(a) Short title.—This Act may be cited as the “Helping Individuals Get a Higher Education while Reducing Education Debt Act” or the “HIGHER ED Act”.

(b) Table of contents.—The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

(a) Amendments.—Section 455(a)(3) of the Higher Education Act of 1965 (20 U.S.C. 1087e(a)(3)) is amended—

(1) in the paragraph heading, by inserting “Temporary” before “Termination”; and

(2) in subparagraph (A), in the matter preceding clause (i), by inserting “, and ending on or before June 30, 2018” after “2012”.

(b) Inapplicability of rulemaking requirements.—Sections 482(c) and 492 of the Higher Education Act of 1965 (20 U.S.C. 1089(c); 1098a) shall not apply to the regulations under this section.

(a) Exception To discharge.—Section 523(a) of title 11, United States Code, is amended—

(1) by striking paragraph (8); and

(2) by redesignating paragraphs (9) through (14B) as paragraphs (8) through (14A), respectively.

(b) Conforming amendments.—Title 11, United States Code, is amended—

(1) in section 704(c)(1)(C)(iv)(I) by striking “(14A)” and inserting “(14)”;

(2) in section 1106(c)(1)(C)(iv)(I) by striking “(14A)” and inserting “(14)”;

(3) in section 1202(c)(1)(C)(iv)(I) by striking “(14A)” and inserting “(14)”; and

(4) in section 1328(a)(2) by striking “(8), or (9)” and inserting “or (8)”.

(c) Effective date; application of amendments.—

(1) EFFECTIVE DATE.—Except as provided in subsection (b), this section and the amendments made by this section shall take effect on the date of the enactment of this Act.

(2) APPLICATION OF AMENDMENTS.—The amendments made by this section shall apply only with respect to cases commenced under title 11 of the United States Code on or after the date of the enactment of this Act.

Section 451(a) of the Higher Education Act of 1965 (20 U.S.C. 1087a(a)) is amended—

(1) by striking “and (2)” and inserting “(2)”; and

(2) by inserting “; and (3) to make loans under section 460A and section 460B” after “section 459A”.

Part D of title IV of the Higher Education Act of 1965 (20 U.S.C. 1087a et seq.) is amended by adding at the end the following:

Section 455(m) of the Higher Education Act of 1965 (20 U.S.C. 1087e(m)) is amended—

(1) by redesignating paragraphs (3) and (4) as paragraphs (4) and (5), respectively;

(2) by inserting after paragraph (2) the following:

“(3) SPECIAL RULES FOR SECTION 460A LOANS.—

“(A) REFINANCED FEDERAL DIRECT LOANS.—Notwithstanding paragraph (1), in determining the number of monthly payments that meet the requirements of such paragraph for an eligible Federal Direct Loan refinanced under section 460A that was originally a loan under this part, the Secretary shall include all monthly payments made on the original loan that meet the requirements of such paragraph.

“(B) REFINANCED FFEL LOANS.—In the case of an eligible Federal Direct Loan refinanced under section 460A that was originally a loan under part B, only monthly payments made after the date on which the loan was refinanced may be included for purposes of paragraph (1).”; and

(3) in paragraph (4)(A) (as redesignated by paragraph (1))—

(A) by inserting “(including any Federal Direct Stafford Loan, Federal Direct PLUS Loan, Federal Direct Unsubsidized Stafford Loan, or Federal Direct Consolidation Loan refinanced under section 460A)” before the period at the end;

(B) by striking “The term” and inserting the following:

“(i) IN GENERAL.—The term”; and

(C) by adding at the end the following:

“(ii) TREATMENT OF CERTAIN CONSOLIDATION LOAN PAYMENTS.—In a case in which a borrower makes a monthly payment under paragraph (1)(A) on a Federal Direct Consolidation Loan that was used to repay an eligible Federal Direct Loan described in clause (i) for which at least one monthly payment has been made under paragraph (1)(A) prior to the consolidation, the monthly payment on such Federal Direct Consolidation Loan shall be treated as a monthly payment on such eligible Federal Direct Loan.”.

