DEBT MANAGEMENT OPTIONS.

SEC. 429. DEBT MANAGEMENT OPTIONS. Part B of title IV of the Act is amended by inserting after section 437 the following new section: “debt management options “Sec. 437A. (a) Program Authority.— For the purpose of offering additional debt management options, the Secretary is authorized, to the extent of funds appropriated under subsection (d)— “(1) to acquire from eligible holders the notes of borrowers under this part (other than section 428B) who are considered to be at high risk of default and who submit a request to the Secretary for an alternative repayment option; “(2) to offer such borrowers one or more alternative repayment options, which may include graduated or extended repayment and which shall, subject to subsection (b)(2), include an income contingent repayment option established in accordance with subsection (b); and “(3) to enter into contracts or other agreements with private firms or other agencies of the Government as necessary to carry out the purposes of this section. “(b) Income Contingent Repayment Option.— “(1) Regulations.— For the purposes of subsection (a)(2), the Secretary shall, by regulation, establish the terms and conditions for an income contingent repayment option. Such regulations shall specify the schedules under which income will be assessed for repayment of loans, shall permit the discharge of the remaining obligation on the loan not later than 25 years after the commencement of income contingent repayment, and may provide for the potential collection of amounts in excess of the principal and interest owed on the original loan or loans. “(2) Collection mechanism determination required.— Such regulations shall not be effective unless the Secretary publishes a finding that— “(A) the Secretary has, pursuant to subsection (a)(3), established a collection mechanism that will provide a high degree of certainty that collections will be made in accordance with the repayment option established under paragraph (1); and “(B) the use of such repayment option and collection mechanism will result in an increase in the net amount the Government will collect. “(c) Determinations of High Risk of Default.— In making determinations under subsection (a)(1), the Secretary shall— 106 STAT. 553 “(1) consider the ratio of part B debt repayment to income; or “(2) establish, by regulation, such other indicators of high risk as the Secretary considers appropriate “(d) Loan Limitation.— Not more than $200,000,000 may be used to acquire loans under this section in any fiscal year. “(e) Authorization of Appropriations.— There are authorized to be appropriated to carry out this section such sums as may be necessary for fiscal year 1994 and for each of the 4 succeeding fiscal years.”.