Less Bureaucracy, Better Student Aid Act

There are transferred, in accordance with the applicable effective dates in subsection (b), to the Department of the Treasury—

(1) functions of the Secretary of Education (including the performance-based organization established pursuant to section 141 of the Higher Education Act of 1965 (20 U.S.C. 1018) and all related functions of any officer or employee of the Department of Education) related to the servicing and voluntary and involuntary collections of defaulted Federal student loan debt, including certification of debt, due process, borrower notification, disputes, bankruptcy, rehabilitation, consolidation, compromise, repayment agreements, and credit reporting;

(2) functions of the Secretary of Education (including the performance-based organization established pursuant to section 141 of the Higher Education Act of 1965 (20 U.S.C. 1018) and all related functions of any officer or employee of the Department of Education) related to the servicing of non-defaulted Federal student loan debt, including borrower notification, processing of payments, repayment plan administration, consolidation, disputes, and credit reporting; and

(3) all functions of the Secretary of Education (including the performance-based organization established pursuant to section 141 of the Higher Education Act of 1965 (20 U.S.C. 1018) and all related functions of any officer or employee of the Department of Education) that remain after the transfer of functions required under paragraphs (1) and (2) with respect to each of the following:

(A) Administrative Provisions for Delivery of Student Financial Assistance under part D of title I of the Higher Education Act of 1965 (20 U.S.C. 1018 et seq.).

(B) Lender and Institution Requirements Relating to Education Loans under part E of such title (20 U.S.C. 1019 et seq.).

(C) Federal Pell Grants under subpart 1 of part A of title IV of the Higher Education Act of 1965 (20 U.S.C. 1070a et seq.).

(D) Federal Supplemental Educational Opportunity Grants under subpart 3 of such part A (20 U.S.C. 1070b et seq.).

(E) Federal Family Education Loan program under part B of title IV of the Higher Education Act of 1965 (20 U.S.C. 1071 et seq.).

(F) Federal Work-study programs under part C of such title (20 U.S.C. 1087–51 et seq.).

(G) William D. Ford Federal Direct Loan program under part D of such title (20 U.S.C. 1087a et seq.).

(H) Federal Perkins Loans under part E of such title (20 U.S.C. 1087aa et seq.).

(I) Need Analysis under part F of such title (20 U.S.C. 1087kk et seq.).

(J) General Provisions Relating to Student Assistance programs under part G of such title (20 U.S.C. 1088 et seq.).

(K) Eligibility and Certification Procedures under subpart 3 of part H of such title (20 U.S.C. 1099c et seq.).

(L) Health Education Assistance Loan program as provided in part A of title VII of the Public Health Service Act (42 U.S.C. 292 et seq.).

The Secretary of Education and the Secretary of the Treasury shall jointly determine effective dates for the transfers required under subsection (a), in accordance with paragraph (2) of this subsection.

The transfers required under subsection (a) shall take effect as follows:

With respect to the transfers required under paragraph (1) of subsection (a), on the effective date determined in accordance with paragraph (1) that is on or after the date of enactment of this Act.

With respect to the transfers required under paragraph (2) of subsection (a), on the effective date determined in accordance with paragraph (1) that is on or after the effective date described in subparagraph (A).

With respect to the transfers required under paragraph (3) of subsection (a), on the effective date determined in accordance with paragraph (1) that is on or after the effective date described in subparagraph (B).

The Director of the Office of Management and Budget shall ensure that this Act does not result in a net increase in full-time equivalent employees at the Federal agencies impacted by this Act, based on the number of such employees at such agencies on the date of enactment of this Act.

If necessary, the Director of the Office of Management and Budget shall make any determination of the functions that are transferred under this Act.

The Director of the Office of Management and Budget, at such time or times as the Director shall provide, may make such determinations as may be necessary with regard to the functions transferred by this Act, and to make such additional incidental dispositions of personnel, assets, liabilities, grants, contracts, property, records, and unexpended balances of appropriations, authorizations, allocations, and other funds held, used, arising from, available to, or to be made available in connection with such functions, as may be necessary to carry out the provisions of this Act. The Director shall provide for the termination of the affairs of all entities terminated by this Act and for such further measures and dispositions as may be necessary to effectuate the purposes of this Act.

