[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5962 Introduced in House (IH)]
<DOC>
114th CONGRESS
2d Session
H. R. 5962
To amend the Higher Education Act of 1965 to provide for the automatic
recertification of income for income-driven repayment plans, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 8, 2016
Ms. Bonamici (for herself and Mr. Costello of Pennsylvania) introduced
the following bill; which was referred to the Committee on Education
and the Workforce, and in addition to the Committee on Ways and Means,
for a period to be subsequently determined by the Speaker, in each case
for consideration of such provisions as fall within the jurisdiction of
the committee concerned
_______________________________________________________________________
A BILL
To amend the Higher Education Act of 1965 to provide for the automatic
recertification of income for income-driven repayment plans, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Streamlining Income-driven,
Manageable Payments on Loans for Education Act'' or the ``SIMPLE Act''.
SEC. 2. NOTIFICATION PROCEDURES FOR BORROWERS WHO ARE DELINQUENT ON
LOANS.
(a) Amendments.--
(1) Notification procedures.--Section 455(d) of the Higher
Education Act of 1965 (20 U.S.C. 1087e(d)) is amended by adding
at the end the following:
``(6) Notification procedures for borrowers who are
delinquent on loans.--
``(A) Authority to obtain income information.--The
Secretary may obtain such information as is reasonably
necessary regarding the income and family size of a
borrower described in this paragraph (and the
borrower's spouse, if applicable). Returns and return
information (as defined in section 6103 of the Internal
Revenue Code of 1986) may be obtained under this
subparagraph only to the extent authorized by section
6103(l)(13) of such Code, except that nothing in this
subparagraph or such Code shall be construed to
authorize the Secretary to obtain such returns and
return information for a borrower who is not at least
60 days delinquent on a loan made under this part. The
Secretary shall establish procedures as are necessary
to effectively implement this paragraph.
``(B) Borrower notification.--With respect to each
borrower of a loan made under this part who is 60 days
delinquent on such loan, the Secretary shall, at a
minimum and as soon as practicable after such 60-day
delinquency, provide to the borrower the following:
``(i) Notification that the borrower is at
least 60 days delinquent on the loan, including
a description of the loan.
``(ii) A description of the repayment plans
under which the borrower is eligible to repay
the loan.
``(iii) Clear and simple instructions on
how to select the repayment plans described in
clause (ii) for the loan.
``(iv) If the income information of the
borrower is available to the Secretary under
subparagraph (A), based on such income
information, the amount of the monthly payments
under each such repayment plan for the loan.
``(v) An explanation that in the case of a
borrower for whom adjusted gross income is
unavailable or does not reasonably reflect the
borrower's current income--
``(I) if the borrower selects to
repay such loan pursuant to an income-
driven repayment plan that defines
discretionary income in such a manner
that an individual not required under
section 6012(a)(1) of the Internal
Revenue Code of 1986 to file a return
with respect to income taxes imposed by
subtitle A of such Code may have a
calculated monthly payment greater than
$0, the borrower will be required to
provide the Secretary with other
documentation of income satisfactory to
the Secretary, which documentation the
Secretary may use to determine an
appropriate repayment schedule; or
``(II) if the borrower selects to
repay such loan pursuant to an income-
driven repayment plan that is not
described in subclause (I), the
borrower will not be required to
provide the Secretary with such other
documentation of income, and the
borrower will have a calculated monthly
payment of $0.
``(vi) An explanation that the Secretary
shall take the actions under subparagraph (D)
with respect to such borrower if the borrower
is 120 days delinquent on the loan and has not
selected a new repayment plan for the loan.
``(vii) Instructions on updating the
information of the borrower obtained under
subparagraph (A).
``(C) Initial selection of plan.--With respect to
each borrower of a loan made under this part who does
not select a new repayment plan for the loan in
accordance with the notice received under subparagraph
(B), and who is 120 days delinquent on the loan, the
Secretary, as soon as practicable after such 120-day
delinquency, shall--
``(i) in a case in which the loan is
eligible for an income-driven repayment plan--
``(I) provide the borrower with the
income-driven repayment plan for which
the loan is eligible and which requires
the lowest monthly payment amount for
such loan, compared to the other such
plans for which the loan is eligible,
or if the loan is eligible for more
than one income-driven repayment plan
that has the same such lowest monthly
payment amount, provide the borrower
with such income-driven repayment plan
that has the most favorable terms for
the borrower;
``(II) if the plan described in
subclause (I) is not the income-driven
plan that would have the lowest monthly
payment amount for the loan if the loan
were eligible for such plan, notify the
borrower of the actions, if any, the
borrower may take for such loan to
become eligible for such income-driven
repayment plan; and
``(III) authorize the borrower to
change the Secretary's selection of a
plan under this clause to any plan
described in paragraph (1) for which
the borrower is eligible; and
``(ii) in a case in which the loan is
ineligible for an income-driven repayment plan,
the Secretary shall notify the borrower of any
actions, if any, the borrower may take for such
loan to become eligible for such a plan.
