A NEW BILL HAS BE PROPOSED!!!!!!
This is the PDF of the actual bill
Offical Summary of the bill
OFFICIAL SUMMARYThe following summary was written by the Congressional Research Service, a nonpartisan arm of the Library of Congress, which serves Congress. GovTrack did not write and has no control over these summaries.
3/8/2012--Introduced.Student Loan Forgiveness Act of 2012 - Amends title IV (Student Assistance) of the Higher Education Act of 1965 to establish a 10/10 Loan Repayment Plan that allows borrowers of Federal Family Education Loans (FFELs) and Direct Loans (DLs) to limit their monthly payment on such loans to one-twelfth of 10% of the amount by which their adjusted gross income and that of their spouse (if applicable) exceeds 150% of the federal poverty level. Requires the Secretary of Education to determine a borrower's repayment obligation under that plan on a case-by-case basis if the repayment formula would result in the borrower paying nothing and the borrower is not in deferment due to an economic hardship. Establishes a 10/10 Loan Forgiveness Program that provides FFEL and DL forgiveness to borrowers who, after the date that is 10 years before the date of this Act's enactment, have made 120 monthly payments under the 10/10 Loan Repayment Plan or under another repayment plan that required them to make payments at least as large as those they would have made under the 10/10 Loan Repayment Plan. Credits the months during which an individual is in deferment due to an economic hardship as months for which payment was made for purposes of the 10/10 Loan Forgiveness Program. Caps the amount of loan forgiveness that the program will provide to individuals who become new borrowers after this Act's enactment. Caps the interest rate on new DLs at 3.4% Amends the public service employee loan forgiveness program to forgive the DLs of participants who have made 60 (currently, 120) monthly payments on such loans pursuant to specified repayment plans. Includes primary care physicians in medically underserved areas in the public service employee loan forgiveness program. Allows certain borrowers to consolidate their private education loans as Direct Consolidation Loans, provided the private loans were made on or before the date of this Act's enactment. Limits such borrowers to those who: (1) were students eligible for unsubsidized Stafford loans or PLUS loans under the FFEL or DL programs for their enrollment at an institution of higher education, or would have been had they been enrolled on at least a half-time basis; (2) borrowed at least one private education loan for such enrollment; and (3) have an average adjusted gross income that does not exceed their total education debt. Caps the interest rate on those Direct Consolidation Loans at 3.4% Requires borrowers to apply for such loans within one year of this Act's enactment. Funds this Act's programs from funds available for Overseas Contingency Operations.
3/8/2012--Introduced.Student Loan Forgiveness Act of 2012 - Amends title IV (Student Assistance) of the Higher Education Act of 1965 to establish a 10/10 Loan Repayment Plan that allows borrowers of Federal Family Education Loans (FFELs) and Direct Loans (DLs) to limit their monthly payment on such loans to one-twelfth of 10% of the amount by which their adjusted gross income and that of their spouse (if applicable) exceeds 150% of the federal poverty level. Requires the Secretary of Education to determine a borrower's repayment obligation under that plan on a case-by-case basis if the repayment formula would result in the borrower paying nothing and the borrower is not in deferment due to an economic hardship. Establishes a 10/10 Loan Forgiveness Program that provides FFEL and DL forgiveness to borrowers who, after the date that is 10 years before the date of this Act's enactment, have made 120 monthly payments under the 10/10 Loan Repayment Plan or under another repayment plan that required them to make payments at least as large as those they would have made under the 10/10 Loan Repayment Plan. Credits the months during which an individual is in deferment due to an economic hardship as months for which payment was made for purposes of the 10/10 Loan Forgiveness Program. Caps the amount of loan forgiveness that the program will provide to individuals who become new borrowers after this Act's enactment. Caps the interest rate on new DLs at 3.4% Amends the public service employee loan forgiveness program to forgive the DLs of participants who have made 60 (currently, 120) monthly payments on such loans pursuant to specified repayment plans. Includes primary care physicians in medically underserved areas in the public service employee loan forgiveness program. Allows certain borrowers to consolidate their private education loans as Direct Consolidation Loans, provided the private loans were made on or before the date of this Act's enactment. Limits such borrowers to those who: (1) were students eligible for unsubsidized Stafford loans or PLUS loans under the FFEL or DL programs for their enrollment at an institution of higher education, or would have been had they been enrolled on at least a half-time basis; (2) borrowed at least one private education loan for such enrollment; and (3) have an average adjusted gross income that does not exceed their total education debt. Caps the interest rate on those Direct Consolidation Loans at 3.4% Requires borrowers to apply for such loans within one year of this Act's enactment. Funds this Act's programs from funds available for Overseas Contingency Operations.
