; or (B) has no outstanding balance on a student loan made, insured, or guaranteed under part B or D on the date the borrower receives a loan made under part D on or after July 1, 2017. (b) Simplified income-Driven repayment plan authorized (1) In general The Secretary shall carry out a simplified income-driven repayment program for new borrowers that meets the following requirements: (A) A new borrower of any covered Federal Direct Loan may elect to have the borrower’s aggregate monthly payment for all such loans equal to the income-driven calculation, divided by 12. (B) The holder of such a loan shall apply the borrower’s monthly payment under this subsection first toward interest due on the loan, next toward any fees due on the loan, and then toward the principal of the loan. (C) Any interest due and not paid under subparagraph (B)— (i) shall, on Federal Direct Stafford Loans, be paid by the Secretary for a period of not more than 3 years after the date of the borrower’s election under subparagraph (A), except that such period shall not include any period during which the borrower is in deferment due to an economic hardship described in section 435(o); and (ii) shall be capitalized— (I) in the case of a Federal Direct Stafford Loan, subject to clause (i)— (aa) at the time the borrower ends the election to make simplified income-driven repayment under this subsection; or (bb) at the time the borrower’s monthly payment calculation under subparagraph (A) exceeds the monthly payment calculation under the fixed repayment plan, based on a 10-year repayment period, when the borrower first made the election under subparagraph (A); and (II) in the case of a Federal Direct Unsubsidized Stafford Loan— (aa) at the time the borrower ends the election to make simplified income-driven repayment under this subsection