate of interest. In the case in which the individual has loans with the same rates of interest, the loans should be discharged in descending order by amount of outstanding principal. For purposes of the Internal Revenue Code of 1986, in the case of an individual, gross income does not include any amount which (but for this subsection) would be includible in gross income by reason of the discharge (in whole or in part) of any loan if such discharge was pursuant to this title. The Secretary of the Treasury may, upon written request from the Secretary of Education, disclose to officers and employees of the Department of Education return information with respect to a taxpayer who has received eligible Federal loans that are outstanding on the date described in subsection (b)(1)(B). Such return information shall be limited to— taxpayer identity information with respect to such taxpayer; the filing status of such taxpayer; and the adjusted gross income of such taxpayer. Return information disclosed under paragraph
(1)may be used by officers and employees of the Department of Education only for the purposes of, and to the extent necessary in, establishing the appropriate qualified loan amount of a taxpayer. Not later than the date that is 24 months after the date of enactment of this Act, the Secretary of Education may use the authority under sections 432(a)(6) and 468(2) of the Higher Education Act of 1965 ( 20 U.S.C. 1082(a)(6) ; 1087hh(2)) to discharge loans under this section beyond the period described in subsection
(a)for— an individual who, through an appeals process established by the Secretary, successfully appeals a loan discharge determination by the Secretary under this section; an individual who, due to special circumstances, misses a deadline established by the Secretary in the administration of loan discharges under this section; or an individual (or a group of individuals) who the Secretary determines should have received a loan discharge or a discharge amount that is different from the amount of loan discharge received under this section, except that a loan discharge amount received under this subsection may not exceed the qualified loan amount determined for the individual (or the group of individuals) under subsection (b). Not later than the date that is 3 months after the date of enactment of this Act, the Secretary of Education, in coordination with the Secretary of the Treasury and the Director of the Bureau of Consumer Financial Protection, shall undertake a campaign to alert borrowers of private education loans— that such borrowers may be eligible to refinance such private loans as Federal Direct Stafford Loans under section 460B of the Higher Education Act of 1965, as added by title II of this Act; and such Federal Direct Stafford Loans may be eligible for loan discharge under this section. In the case of a borrower of an eligible Federal loan that was in default prior to being discharged under this section and on which, as a result of such loan discharge, there is no outstanding balance of principal or interest, the Secretary, guaranty agency or other holder of the loan shall request any consumer reporting agency to which the Secretary, guaranty agency or holder, as applicable, reported the default of the loan, to remove the record of the default from the borrower’s credit history. In this section, the terms individual and taxpayer do not include a Member of Congress.
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