Sec. 222. Loan repayment
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Section 455(d) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(d) ) is amended— in paragraph (1)(D) by inserting (including a repayment assistance plan under 455(e)(9)) after an income contingent repayment plan ; and by adding at the end the following: Notwithstanding paragraph (1), beginning on July 1, 2024, the Secretary shall offer a borrower of a loan made under this part on or after July 1, 2024, 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 a repayment assistance plan under section 455(e)(9). 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 repayment assistance plan under section 455(e)(9). All loans made under this part on or after July 1, 2024, 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 455(e)(9)) 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 repayment assistance plan under section 455(e)(9). The Secretary may not— authorize a borrower of a loan made under this part on or after July 1, 2024, 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 for any loan made under this part on or after July 1, 2024, that is not described in such clause
(i)or (ii). . Section 455(e) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(e) ) is amended by adding at the end the following: Notwithstanding any other provision of this Act, beginning on July 1, 2024, the Secretary shall carry out a repayment assistance program that shall have the terms and conditions of an income-contingent repayment plan described in paragraphs
(1)through (8), except that— a borrower of any loan made under this part (other than an excepted PLUS loan or excepted consolidation loan), may elect to have the borrower’s aggregate monthly payment for all such loans not exceed the applicable monthly payment for the borrower, except that a borrower may not be precluded from repaying an amount that exceeds such applicable monthly payment for any month; the Secretary shall apply the borrower’s monthly payment under this paragraph first toward interest due on such a loan, next toward any fees due on the loan, and then toward the principal of the loan; any principal due and not paid under clause
(ii)shall be deferred; the amount of time the borrower makes monthly payments under clause
(i)may exceed 10 years; notwithstanding paragraph (7), the Secretary shall repay or cancel any outstanding balance of principal and interest due on all loans made under this part (other than excepted PLUS loans or excepted consolidation loans) to a borrower— who, at any time, elected to participate in a repayment assistance plan under clause (i); whose final monthly payment for such loans prior to the loan cancellation under this clause was made under such repayment assistance plan; and who has repaid on such loans (pursuant to a repayment assistance plan under clause (i), a standard repayment plan under subsection (d)(6)(A)(i), or a combination of any such plan or any of the repayment plans listed in clause (ii), (iii), (iv), or
(v)of paragraph (7)(B), or, in the case of a consolidation loan, pursuant to a repayment schedule described item (aa)(BB) of this subclause) an amount that is equal to— the total amount of principal and interest that the borrower would have repaid under a standard repayment plan under paragraph (1)(A) or (6)(A)(i) of subsection (d), based on a 10-year repayment period, when the borrower entered repayment on such loans; or in the case of a Federal Direct Consolidation Loan, the total amount of principal and interest that the borrower would have repaid under the repayment schedule established for the loan under section 428C(c)(2) on the date on which such loan was made; plus an amount equal to the amount of any unpaid interest that has accrued, but was not included in the calculation of the total amount of principal and interest that would have been repaid under the standard repayment plan or schedule described in item (aa)— during any deferment period described in clause
(i)or
(ii)of subsection (f)(2)(A); or during any forbearance period while serving in a medical or dental internship or residency program as described in section 428(c)(3)(A)(i)(I); and a borrower who is repaying a loan pursuant to a repayment assistance plan under clause
(i)may elect, at any time, to terminate repayment pursuant to such plan and repay such loan under the standard repayment plan under subsection (d)(6)(A)(i). For each month for which a borrower’s aggregate monthly payment under this paragraph is insufficient to pay the total amount of interest that accrues on a loan for the month, the amount of interest accrued and not paid for the month shall be subtracted from the total amount of interest due on such loan for the month. For each month for which a borrower’s aggregate monthly payment under this paragraph repays an amount due on an individual loan that is less than twice the total amount of interest that accrues on such loan for the month, the amount of the total principal due on such loan shall be reduced by an amount equal to half of the monthly payment under this paragraph on such loan for the month. In this paragraph: The term adjusted gross income has the meaning given the term in section 62 of the Internal Revenue Code of 1986. The term applicable monthly payment means, when used with respect to a borrower, the amount obtained by dividing by 12, 10 percent of the result obtained by calculating, on at least an annual basis, the amount by which— the adjusted gross income of the borrower or, if the borrower is married and files a Federal income tax return jointly with or separately from the borrower’s spouse, the adjusted gross income of the borrower and the borrower’s spouse; 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) ). The term excepted Consolidation Loan means a Federal Direct Consolidation Loan, if the proceeds of such loan were used to the discharge the liability on— an excepted PLUS loan; or a Federal Direct Consolidation loan, if the proceeds of such loan were used to discharge the liability on an excepted PLUS loan. The term excepted PLUS Loan has the meaning given the term in section 493C. .
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