Equity in Student Loan Relief Act
This bill establishes a temporary program to suspend payments and interest through September 30, 2020, on Federal Family Education Loans (FFELs) that are not held by the Department of Education (ED). (Currently, payments and interest are suspended through this period on certain Federal Direct Loans and FFELs held by ED.)
Specifically, ED must (1) enter into agreements with eligible lenders and guaranty agencies to reduce the interest rate to 0% on FFELs, and (2) make monthly payments to lenders and guaranty agencies to offset the cost of the reduced interest rate.
A lender or guaranty agency that enters into an agreement with ED must (1) temporarily waive interest and suspend all payments due from borrowers through September 30, 2020; (2) suspend all involuntary collections; (3) notify borrowers, within 15 days, that their loan payments have been suspended and interest has been waived; and (4) carry out a program, beginning on August 1, 2020, to provide not fewer than six notices to borrowers that normal payment obligations will resume.
Additionally, ED must deem each month for which a loan payment was suspended as if the borrower of the loan had made a payment for the purpose of any authorized loan forgiveness program or loan rehabilitation program.
Finally, ED must ensure that any suspended payment on such a loan is treated as a regularly scheduled payment made by a borrower for the purpose of reporting information about the loan to a consumer reporting agency.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6597 Introduced in House (IH)]
<DOC>
116th CONGRESS
2d Session
H. R. 6597
To extend zero interest rate benefits and payment suspension to certain
Federal student loan borrowers, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 22, 2020
Ms. Stefanik (for herself, Mrs. Trahan, Mr. Smucker, Ms. Adams, Mrs.
Lee of Nevada, Mr. Welch, Mr. Fitzpatrick, and Mrs. Watson Coleman)
introduced the following bill; which was referred to the Committee on
Education and Labor
_______________________________________________________________________
A BILL
To extend zero interest rate benefits and payment suspension to certain
Federal student loan borrowers, and for other purposes.
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 ``Equity in Student Loan Relief Act''.
SEC. 2. LOWERING RATES FOR BORROWERS WITH FEDERAL FAMILY EDUCATION
LOANS.
(a) Temporary Program of Federal Subsidy Payments To Defray
Borrower Interest Costs on Federal Family Education Loans.--
Notwithstanding any other provision of the Higher Education Act of 1965
(20 U.S.C. 1071 et seq.), the Secretary of Education shall carry out a
temporary program concerning the novel coronavirus virus disease
(COVID-19) outbreak to provide payment relief to borrowers with loans
made under part B of the Higher Education Act of 1965 (20 U.S.C. 1071
et seq.), that are not held by the Federal Government.
(1) Under the program, the Secretary is directed to enter
into agreements expeditiously with eligible lenders and
guaranty agencies to reduce interest rates to 0.00 percent on
such loans and shall make payments, as set forth below, to such
eligible lenders and guaranty agencies to offset the cost of
the reduced interest rates. Under such agreements, the
Secretary shall--
(A) make Federal interest subsidy payments on
behalf of each borrower whose loans are held by such
eligible lender or guaranty agency equal to the total
amount of the interest on the unpaid principal amount
of the loans, calculated at the borrower interest rates
established under section 427A of the Higher Education
Act of 1965 (20 U.S.C. 1077a); and
(B) make these Federal interest subsidy payments to
an eligible lender or guaranty agency on a monthly
basis, beginning as of March 13, 2020.
(2) Under the program and effective as of March 13, 2020,
all eligible lenders and guaranty agencies who have entered
agreements with the Secretary under this subsection shall--
(A) temporarily waive interest, effectively
reducing the interest rates charged to borrowers on
loans made under this part to 0.00 percent;
(B) provide a report to the Secretary no later than
30 days from the date of such agreement confirming that
such interest rates have been reduced to 0.00 percent
effective as of March 13, 2020; and
(C) continue such reduction in interest rates
through September 30, 2020.