Organizations that will endorse
Forgivestudentloandebt.com
Aging with student debt
....and more will come in time
Aging with student debt
....and more will come in time
Statements towards this bill
National Association of Student Financial Aid Administrators 1,426 Facebook fans 1,585 Twitter followersLast week Rep. Hansen Clarke (D-MI) introduced HR 4170, the Student Loan Forgiveness Act of 2012, in the House of Representatives. This bill would forgive the balance on student loans to eligible borrowers who make 10 years worth of payments. In addition to helping struggling borrowers, HR 4170 is intended, on a broader level, to increase economic recovery.
"This provides student loan borrowers with a second chance," Rep. Clarke said. "By cutting this debt, this frees up their money to invest on their own, and that will create new jobs throughout the country."
The bill contains two main provisions, first the requirement the Secretary institute a "10/10 Loan Repayment Plan" in which an eligible borrower may elect to have their aggregate monthly loan payment equal to 10 percent of their discretionary income, an idea similar to the current Income-Based Repayment (IBR) program. Second, and more broadly, the bill provides that an eligible borrower who has made 120 loan payments (10 years) will have the balance of their loan forgiven if they have made payments through any one or a combination of the following:
Monthly payments under the 10/10 Loan Repayment Plan;
Monthly payments under any authorized repayment plan (Standard, Extended, Graduated, Income-Contingent, Income-Sensitive, Income-Based), as long as the payment is not less than the amount that would have be calculated for the 10/10 Loan Repayment Program;
Monthly payment of $0 during a period of deferment due to economic hardship.
The bill caps the loan forgiveness amount at $45,520 and also includes multiple eligibility caveats, including documentation requirements and special provisions for married borrowers.
Additionally, the bill would also cap interest rates on all new federal direct loans at 3.4 percent, improve and expand public service loan forgiveness to include primary care physicians in underserved areas, and refinance private education loans through Direct Loan Consolidation for certain borrowers. Bill language specifies that the offset for the cost of this program would come funds available for the Overseas Contingency Operations. While no official cost has been given, the bill would certainly contain a high price tag, making it very unlikely that it will see any movement in Congress.
"This provides student loan borrowers with a second chance," Rep. Clarke said. "By cutting this debt, this frees up their money to invest on their own, and that will create new jobs throughout the country."
The bill contains two main provisions, first the requirement the Secretary institute a "10/10 Loan Repayment Plan" in which an eligible borrower may elect to have their aggregate monthly loan payment equal to 10 percent of their discretionary income, an idea similar to the current Income-Based Repayment (IBR) program. Second, and more broadly, the bill provides that an eligible borrower who has made 120 loan payments (10 years) will have the balance of their loan forgiven if they have made payments through any one or a combination of the following:
Monthly payments under the 10/10 Loan Repayment Plan;
Monthly payments under any authorized repayment plan (Standard, Extended, Graduated, Income-Contingent, Income-Sensitive, Income-Based), as long as the payment is not less than the amount that would have be calculated for the 10/10 Loan Repayment Program;
Monthly payment of $0 during a period of deferment due to economic hardship.
The bill caps the loan forgiveness amount at $45,520 and also includes multiple eligibility caveats, including documentation requirements and special provisions for married borrowers.
Additionally, the bill would also cap interest rates on all new federal direct loans at 3.4 percent, improve and expand public service loan forgiveness to include primary care physicians in underserved areas, and refinance private education loans through Direct Loan Consolidation for certain borrowers. Bill language specifies that the offset for the cost of this program would come funds available for the Overseas Contingency Operations. While no official cost has been given, the bill would certainly contain a high price tag, making it very unlikely that it will see any movement in Congress.