Sec. 231. Amendments to terms and conditions of public service loan forgiveness
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Paragraph
(1)of section 455(m) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(m) ) is amended— in the matter preceding subparagraph (A), by striking a borrower who and inserting a borrower ; by amending subparagraph
(A)to read as follows: who— has made 96 qualifying monthly payments on the eligible Federal Direct Loan after October 1, 2007; and has been employed in a public service job during the period in which the borrower makes each of the 96 qualifying monthly payments; and ; and by amending subparagraph
(B)to read as follows: without regard to the employment status of the borrower at the time of such cancellation. . Section 455(m) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(m) ) is further amended by redesignating paragraphs (2), (3), and (4), as paragraphs (3), (6), and (7), respectively. Section 455(m) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(m) ) is further amended— by inserting after paragraph (1), as so amended, the following: For the purpose of determining under paragraph
(1)the number of qualifying monthly payments made by a borrower on an eligible Federal Direct Loan, the Secretary shall consider the borrower to have made a qualifying monthly payment for each month that— the borrower pays (as a lump sum or in multiple installments) an amount that is not less than the monthly payment amount due on the eligible Federal Direct Loan pursuant to any one or a combination of the following— payments under an income-based repayment plan under section 493C; payments under a standard repayment plan under subsection (d)(1)(A), based on a 10-year repayment period; monthly payments under a repayment plan under subsection (d)(1) or
(g)of not less than the monthly amount calculated under subsection (d)(1)(A), based on a 10-year repayment period; payments under an income contingent repayment plan under subsection (d)(1)(D); payments under the Income-Driven Repayment Plan under section 455A(c); or payments under the fixed repayment plan under section 455A(b); or in lieu of a payment described in clause (i), the borrower is in one of the following periods of deferment or forbearance— cancer treatment deferment under section 427(a)(2)(C)(iv), 428(b)(1)(M)(v), or 455(f)(3); rehabilitation training program deferment under section 427(a)(2)(C)(i)(II), 428(b)(1)(M)(i)(II), or 455(f)(2)(A)(ii); military service deferment under section 428(b)(1)(M)(iii) or 455(f)(2)(C); unemployment deferment under section 427(a)(2)(C)(ii), 428(b)(1)(M)(ii), 428B(d)(1)(A)(i), or 455(f)(2)(B); deferment due to an economic hardship described in section 427(a)(2)(C)(iii), section 428(b)(1)(M)(iv), section 428B(d)(1)(A)(i), section 435(o), or section 455(f)(2)(D); Peace Corps service deferment under section 682.210(b)(2)(ii) or 682.210(k) of title 34, Code of Federal Regulations (or successor regulations), as made applicable to Direct Loan borrowers under section 685.204(j) of such title 34; post-active-duty student deferment under section 493D; AmeriCorps forbearance under section 428(c)(3)(A)(i)(III); National Guard Duty forbearance under section 682.211(h)(2)(iii) or 685.205(a)(7) of title 34, Code of Federal Regulations (or successor regulations); Department of Defense student loan repayment program forbearance under section 428(c)(3)(A)(i)(IV); administrative forbearance or mandatory administrative forbearance under section 428(c)(3)(D) or 428H(e)(7); or student loan debt burden forbearance under section 428(c)(3)(A)(i)(II). Subject to clause (ii), if, for any month, a borrower makes a qualifying monthly payment on an eligible Federal Direct Loan in an amount that exceeds the monthly payment amount due on such loan for such month, the Secretary shall— if the excess amount is less than the monthly payment amount due for the subsequent month on such loan, apply the excess amount toward the monthly payment amount due for such subsequent month; if the excess amount is equal to the monthly payment amount due for the subsequent month on such loan, treat the excess amount as the monthly payment for such subsequent month; if the excess amount is greater than the monthly payment amount due for the subsequent month on such loan, but less than the total monthly payment amounts due for the 2 subsequent months on such loan— treat the portion of the excess amount that covers the monthly payment amount due for the subsequent month as the monthly payment for such subsequent month; and apply the remainder of the excess amount toward the monthly payment amount due for the second subsequent month; if the excess amount is equal to or greater than the monthly payment amount due for the 2 subsequent months on such loan, but less than the total monthly payment amounts due for the 3 subsequent months on such loan— treat the portion of the excess amount that covers the monthly payment amounts due for the subsequent month and the second subsequent month as the monthly payments for such months; and apply any remainder of such excess amount toward the monthly payment amount due for the third subsequent month; if the excess amount is equal to the monthly payment amounts due for the 3 subsequent months on such loan, treat the excess amount as the monthly payments for such months; if the excess amount is greater than the monthly payment amounts due for the 3 subsequent months on such loan— treat the portion of the excess amount that covers the monthly payment amounts due for the 3 subsequent months as the monthly payments for such months; and apply any remainder of such excess amount to the principal balance of the eligible Federal Direct loan; and notwithstanding subclauses
