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July 19, 2007, 12:00 am ET - Amendment SA 2337 proposed by Senator Nelson NE to Amendment SA 2327.
July 19, 2007, 1:47 pm ET - Nelson (NE) Amdt. No. 2337

Full Text of this Amendment

SA 2337. Mr. NELSON of Nebraska (for himself and Mr. Burr) submitted an amendment intended to be proposed to amendment SA 2327 proposed by Mr. Kennedy to the bill H.R. 2669, to provide for reconciliation pursuant to section 601 of the concurrent resolution on the budget for fiscal year 2008; as follows:

Beginning on page 5, strike line 13 and all that follows through page 27, line 18, and insert the following:
``(A) $1,670,000,000 for fiscal year 2008;
``(B) $2,060,000,000 for fiscal year 2009;
``(C) $2,460,000,000 for fiscal year 2010;
``(D) $2,880,000,000 for fiscal year 2011;
``(E) $2,970,000,000 for fiscal year 2012;
``(F) $360,000,000 for fiscal year 2013;
``(G) $3,080,000,000 for fiscal year 2014;
``(H) $3,140,000,000 for fiscal year 2015;
``(I) $3,190,000,000 for fiscal year 2016; and
``(J) $3,270,000,000 for fiscal year 2017.
``(2) AVAILABILITY OF FUNDS.--Funds appropriated under paragraph (1) for a fiscal year shall remain available through the last day of the fiscal year immediately succeeding the fiscal year for which the funds are appropriated.''.
(b) Effective Date.--The amendment made by subsection (a) shall take effect on July 1, 2008.
TITLE II--STUDENT LOAN BENEFITS, TERMS, AND CONDITIONS


SEC. 201. DEFERMENTS.
(a) FISL.--Section 427(a)(2)(C)(iii) (20 U.S.C. 1077(a)(2)(C)(iii)) is amended by striking ``3 years'' and inserting ``6 years''.
(b) Interest Subsidies.--Section 428(b)(1)(M)(iv) (20 U.S.C. 1078(b)(1)(M)(iv)) is amended by striking ``3 years'' and inserting ``6 years''.
(c) Direct Loans.--Section 455(f)(2)(D) (20 U.S.C. 1087e(f)(2)(D)) is amended by striking ``3 years'' and inserting ``6 years''.
(d) Perkins.--Section 464(c)(2)(A)(iv) (20 U.S.C. 1087dd(c)(2)(A)(iv)) is amended by striking ``3 years'' and inserting ``6 years''.
(e) Effective Date and Applicability.--The amendments made by this section shall take effect on July 1, 2008, and shall only apply with respect to the loans made to a borrower of a loan under title IV of the Higher Education Act of 1965 who obtained the borrower's first loan under such title prior to October 1, 2012.
SEC. 202. STUDENT LOAN DEFERMENT FOR CERTAIN MEMBERS OF THE ARMED FORCES.
(a) Federal Family Education Loans.--Section 428(b)(1)(M)(iii) (20 U.S.C. 1078(b)(1)(M)(iii)) is amended--
(1) in the matter preceding subclause (I), by striking ``not in excess of 3 years'';
(2) in subclause (II), by striking ``; or'' and inserting a comma; and
(3) by adding at the end the following:
``and for the 180-day period following the demobilization date for the service described in subclause (I) or (II); or''.
(b) Direct Loans.--Section 455(f)(2)(C) (20 U.S.C. 1087e(f)(2)(C)) is amended--
(1) in the matter preceding clause (i), by striking ``not in excess of 3 years'';
(2) in clause (ii), by striking ``; or'' and inserting a comma; and
(3) by adding at the end the following:
``and for the 180-day period following the demobilization date for the service described in clause (i) or (ii); or''.
