; 4 percent of the borrower’s gross income; (III) if the borrower’s gross income is equal to or greater than 842 percent, but not more than 925 percent of such poverty line, 5 percent of the borrower’s gross income; (IV) if the borrower’s gross income is equal to or greater than 926 percent, but not more than 1,010 percent of such poverty line, 6 percent of the borrower’s gross income; (V) if the borrower’s gross income is equal to or greater than 1,011 percent, but not more than 1,094 percent of such poverty line, 7 percent of the borrower’s gross income; (VI) if the borrower’s gross income is equal to or greater than 1,095 percent, but not more than 1,178 percent of such poverty line, 8 percent of the borrower’s gross income; (VII) if the borrower’s gross income is equal to or greater than 1,179 percent, and 1,262 percent of such poverty line, 9 percent of the borrower’s gross income; and (VIII) if the borrower’s gross income is equal to or greater than 1,263 percent of such poverty line, 10 percent of the borrower’s gross income; (B) may elect to have any payments made under subparagraph (A) that exceed the amount owed by the borrower on such loans for a calendar year be refunded to the borrower or applied to the amount owed by the borrower on such loans for the succeeding calendar year; (2) the Secretary will cancel any outstanding balance of principal or interest due on all Federal Interest Free Education Loans made to a borrower who has made 300 monthly payments under this subsection; and (3) a borrower will be taxed on the amount cancelled under paragraph (2), which taxes shall be applied to carry out the Federal Direct Loan program under this part. .