II 

116TH CONGRESS 

2D SESSION S. 4237 

To extend zero interest rate benefits and payment suspension to all Federal 

student loan borrowers, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 21, 2020 

Mr. REED (for himself, Ms. MURKOWSKI, Mr. JONES, and Mr. TILLIS) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions 

A BILL 

To extend zero interest rate benefits and payment suspension 

to all Federal student loan borrowers, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Student Loan Fairness 

5 Act’’. 

6 SEC. 2. ASSISTANCE FOR BORROWERS WITH FEDERAL FAM7 ILY EDUCATION LOANS AND FEDERAL PER8 KINS LOANS. 

9 (a) TEMPORARY PROGRAM OF ASSISTANCE FOR BOR10 ROWERS WITH FEDERAL FAMILY EDUCATION LOANS


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1 AND FEDERAL PERKINS LOANS.—Notwithstanding any 

2 other provision of the Higher Education Act of 1965 (20 

3 U.S.C. 1071 et seq.), the Secretary of Education shall 

4 carry out a temporary program to make interest payments 

5 on behalf of borrowers on loans made under part B of 

6 the Higher Education Act of 1965 (20 U.S.C. 1071 et 

7 seq.) or loans under part E of the Higher Education Act 

8 of 1965 (20 U.S.C. 1087aa et seq.), that are not held by 

9 the Federal Government (referred to in this section as 

10 ‘‘qualifying loans’’) to assist such borrowers during the pe11 riod of response and recovery relating to the novel 

12 coronavirus disease (COVID–19) outbreak. 

13 (1) Under the program, the Secretary shall 

14 enter into agreements, expeditiously, but not later 

15 than 30 days after the date of enactment of this 

16 Act, with eligible lenders and guaranty agencies 

17 under which the Secretary shall make interest pay18 ments to such eligible lenders and guaranty agencies 

19 on behalf of all borrowers of all qualifying loans in 

20 accordance with this section. Under such agree21 ments— 

22 (A) the Secretary shall— 

23 (i) make payments on behalf of each 

24 borrower of qualifying loans whose loans 

25 are held by such eligible lender or guaranty 


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1 agency equal to the total amount of the in2 terest on the unpaid principal amount of 

3 such loans, calculated at the borrower in4 terest rates established under section 427A 

5 of the Higher Education Act of 1965 (20 

6 U.S.C. 1077a) (or at a lesser rate as es7 tablished under section 427A(m) of such 

8 Act, if applicable) for loans under part B 

9 of such Act and calculated at the borrower 

10 interest rates established under section 

11 464 of such Act (20 U.S.C. 1087dd) for 

12 loans under part E of such Act; and 

13 (ii) make such payments to an eligible 

14 lender or guaranty agency on a monthly 

15 basis, for the period beginning on March 

16 13, 2020, and ending on September 30, 

17 2020 (referred to in this section as the 

18 ‘‘applicable period’’); and 

19 (B) each eligible lender and guaranty 

20 agency who has entered into an agreement with 

21 the Secretary under this subsection shall— 

22 (i) credit the interest payments paid 

23 by the Secretary under this subsection as 

24 full satisfaction of the obligation of the 


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1 borrowers to pay interest during the appli2 cable period; 

3 (ii) credit the account of a borrower, 

4 as an amount paid on the principal or in5 terest of the qualifying loan in addition to 

6 the amounts credited under clause (i), in 

7 the case of a borrower who has made an 

8 interest payment for the applicable period; 

9 and 

10 (iii) not later than 30 days from the 

11 date of such agreement, provide a report to 

12 the Secretary confirming that such bor13 rowers have been or will be credited in ac14 cordance with this subparagraph. 

15 (2) For purposes of this subsection, an eligible 

16 lender includes the holder of the loan or, if the hold17 er acts as eligible lender trustee for the beneficial 

18 owner of the loan, the beneficial owner of the loan. 

19 (3) Nothing in this subsection shall affect pay20 ment calculations under section 438 of the Higher 

21 Education Act of 1965 (20 U.S.C. 1087). 

22 (4) The Secretary shall ensure that each agree23 ment under this subsection includes every qualifying 

24 loan held by the eligible lender or guaranty agency. 


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1 (b) TEMPORARY POSTPONEMENT OF PART B AND

2 PART E LOAN PAYMENTS.—Notwithstanding any other 

3 provision of the Higher Education Act of 1965 (20 U.S.C. 

4 1071 et seq.), the Secretary shall require eligible lenders 

5 and guaranty agencies with agreements with the Secretary 

6 under subsection (a) to suspend all payments due from 

7 borrowers on qualifying loans through September 30, 

8 2020. 