(c) Perkins Loans.--Section 464(c)(2)(A)(iii) (20 U.S.C. 1087dd(c)(2)(A)(iii)) is amended--
(1) in the matter preceding subclause (I), by striking ``not in excess of 3 years'';
(2) in subclause (II), by striking the semicolon and inserting a comma; and
(3) by adding at the end the following:
``and for the 180-day period following the demobilization date for the service described in subclause (I) or (II);''.
(d) Applicability.--Section 8007(f) of the Higher Education Reconciliation Act of 2005 (20 U.S.C. 1078 note) is amended by striking ``loans for which'' and all that follows through the period at the end and inserting ``all loans under title IV of the Higher Education Act of 1965.''.
(e) Effective Date.--The amendments made by this section shall take effect on July 1, 2008.
SEC. 203. INCOME-BASED REPAYMENT PLANS.
(a) FFEL.--Section 428 (as amended by sections 201(b) and 202(a)) (20 U.S.C. 1078) is further amended--
(1) in subsection (b)--
(A) in paragraph (1)--
(i) in subparagraph (D), by striking ``income contingent'' and inserting ``income-based''; and
(ii) in subparagraph (E)(i), by striking ``income-sensitive'' and inserting ``income-based''; and
(B) by striking clause (iii) of paragraph (9)(A) and inserting the following:
``(iii) an income-based repayment plan, with parallel terms, conditions, and benefits as the income-based repayment plan described in subsections (e) and (d)(1)(D) of section 455, except that--
``(I) the plan described in this clause shall not be available to a borrower of an excepted PLUS loan (as defined in section 455(e)(10)) or of a loan made under 428C that includes an excepted PLUS loan;
``(II) in lieu of the process of obtaining Federal income tax returns and information from the Internal Revenue Service, as described in section 455(e)(1), the borrower shall provide the lender with a copy of the Federal income tax return and return information for the borrower (and, if applicable, the borrower's spouse) for the purposes described in section 455(e)(1), and the lender shall determine the repayment obligation on the loan, in accordance with the procedures developed by the Secretary;
``(III) in lieu of the requirements of section 455(e)(3), in the case of a borrower who chooses to repay a loan made, insured, or guaranteed under this part pursuant to income-based repayment and for whom the adjusted gross income is unavailable or does not reasonably reflect the borrower's current income, the borrower shall provide the lender with other documentation of income that the Secretary has determined is satisfactory for similar borrowers of loans made under part D;
``(IV) the Secretary shall pay any interest due and not paid for under the repayment schedule described in section 455(e)(4) for a loan made, insured, or guaranteed under this part in the same manner as the Secretary pays any such interest under section 455(e)(6) for a Federal Direct Stafford Loan;
``(V) the Secretary shall assume the obligation to repay an outstanding balance of principal and interest due on all loans made, insured, or guaranteed under this part (other than an excepted PLUS Loan or a loan under section 428C that includes an excepted PLUS loan), for a borrower who satisfies the requirements of subparagraphs (A) and (B) of section 455(e)(7), in the same manner as the Secretary cancels such outstanding balance under section 455(e)(7); and
``(VI) in lieu of the notification requirements under section 455(e)(8), the lender shall notify a borrower of a loan made, insured, or guaranteed under this part who chooses to repay such loan pursuant to income-based repayment of the terms and conditions of such plan, in accordance with the procedures established by the Secretary, including notification that--
``(aa) the borrower shall be responsible for providing the lender with the information necessary for documentation of the borrower's income, including income information for the borrower's spouse (as applicable); and
``(bb) if the borrower considers that special circumstances warrant an adjustment, as described in section 455(e)(8)(B), the borrower may contact the lender, and the lender shall determine whether such adjustment is appropriate, in accordance with the criteria established by the Secretary; and'';
(2) in subsection (e)--
(A) in the subsection heading, by striking ``Income-Sensitive'' and inserting ``Income-Based'';
(B) in paragraph (1)--
(i) by striking ``income-sensitive repayment'' and inserting ``income-based repayment''; and
(ii) by inserting ``and for the public service loan forgiveness program under section 455(m), in accordance with section 428C(b)(5)'' before the semicolon; and
(C) in paragraphs (2) and (3), by striking ``income-sensitive'' each place the term occurs and inserting ``income-based''; and
(3) in subsection (m)--
(A) in the subsection heading, by striking ``Income Contingent'' and inserting ``Income-Based'';
(B) in paragraph (1), by striking ``income contingent repayment plan'' and all that follows through the period at the end and inserting ``income-based repayment plan as described in subsection (b)(9)(A)(iii) and section 455(d)(1)(D).''; and
(C) in the paragraph heading of paragraph (2), by striking ``INCOME CONTINGENT'' and inserting ``INCOME-BASED''.
