Coronavirus E-BD Act of 2020

II 116TH CONGRESS 2D SESSION S. 3745 To direct the Secretary of Education to provide relief to borrowers of student loans for whom the Department of Education found misrepresentation by the institution of higher education or a State attorney general has asserted a right to borrower defense discharge. IN THE SENATE OF THE UNITED STATES MAY 14, 2020 Mr. DURBIN (for himself, Mr. BROWN, and Ms. WARREN) introduced the fol- lowing bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions A BILL To direct the Secretary of Education to provide relief to borrowers of student loans for whom the Department of Education found misrepresentation by the institution of higher education or a State attorney general has as- serted a right to borrower defense discharge. 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 ‘‘Coronavirus Emer- 4 gency Borrower Defense Act of 2020’’ or the ‘‘Coronavirus 5 E-BD Act of 2020’’. 6 VerDate Sep 11 2014 15:59 Jun 03, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S3745.IS S3745 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 3745 IS SEC. 2. EMERGENCY BORROWER DEFENSE. 1 (a) EMERGENCY BORROWER DEFENSE.—An eligible 2 borrower, or parent borrower who took out an eligible loan 3 on behalf of an eligible borrower, shall be entitled to relief 4 on such loan pursuant to this section. 5 (b) ELIGIBLE BORROWER; ELIGIBLE LOAN.—In this 6 section: 7 (1) ELIGIBLE BORROWER.— 8 (A) IN GENERAL.—The term ‘‘eligible bor- 9 rower’’ means— 10 (i) a borrower covered by Department 11 of Education findings made on or before 12 the date of enactment of this section 13 against an institution of higher education 14 for job placement rate misrepresentation; 15 (ii) a borrower on whose behalf a 16 State attorney general has asserted a right 17 to borrower defense discharge if the asser- 18 tion was made by the State attorney gen- 19 eral to the Secretary of Education on or 20 before the date of enactment of this sec- 21 tion; or 22 (iii) a borrower who— 23 (I) was subject to a misrepresen- 24 tation made by the institution of high- 25 er education that the borrower at- 26 VerDate Sep 11 2014 15:59 Jun 03, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3745.IS S3745 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 3745 IS tended related to guaranteed employ- 1 ment or transferability of credits 2 where such misrepresentation was es- 3 tablished by the Department of Edu- 4 cation in findings made on or before 5 the date of enactment of this section; 6 and 7 (II) has asserted being subject to 8 such misrepresentation in a borrower 9 defense application to the Secretary of 10 Education. 11 (B) ELIGIBILITY.—A borrower— 12 (i) described in clause (i) or (ii) of 13 subparagraph (A), shall be an eligible bor- 14 rower whether or not the borrower has ap- 15 plied for borrower defense and whether or 16 not the borrower’s claim has been adju- 17 dicated, if the borrower has not previously 18 received complete relief on the eligible loan 19 based on the borrower defense; and 20 (ii) described in subparagraph (A)(iii), 21 shall be an eligible borrower whether or 22 not the borrower’s claim has been adju- 23 dicated, so long as they have not previously 24 received complete relief on their Federal 25 VerDate Sep 11 2014 15:59 Jun 03, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3745.IS S3745 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 3745 IS student loans based on their borrower de- 1 fense. 2 (2) ELIGIBLE LOAN.—The term ‘‘eligible loan’’ 3 means a loan made, insured, or guaranteed under 4 part B or D of title IV of the Higher Education Act 5 of 1965 (20 U.S.C. 1071 et seq.; 1087a et seq.). 6 (c) RELIEF.—With respect to— 7 (1) an eligible borrower described in clause (i) 8 or (ii) of subsection (b)(1)(A), or an eligible bor- 9 rower described in subsection (b)(1)(A)(iii) who ap- 10 plied for borrower defense prior to the date of enact- 11 ment of this section, the Secretary of Education 12 shall— 13 (A) not later than 30 days after the date 14 of enactment of this section, discharge the bor- 15 rower, or parent borrower who took out an eli- 16 gible loan on behalf of such borrower, of the full 17 obligation to repay the eligible loan (including 18 associated interest, costs, and fees that the bor- 19 rower or parent borrower would otherwise be 20 obligated to pay); 21 (B) not later than 45 days after the date 22 of enactment of this section, reimburse the bor- 23 rower, or parent borrower who took out an eli- 24 gible loan on behalf of such borrower, for 25 VerDate Sep 11 2014 15:59 Jun 03, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S3745.IS S3745 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 3745 IS amounts paid toward the loan voluntarily or 1 through enforced collection; 2 (C) not later than 60 days after the date 3 of enactment of this section, report the dis- 4 charge under this section to all