Section 493C of the Higher Education Act of 1965 (20 U.S.C. 1098e) is amended by adding at the end the following:

“(f) Special rule for refinanced loans.—

“(1) REFINANCED FEDERAL DIRECT AND FFEL LOANS.—In calculating the period of time during which a borrower of a loan that is refinanced under section 460A has made monthly payments for purposes of subsection (b)(7), the Secretary shall deem the period to include all monthly payments made for the original loan, and all monthly payments made for the refinanced loan, that otherwise meet the requirements of this section.

“(2) FEDERAL DIRECT REFINANCED PRIVATE LOANS.—In calculating the period of time during which a borrower of a Federal Direct Refinanced Private Loan under section 460B has made monthly payments for purposes of subsection (b)(7), the Secretary shall include only payments—

“(A) that are made after the date of the issuance of the Federal Direct Refinanced Private Loan; and

“(B) that otherwise meet the requirements of this section.”.

Section 455(m)(3)(B)(ii) of the Higher Education Act of 1965 (20 U.S.C. 1087e(m)(3)(B)(ii)) is amended—

(1) by striking “teaching as” and inserting the following: “teaching—

“(I) as”;

(2) by striking “, foreign language faculty, and part-time faculty at community colleges), as determined by the Secretary.” and inserting “and foreign language faculty), as determined by the Secretary; or”; and

(3) by adding at the end the following:

“(II) as a part-time faculty member or instructor who—

“(aa) teaches not less than 1 course at an institution of higher education (as defined in section 101(a)), a postsecondary vocational institution (as defined in section 102(c)), or a Tribal College or University (as defined in section 316(b)); and

“(bb) is not employed on a full-time basis by any other employer.”.

Section 493C of the Higher Education Act of 1965 (20 U.S.C. 1098e) is amended—

(1) in subsection (b)—

(A) in paragraph (8), by striking “and” after the semicolon;

(B) in paragraph (9), by striking the period at the end and inserting “; and”; and

(C) by adding at the end the following:

“(10) a borrower who is repaying a loan made under part B or D pursuant to this section may repay such loan in full at any time without penalty.”; and

(2) by adding at the end the following:

“(f) Income-Based repayment for new loans on and after July 1, 2018, and for borrowers who enter IBR after July 1, 2018.—

“(1) IN GENERAL.—The income-based repayment plan shall be carried out in accordance with this section, except as otherwise specified in this subsection (including through the special terms described in paragraph (2))—

“(A) with respect to any loan issued on or after July 1, 2018, if such borrower elects the income-based repayment plan for that loan; and

“(B) with respect to any borrower who is repaying a loan made, insured, or guaranteed under part B or D, if such borrower elects to repay the loan under the income-based repayment plan on or after July 1, 2018.

“(2) SPECIAL TERMS.—Notwithstanding any other provision of this section, with respect to a loan described under paragraph (1), the following terms shall apply to the income-based repayment plan:

“(A) (i) Notwithstanding subsection (a)(3)(B), the repayment amount under this subsection shall be an amount equal to 10 percent of the result obtained by calculating, on at least an annual basis, the amount by which—

“(I) the borrower's, and the borrower's spouse's (if applicable), adjusted gross income; exceeds

“(II) the applicable percentage of the poverty line in accordance with clause (ii) that is 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)).

“(ii) For purposes of clause (i), the term ‘applicable percentage’ means 150 percent reduced by 1 percentage point for each $1,000 by which the borrower’s adjusted gross income exceeds $100,000.

“(B) A borrower may elect—

“(i) during any period during which the borrower’s (and the borrower’s spouse, if applicable) adjusted gross income is equal to or less than 225 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)), to have the borrower’s aggregate monthly payment for all such loans equal to $0; and

“(ii) during any period during which the borrower’s (and the borrower’s spouse, applicable) adjusted gross income exceeds 225 percent of such poverty line, to have the borrower’s aggregate monthly payment for all such loans not exceed, the lesser of—

“(I) the result described in subparagraph (A) divided by 12; or

“(II) the monthly amount calculated under section 455(d)(1)(A), based on a 10-year repayment period, when the borrower first made the election described in this subsection.