``(D) Additional selection of plan.--With respect
to each borrower of a loan made under this part who
selects a new repayment plan in accordance with the
notice received under subparagraph (B), and who
continues to be delinquent on such loan for a period
after such selection that the Secretary determines is
sufficient to indicate that the borrower may benefit
from repaying such loan under a new repayment plan, but
such period is not less than a 60-day period, the
Secretary, as soon as practicable after such period,
shall carry out the procedures under this paragraph for
such loan.
``(E) Opt-out.--The Secretary shall authorize a
borrower to opt-out of the procedures under this
paragraph.''.
(2) Definition of income-driven repayment plan.--Section
455(d) of the Higher Education Act of 1965 (20 U.S.C. 1087e(d))
is further amended by adding at the end the following:
``(7) Definition.--In this section, the term `income-driven
repayment plan' means a plan described in subparagraph (D) or
(E) of paragraph (1).''.
(3) Changing plans.--Section 493C of the Higher Education
Act of 1965 (20 U.S.C. 1098e) is amended by adding at the end
the following:
``(f) Changing Plans.--A borrower changing from income-based
repayment under this section to a different repayment plan shall not be
required to pay the one monthly payment under the standard repayment
plan described in section 682.215(d)(3) or 685.221(d)(2) of title 34,
Code of Federal Regulations (or successor regulations) or any other
amount.''.
(b) Effective Date; Application.--
(1) Automatic enrollment.--The amendments made by
paragraphs (1) and (2) of subsection (a) shall--
(A) take effect as soon as practicable after the
Secretary of Education finalizes the procedures under
section 4 of this Act, but not later than 2 years after
the date of enactment of such Act; and
(B) apply with respect to any loan made under part
D of title IV of the Higher Education Act of 1965 (20
U.S.C. 1087a et seq.) to a new borrower (defined in
section 103 of the Higher Education Act of 1965 (20
U.S.C. 1003)) on or after the date on which such
amendments take effect.
(2) Changing plans.--The amendment made by subsection
(a)(3) shall take effect on the date of enactment of this Act.
SEC. 3. AUTOMATIC RECERTIFICATION OF INCOME.
(a) Income-Contingent Repayment.--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:
``(8) Automatic recertification.--
``(A) In general.--Beginning as soon as practicable
after the Secretary finalizes the procedures under
section 4 of the Streamlining Income-driven, Manageable
Payments on Loans for Education Act, but not later than
2 years after the date of enactment of such Act, the
Secretary shall establish and implement procedures for
the following:
``(i) With respect to any borrower who, on
or after the date on which the Secretary
establishes procedures for this subparagraph,
selects (or for whom the Secretary selects)
income contingent repayment for repayment of a
loan made under this part--
``(I) obtain (for each year of such
repayment and without further action by
the borrower) such information as is
reasonably necessary regarding the
income of such borrower (and the
borrower's spouse, if applicable), for
the purpose of determining the
repayment obligation of the borrower
for such year, including information
with respect to the borrower's family
size in accordance with the procedures
under section 4 of the Streamlining
Income-driven, Manageable Payments on
Loans for Education Act;
``(II) allow the borrower to opt-
out, at anytime, of the Secretary being
able to obtain information under
subclause (I) without further action by
the borrower; and
``(III) provide the borrower with
an opportunity to update the
information obtained under subclause
(I) before the determination of the
annual repayment obligation of the
borrower; and
``(IV) in the case of a borrower
for whom adjusted gross income is
unavailable or does not reasonably
reflect the borrower's current income--
``(aa) if the borrower
selects to repay such loan
pursuant to an income-driven
repayment plan that defines
discretionary income in such a
manner that an individual not
required under section
6012(a)(1) of the Internal
Revenue Code of 1986 to file a
return with respect to income
taxes imposed by subtitle A of
such Code may have a calculated
monthly payment greater than
$0, such borrower will be
required to provide the
Secretary with other
documentation of income
satisfactory to the Secretary,
which documentation the
Secretary may use to determine
an appropriate repayment
schedule; or
``(bb) if the borrower
selects to repay such loan
pursuant to an income-driven
repayment plan that is not
described in item (aa), the
borrower will not be required
to provide the Secretary with
such other documentation of
income, and the borrower will
have a calculated monthly
payment of $0.
``(ii) With respect to any borrower who
selects income contingent repayment for
repayment of a loan made under this part before
the date on which the Secretary establishes
procedures for this subparagraph, the
Secretary--
``(I) shall provide such borrower
with the ability to opt into the
procedures described in clause (i); and
``(II) until the borrower has opted
into such procedures, shall not be able
to obtain information under clause
(i)(I) without further action by the
borrower.
``(B) Returns and return information.--Returns and
return information (as defined in section 6103 of the
Internal Revenue Code of 1986) may be obtained under
subparagraph (A)(i)(I) only to the extent authorized by
section 6103(l)(13) of such Code.
``(C) Other requirements.--The procedures
established by the Secretary under this paragraph shall
be consistent with the requirements of paragraphs (1)
through (7), except as otherwise provided in this
paragraph.
