Student Debt Emergency Relief Act

I 116TH CONGRESS 2D SESSION H. R. 6363 To amend the Higher Education Act of 1965 to halt collection of certain student loans, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MARCH 23, 2020 Ms. PRESSLEY (for herself, Ms. OMAR, Mr. RICHMOND, Mr. WELCH, Ms. NORTON, Ms. VELA´ZQUEZ, Ms. CASTOR of Florida, Mr. RUSH, Mr. GARCI´A of Illinois, Mr. DEUTCH, Ms. TLAIB, Ms. CLARKE of New York, Ms. SCHAKOWSKY, Mr. NADLER, Mrs. NAPOLITANO, Ms. OCASIO-COR- TEZ, Mr. GRIJALVA, Mr. CARSON of Indiana, Mr. POCAN, and Ms. LEE of California) introduced the following bill; which was referred to the Committee on Education and Labor, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend the Higher Education Act of 1965 to halt collection of certain student loans, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Student Debt Emer- 4 gency Relief Act’’. 5 VerDate Sep 11 2014 18:22 Apr 09, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H6363.IH H6363 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 6363 IH SEC. 2. PAYMENTS FOR STUDENT LOAN BORROWERS AS A 1 RESULT OF A NATIONAL EMERGENCY. 2 (a) PAYMENTS FOR STUDENT LOAN BORROWERS 3 DURING A NATIONAL EMERGENCY.— 4 (1) IN GENERAL.—Part G of title IV of the 5 Higher Education Act of 1965 (20 U.S.C. 1088 et 6 seq.) is amended by inserting after section 493D the 7 following: 8 ‘‘SEC. 493E. PAYMENTS FOR STUDENT LOAN BORROWERS 9 DURING A NATIONAL EMERGENCY. 10 ‘‘(a) DEFINITIONS.—In this section: 11 ‘‘(1) CORONAVIRUS.—The term ‘coronavirus’ 12 has the meaning given the term in section 506 of the 13 Coronavirus Preparedness and Response Supple- 14 mental Appropriations Act, 2020 (Public Law 116– 15 123). 16 ‘‘(2) INCOME-DRIVEN REPAYMENT.—The term 17 ‘income-driven repayment’ means— 18 ‘‘(A) income-based repayment authorized 19 under section 493C for loans made, insured, or 20 guaranteed under part B or part D; or 21 ‘‘(B) income contingent repayment author- 22 ized under section 455(e) for loans made under 23 part D. 24 ‘‘(3) INVOLUNTARY COLLECTION.—The term 25 ‘involuntary collection’ means— 26 VerDate Sep 11 2014 18:22 Apr 09, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H6363.IH H6363 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 6363 IH ‘‘(A) a wage garnishment authorized under 1 section 488A of this Act or section 3720D of 2 title 31, United States Code; 3 ‘‘(B) a reduction of tax refund by amount 4 of debt authorized under section 3720A of title 5 31, United States Code; 6 ‘‘(C) a reduction of any other Federal ben- 7 efit payment by administrative offset authorized 8 under section 3716 of title 31, United States 9 Code (including a benefit payment due to an in- 10 dividual under the Social Security Act or any 11 other provision described in subsection 12 (c)(3)(A)(i) of such section); and 13 ‘‘(D) any other involuntary collection activ- 14 ity. 15 ‘‘(4) NATIONAL EMERGENCY.—The term ‘na- 16 tional emergency’ means— 17 ‘‘(A) a public health emergency related to 18 the coronavirus that is declared by the Sec- 19 retary of Health and Human Services pursuant 20 to section 319 of the Public Health Service Act 21 (42 U.S.C. 247d); or 22 ‘‘(B) a national emergency related to the 23 coronavirus declared by the President under the 24 VerDate Sep 11 2014 18:22 Apr 09, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H6363.IH H6363 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 6363 IH National Emergencies Act (50 U.S.C. 1601 et 1 seq.). 2 ‘‘(b) NATIONAL EMERGENCY STUDENT LOAN RE- 3 PAYMENT ASSISTANCE.— 4 ‘‘(1) AUTHORITY.—Upon the declaration of a 5 national emergency, the Secretary shall for each bor- 6 rower of a loan made, insured, or guaranteed under 7 part B, D, or E, pay the total amount due for such 8 month on the loan, based on the payment plan se- 9 lected by the borrower or the borrower’s loan status. 10 ‘‘(2) NO CAPITALIZATION OF INTEREST.—With 11 respect to any loan during a national emergency pe- 12 riod, interest due on loans made, insured, or guaran- 13 teed under part B, D, or E during such period shall 14 not be capitalized at any time during or after the 15 national emergency. 16 ‘‘(3) APPLICABILITY OF PAYMENTS.—Any pay- 17 ment made by the Secretary under this section shall 18 be considered by the Secretary, or by a lender with 19 respect to a loan made, insured, or guaranteed 20 under part B— 21 ‘‘(A) as a qualifying payment under the 22 public service loan forgiveness program under 23 section 455(m), if the borrower would otherwise 24 qualify under such section; 25 VerDate Sep 11 2014 18:22 Apr 09, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H6363.IH H6363 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 6363 IH ‘‘(B) in the case of a borrower enrolled in 1 an income-driven repayment plan, as a quali- 2 fying payment for the purpose of calculating eli- 3 gibility for loan forgiveness for the borrower in 4 accordance with section 493C(b)(7) or section 5 455(d)(1)(D), as the case may be; and 6 ‘‘(C) in the case of a borrower in default, 7 as an on-time monthly payment for purposes of 8 loan rehabilitation pursuant to section 428F(a). 