Equity in Student Loan Relief Act

I 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 Com- mittee 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 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 ‘‘Equity in Student 4 Loan Relief Act’’. 5 SEC. 2. LOWERING RATES FOR BORROWERS WITH FED- 6 ERAL FAMILY EDUCATION LOANS. 7 (a) TEMPORARY PROGRAM OF FEDERAL SUBSIDY 8 PAYMENTS TO DEFRAY BORROWER INTEREST COSTS ON 9 VerDate Sep 11 2014 00:23 Apr 25, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H6597.IH H6597 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 6597 IH FEDERAL FAMILY EDUCATION LOANS.—Notwithstanding 1 any other provision of the Higher Education Act of 1965 2 (20 U.S.C. 1071 et seq.), the Secretary of Education shall 3 carry out a temporary program concerning the novel 4 coronavirus virus disease (COVID–19) outbreak to pro- 5 vide payment relief to borrowers with loans made under 6 part B of the Higher Education Act of 1965 (20 U.S.C. 7 1071 et seq.), that are not held by the Federal Govern- 8 ment. 9 (1) Under the program, the Secretary is di- 10 rected to enter into agreements expeditiously with el- 11 igible lenders and guaranty agencies to reduce inter- 12 est rates to 0.00 percent on such loans and shall 13 make payments, as set forth below, to such eligible 14 lenders and guaranty agencies to offset the cost of 15 the reduced interest rates. Under such agreements, 16 the Secretary shall— 17 (A) make Federal interest subsidy pay- 18 ments on behalf of each borrower whose loans 19 are held by such eligible lender or guaranty 20 agency equal to the total amount of the interest 21 on the unpaid principal amount of the loans, 22 calculated at the borrower interest rates estab- 23 lished under section 427A of the Higher Edu- 24 cation Act of 1965 (20 U.S.C. 1077a); and 25 VerDate Sep 11 2014 00:23 Apr 25, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H6597.IH H6597 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 6597 IH (B) make these Federal interest subsidy 1 payments to an eligible lender or guaranty 2 agency on a monthly basis, beginning as of 3 March 13, 2020. 4 (2) Under the program and effective as of 5 March 13, 2020, all eligible lenders and guaranty 6 agencies who have entered agreements with the Sec- 7 retary under this subsection shall— 8 (A) temporarily waive interest, effectively 9 reducing the interest rates charged to borrowers 10 on loans made under this part to 0.00 percent; 11 (B) provide a report to the Secretary no 12 later than 30 days from the date of such agree- 13 ment confirming that such interest rates have 14 been reduced to 0.00 percent effective as of 15 March 13, 2020; and 16 (C) continue such reduction in interest 17 rates through September 30, 2020. 18 (3) For purposes of this paragraph, an eligible 19 lender includes the holder of the loan or, if the hold- 20 er acts as eligible lender trustee for the beneficial 21 owner of the loan, the beneficial owner of the loan. 22 (4) Nothing in this paragraph shall affect pay- 23 ment calculations under section 438 of the Higher 24 Education Act of 1965 (20 U.S.C. 1087). 25 VerDate Sep 11 2014 00:23 Apr 25, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H6597.IH H6597 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 6597 IH (b) TEMPORARY POSTPONEMENT OF PART B LOAN 1 PAYMENTS.—Notwithstanding any other provision of the 2 Higher Education Act of 1965 (20 U.S.C. 1071 et seq.), 3 the Secretary shall require eligible lenders and guaranty 4 agencies with agreements with the Secretary under sub- 5 section (a) to suspend all payments due from borrowers 6 through September 30, 2020. 7 (1) CONSIDERATION OF PAYMENTS.—Notwith- 8 standing any other provision of the Higher Edu- 9 cation Act of 1965 (20 U.S.C. 1001 et seq.), the 10 Secretary shall deem each month for which a loan 11 payment was suspended under this subsection as if 12 the borrower of the loan had made a qualified pay- 13 ment for the purpose of any loan forgiveness pro- 14 gram and loan rehabilitation program authorized 15 under the Higher Education Act of 1965 (20 U.S.C. 16 1071 et seq.). 