“(C) With respect to any loan for which payments may be made under subparagraph (B), be paid, or be treated as if no interest has accrued, by the Secretary—

“(i) for any period described in subparagraph (B)(i); and

“(ii) for the 6-month period after the date the borrower ceases to carry at least one-half the normal full-time academic workload at an institution of higher education, as determined by the institution, and during which the borrower is not earning any income.

“(D) Subsection (b)(7)(B) shall be applied by substituting ‘20 years’ for ‘25 years’.

“(E) A borrower of such a loan shall not be required to have a partial financial hardship and may elect, and remain enrolled in, the income-based repayment plan under this subsection regardless of income level.

“(F) Subparagraph (A) of subsection (b)(6) shall not apply and a borrower's monthly payment shall be determined in accordance with subparagraph (A) divided by 12, which may exceed the monthly repayment amount under a standard 10-year repayment plan.

“(G) Subparagraph (B) of subsection (b)(3) shall not apply.

“(3) ADDITIONAL SPECIAL TERMS FOR CERTAIN BORROWERS.—A borrower described in paragraph (1)(B)—

“(A) may choose to retain the repayment plan in which the borrower is enrolled on June 30, 2018;

“(B) may elect to—

“(i) leave the repayment plan described in subparagraph (A) and enter the income-based repayment plan under this subsection;

“(ii) leave the repayment plan described in subparagraph (A) and enter a standard 10-year repayment plan under section 455(d)(A)(A); or

“(iii) not more than once per calendar year, switch between the repayment plans described in clauses (i) and (ii);

“(C) after electing to leave a repayment plan other than an income-based repayment plan described under this subsection or a standard 10-year repayment plan under section 455(d)(A)(A), shall not be permitted to re-elect a repayment plan that is not an income-based repayment plan under this subsection or such standard 10-year repayment plan; and

“(D) shall retain, for purposes of repayment or cancellation of any outstanding balance of principal and interest due on a loan (as described in subsection (b)(7)) any years of repayment under another income-based or income-contingent repayment plan under this title.

“(4) CAP ON INTEREST ACCRUAL.—Notwithstanding any other provision of this Act, the total amount of interest that accrues during a borrower's grace period and the time that a borrower is in repayment under this subsection shall not exceed 50 percent of the original principal amount of the loan.”.

(a) Effective date; Rulemaking regarding termination of certain repayment plans.—

(1) EFFECTIVE DATE.—The amendments made by this section shall take effect on July 1, 2018.

(2) REGULATIONS.—Before the effective date described in paragraph (1), the Secretary of Education shall carry out a plan to end all eligibility for repayment plans other than a standard repayment plan under section 428(b)(9)(A)(i) or 455(d)(1)(A) with a repayment period of 10 years and an income-based repayment plan described under section 493C(f) for loans made under part B or D of title IV of the Higher Education Act of 1965, unless the borrower is enrolled in another repayment plan before such effective date, in accordance with the amendments made by this Act.

(b) Changes to current law.—

(1) Section 428(b) of the Higher Education Act of 1965 (20 U.S.C. 1078(b)) is amended—

(A) in paragraph (1)—

(i) in subparagraph (D)—

(I) in clause (ii), by striking “may annually change the selection of a repayment plan under this part,” and inserting “may at any time after July 1, 2018, and not more frequently than once per calendar year thereafter, change the selection of a repayment plan under this part to one of the 2 repayment plans described in paragraph (9)(C),”; and

(II) in clause (iii), by striking “be subject to income-contingent repayment in accordance with subsection (m);” and inserting “be subject to income-based repayment in accordance with section 493C(f);”; and

(ii) in subparagraph (E)(i), by striking “the option of repaying the loan in accordance with a standard, graduated, income-sensitive, or extended repayment schedule (as described in paragraph (9)) established by the lender in accordance with regulations of the Secretary; and” and inserting “the option of repaying the loan in accordance with a repayment plan described in paragraph (9)(C) established by the lender in accordance with regulations of the Secretary; and”; and