9 ‘‘(4) REPORTING TO CONSUMER REPORTING 10 AGENCIES.—During the period in which the Sec- 11 retary is making payments on a loan under para- 12 graph (1), the Secretary shall ensure that, for the 13 purpose of reporting information about the loan to 14 a consumer reporting agency, any payment made by 15 the Secretary is treated as if it were a regularly 16 scheduled payment made by a borrower. 17 ‘‘(5) NOTICE OF PAYMENTS AND PROGRAM.— 18 Not later than 15 days following the date of enact- 19 ment of the Student Debt Emergency Relief Act, 20 and monthly thereafter during the period of a na- 21 tional emergency, the Secretary shall provide a no- 22 tice to all borrowers of loans made, insured, or guar- 23 anteed under part B, D, or E— 24 VerDate Sep 11 2014 18:22 Apr 09, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H6363.IH H6363 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 6363 IH ‘‘(A) informing borrowers of the actions 1 taken under this section; 2 ‘‘(B) providing borrowers with an easily 3 accessible method to opt out of the benefits pro- 4 vided under this section; and 5 ‘‘(C) notifying the borrower that the pro- 6 gram under this section is a temporary program 7 and will end after the national emergency ends. 8 ‘‘(6) SUSPENSION OF INVOLUNTARY COLLEC- 9 TION.—In the event of a national emergency, the 10 Secretary, or other holder of a loan made, insured, 11 or guaranteed under part B, D, or E, shall imme- 12 diately take action to halt all involuntary collection 13 related to the loan. 14 ‘‘(7) MANDATORY FORBEARANCE.—During the 15 period in which the Secretary is making payments 16 on a loan under paragraph (1), the Secretary, or a 17 lender or guaranty agency for a loan made under 18 part B, shall grant the borrower forbearance, in the 19 form of a temporary cessation of all payments on 20 the loan other than the payments of interest and 21 principal on the loan that are made under that para- 22 graph. In the case of a borrower who is delinquent 23 but who is not yet in default prior to the time when 24 the Secretary begins making payments under para- 25 VerDate Sep 11 2014 18:22 Apr 09, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H6363.IH H6363 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 6363 IH graph (1), the Secretary, or a lender or guaranty 1 agency for a loan made under part B, shall grant 2 the borrower forbearance retroactively to address 3 any such delinquency. 4 ‘‘(c) WAIVER OF INTEREST DURING NATIONAL 5 EMERGENCY.—Notwithstanding any other provision of 6 law, the Secretary shall pay any interest that would other- 7 wise be charged or accrue during a national emergency 8 on any loan made, insured, or guaranteed under part B, 9 D, or E. 10 ‘‘(d) TERMINATION AND TRANSITION PERIOD.—Sec- 11 retary shall make payments on a loan under subsection 12 (b)(1) until the Secretary is authorized by Congress to 13 cease making such payments and to terminate the pro- 14 gram. Upon the termination of the authority of the Sec- 15 retary to make payments on a loan under subsection 16 (b)(1), the Secretary shall carry out a program to provide 17 for a transition period of 90 days, beginning on the day 18 the termination of the authority of the Secretary to make 19 payments on a loan under subsection (b)(1), during 20 which— 21 ‘‘(1) the Secretary shall provide not less than 3 22 notices to borrowers indicating when the borrower’s 23 normal payment obligations will resume; and 24 VerDate Sep 11 2014 18:22 Apr 09, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H6363.IH H6363 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 6363 IH ‘‘(2) any missed payments by a borrower under 1 part B, D, or E shall not— 2 ‘‘(A) result in fees or penalties; or 3 ‘‘(B) be reported to any consumer report- 4 ing agency or otherwise impact the borrower’s 5 credit history. 6 ‘‘(e) IMPLEMENTATION IN FFEL ENTITIES.—To fa- 7 cilitate implementation of this section— 8 ‘‘(1) lenders and guaranty agencies holding 9 loans made, insured, or guaranteed under part B 10 shall report, to the satisfaction of the Secretary, in- 11 formation to verify at the borrower level the amount 12 of payments made under this section; and 13 ‘‘(2) the Secretary shall have the authority to 14 establish a payment schedule for purposes of this 15 section for loans made, insured, or guaranteed under 16 part B and not held by the Secretary. 17 ‘‘(f) WAIVERS.