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The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress.
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.