Emergency Relief for Student Borrowers Act of 2020

I 116TH CONGRESS 2D SESSION H. R. 6316 To provide relief for Federal and private student loan borrowers during the COVID–19 pandemic, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MARCH 23, 2020 Ms. DEAN introduced the following bill; which was referred to the Committee on Education and Labor, and in addition to the Committees on Financial Services, and Ways and Means, for a period to be subsequently deter- mined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To provide relief for Federal and private student loan bor- rowers during the COVID–19 pandemic, 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 ‘‘Emergency Relief for 4 Student Borrowers Act of 2020’’. 5 VerDate Sep 11 2014 02:01 Apr 07, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H6316.IH H6316 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 6316 IH SEC. 2. PAYMENTS FOR FEDERAL STUDENT LOAN BOR- 1 ROWERS AS A RESULT OF A NATIONAL EMER- 2 GENCY. 3 (a) IN GENERAL.—Part G of title IV of the Higher 4 Education Act of 1965 (20 U.S.C. 1088 et seq.) is amend- 5 ed by inserting after section 493D the following: 6 ‘‘SEC. 493E. PAYMENTS FOR STUDENT LOAN BORROWERS 7 DURING THE COVID–19 NATIONAL EMER- 8 GENCY. 9 ‘‘(a) DEFINITIONS.—In this section: 10 ‘‘(1) CORONAVIRUS.—The term ‘coronavirus’ 11 has the meaning given the term in section 506 of the 12 Coronavirus Preparedness and Response Supple- 13 mental Appropriations Act, 2020 (Public Law 116– 14 123). 15 ‘‘(2) INCOME-DRIVEN REPAYMENT.—The term 16 ‘income-driven repayment’ means— 17 ‘‘(A) income-based repayment authorized 18 under section 493C for loans made, insured, or 19 guaranteed under part B or part D; or 20 ‘‘(B) income contingent repayment author- 21 ized under section 455(e) for loans made under 22 part D. 23 ‘‘(3) INVOLUNTARY COLLECTION.—The term 24 ‘involuntary collection’ means— 25 VerDate Sep 11 2014 02:01 Apr 07, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H6316.IH H6316 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 6316 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) COVID–19 EMERGENCY PERIOD.—For 16 purposes of this Act, the term ‘COVID–19 emer- 17 gency period’ means the period that begins upon the 18 date of the enactment of this Act and ends upon the 19 date of the termination by the Federal Emergency 20 Management Administration of the emergency de- 21 clared on March 13, 2020, by the President under 22 the Robert T. Stafford Disaster Relief and Emer- 23 gency Assistance Act (42 U.S.C. 4121 et seq.) relat- 24 VerDate Sep 11 2014 02:01 Apr 07, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H6316.IH H6316 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 6316 IH ing to the Coronavirus Disease 2019 (COVID–19) 1 pandemic. 2 ‘‘(b) COVID–19 NATIONAL EMERGENCY STUDENT 3 LOAN REPAYMENT ASSISTANCE.— 4 ‘‘(1) AUTHORITY.—Effective on the date of the 5 enactment of this section, during the COVID–19 6 emergency period and the 6-month period imme- 7 diately following, the Secretary of Education shall 8 for each borrower of a loan made, insured, or guar- 9 anteed under part B, D, or E, pay the total amount 10 due for such month on the loan, based on the pay- 11 ment plan selected by the borrower or the borrower’s 12 loan status. 13 ‘‘(2) NO CAPITALIZATION OF INTEREST.—With 14 respect to any loan in repayment during the 15 COVID–19 national emergency period and the 6- 16 month period immediately following, interest due on 17 loans made, insured, or guaranteed under part B, D, 18 or E during such period shall not be capitalized at 19 any time during the COVID–19 national emergency 20 period and the 6-month period immediately fol- 21 lowing. 22 ‘‘(3) APPLICABILITY OF PAYMENTS.—Any pay- 23 ment made by the Secretary of Education under this 24 section shall be considered by the Secretary of Edu- 25 VerDate Sep 11 2014 02:01 Apr 07, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H6316.IH H6316 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 6316 IH cation, or by a lender with respect to a loan made, 1 insured, or guaranteed under part B— 2 ‘‘(A) as a qualifying payment under the 3 public service loan forgiveness program under 4 section 455(m), if the borrower would otherwise 5 qualify under such section; 6 ‘‘(B) in the case of a borrower enrolled in 7 an income-driven repayment plan, as a quali- 8 fying payment for the purpose of calculating eli- 9 gibility for loan forgiveness for the borrower in 10 accordance with section 493C(b)(7) or section 11 455(d)(1)(D), as the case may be; and 12 ‘‘(C) in the case of a borrower in default, 13 as an on-time monthly payment for purposes of 14 loan rehabilitation pursuant to section 428F(a). 