(B) in paragraph (9), by adding at the end the following:

“(C) SELECTION OF REPAYMENT PLANS ON AND AFTER JULY 1, 2018.—

“(i) OPPORTUNITY TO CHANGE REPAYMENT PLANS.—Notwithstanding any other provision of this paragraph, or any other provision of law, and in accordance with regulations, beginning on July 1, 2018, the lender shall offer a borrower of a loan made, insured, or guaranteed under this part the opportunity to change repayment plans not more than once per calendar year, and to enroll in one of the following repayment plans:

“(I) A standard repayment plan under section 428(b)(9)(A)(i) with a repayment period of 10 years.

“(II) The income-based repayment plan under section 493C(f).”; and

(2) in section 455(d)—

(A) by redesignating paragraphs (2) through (5) as paragraphs (3) through (6), respectively; and

(B) by inserting after paragraph (1), the following:

“(2) DESIGN AND SELECTION ON AND AFTER JULY 1, 2018.—

“(A) IN GENERAL.—Notwithstanding paragraph (1), for the borrower of a loan made on or after July 1, 2018, and for other borrowers subject to paragraph (7), the Secretary shall offer a borrower of a loan made under this part 2 plans for repayment of such loan, including principal and interest on the loan. The borrower shall be entitled to accelerate, without penalty, repayment on the borrower's loans under this part. The borrower may choose—

“(i) a standard repayment plan under section 455(d)(1)(A) with a repayment period of 10 years; or

“(ii) the income-based repayment plan under section 493C(f).

“(B) SELECTION BY THE SECRETARY.—If a borrower of a loan made under this part on or after July 1, 2018, does not select a repayment plan described in subparagraph (A), the Secretary may provide the borrower with a standard repayment plan under section 455(d)(1)(A) with a repayment period of 10 years.

“(C) CHANGES IN SELECTIONS.—Beginning on July 1, 2018, a borrower of a loan made under this part may change the borrower's selection of a repayment plan in accordance with paragraph (7) and under such terms and conditions as may be established by the Secretary.

“(D) BORROWER IN DEFAULT.—Beginning on July 1, 2018, the Secretary may require any borrower who has defaulted on a loan made under this part to—

“(i) pay all reasonable collection costs associated with such loan; and

“(ii) repay the loan pursuant to an income-based repayment plan under section 493C(f).”; and

(3) by adding at the end the following:

“(7) BORROWERS OF LOANS MADE BEFORE JULY 1, 2018.—A borrower who is in repayment on a loan made under part B or part D before July 1, 2018—

“(A) may choose to retain the repayment plan that the borrower was enrolled in on the day before such date;

“(B) may elect to—

“(i) enter the income-based repayment plan under section 493C(f);

“(ii) enter a standard repayment plan under section 455(d)(1)(A) with a repayment period of 10 years; or

“(iii) switch between the repayment plans described in clauses (i) and (ii) not more than once during a calendar year;

“(C) after electing to leave a repayment plan other than an income-based repayment plan described under this subsection or a standard repayment plan under section 455(d)(1)(A), shall not be permitted to re-elect a repayment plan that is not an income-based repayment plan under this subsection or a standard repayment plan under section 455(d)(1)(A); and

“(D) shall retain, for purposes of repayment or cancellation of any outstanding balance of principal and interest due on a loan (as described in section 493C(b)(7)) any years of repayment under another income-based or income-contingent repayment plan under this title.”.

(a) Income-Contingent repayment.—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:

“(8) NOTIFICATION AND AUTOMATIC ENROLLMENT PROCEDURES FOR BORROWERS WHO ARE DELINQUENT ON LOANS.—

“(A) AUTHORITY TO OBTAIN INCOME INFORMATION.—

“(i) IN GENERAL.—In the case of any borrower who is at least 60 days delinquent on a covered loan, the Secretary may obtain such information as is reasonably necessary regarding the income and family size of the borrower (and the borrower's spouse, if applicable).

“(ii) AVAILABILITY OF RETURNS AND RETURN INFORMATION.—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.

