Student Loan Grace Period Extension Act

Student Loan Grace Period Extension Act - Amends title IV (Student Assistance) of the Higher Education Act of 1965 to extend the grace period before payment must begin on Direct Stafford Loans from 6 months to 12 months after borrowers cease to carry at least one-half the normal full-time academic workload.

Extends the federal interest subsidy on Direct Stafford Loans to all of the interest accrued on such loans before the loan repayment period begins. (Currently, the subsidy applies to all of the interest accrued before a borrower ceases to carry at least one-half the normal full-time academic workload.)

[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4286 Introduced in House (IH)]

112th CONGRESS
  2d Session
                                H. R. 4286

   To restore and extend the grace period before repayment begins on 
Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford 
                                 Loans.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 28, 2012

   Ms. Hahn introduced the following bill; which was referred to the 
                Committee on Education and the Workforce

_______________________________________________________________________

                                 A BILL


 
   To restore and extend the grace period before repayment begins on 
Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford 
                                 Loans.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Student Loan Grace Period Extension 
Act''.

SEC. 2. RESTORATION AND EXTENSION OF THE START OF THE REPAYMENT PERIOD 
              FOR CERTAIN FEDERAL DIRECT LOANS.

    (a) Restoration of Interest Subsidy During Grace Period.--Section 
309(d) of title III of division F of Public Law 112-74 (amending 
section 428(a)(3)(A)(i)(I) of the Higher Education Act of 1965 (20 
U.S.C. 1078(a)(3)(A)(i)(I))) is repealed, and the provisions of law 
amended by such section are restored or revived as if such section had 
not been enacted.
    (b) Grace Period Extension.--
            (1) Amendment.--Section 428(b)(7) of the Higher Education 
        Act of 1965 (20 U.S.C. 1078(b)(7)) is amended--
                    (A) in subparagraph (A), by striking ``6 months'' 
                and inserting ``12 months''; and
                    (B) in subparagraph (D), by striking ``6-month 
                period'' and inserting ``12-month period''.
            (2) Effective date and application.--The amendments made by 
        paragraph (1) shall take effect on the date of enactment of 
        this section, and shall apply with respect to--
                    (A) Federal Direct Stafford Loans and Federal 
                Direct Unsubsidized Stafford Loans made on or after 
                such date of enactment;
                    (B) Federal Direct Stafford Loans made before such 
                date of enactment to borrowers who have not yet entered 
                repayment on such loans on such date of enactment; and
                    (C) Federal Direct Unsubsidized Stafford Loans made 
                before such date of enactment to borrowers who--
                            (i) have not yet entered repayment on such 
                        loans on the date that is 60 days after such 
                        date of enactment; and
                            (ii) elect a 12-month grace period in 
                        accordance with paragraph (3).
            (3) Election of extended grace period for certain fdus 
        loans.--The Secretary of Education shall provide an opportunity 
        for each borrower who has a Federal Direct Unsubsidized 
        Stafford Loan that was made before the date of enactment of 
        this section and who has not yet entered repayment on such loan 
        on the date that is 60 days after such date of enactment to 
        elect a 12-month grace period, in accordance with section 
        428(b)(7) of the Higher Education Act of 1965, as amended by 
        this subsection, before beginning repayment. The Secretary 
        shall--
                    (A) notify each such borrower of the opportunity 
                for such an election not later than 30 days after such 
                date of enactment;
                    (B) advise each such borrower of the financial 
                consequences of electing such 12-month grace period;
                    (C) not require such a borrower to accept a 12-
                month grace period in accordance with section 428(b)(7) 
                of the Higher Education Act of 1965 (as amended by this 
                subsection), unless the borrower specifically elects 
                such 12-month grace period during the 90-day period 
                beginning on the day the Secretary notifies such 
                borrower of the option to elect such a 12-month grace 
                period, except that a borrower shall make such an 
                election no later than 10 days before the start of the 
                borrower's repayment period, as determined under 
                section 428(b)(7) of the Higher Education Act of 1965 
                as in effect on the day before the date of enactment of 
                this section; and
                    (D) in the case of such a borrower who does not 
                elect such a 12-month grace period during the period 
                described in subparagraph (C), determine the start of 
                the borrower's repayment period in accordance with 
                section 428(b)(7) of the Higher Education Act of 1965 
                as in effect on the day before the date of enactment of 
                this section.
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