(b) Consolidation Loans.--Section 428C (20 U.S.C. 1078-3) is amended--
(1) in subsection (a)(3)(B)(i)(V), by striking ``for the purposes of obtaining an income contingent repayment plan,'' and inserting ``for the purpose of using the public service loan forgiveness program under section 455(m),'';
(2) in subsection (b)(5)--
(A) in the first sentence, by striking ``, or is unable to obtain a consolidation loan with income-sensitive repayment terms acceptable to the borrower from such a lender,'' and inserting ``, or chooses to obtain a consolidation loan for the purposes of using the public service loan forgiveness program offered under section 455(m),''; and
(B) in the second sentence, by striking ``income contingent repayment under part D of this title'' and inserting ``income-based repayment''; and
(3) in subsection (c)--
(A) in paragraph (2)(A)--
(i) in the first sentence, by striking ``of graduated or income-sensitive repayment schedules, established by the lender in accordance with the regulations of the Secretary.'' and inserting ``of graduated repayment schedules, established by the lender in accordance with the regulations of the Secretary, and income-based repayment schedules, established pursuant to regulations by the Secretary.''; and
(ii) in the second sentence, by striking ``Except as required'' and all that follows through ``subsection (b)(5),'' and inserting ``Except as required by such income-based repayment schedules,''; and
(B) in paragraph (3)(B), by striking ``income contingent repayment offered by the Secretary under subsection (b)(5)'' and inserting ``income-based repayment''.
(c) Direct Loans.--Section 455 (as amended by sections 201(c) and 202(b)) (20 U.S.C. 1087e) is further amended--
(1) in subsection (d)--
(A) in paragraph (1)(D)--
(i) by striking ``income contingent repayment plan'' and inserting ``income-based repayment plan''; and
(ii) by striking ``a Federal Direct PLUS loan'' and inserting ``an excepted PLUS loan or any Federal Direct Consolidation Loan that includes an excepted PLUS loan (as defined in subsection (e)(10))''; and
(B) in paragraph (5)(B), by striking ``income contingent'' and inserting ``income-based''; and
(2) in subsection (e)--
(A) in the subsection heading, by striking ``Income Contingent'' and inserting ``Income-Based'';
(B) in paragraphs (1), (2), and (3), by striking ``income contingent'' each place the term appears and inserting ``income-based'';
(C) in paragraph (4)--
(i) by striking ``Income contingent'' and inserting ``Income-based''; and
(ii) by striking ``Secretary.'' and inserting ``Secretary, except that the monthly required payment under such schedule shall not exceed 15 percent of the result obtained by calculating the amount by which--
``(A) the borrower's adjusted gross income; exceeds
``(B) 150 percent of the poverty line applicable to the borrower's family size, as determined under section 673(2) of the Community Service Block Grant Act,
divided by 12.'';
(D) in paragraph (5), by striking ``income contingent'' and inserting ``income-based'';
(E) by redesignating paragraph (6) as paragraph (8);
(F) by inserting after paragraph (5) the following:
``(6) TREATMENT OF INTEREST.--In the case of a Federal Direct Stafford Loan, any interest due and not paid for under paragraph (2) shall be paid by the Secretary.