“(B) BORROWER NOTIFICATION.—With respect to each borrower of a covered loan who is at least 60 days delinquent on such loan and who has not been subject to the procedures under this paragraph for such loan in the preceding 120 days, the Secretary shall, 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 at least 1 covered loan, and a description of all delinquent covered loans, nondelinquent covered loans, and noncovered loans of the borrower.

“(ii) A brief description of the repayment plans for which the borrower is eligible and the covered loans and noncovered loans of the borrower that may be eligible for such plans, based on information available to the Secretary.

“(iii) Clear and simple instructions on how to select the repayment plans.

“(iv) The amount of monthly payments for the covered and noncovered loans under the repayment plans for which the borrower is eligible, based on information available to the Secretary, including, if the income information of the borrower is available to the Secretary under subparagraph (A)—

“(I) the amount of the monthly payment under each income-driven repayment plan for which the borrower is eligible for the borrower's covered and noncovered loans, based on such income information; and

“(II) the income, family size, tax filing status, and tax year information on which each monthly payment is based.

“(v) An explanation that in the case of a borrower for whom adjusted gross income is unavailable—

“(I) if the borrower selects to repay the covered loans of such borrower 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; and

“(II) if the borrower selects to repay such loans 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 (C) with respect to such borrower, if—

“(I) the borrower is 120 days delinquent on one or more covered loans and has not selected a new repayment plan for the covered loans of the borrower; and

“(II) in the case of such a borrower whose repayment plan for the covered loans of the borrower is not an income-driven repayment plan, the monthly payments under such repayment plan are higher than such monthly payments would be under an income-driven repayment plan for such loans.

“(vii) Instructions on updating the information of the borrower obtained under subparagraph (A).

“(C) SECRETARY'S INITIAL SELECTION OF PLAN.—With respect to each borrower described in subparagraph (B) who has a repayment plan for the covered loans of the borrower that meets the requirements of clause (vi)(II) of subparagraph (B) and has not selected a new repayment plan for such loans in accordance with the notice received under such subparagraph, and who is at least 120 days delinquent on such a loan, the Secretary shall, as soon as practicable—

“(i) in a case in which any of the borrower's covered loans are eligible for an income-driven repayment plan—

“(I) (aa) provide the borrower with the income-driven repayment plan that requires the lowest monthly payment amount for each covered loan of the borrower, compared to any other such plan for which the borrower is eligible; or

“(bb) if more than one income-driven repayment plan would offer the borrower the same lowest monthly payment amount, provide the borrower with the income-driven repayment plan that has the most favorable terms for the borrower;

“(II) if the plan selected under subclause (I) is not the income-driven repayment plan that would have the lowest monthly payment amount if the borrower were eligible for such plan for the borrower’s covered loans and noncovered loans, notify the borrower of the actions, if any, the borrower may take 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 none of the borrower’s covered loans are eligible for an income-driven repayment plan, notify the borrower of the actions, if any, the borrower may take for such loans to become eligible for such a plan.

“(D) SECRETARY'S ADDITIONAL SELECTION OF PLAN.—

“(i) IN GENERAL.—With respect to each borrower of a covered loan 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 described in clause (ii), the Secretary shall, as soon as practicable after such period, carry out the procedures described in clauses (i) and (ii) of subparagraph (C) for the covered loans of the borrower, if such procedures would result in lower monthly repayment amounts on such loan.

“(ii) DESCRIPTION OF PERIOD.—The duration of the period described in clause (i) shall be the amount of time that the Secretary determines is sufficient to indicate that the borrower may benefit from repaying such loan under a new repayment plan, but in no case shall such period be less than 60 days.

“(E) OPT-OUT.—A borrower of a covered loan shall have the right to opt-out of the procedures under this paragraph.

“(9) DEFINITIONS.—In this subsection:

“(A) COVERED LOAN.—The term ‘covered loan’ means—

“(i) a loan made under this part;

“(ii) a loan purchased under section 459A; or

“(iii) a loan that has been assigned to the Secretary under section 428(c)(8) or part E.

