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H.R. 3634 (114th): Student Loan Debt Protection Act of 2015


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The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress, and was published on Sep 28, 2015.


Student Loan Debt Protection Act of 2015

This bill amends the federal bankruptcy code to permit a borrower to discharge in bankruptcy a nonprofit, government, or private student loan, or an obligation to repay an educational benefit, scholarship, or stipend.

It amends title IV (Student Assistance) of the Higher Education Act of 1965 to reinstate the six-year statute of limitations on actions to recover on defaulted student loans.

The bill prohibits collecting the amount owed on a defaulted federal student loan through: (1) offsets of social security, railroad retirement, or black lung benefits; (2) offsets of tax refunds; or (3) wage garnishment. It amends the Internal Revenue Code to exclude from an individual's gross income: (1) discharged student loan debt, and (2) income distributions from qualified tuition plans that are used to pay the interest or principal on student loans.

The bill makes parent PLUS loans eligible for income-contingent repayment plans, including the Pay As You Earn repayment plan. Additionally, it makes parent PLUS loans and consolidation loans that repay parent PLUS loans eligible for income-based repayment plans and loan forgiveness for service in areas of national need.

It prohibits: (1) evidence of an individual's default on a federal student loan from being used in a federal or state proceeding involving the individual's professional or vocational license, and (2) an institution of higher education from blocking access to a student's records due to federal student loan default.

Finally, the bill modifies the public service loan forgiveness program to require the Department of Education to forgive 50% of the Direct loan balance for an eligible borrower who is employed in a public service job and makes 60 monthly payments after October 1, 2015.