17 (2) REPORTING TO CONSUMER REPORTING 18 AGENCIES.—During the period in which the bor- 19 rower payments on a loan are suspended under this 20 subsection, the Secretary shall ensure that, for the 21 purpose of reporting information about the loan to 22 a consumer reporting agency, any payment that has 23 been suspended is treated as if it were a regularly 24 scheduled payment made by a borrower. 25 VerDate Sep 11 2014 00:23 Apr 25, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H6597.IH H6597 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 6597 IH (c) SUSPENDING INVOLUNTARY COLLECTION.—Not- 1 withstanding any other provision of the Higher Education 2 Act of 1965 (20 U.S.C. 1071 et seq.), the Secretary shall 3 require guaranty agencies with agreements with the Sec- 4 retary under subsection (a) to suspend all involuntary col- 5 lection related to the loan, through September 30, 2020. 6 Such efforts shall include— 7 (1) a wage garnishment authorized under sec- 8 tion 488A of the Higher Education Act of 1965 (20 9 U.S.C. 1095a) or section 3720D of title 31, United 10 States Code; 11 (2) a reduction of tax refund by amount of debt 12 authorized under section 3720A of title 31, United 13 States Code, or section 6402(d) of the Internal Rev- 14 enue Code of 1986; 15 (3) a reduction of any other Federal benefit 16 payment by administrative offset authorized under 17 section 3716 of title 31, United States Code (includ- 18 ing a benefit payment due to an individual under the 19 Social Security Act or any other provision described 20 in subsection (c)(3)(A)(i) of such section); and 21 (4) any other involuntary collection activity by 22 the Secretary. 23 (d) NOTICE TO BORROWERS AND TRANSITION PE- 24 RIOD.—To inform borrowers of the actions taken in ac- 25 VerDate Sep 11 2014 00:23 Apr 25, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H6597.IH H6597 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 6597 IH cordance with this section and ensure an effective transi- 1 tion, the Secretary shall require eligible lenders and guar- 2 anty agencies with agreements under subsection (a) to— 3 (1) not later than 15 days after entering into 4 such agreement, notify borrowers— 5 (A) of the actions taken in accordance with 6 this section for whom payments have been sus- 7 pended and interest waived; 8 (B) of the actions taken in accordance with 9 subsection (c) for whom collections have been 10 suspended; 11 (C) of the option to continue making pay- 12 ments toward principal; and 13 (D) that the program under this section is 14 a temporary program; and 15 (2) beginning on August 1, 2020, carry out a 16 program to provide not less than 6 notices by postal 17 mail, telephone, or electronic communication to bor- 18 rowers indicating— 19 (A) when the borrower’s normal payment 20 obligations will resume; and 21 (B) that the borrower has the option to 22 apply for income-driven repayment or other re- 23 payment or forgiveness programs, including a 24 brief description of such options. 25 VerDate Sep 11 2014 00:23 Apr 25, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H6597.IH H6597 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 6597 IH (e) WAIVERS.—In carrying out this section, the Sec- 1 retary may waive the application of— 2 (1) subchapter I of chapter 35 of title 44, 3 United States Code (commonly known as the ‘‘Pa- 4 perwork Reduction Act’’); 5 (2) the master calendar requirements under 6 section 482 of the Higher Education Act of 1965 7 (20 U.S.C. 1089); 8 (3) negotiated rulemaking under section 492 of 9 the Higher Education Act of 1965 (20 U.S.C. 10 1098a); and 11 (4) the requirement to publish the notices re- 12 lated to the system of records of the agency before 13 implementation required under paragraphs (4) and 14 (11) of section 552a(e) of title 5, United States 15 Code (commonly known as the ‘‘Privacy Act of 16 1974’’), except that the notices shall be published 17 not later than 180 days after the date of enactment 18 of this Act. 19 Æ VerDate Sep 11 2014 00:23 Apr 25, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\H6597.IH H6597 pamtmann on DSKBC07HB2PROD with BILLS