“(B) INCOME-DRIVEN REPAYMENT PLAN.—The term ‘income-driven repayment plan’ means—

“(i) in the case of a covered loan made under this part, purchased under section 459A, or assigned to the Secretary before July 1, 2018, a plan described in subparagraph (D) or (E) of paragraph (1); and

“(ii) in the case of a covered loan made under this part, purchased under section 459A, or assigned to the Secretary before July 1, 2018, the income-based repayment plan under section 493C(f).

“(C) NONCOVERED LOAN.—The term ‘noncovered loan’ means a loan made, insured, or guaranteed under this title that is not a covered loan.”.

(b) Changing plans.—Section 493C(b)(8) of the Higher Education Act of 1965 (20 U.S.C. 1098e(b)(8)) is amended to read as follows:

“(8) a borrower who is repaying a loan made, insured, or guaranteed under part B or D pursuant to income-based repayment may elect, at any time, to terminate repayment pursuant to income-based repayment and repay such loan under any repayment plan for which the loan is eligible in accordance with the requirements of part B or part D, respectively; and”.

(c) Effective date; Application.—

(1) AUTOMATIC ENROLLMENT.—The amendments made by subsection (a) shall—

(A) take effect as soon as the Secretary of Education determines practicable after the Secretary finalizes the procedures under section 405, but not later than 2 years after the date of enactment of this Act; and

(B) apply to all borrowers of covered loans (as defined in section 455(d)(9) of the Higher Education Act of 1965, as added by subsection (a)).

(2) CHANGING PLANS.—The amendment made by subsection (b) shall take effect on the date of enactment of this Act.

(a) Income-Contingent repayment.—Section 455(e) of the Higher Education Act of 1965 (20 U.S.C. 1087e(e)) is amended—

(1) in paragraph (3)—

(A) by striking “does not reasonably reflect the borrower's current income” and inserting “whose income has decreased relative to the adjusted gross income available to the Secretary”; and

(B) by inserting “, consistent with the procedures established under paragraph (8)(B)(iv)” before the period at the end; and

(2) by adding at the end the following:

“(8) AUTOMATIC RECERTIFICATION.—

“(A) DEFINITION.—In this paragraph, the term ‘covered loan’ has the meaning given the term in subsection (d)(9).

“(B) IN GENERAL.—Beginning as soon as the Secretary determines practicable after the Secretary finalizes the procedures under section 405 of the Helping Individuals Get a Higher Education while Reducing Education Debt Act, but not later than 2 years after the date of enactment of such Act, the Secretary shall establish and implement, with respect to any borrower described in subparagraph (C), procedures to—

“(i) obtain (for each year of 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 405 of the Helping Individuals Get a Higher Education while Reducing Education Debt Act, subject to clause (ii);

“(ii) allow the borrower, at any time, to opt-out of clause (i) and prevent the Secretary from obtaining information under such clause without further action by the borrower;

“(iii) provide the borrower with an opportunity to update the information obtained under clause (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—

“(I) if the borrower has selected to repay the covered loans of such borrower pursuant to an income-contingent 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 has selected to repay such loans pursuant to an income-contingent repayment 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.

“(C) APPLICABILITY.—Subparagraph (B) shall apply to each borrower of a covered loan who, on or after the date on which the Secretary establishes procedures under such subparagraph—

“(i) selects, or for whom the Secretary selects under subparagraph (C) or (D) of paragraph (8) of subsection (d), or section 428(m)(1), an income-contingent repayment plan; or

“(ii) recertifies income and family size under such plan.

“(D) AVAILABILITY OF 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 (B)(i) only to the extent authorized by section 6103(l)(13) of such Code.

“(E) 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.”.