consumer re- 5 porting agencies to which the Secretary pre- 6 viously reported the status of the loan, so as to 7 delete all adverse credit history assigned to the 8 loan; and 9 (D) not later than 60 days after the date 10 of enactment of this section, no longer consider 11 a borrower, or parent borrower who took out a 12 loan on behalf of such borrower, who has de- 13 faulted on a loan discharged under this section 14 to be in default on the discharged loan; and 15 (2) an eligible borrower described in subsection 16 (b)(1)(A)(iii) who did not apply for borrower defense 17 prior to the date of enactment of this section, the 18 Secretary of Education shall— 19 (A) not later than 30 days after the date 20 such borrower applies for borrower defense, dis- 21 charge the borrower, or parent borrower who 22 took out an eligible loan on behalf of such bor- 23 rower, of the full obligation to repay the eligible 24 loan (including associated interest, costs, and 25 VerDate Sep 11 2014 15:59 Jun 03, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S3745.IS S3745 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 3745 IS fees that the borrower or parent borrower would 1 otherwise be obligated to pay); 2 (B) not later than 45 days after such bor- 3 rower applies for borrower defense, reimburse 4 the borrower, or parent borrower who took out 5 an eligible loan on behalf of such borrower, for 6 amounts paid toward the loan voluntarily or 7 through enforced collection; 8 (C) not later than 60 days after such bor- 9 rower applies for borrower defense, report the 10 discharge under this section to all consumer re- 11 porting agencies to which the Secretary pre- 12 viously reported the status of the loan, so as to 13 delete all adverse credit history assigned to the 14 loan; and 15 (D) not later than 60 days after such bor- 16 rower applies for borrower defense, no longer 17 consider a borrower, or parent borrower who 18 took out a loan on behalf of such borrower, who 19 has defaulted on a loan discharged under this 20 section to be in default on the discharged loan. 21 (d) NOTIFICATION.—With respect to— 22 (1) an eligible borrower described in clause (i) 23 or (ii) of subsection (b)(1)(A), an eligible borrower 24 described in subsection (b)(1)(A)(iii) who applied for 25 VerDate Sep 11 2014 15:59 Jun 03, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S3745.IS S3745 pamtmann on DSKBC07HB2PROD with BILLS 7 •S 3745 IS borrower defense prior to the date of enactment of 1 this section, or a parent borrower who took out an 2 eligible loan on behalf of such an eligible borrower, 3 the Secretary of Education shall, not later than 20 4 days after the date of enactment of this section, no- 5 tify such borrower or parent borrower in writing 6 of— 7 (A) the relief to which the borrower is enti- 8 tled pursuant to subsection (c); 9 (B) the time in which such relief will be 10 provided pursuant to subsection (c); 11 (C) the borrower’s eligibility to receive as- 12 sistance under title IV of the Higher Education 13 Act of 1965 (20 U.S.C. 1070 et seq.) after re- 14 ceiving relief pursuant to subsection (c); and 15 (D) any further relief to such borrower or 16 parent borrower as the Secretary of Education 17 determines is appropriate; and 18 (2) an eligible borrower described in subsection 19 (b)(1)(A)(iii) who did not apply for borrower defense 20 prior to the date of enactment of this section, or a 21 parent borrower who took out an eligible loan on be- 22 half of such an eligible borrower, the Secretary of 23 Education shall, not later than 20 days after such 24 VerDate Sep 11 2014 15:59 Jun 03, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S3745.IS S3745 pamtmann on DSKBC07HB2PROD with BILLS 8 •S 3745 IS borrower applies for borrower defense, notify such 1 borrower or parent borrower in writing of— 2 (A) the relief to which the borrower is enti- 3 tled pursuant to subsection (c); 4 (B) the time in which such relief will be 5 provided pursuant to subsection (c); 6 (C) the borrower’s eligibility to receive as- 7 sistance under title IV of the Higher Education 8 Act of 1965 (20 U.S.C. 1070 et seq.) after re- 9 ceiving relief pursuant to subsection (c); and 10 (D) any further relief to such borrower or 11 parent borrower as the Secretary of Education 12 determines is appropriate. 13 (e) INSTITUTIONAL ACCOUNTABILITY.—For a dis- 14 charge granted under this section, the Secretary of Edu- 15 cation shall, as applicable, initiate an appropriate pro- 16 ceeding to require the institution of higher education 17 whose act or omission resulted in the discharge to repay 18 to the Secretary of Education the amount discharged 19 whether by offset, claim on a letter of credit, or other pro- 20 tection provided by the institution of higher education. 21 Æ VerDate Sep 11 2014 15:59 Jun 03, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\S3745.IS S3745 pamtmann on DSKBC07HB2PROD with BILLS