(I)through (VI), if the borrower has a monthly payment amount due on such loan for such month that is equal to $0, apply any excess amount for such month to the principal balance of the eligible Federal Direct loan. Prior to or at the time of making a payment that exceeds the monthly payment amount due on an eligible Federal Direct Loan for such month, a borrower may request that any excess amount for such month be applied to the principal balance of an eligible Federal Direct loan in lieu of such excess amount being applied in accordance with clause (i). The Secretary shall establish a buyback payment process under which a qualified borrower of an eligible Federal Direct Loan may make a buyback payment in order to have eligible months of the borrower’s public service employment period during which the borrower did not make a qualifying monthly payment on such loan be treated as if the borrower had made a qualifying monthly payment on such loan. A borrower is a qualified borrower for the purposes of making a buyback payment in accordance with this subparagraph if the borrower— has an eligible Federal Direct Loan that is not in default; has been employed in a public service job for not less than a 96 month employment period, but during such employment period has made fewer than 96 qualifying monthly payments on an eligible Federal Direct Loan; and requests to make a buyback payment in accordance with this subparagraph. For the purposes of this subparagraph, an eligible month means a month during which a qualified borrower was employed in a public service job, was not in an in-school deferment or grace period, and did not make a qualifying monthly payment on an eligible Federal Direct Loan for such month— because the borrower made a monthly payment on such eligible Federal Direct Loan pursuant to a repayment plan that is not a qualifying repayment plan; because the borrower was in a period of deferment or forbearance other than a period described in clause
(ii)of subparagraph (A); or for another reason determined appropriate by the Secretary. A buyback payment made in accordance with this subparagraph— shall be made by a qualified borrower as a lump sum payment amount, and in an amount that equals the total amount the borrower would have paid in qualifying monthly payments on the eligible Federal Direct Loan for all eligible months the borrower is requesting to buyback, pursuant to a qualifying repayment plan applicable to the borrower, in accordance with section 685.219(g)(6) of title 34, Code of Federal Regulations (as such section is in effect on the date of enactment of this paragraph) or any other relevant regulations in effect on such date; may not be made with respect to an eligible Federal Direct Loan that has been paid off, discharged, or cancelled; and with respect to an eligible Federal Direct Loan that is a consolidation loan, may not be used to buyback eligible months that occurred before the date of the consolidation of such loan. For purposes of determining under paragraph
(1)the number of qualifying monthly payments made by a borrower, any payment or period of deferment or forbearance that is determined to be a qualifying monthly payment may not, at a later time, be determined not to be a qualifying monthly payment. ; and in paragraph (6), as redesignated by subsection (b), by adding at the end the following: The term qualifying repayment plan means any of the repayment plans listed in clause
(i)of paragraph (2)(A). . Paragraph
(3)of section 455(m) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(m) ), as redesignated by subsection (b), is amended to read as follows: Upon certification by a borrower of completion of 96 qualifying monthly payments by the borrower, the Secretary shall determine whether the borrower meets each of the requirements of paragraph (1), and— if the Secretary determines that the borrower does meet such requirements, cancel the obligation to repay the balance of principal and interest due as of the time of such cancellation on the eligible Federal Direct Loans made to the borrower under this part, without further action by the borrower; or if the Secretary determines that the borrower does not meet such requirements, notify the borrower of such determination in accordance with paragraph (4). . Section 455(m) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(m) ), as redesignated by subsection (b), is further amended by inserting after paragraph (3), as so amended, the following: In a case in which the Secretary determines that a borrower has not met the requirements of paragraph (1), the Secretary shall— notify the borrower that— the borrower’s application has been denied, including the basis for such denial; the borrower is in a 90-day forbearance period described in subparagraph (B); and the Secretary will resume collection of the eligible Federal Direct Loans for which the borrower was seeking loan cancellation under this subsection after such 90-day forbearance period, unless the borrower opts to extend such forbearance period under paragraph (5)(A)(ii); and grant the borrower a 90-day forbearance period, beginning on the date of the notice described in subparagraph
(A)provided to the borrower, and during which— payments of principal and interest need not be made on the eligible Federal Direct Loans for which the borrower was seeking loan cancellation under this subsection; and any interest accrued and not paid may not be capitalized. Not later than 90 days after the date of the notice described in paragraph (4)(A) provided to the borrower— the borrower may request, on a form approved by the Secretary, that the Secretary reconsider the basis for the Secretary’s denial under paragraph (4)(A)(i); and if the Secretary grants the borrower’s reconsideration request, offer the borrower an extension of the 90-day forbearance period described in paragraph (4)(B), which shall— begin on the date of the borrower’s reconsideration request under this subparagraph; and end on the date of the notice provided to the borrower under subparagraph (C)(i)(I) of the Secretary’s reconsideration decision. In evaluating a reconsideration request from a borrower, the Secretary shall consider any relevant evidence or supporting documentation that may assist the Secretary in determining whether the borrower meets each of the requirements of paragraph
(1)to qualify for loan cancellation under this subsection. Not later than 6 months after receipt of a borrower’s reconsideration request, the Secretary shall— notify the borrower of the reconsideration decision and the reason for the Secretary’s determination; in a case in which the reconsideration request is granted, adjust the borrower’s number of qualifying monthly payments under paragraph
(1)or cancel the loan under paragraph (3); and in a case in which the Secretary denies the reconsideration request, with respect to a borrower who agrees to the forbearance extension described in subparagraph (A)(ii), include in the notice provided to the borrower under subclause (I), a reminder that the Secretary will resume collection of the eligible Federal Direct Loans for which the borrower was seeking loan cancellation under this subsection as of the date of such notice. After the Secretary makes a decision on the borrower’s reconsideration request, the Secretary’s decision is final, and the borrower will not receive additional reconsideration. .
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Sec. 231
Amendments to terms and conditions of public service loan forgiveness
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