``(9) Outreach.--Beginning as soon as practicable after the
Secretary finalizes the procedures under section 4 of the
Streamlining Income-driven, Manageable Payments on Loans for
Education Act, but not later than 2 years after the date of
enactment of such Act, the Secretary shall--
``(A) inform borrowers repaying a loan made under
this part pursuant to an income-driven repayment plan
(defined in section 455(d)(7)) of the benefits of
automatic recertification procedures under paragraph
(8)(A)(i); and
``(B) encourage such borrowers to opt into such
automatic recertification.''.
(b) Income-Based Repayment.--Section 493C(c) of the Higher
Education Act of 1965 (20 U.S.C. 1098e(c)) is amended by adding at the
end the following: ``Beginning as soon as practicable after the
Secretary finalizes the procedures under section 4 of the Streamlining
Income-driven, Manageable Payments on Loans for Education Act, but not
later than 2 years after the date of enactment of such Act, the
Secretary shall carry out the procedures under 455(e)(8) with respect
to income-based repayment under this section.''.
SEC. 4. STUDY AND PROCEDURES ON DETERMINING FAMILY SIZE.
(a) In General.--Not later than 1 year after the date of the
enactment of this Act, the Secretary of Education shall--
(1) jointly with the Secretary of the Treasury, conduct a
study, which meets the specifications described in subsection
(b), on the effect of using data from the Internal Revenue
Service on the deduction for personal exemptions provided by
section 151 of the Internal Revenue Code of 1986 for a proxy
for family size in an income-driven repayment plan, and publish
such study in the Federal Register;
(2) use the results of the study conducted under paragraph
(1) to develop procedures for determining family size for the
automatic recertification of income for an income-driven
repayment plan in a manner that minimizes burdens and
unintended harm to borrowers;
(3) publish the procedures developed under paragraph (2) in
the Federal Register; and
(4) after a notice and comment period on such procedures,
use such comments to finalize the procedures.
(b) Specifications.--The study conducted under subsection (a)(1)
shall--
(1) determine how closely such personal exemptions match
the family size that borrowers report on their income-driven
repayment plan request form;
(2) compare the borrower's actual monthly payment amount
with the monthly payment amount borrowers would have using
family size information derived from tax returns; and
(3) use data from more than one year, where possible, to
analyze how much family size changes over time.
(c) Definition.--The term ``income-driven repayment plan'' has the
meaning given the term in section 455(d)(7) of the Higher Education Act
of 1965, as amended by this Act.
SEC. 5. DISCLOSURE OF TAX RETURN INFORMATION TO CARRY OUT INCOME
CONTINGENT REPAYMENT OF STUDENT LOANS.
(a) Repeal of Termination.--Section 6103(l)(13) of the Internal
Revenue Code of 1986 is amended by striking subparagraph (D).
(b) Disclosure to Contractors.--
(1) In general.--Section 6103(l)(13) of such Code, as
amended by subsection (a), is amended by redesignating
subparagraph (C) as subparagraph (D) and by inserting after
subparagraph (B) the following new subparagraph:
``(C) Disclosure to certain contractors.--Officers
and employees of the Department of Education may
disclose the information described in subparagraph (A)
to contractors of the Department of Education to the
extent necessary for the purposes described in
subparagraph (B).''.
(2) Conforming amendments.--
(A) Section 6103(a)(3) of such Code is amended by
inserting ``(13),'' after ``(12),''.
(B) Section 6103(p)(4) of such Code is amended by
inserting ``(13),'' after ``(l)(10),'' each place it
occurs.
(c) Disclosure of Information Regarding Personal Exemptions.--
Section 6103(l)(13)(A) of such Code is amended by striking ``and'' at
the end of clause (ii), by striking the period at the end of clause
(iii) and inserting ``, and'', and by inserting after clause (iii) the
following:
``(iv) the personal exemptions of such
taxpayer provided by section 151.''.
(d) Use of Disclosed Information for Enrollment in Income-Driven
Repayment Plan.--Section 6103(l)(13)(B) of such Code is amended--
(1) by striking ``to the extent necessary in,
establishing'' and inserting ``to the extent necessary in--
``(i) establishing'',
(2) by striking the period at the end and inserting ``,
and'', and
(3) by adding at the end the following new clause:
``(ii) enrolling borrowers who are at least
120 days delinquent on a loan in an income-
driven repayment plan (as defined in section
455(d)(7) of the Higher Education Act of
1965).''.
(e) Use of Disclosed Information for Annual Recertifications.--
(1) In general.--Section 6103(l)(13)(B)(i) of such Code, as
amended by subsection (d), is amended by inserting ``(including
annual recertification)'' after ``applicable student loan''.
(2) Loans to which annual recertification applies.--Section
6103(l)(13)(D), as amended by subsections (a) and (b), is
amended by striking ``and'' at the end of clause (i), by
striking the period at the end of clause (ii) and inserting ``,
and'', and by adding at the end the following new clause:
``(iii) with respect to any annual
recertification referred to in subparagraph
(B)(i), any loan made under part B or D of
title IV of the Higher Education Act of
1965.''.
(f) Effective Date.--The amendments made by this section shall
apply to disclosures made after the date of the enactment of this Act.
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