This Act may be cited as the “Streamlining Income-driven, Manageable Payments on Loans for Education Act” or the “SIMPLE Act”.

Section 437(a) of the Higher Education Act of 1965 (20 U.S.C. 1087(a)) is amended by adding at the end the following:

(a) Amendments.—

(1) NOTIFICATION AND AUTOMATIC ENROLLMENT PROCEDURES.—Section 455(d) of the Higher Education Act of 1965 (20 U.S.C. 1087e(d)) is amended by adding at the end the following:

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

“(A) AUTHORITY TO OBTAIN INCOME INFORMATION.—In the case of any borrower who is at least 60 days delinquent on a covered loan, the Secretary shall submit a written request to the Secretary of the Treasury under section 6103(l)(13) of the Internal Revenue Code of 1986 for disclosure of information relating to income, tax filing status, and number of dependents of such borrower (and such borrower’s spouse, if applicable).

“(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, tax filing status, number of dependents, 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.

“(F) PROCEDURES.—The Secretary shall establish procedures as are necessary to effectively implement this paragraph.

“(7) NOTIFICATION AND AUTOMATIC ENROLLMENT PROCEDURES FOR BORROWERS WHO ARE REHABILITATING DEFAULTED LOANS.—

“(A) AUTHORITY TO OBTAIN INCOME INFORMATION.—In the case of any borrower who is rehabilitating a covered loan pursuant to section 428F(a), the Secretary may submit a written request to the Secretary of the Treasury under section 6103(l)(13) of the Internal Revenue Code of 1986 for disclosure of information relating to income, tax filing status, and number of dependents of such borrower (and such borrower’s spouse, if applicable).

“(B) BORROWER NOTIFICATION.—Not later than 30 days after a borrower makes the 6th payment required for the loan rehabilitation described in subparagraph (A), the Secretary shall notify the borrower of the process under subparagraph (C) with respect to such loan.

“(C) SECRETARY'S SELECTION OF PLAN.—With respect to each borrower who has made the 9th payment required for the loan rehabilitation described in subparagraph (A), the Secretary shall, as soon as practicable after such payment—

“(i) in a case in which any of the borrower's covered loans, without regard to whether the loan has been so rehabilitated, is 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; and

“(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

“(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 a loan to become eligible for such a plan.

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

“(E) PROCEDURES.—The Secretary shall establish procedures as are necessary to effectively implement this paragraph.”.

(2) DEFINITIONS.—Section 455(d) of the Higher Education Act of 1965 (20 U.S.C. 1087e(d)), as amended by paragraph (1), is further amended by adding at the end the following:

“(8) 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 a plan described in subparagraph (D) or (E) of paragraph (1).

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

(3) 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”.

(b) Effective date; application.—

(1) AUTOMATIC ENROLLMENT.—The amendments made by paragraphs (1) and (2) of subsection (a) shall—

(A) take effect as soon as the Secretary of Education determines practicable, 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)(8) of the Higher Education Act of 1965, as added by subsection (a)).

(2) CHANGING PLANS.—The amendment made by subsection (a)(3) 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)(8).

“(B) IN GENERAL.—Beginning as soon as the Secretary determines practicable, but not later than 2 years after the date of enactment of the Streamlining Income-driven, Manageable Payments on Loans for Education Act, the Secretary shall, with respect to any borrower described in subparagraph (C)—

“(i) offer an opportunity for such borrower to opt out of clause (ii) and prevent the Secretary from obtaining information under such clause;

“(ii) submit a written request to the Secretary of the Treasury under section 6103(l)(13) of the Internal Revenue Code of 1986 for disclosure of information relating to income, tax filing status, and number of dependents of such borrower (and such borrower’s spouse, if applicable) for purposes of determining the repayment obligation of the borrower for such year; and

“(iii) provide the borrower with an opportunity to update the information obtained under clause (ii) before the determination of the annual repayment obligation of the borrower.

“(C) APPLICABILITY.—Subparagraph (B) shall apply to each borrower of a covered loan who—

“(i) selects, or for whom the Secretary selects under subparagraph (C) or (D) of paragraph (6) or paragraph (7)(C) of subsection (d), or section 428(m)(1), an income contingent repayment plan; or

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

“(D) BORROWER FOR WHOM ADJUSTED GROSS INCOME IS UNAVAILABLE.—In the case of a borrower for whom information is unavailable under subparagraph (B)—

“(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 clause (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.

“(E) OTHER REQUIREMENTS.—The Secretary’s actions 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, carry out, with respect to borrowers of any covered loan (as defined in section 455(d)(8)), 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.—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 shall, subject to such requirements and conditions as the Secretary may prescribe, upon written request from the Secretary of Education under section 437(a), section 455(d), or section 455(e) of the Higher Education Act of 1965, disclose to officers and employees of the Department of Education returns and return information with respect to a taxpayer described in such section.

“(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) carrying out income monitoring under section 437(a) of the Higher Education Act of 1965,

“(ii) establishing the appropriate repayment amount under an applicable income-driven repayment plan (as defined in section 455(d)(8) of such Act) 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, borrowers who are enrolled in such a plan,

“(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)(6)(B) of the Higher Education Act of 1965, 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)(6)(C) of such Act, and

“(iv) in the case of borrowers who are rehabilitating defaulted loans, providing notice of eligibility for an income-driven repayment plan (as so defined) and automatic enrollment in such a plan pursuant to section 455(d)(7) of the Higher Education Act of 1965.

“(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 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.”.

(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.