Sec. 4. Repayment plans
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Section 455(d) ( 20 U.S.C. 1087e(d) ) is amended by adding at the end the following: Notwithstanding paragraph (1), and subject to subparagraph (E), beginning on July 1, 2023, the Secretary shall offer a borrower of a loan made under this part two plans for repayment of such loan, including principal and interest on the loan. The borrower shall be entitled to accelerate, without penalty, repayment on such loans. The borrower may choose— a standard repayment plan with a fixed monthly repayment amount paid over a fixed period of time, not to exceed 10 years; or an income-driven repayment assistance plan under section 494A.
If such borrower does not select a repayment plan described in subparagraph (A), the Secretary shall provide the borrower with the repayment plan described in subparagraph (A)(i). Subject to clause (ii), a borrower may change the borrower’s selection of a repayment plan under subparagraph (A), or the Secretary’s selection of a plan for the borrower under subparagraph (B), as the case may be. Nothing in this subsection shall prohibit the Secretary from encouraging distressed borrowers from enrolling in the income-driven repayment assistance plan under section 494A.
All loans made under this part on or after July 1, 2023, to a borrower shall be repaid under the same repayment plan under subparagraph (A), except that the borrower may repay an excepted PLUS loan or an excepted consolidation loan (as such terms are defined in section 494A) separately from other loans made under this part to the borrower. The Secretary may require a borrower who has defaulted on a loan made under this part to— pay all reasonable collection costs associated with such loan; and repay the loan pursuant to the income-driven repayment assistance plan under section 494A.
A borrower who, as of the day before the date of enactment of FAIR Act , was repaying a loan made under this part pursuant to a plan described in subparagraph (A), (B), or
(C)of paragraph
(1)may— continue to repay such loan pursuant to such plan; or choose to repay such loan pursuant to a plan described in clause
(i)or
(ii)of subparagraph (A). With respect to a borrower who, as of the day before the date of enactment of FAIR Act , was repaying a loan made under this part pursuant to a plan described in subparagraph
(D)or
(E)of paragraph (1), the Secretary shall, pursuant to section 494A(b), enroll such borrower into the income-driven repayment assistance plan under section 494A. Except as provided in subparagraph (E), the Secretary may not— authorize a borrower of a loan made under this part to repay such loan pursuant to a repayment plan that is not described in clause
(i)or
(ii)of subparagraph (A); or carry out or modify a repayment plan that is not described in such clause
(i)or (ii). . Section 428(b)(9) is amended— in subparagraph (A)— in clause (iv), by striking and at the end; in clause (v), by striking the period at the end and inserting ; and ; by adding at the end the following: for any borrower repaying, on or after July 1, 2023, a loan made, insured, or guaranteed under this part— in the case of a borrower who, as of the day before the date of enactment of FAIR Act , was repaying such loan pursuant to a plan described in clause (i), (ii), (iii), or (iv), continuing to repay such loan pursuant to such plan; or an income-driven repayment assistance plan under section 494A; or the standard repayment plan described in clause (i). ; by adding at the end the following: In the case of any borrower not described in subparagraph (A)(vi)(I), the borrower may change the borrower’s selection of a repayment plan under subparagraph (A)(vi)(II). Nothing in this subsection shall prohibit the lender from encouraging distressed borrowers from enrolling in the income-driven repayment assistance plan under section 494A. With respect to a borrower who, as of the day before the date of enactment of the FAIR Act was repaying a loan made, insured, or guaranteed under this part pursuant to a plan described in subparagraph (A)(v), the Secretary shall, pursuant to section 494A(b), enroll such borrower into an income-driven repayment assistance plan under section 494A. The Secretary may require a borrower who has defaulted on a loan made, insured, or guaranteed under this part to— pay all reasonable collection costs associated with such loan; and repay the loan pursuant to the income-driven repayment assistance plan under section 494A. The Secretary may not— authorize a borrower of a loan made, insured, or guaranteed under this part to repay such loan pursuant to a repayment plan that is not described in subparagraph (A)(vi); or carry out or modify a repayment plan that is not described in subparagraph (A)(vi). . Section 428C ( 20 U.S.C. 1078–3 ) is amended— in subsection (a)(3)(B)(i)(V)(aa), by striking or income-based repayment and inserting , income-based repayment, or income-driven repayment assistance under section 494A ; and in subsection (c)— in paragraph (2)(A)— in the first sentence, by inserting , or a schedule for income-driven repayment assistance under section 494A, after schedules ; and in the second sentence, by inserting or by the terms of repayment pursuant to income-driven repayment assistance under section 494A, after subsection (b)(5) ; and in paragraph (3)— in subparagraph (A), by inserting or an income-driven repayment assistance schedule under section 494A after section 493C ; and in subparagraph (C), by inserting or an income-based repayment assistance schedule under section 494A after section 493C . Section 455(b)(9)(C) ( 20 U.S.C. 1087e(b)(9)(C) ) is amended by inserting (which in the case of a loan for which the first disbursement of principal is made on or after July 1, 2023, may not exceed than 0.25 percentage points) after interest rate reduction . The amendment made by this section shall not apply to any borrower who is a student enrolled in a program of study at an institution of higher education (as defined in section 102 of the Higher Education Act of 1965 ( 20 U.S.C. 1002 )) as of June 30, 2023, or any loans made under part D of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1087a et seq. ) to (or on behalf of) such student, during the period required for the completion of such program. The third sentence of section 485(d)(1) is amended— by striking income-sensitive and income-based repayment plans for loans made, insured or guaranteed under part B and inserting income-sensitive repayment plans and an income-driven repayment plan under section 494A for loans made, insured or guaranteed under part B ; and by striking and income-contingent and all that follows through under part D and inserting and an income-driven repayment assistance plan under section 494A for loans made under part D . Section 455(m)(1)(A) ( 20 U.S.C. 1087e(m)(1)(A) ) is amended— by striking or at the end of clause (iii); in clause (iv), by striking and and inserting or ; and by inserting at the end the following: payments under an income-driven repayment assistance plan under section 494A; and .
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- 20 USC 1078–3
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