(b) Income-Based repayment.—Section 493C(c) of the Higher Education Act of 1965 (20 U.S.C. 1098e(c)) is amended—

(1) by striking “The Secretary shall establish” and inserting the following:

“(1) IN GENERAL.—The Secretary shall establish”;

(2) by striking “The Secretary shall consider” and inserting the following:

“(2) PROCEDURES FOR ELIGIBILITY.—The Secretary shall—

“(A) consider”; and

(3) by striking “428C(b)(1)(E).” and inserting the following: “428C(b)(1)(E); and

“(B) beginning as soon as the Secretary determines practicable after the Secretary finalizes the procedures under section 405 of the Helping Individuals Get a Higher Education while Reducing Education Debt Act, but not later than 2 years after the date of enactment of such Act, carry out, with respect to borrowers of any covered loan (as defined in section 455(d)(9)), procedures for income-based repayment plans that are equivalent to the procedures carried out under section 455(e)(8) with respect to income-contingent repayment plans.”.

(a) In general.—Not later than 1 year after the date of 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)(9) of the Higher Education Act of 1965, as amended by this Act.

(a) In general.—Paragraph (13) of section 6103(l) of the Internal Revenue Code of 1986 is amended to read as follows:

“(13) DISCLOSURE OF RETURNS AND RETURN INFORMATION FOR PURPOSES OF STUDENT LOAN ADMINISTRATION.—

“(A) IN GENERAL.—The Secretary, subject to such requirements and conditions as the Secretary may prescribe, shall upon written request from the Secretary of Education disclose to officers and employees of the Department of Education returns and return information with respect to a taxpayer who has received an applicable student loan.

“(B) RESTRICTION ON USE OF DISCLOSED INFORMATION.—Return information disclosed under subparagraph (A) may be used by officers and employees of the Department of Education only for the purposes of, and to the extent necessary for purposes of—

“(i) establishing the appropriate income-contingent repayment amount in connection with an applicable student loan,

“(ii) establishing the appropriate repayment amount under an applicable income-driven repayment plan (as defined in section 455(d)(9) of such Act (20 U.S.C. 1087e(d))) in connection with an applicable student loan for—

“(I) borrowers who have selected such a plan, and

“(II) in the case of any recertification under section 455(e)(8) or 493C(c)(2)(B) of the Higher Education Act of 1965 (20 U.S.C. 1087e(e); 1098e(c)), borrowers who are enrolled in such a plan, and

“(iii) in the case of borrowers who are at least 60 days delinquent on an applicable student loan—

“(I) providing notice of eligibility for an income-driven repayment plan (as so defined) pursuant to section 455(d)(8)(B) of the Higher Education Act of 1965 (20 U.S.C. 1087e(d)), and

“(II) automatic enrollment in such an income-driven repayment plan after such borrowers are at least 120 days delinquent on such a loan pursuant to section 455(d)(8)(C) of such Act (20 U.S.C. 1087e(d)).

“(C) DISCLOSURE TO CERTAIN CONTRACTORS.—Officers and employees of the Department of Education may disclose the information described in subparagraph (A) to persons awarded contracts by the Secretary of Education under section 456 of the Higher Education Act of 1965 (20 U.S.C. 1087f) to the extent necessary for the purposes described in subparagraph (B).

“(D) SPOUSAL INFORMATION FOR MARRIED INDIVIDUALS FILING SEPARATE RETURNS.—For purposes of this paragraph, in the case of a married individual filing a separate return, the term ‘taxpayer’ includes the spouse of that individual if the Secretary of Education requests information from the spouse of that individual and the individual and the spouse have consented in writing.

“(E) APPLICABLE STUDENT LOAN.—For purposes of this paragraph, the term ‘applicable student loan’ means—

“(i) any loan which is made, insured, or guaranteed under a program authorized under part B or D of title IV of the Higher Education Act of 1965 (20 U.S.C. 1071 et seq.; 1087a et seq.), and

“(ii) any loan which is made under part E of such title IV (20 U.S.C. 1087aa et seq.) which is in default and has been assigned to the Department of Education.”.

(b) Conforming amendments.—

(1) Section 6103(a)(3) of such Code is amended by inserting “(13),” after “(12),”.

(2) Section 6103(p)(4) of such Code is amended by inserting “(13),” after “(l)(10),” each place it occurs.

(c) Effective date.—The amendments made by this section shall apply to disclosures made after the date of enactment of this Act.