On each of the effective dates under section 3(b), the Director of the Office of Management and Budget shall certify compliance with the provisions of this Act that take effect on such date, including the requirement under subsection (a) as applicable on such date, to the Committee on Education and Workforce of the House of Representatives and the Committee on Health, Education, Labor, and Pensions of the Senate.

(1) the Secretary of Education shall be deemed to refer to the Secretary of the Treasury; and

(2) the Department of Education shall be deemed to refer to the Department of the Treasury.

All orders, determinations, rules, regulations, permits, grants, loans, contracts, agreements, certificates, licenses, and privileges— shall continue in effect according to their terms until modified, terminated, superseded, set aside, or revoked in accordance with law by the President, the Secretary of the Treasury, any other authorized official, a court of competent jurisdiction, or operation of law.

(1) that have been issued, made, granted, or allowed to become effective by the President, any Federal agency or official thereof, or by a court of competent jurisdiction, in the performance of any function that is transferred by this Act; and

(2) that are in effect on the effective date of such transfer (or become effective after such date pursuant to their terms as in effect on such effective date),

This Act shall not affect any proceedings or any application for any benefits, service, license, permit, certificate, or financial assistance pending on the date of the enactment of this Act before the Department of Education (with respect to functions transferred by this Act). Such proceedings and applications shall continue, orders shall be issued in such proceedings, appeals shall be taken therefrom, and payments shall be made pursuant to such orders, as if this Act had not been enacted, and orders issued in any such proceeding shall continue in effect until modified, terminated, superseded, or revoked by a duly authorized official, by a court of competent jurisdiction, or by operation of law. Nothing in this subsection shall be considered to prohibit the discontinuance or modification of any such proceeding under the same terms and conditions and to the same extent that such proceeding could have been discontinued or modified if this Act had not been enacted.

Except as provided in subsection (e)—

(1) this Act shall not affect suits commenced before the date of enactment of this Act; and

(2) in all such suits, proceeding shall be had, appeals taken, and judgments rendered in the same manner and with the same effect as if this Act had not been enacted.

No suit, action, or other proceeding commenced by or against the Department of Education (with respect to the functions transferred by this Act), or by or against any individual in the official capacity of such individual as an officer or employee of the Department of Education (with regard to functions transferred by this Act), shall abate by reason of the enactment of this Act.

If, before the date on which a transfer of a function under this Act takes effect, the Secretary of Education or any officer or employee of the Department of Education in the official capacity as such an officer or employee is party to a suit relating to the function, then such suit shall be continued and the Secretary of the Treasury, or other appropriate official of the Department of the Treasury, shall be substituted or added as a party.

Except as otherwise provided by this Act, any statutory requirements relating to notice, hearings, action upon the record, or administrative or judicial review that apply to any function transferred by this Act shall apply to the exercise of such function by the Secretary of the Treasury, and other officers of the Department of the Treasury, to which such function is transferred by this Act.

Beginning on the effective date of the transfers required under paragraph (1) of section 2(a) (as determined in accordance with section 2(b)), delinquent or defaulted Federal student loan debt may not be subject to an exemption under paragraph (2)(B) of section 3711(g) of title 31, United States Code, from the requirement under paragraph (1) of such section.

In this Act:

The term delinquent or defaulted, when used with respect to student loan debt, means debt that is considered delinquent or in default in accordance with the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).

The term student loan debt means any debt under part B, D, or E of title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.), or any debt that arises from a Health Education Assistance Loan as provided in part A of title VII of the Public Health Service Act (42 U.S.C. 292 et seq.), that is assigned to or otherwise held by the Secretary of Education.

(1) the services of officers, employees, and other personnel of the Department of Education with regard to functions transferred under this Act;

(2) assets of the Department of Education with regard to such functions; and

(3) funds appropriated to such functions.