``(7) LOAN FORGIVENESS.--The Secretary shall cancel the obligation to repay an outstanding balance of principal and interest due on all loans made under this part, or assume the obligation to repay an outstanding balance of principal and interest due on all loans made, insured, or guaranteed under part B, (other than an excepted PLUS Loan, or any Federal Direct Consolidation Loan or loan under section 428C that includes an excepted PLUS loan) to a borrower who--
``(A) makes the election under this subsection or under section 428(b)(9)(A)(iii); and
``(B) for a period of time prescribed by the Secretary not to exceed 25 years (including any period during which the borrower is in deferment due to an economic hardship described in section 435(o)), meets 1 of the following requirements with respect to each payment made during such period:
``(i) Has made the payment under this subsection or section 428(b)(9)(A)(iii).
``(ii) Has made the payment under a standard repayment plan under section 428(b)(9)(A)(i) or 455(d)(1)(A).
``(iii) Has made a payment that counted toward the maximum repayment period under income-sensitive repayment under section 428(b)(9)(A)(iii) or income contingent repayment under section 455(d)(1)(D), as each such section was in effect on June 30, 2008.
``(iv) Has made a reduced payment of not less than the amount required under subsection (e), pursuant to a forbearance agreement under section 428(c)(3)(A)(i) for a borrower described in 428(c)(3)(A)(i)(II).'';
(G) in the matter preceding subparagraph (A) of paragraph (8) (as redesignated by subparagraph (E)), by striking ``income contingent'' and inserting ``income-based''; and
(H) by adding at the end the following:
``(9) RETURN TO STANDARD REPAYMENT.--A borrower who is repaying a loan made under this part pursuant to income-based repayment may choose, at any time, to terminate repayment pursuant to income-based repayment and repay such loan under the standard repayment plan.
``(10) DEFINITION OF EXCEPTED PLUS LOAN.--In this subsection, the term `excepted PLUS loan' means a Federal Direct PLUS loan or a loan under section 428B that is made, insured, or guaranteed on behalf of a dependent student.''.
(d) Conforming Amendments and Technical Corrections.--The Act (20 U.S.C. 1001 et seq.) is further amended--
(1) in section 427(a)(2)(H) (20 U.S.C. 1077(a)(2)(H))--
(A) by striking ``or income-sensitive''; and
(B) by inserting ``or income-based repayment schedule established pursuant to regulations by the Secretary'' before the semicolon at the end; and
(2) in section 455(d)(1)(C) (20 U.S.C. 1087e(d)(1)(C)), by striking ``428(b)(9)(A)(v)'' and inserting ``428(b)(9)(A)(iv)''.
(e) Transition Provision.--A student who, as of June 30, 2008, elects to repay a loan under part B or part D of the Higher Education Act of 1965 (20 U.S.C. 1071 et seq., 1087a et seq.) through an income-sensitive repayment plan under section 428(b)(9)(A)(iii) of such Act (20 U.S.C. 1078(b)(9)(A)(iii)) or an income contingent repayment plan under section 455(d)(1)(D) of such Act (20 U.S.C. 1087e(d)(1)(D)) (as each such section was in effect on the day before the date of enactment of
this Act) shall have the option to continue repayment under such section (as such section was in effect on such day), or may elect, beginning on July 1, 2008, to use the income-based repayment plan under section 428(b)(9)(A)(iii) or 455(d)(1)(D) (as applicable) of the Higher Education Act of 1965, as amended by this section.
(f) Effective Date and Applicability.--The amendments made by this section shall take effect on July 1, 2008, and shall only apply with respect to a borrower of a loan under title IV of the Higher Education Act of 1965 who obtained the borrower's first loan under such title prior to October 1, 2012.
TITLE III--FEDERAL FAMILY EDUCATION LOAN PROGRAM


SEC. 301. REDUCTION OF LENDER INSURANCE PERCENTAGE.