15 ‘‘(4) REPORTING TO CONSUMER REPORTING 16 AGENCIES.—During the period in which the Sec- 17 retary of Education is making payments on a loan 18 under paragraph (1), the Secretary shall ensure 19 that, for the purpose of reporting information about 20 the loan to a consumer reporting agency, any pay- 21 ment made by the Secretary is treated as if it were 22 a regularly scheduled payment made by a borrower. 23 ‘‘(5) NOTICE OF PAYMENTS AND PROGRAM.— 24 Not later than 15 days following the date of enact- 25 VerDate Sep 11 2014 02:01 Apr 07, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H6316.IH H6316 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 6316 IH ment of this section, and monthly thereafter during 1 the COVID–19 national emergency period and the 2 6-month period immediately following, the Secretary 3 of Education shall provide a notice to all borrowers 4 of loans made, insured, or guaranteed under part B, 5 D, or E— 6 ‘‘(A) informing borrowers of the actions 7 taken under this section; 8 ‘‘(B) providing borrowers with an easily 9 accessible method to opt out of the benefits pro- 10 vided under this section; and 11 ‘‘(C) notifying the borrower that the pro- 12 gram under this section is a temporary program 13 and will end 6 months after the COVID–19 na- 14 tional emergency period ends. 15 ‘‘(6) SUSPENSION OF INVOLUNTARY COLLEC- 16 TION.—During the COVID–19 national emergency 17 period and the 6-month period immediately fol- 18 lowing, the Secretary of Education, or other holder 19 of a loan made, insured, or guaranteed under part 20 B, D, or E, shall immediately take action to halt all 21 involuntary collection related to the loan. 22 ‘‘(7) MANDATORY FORBEARANCE.—During the 23 period in which the Secretary of Education is mak- 24 ing payments on a loan under paragraph (1), the 25 VerDate Sep 11 2014 02:01 Apr 07, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H6316.IH H6316 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 6316 IH Secretary, or a lender or guaranty agency for a loan 1 made under part B, shall grant the borrower for- 2 bearance as follows: 3 ‘‘(A) A temporary cessation of all pay- 4 ments on the loan other than the payments of 5 interest and principal on the loan that are made 6 under paragraph (1). 7 ‘‘(B) For borrowers who are delinquent 8 but who are not yet in default before the date 9 on which the Secretary begins making payments 10 under paragraph (1), the retroactive application 11 of forbearance to address any delinquency.’’. 12 (b) FFEL AMENDMENT.—Section 428(c)(8) of the 13 Higher Education Act of 1965 (20 U.S.C. 1078(c)(8)) is 14 amended by striking ‘‘and for which’’ and all that follows 15 through ‘‘this subsection’’. 16 SEC. 3. PAYMENTS FOR PRIVATE EDUCATION LOAN BOR- 17 ROWERS AS A RESULT OF THE COVID–19 NA- 18 TIONAL EMERGENCY. 19 Section 140 of the Truth in Lending Act (15 U.S.C. 20 1650) is amended by adding at the end the following new 21 subsection: 22 ‘‘(h) COVID–19 NATIONAL EMERGENCY PRIVATE 23 EDUCATION LOAN REPAYMENT ASSISTANCE.— 24 VerDate Sep 11 2014 02:01 Apr 07, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H6316.IH H6316 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 6316 IH ‘‘(1) AUTHORITY.—Effective on the date of the 1 enactment of this section, for the duration of the 2 COVID–19 emergency period and the 6-month pe- 3 riod immediately following, the Secretary of the 4 Treasury shall, for each borrower of a private edu- 5 cation loan, pay the total amount due for such 6 month on the loan, based on the payment plan se- 7 lected by the borrower or the borrower’s loan status. 8 ‘‘(2) NO CAPITALIZATION OF INTEREST.—With 9 respect to any loan in repayment during the 10 COVID–19 national emergency period and the 6- 11 month period immediately following, interest due on 12 a private education loan during such period shall not 13 be capitalized at any time during the COVID–19 na- 14 tional emergency period and the 6-month period im- 15 mediately following. 16 ‘‘(3) REPORTING TO CONSUMER REPORTING 17 AGENCIES.—During the period in which the Sec- 18 retary of the Treasury is making payments on a 19 loan under paragraph (1), the Secretary shall ensure 20 that, for the purpose of reporting information about 21 the loan to a consumer reporting agency, any pay- 22 ment made by the Secretary is treated as if it were 23 a regularly scheduled payment made by a borrower. 24 VerDate Sep 11 2014 02:01 Apr 07, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H6316.IH H6316 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 6316 IH ‘‘(4) NOTICE OF PAYMENTS AND PROGRAM.