(1) by inserting after `falsely certified by the eligible institution,' the following: `or if the institution failed to make a refund of loan proceeds which the institution owed to such student's lender,'; and

(2) by adding at the end the following new sentences: `In the case of a discharge based upon a failure to refund, the amount of the discharge shall not exceed that portion of the loan which should have been refunded. The Secretary shall report to the Committee on Education and the Workforce of the House of Representatives and the Committee on Labor and Human Resources of the Senate annually as to the dollar amount of loan discharges attributable to failures to make refunds.'.