(3) For purposes of this paragraph, an eligible lender
includes the holder of the loan or, if the holder acts as
eligible lender trustee for the beneficial owner of the loan,
the beneficial owner of the loan.
(4) Nothing in this paragraph shall affect payment
calculations under section 438 of the Higher Education Act of
1965 (20 U.S.C. 1087).
(b) Temporary Postponement of Part B Loan Payments.--
Notwithstanding any other provision of the Higher Education Act of 1965
(20 U.S.C. 1071 et seq.), the Secretary shall require eligible lenders
and guaranty agencies with agreements with the Secretary under
subsection (a) to suspend all payments due from borrowers through
September 30, 2020.
(1) Consideration of payments.--Notwithstanding any other
provision of the Higher Education Act of 1965 (20 U.S.C. 1001
et seq.), the Secretary shall deem each month for which a loan
payment was suspended under this subsection as if the borrower
of the loan had made a qualified payment for the purpose of any
loan forgiveness program and loan rehabilitation program
authorized under the Higher Education Act of 1965 (20 U.S.C.
1071 et seq.).
(2) Reporting to consumer reporting agencies.--During the
period in which the borrower payments on a loan are suspended
under this subsection, the Secretary shall ensure that, for the
purpose of reporting information about the loan to a consumer
reporting agency, any payment that has been suspended is
treated as if it were a regularly scheduled payment made by a
borrower.
(c) Suspending Involuntary Collection.--Notwithstanding any other
provision of the Higher Education Act of 1965 (20 U.S.C. 1071 et seq.),
the Secretary shall require guaranty agencies with agreements with the
Secretary under subsection (a) to suspend all involuntary collection
related to the loan, through September 30, 2020. Such efforts shall
include--
(1) a wage garnishment authorized under section 488A of the
Higher Education Act of 1965 (20 U.S.C. 1095a) or section 3720D
of title 31, United States Code;
(2) a reduction of tax refund by amount of debt authorized
under section 3720A of title 31, United States Code, or section
6402(d) of the Internal Revenue Code of 1986;
(3) a reduction of any other Federal benefit payment by
administrative offset authorized under section 3716 of title
31, United States Code (including a benefit payment due to an
individual under the Social Security Act or any other provision
described in subsection (c)(3)(A)(i) of such section); and
(4) any other involuntary collection activity by the
Secretary.
(d) Notice to Borrowers and Transition Period.--To inform borrowers
of the actions taken in accordance with this section and ensure an
effective transition, the Secretary shall require eligible lenders and
guaranty agencies with agreements under subsection (a) to--
(1) not later than 15 days after entering into such
agreement, notify borrowers--
(A) of the actions taken in accordance with this
section for whom payments have been suspended and
interest waived;
(B) of the actions taken in accordance with
subsection (c) for whom collections have been
suspended;
(C) of the option to continue making payments
toward principal; and
(D) that the program under this section is a
temporary program; and
(2) beginning on August 1, 2020, carry out a program to
provide not less than 6 notices by postal mail, telephone, or
electronic communication to borrowers indicating--
(A) when the borrower's normal payment obligations
will resume; and
(B) that the borrower has the option to apply for
income-driven repayment or other repayment or
forgiveness programs, including a brief description of
such options.
(e) Waivers.--In carrying out this section, the Secretary may waive
the application of--
(1) subchapter I of chapter 35 of title 44, United States
Code (commonly known as the ``Paperwork Reduction Act'');
(2) the master calendar requirements under section 482 of
the Higher Education Act of 1965 (20 U.S.C. 1089);
(3) negotiated rulemaking under section 492 of the Higher
Education Act of 1965 (20 U.S.C. 1098a); and
(4) the requirement to publish the notices related to the
system of records of the agency before implementation required
under paragraphs (4) and (11) of section 552a(e) of title 5,
United States Code (commonly known as the ``Privacy Act of
1974''), except that the notices shall be published not later
than 180 days after the date of enactment of this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Education and Labor.
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