— 1 Not later than 15 days following the date of enact- 2 ment of this subsection, and monthly thereafter dur- 3 ing the COVID–19 national emergency period and 4 the 6-month period immediately following, the Sec- 5 retary of the Treasury shall provide a notice to all 6 borrowers of private education loans— 7 ‘‘(A) informing borrowers of the actions 8 taken under this subsection; 9 ‘‘(B) providing borrowers with an easily 10 accessible method to opt out of the benefits pro- 11 vided under this subsection; and 12 ‘‘(C) notifying the borrower that the pro- 13 gram under this subsection is a temporary pro- 14 gram and will end 6 months after the COVID– 15 19 national emergency period ends. 16 ‘‘(5) SUSPENSION OF INVOLUNTARY COLLEC- 17 TION.—During the COVID–19 national emergency 18 period and the 6-month period immediately fol- 19 lowing, the holder of a private education loan shall 20 immediately take action to halt all involuntary col- 21 lection related to the loan. 22 ‘‘(6) MANDATORY FORBEARANCE.—During the 23 period in which the Secretary of the Treasury is 24 making payments on a loan under paragraph (1), 25 VerDate Sep 11 2014 02:01 Apr 07, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H6316.IH H6316 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 6316 IH the servicer of such loan shall grant the borrower 1 forbearance as follows: 2 ‘‘(A) A temporary cessation of all pay- 3 ments on the loan other than the payments of 4 interest and principal on the loan that are made 5 under paragraph (1). 6 ‘‘(B) For borrowers who are delinquent 7 but who are not yet in default before the date 8 on which the Secretary begins making payments 9 under paragraph (1), the retroactive application 10 of forbearance to address any delinquency. 11 ‘‘(7) DATA TO IMPLEMENT.—Holders and 12 servicers of private education loans shall report, to 13 the satisfaction of the Secretary of the Treasury, the 14 information necessary to calculate the amount to be 15 paid under this section. 16 ‘‘(8) COVID–19 EMERGENCY PERIOD DE- 17 FINED.—In this subsection, the term ‘COVID–19 18 emergency period’ means the period that begins 19 upon the date of the enactment of this Act and ends 20 upon the date of the termination by the Federal 21 Emergency Management Administration of the 22 emergency declared on March 13, 2020, by the 23 President under the Robert T. Stafford Disaster Re- 24 lief and Emergency Assistance Act (42 U.S.C. 4121 25 VerDate Sep 11 2014 02:01 Apr 07, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H6316.IH H6316 pamtmann on DSKBC07HB2PROD with BILLS 11 •HR 6316 IH et seq.) relating to the Coronavirus Disease 2019 1 (COVID–19) pandemic.’’. 2 SEC. 4. MINIMUM RELIEF FOR FEDERAL AND PRIVATE STU- 3 DENT LOAN BORROWERS AS A RESULT OF 4 THE COVID–19 NATIONAL EMERGENCY. 5 (a) MINIMUM STUDENT LOAN RELIEF AS A RESULT 6 OF THE COVID–19 NATIONAL EMERGENCY.—Not later 7 than 270 days after the last day of the COVID–19 emer- 8 gency period, the Secretaries concerned shall jointly carry 9 out a program under which a qualified borrower, with re- 10 spect to the covered loans and private education of loans 11 of such qualified borrower, shall receive in accordance with 12 subsection (c) an amount equal to the lesser of the fol- 13 lowing: 14 (1) The total amount of each covered loan and 15 each private education loan of the borrower; or 16 (2) $10,000. 17 (b) NOTIFICATION OF BORROWERS.—Not later than 18 270 days after the last day of the COVID–19 emergency 19 period, the Secretaries concerned shall notify each quali- 20 fied borrower of— 21 (1) the requirements to provide loan relief to 22 such borrower under this section; and 23 (2) the opportunity for such borrower to make 24 an election under subsection (c)(1) with respect to 25 VerDate Sep 11 2014 02:01 Apr 07, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H6316.IH H6316 pamtmann on DSKBC07HB2PROD with BILLS 12 •HR 6316 IH the application of such loan relief to the covered 1 loans and private education loans of such borrower. 2 (c) DISTRIBUTION OF FUNDING.— 3 (1) ELECTION BY BORROWER.—Not later than 4 45 days after a notice is sent under subsection (b), 5 a qualified borrower may elect to apply the amount 6 determined with respect to such borrower under sub- 7 section (a) to— 8 (A) any covered loan of the borrower; 9 (B) any private education loan of the bor- 10 rower; and 11 (C) any combination of the loans described 12 in subparagraphs (A) and (B). 13 (2) AUTOMATIC PAYMENT.— 14 (A) IN GENERAL.—In the case of a quali- 15 fied borrower who does not make an election 16 under paragr [Text truncated for display. 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