(a) Amendment.--Section 428(b)(1)(G) (20 U.S.C. 1078(b)(1)(G)) is amended--
(1) in the matter preceding clause (i), by striking ``insures 98 percent'' and inserting ``insures 97 percent'';
(2) in clause (i), by inserting ``and'' after the semicolon;
(3) by striking clause (ii); and
(4) by redesignating clause (iii) as clause (ii).
(b) Effective Date.--The amendment made by subsection (a) shall take effect with respect to loans made on or after October 1, 2007.
SEC. 302. GUARANTY AGENCY COLLECTION RETENTION.
Clause (ii) of section 428(c)(6)(A) (20 U.S.C. 1078(c)(6)(A)(ii)) is amended to read as follows:
``(ii) an amount equal to 24 percent of such payments for use in accordance with section 422B, except that--
``(I) beginning October 1, 2003 and ending September 30, 2007, this subparagraph shall be applied by substituting `23 percent' for `24 percent'; and
``(II) beginning October 1, 2007, this subparagraph shall be applied by substituting `16 percent' for `24 percent'.''.
SEC. 303. ELIMINATION OF EXCEPTIONAL PERFORMER STATUS FOR LENDERS.
(a) Elimination of Status.--Part B of title IV (20 U.S.C. 1071 et seq.) is amended by striking section 428I (20 U.S.C. 1078-9).
(b) Conforming Amendments.--Part B of title IV is further amended--
(1) in section 428(c)(1) (20 U.S.C. 1078(c)(1))--
(A) by striking subparagraph (D); and
(B) by redesignating subparagraphs (E) through (H) as subparagraphs (D) through (G), respectively; and
(2) in section 438(b)(5) (20 U.S.C. 1087-1(b)(5)), by striking the matter following subparagraph (B).
(c) Effective Date.--The amendments made by subsections (a) and (b) shall take effect on October 1, 2007, except that section 428I of the Higher Education Act of 1965 (as in effect on the day before the date of enactment of this Act) shall apply to eligible lenders that received a designation under subsection (a) of such section prior to October 1, 2007, for the remainder of the year for which the designation was made.
SEC. 304. DEFINITIONS.
(a) Amendments.--Section 435(o)(1) (20 U.S.C. 1085(o)(1)) is amended--
(1) in subparagraph (A)(ii), by striking ``100 percent of the poverty line for a family of 2'' and inserting ``150 percent of the poverty line applicable to the borrower's family size''; and
(2) in subparagraph (B)(ii), by striking ``to a family of two'' and inserting ``to the borrower's family size''.
(b) Applicability.--The amendment made by subsection (a) shall only apply with respect to any borrower of a loan under title IV of the Higher Education Act of 1965 who obtained the borrower's first loan under such title prior to October 1, 2012.
SEC. 305. SPECIAL ALLOWANCES.
(a) Reduction of Lender Special Allowance Payments.--Section 438(b)(2)(I) (20 U.S.C. 1087-1(b)(2)(I)) is amended--
(1) in clause (i), by striking ``(iii), and (iv)'' and inserting ``(iii), (iv), and (vi)''; and
(2) by adding at the end the following:
``(vi) REDUCTION FOR LOANS DISBURSED ON OR AFTER OCTOBER 1, 2007.--With respect to a loan on which the applicable interest rate is determined under section 427A(l) and for which the first disbursement of principal is made on or after October 1, 2007, the special allowance payment computed pursuant to this subparagraph shall be computed--
``(I) by substituting `1.39 percent' for `1.74 percent' in clause (ii);
``(II) by substituting `1.99 percent' for `2.34 percent' each place it appears in this subparagraph;
``(III) by substituting `1.99 percent' for `2.64 percent' in clause (iii); and
``(IV) by substituting `2.29 percent' for `2.64 percent' in clause (iv).''.


(As printed in the Congressional Record for the Senate on Jul 19, 2007.)