—In carrying out this section, the Sec- 18 retary may waive the application of— 19 ‘‘(1) subchapter I of chapter 35 of title 44, 20 United States Code; 21 ‘‘(2) the master calendar requirements under 22 section 482; 23 ‘‘(3) negotiated rulemaking under section 492; 24 and 25 VerDate Sep 11 2014 18:22 Apr 09, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H6363.IH H6363 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 6363 IH ‘‘(4) the requirement to publish the notices re- 1 lated to the system of records of the agency before 2 implementation required under paragraphs (4) and 3 (11) of section 552a(e) of title 5, United States 4 Code (commonly known as the ‘Privacy Act of 5 1974’), except that the notices shall be published not 6 later than 180 days after the date of enactment of 7 the Student Debt Emergency Relief Act. 8 ‘‘(g) AUTHORIZATION OF MANDATORY FUNDING FOR 9 IMPLEMENTATION.— 10 ‘‘(1) IN GENERAL.—There are authorized to be 11 appropriated, and there are appropriated, from 12 amounts in the Treasury not already appropriated— 13 ‘‘(A) $50,000,000 for fiscal year 2020 for 14 the costs associated with implementation and 15 coordination required of this section; and 16 ‘‘(B) such sums as are necessary to pro- 17 vide the payments and interest cancellation pro- 18 vided under this section. 19 ‘‘(2) AVAILABILITY.—Amounts made available 20 under paragraph (1) shall— 21 ‘‘(A) be in addition to any other amounts 22 available to carry out this section; and 23 ‘‘(B) remain available until expended.’’. 24 VerDate Sep 11 2014 18:22 Apr 09, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H6363.IH H6363 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 6363 IH (2) FFEL AMENDMENT.—Section 428(c)(8) of 1 the Higher Education Act of 1965 (20 U.S.C. 2 1078(c)(8)) is amended by striking ‘‘and for which’’ 3 and all that follows through ‘‘this subsection’’. 4 (b) MINIMUM RELIEF FOR STUDENT LOAN BOR- 5 ROWERS AS A RESULT OF A NATIONAL EMERGENCY.— 6 Part G of title IV of the Higher Education Act of 1965 7 (20 U.S.C. 1088 et seq.), as amended by subsection (a), 8 is further amended by inserting after section 493E the 9 following: 10 ‘‘SEC. 493F. MINIMUM RELIEF FOR STUDENT LOAN BOR- 11 ROWERS AS A RESULT OF A NATIONAL EMER- 12 GENCY. 13 ‘‘(a) MINIMUM STUDENT LOAN RELIEF AS A RESULT 14 OF A NATIONAL EMERGENCY.—Not later than 90 days 15 after termination of the authority of the Secretary to make 16 payments on a loan under section 493(E)(b)(1), the Sec- 17 retary shall, for each borrower of a loan made under part 18 B, D, or E, apply to the total outstanding balance due 19 on all such loans of the borrower, an amount equal to the 20 lesser of— 21 ‘‘(1) the difference between $30,000 and the 22 total amount of payments made by the Secretary 23 under section 493E(b) on such loans of the borrower 24 during the period of time when the Secretary was 25 VerDate Sep 11 2014 18:22 Apr 09, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H6363.IH H6363 pamtmann on DSKBC07HB2PROD with BILLS 11 •HR 6363 IH authorized to make payments on a loan under sec- 1 tion 493E(b)(1); or 2 ‘‘(2) the total amount of outstanding principal 3 and interest due on such loans of the borrower, as 4 of the date of the calculation under this subsection. 5 ‘‘(b) DATA TO IMPLEMENT.—Contractors of the Sec- 6 retary and lenders and guaranty agencies holding loans 7 made, insured, or guaranteed under part B shall report, 8 to the satisfaction of the Secretary, the information nec- 9 essary to calculate the amount to be applied under sub- 10 section (a).’’. 11 SEC. 3. EXCLUSION FROM GROSS INCOME. 12 (a) IN GENERAL.—Part III of subchapter B of chap- 13 ter 1 of the Internal Revenue Code of 1986 is amended 14 by inserting after section 139H the following new section: 15 ‘‘SEC. 139I. STUDENT LOAN PAYMENTS RESULTING FROM A 16 NATIONAL EMERGENCY. 17 ‘‘Gross income shall not include any payment made 18 on behalf of the taxpayer under section 493E(b)(1) or 19 493F of the Higher Education Act of 1965.’’. 20 (b) CLERICAL AMENDMENT.—The table of sections 21 for part III of subchapter B of chapter 1 of the Internal 22 Revenue Code of 1986 is amended by inserting after the 23 item relating to section 139H the following new item: 24 ‘‘Sec. 139I. Student loan payments resulting from a national emergency.’’. VerDate Sep 11 2014 18:22 Apr 09, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6211 E:\BILLS\H6363.IH H6363 pamtmann on DSKBC07HB2PROD with BILLS 12 •HR 6363 IH (c) EFFECTIVE DATE.—The amendments made by 1 this section shall apply to taxable years beginning after 2 December 31, 2019. 3 Æ VerDate Sep 11 2014 18:22 Apr 09, 2020 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6301 E:\BILLS\H6363.IH H6363 pamtmann on DSKBC07HB2PROD with BILLS