9 (1) CONSIDERATION OF PAYMENTS.—Notwith10 standing any other provision of the Higher Edu11 cation Act of 1965 (20 U.S.C. 1001 et seq.), the 

12 Secretary shall deem each month for which a loan 

13 payment was suspended under this subsection as if 

14 the borrower of the loan had made a qualified pay15 ment for the purpose of any loan forgiveness pro16 gram and loan rehabilitation program authorized 

17 under the Higher Education Act of 1965 (20 U.S.C. 

18 1071 et seq.). 

19 (2) REPORTING TO CONSUMER REPORTING

20 AGENCIES.—During the period in which the bor21 rower payments on a loan are suspended under this 

22 subsection, the Secretary shall ensure that, for the 

23 purpose of reporting information about the loan to 

24 a consumer reporting agency, any payment that has 


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1 been suspended is treated as if it were a regularly 

2 scheduled payment made by a borrower. 

3 (c) SUSPENDING INVOLUNTARY COLLECTION.—Not4 withstanding any other provision of the Higher Education 

5 Act of 1965 (20 U.S.C. 1071 et seq.), the Secretary shall 

6 suspend, and shall require guaranty agencies with agree7 ments with the Secretary under subsection (a) to suspend, 

8 all involuntary collection related to the qualifying loan, 

9 through September 30, 2020. Such efforts shall include— 

10 (1) a wage garnishment authorized under sec11 tion 488A of the Higher Education Act of 1965 (20 

12 U.S.C. 1095a) or section 3720D of title 31, United 

13 States Code; 

14 (2) a reduction of tax refund by amount of debt 

15 authorized under section 3720A of title 31, United 

16 States Code, or section 6402(d) of the Internal Rev17 enue Code of 1986; 

18 (3) a reduction of any other Federal benefit 

19 payment by administrative offset authorized under 

20 section 3716 of title 31, United States Code (includ21 ing a benefit payment due to an individual under the 

22 Social Security Act or any other provision described 

23 in subsection (c)(3)(A)(i) of such section); and 

24 (4) any other involuntary collection activity by 

25 the Secretary. 


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1 (d) NOTICE TO BORROWERS AND TRANSITION PE2 RIOD.—To inform borrowers of the actions taken in ac3 cordance with this section and ensure an effective transi4 tion, the Secretary shall require eligible lenders and guar5 anty agencies with agreements under subsection (a) to— 

6 (1) not later than 15 days after entering into 

7 such agreement, notify borrowers— 

8 (A) of the actions taken in accordance with 

9 this section for whom payments have been sus10 pended and interest paid by the Secretary on 

11 behalf of that borrower; 

12 (B) of the actions taken in accordance with 

13 subsection (c) for whom collections have been 

14 suspended; 

15 (C) of the option to continue making pay16 ments toward principal; and 

17 (D) that the program under this section is 

18 a temporary program; and 

19 (2) beginning on August 1, 2020, carry out a 

20 program to provide not less than 6 notices by postal 

21 mail, telephone, or electronic communication to bor22 rowers indicating— 

23 (A) when the borrower’s normal payment 

24 obligations will resume; and 


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1 (B) any options the borrower may have for 

2 income-driven repayment or forgiveness. 

3 (e) WAIVERS.—In carrying out this section, the Sec4 retary may waive the application of— 

5 (1) subchapter I of chapter 35 of title 44, 

6 United States Code (commonly known as the ‘‘Pa7 perwork Reduction Act’’); 

8 (2) the master calendar requirements under 

9 section 482 of the Higher Education Act of 1965 

10 (20 U.S.C. 1089); 

11 (3) negotiated rulemaking under section 492 of 

12 the Higher Education Act of 1965 (20 U.S.C. 

13 1098a); and 

14 (4) the requirement to publish the notices re15 lated to the system of records of the agency before 

16 implementation required under paragraphs (4) and 

17 (11) of section 552a(e) of title 5, United States 

18 Code (commonly known as the ‘‘Privacy Act of 

19 1974’’), except that the notices shall be published 

20 not later than 180 days after the date of enactment 

21 of this Act. 

22 (f) DEFERMENT OR FORBEARANCE.—The Secretary 

23 shall require eligible lenders and guaranty agencies with 

24 agreements with the Secretary under subsection (a) to en25 sure that any period of deferment or forbearance on a 


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1 qualifying loan during the period beginning on March 13, 

2 2020, and ending on September 30, 2020, shall not be 

3 counted toward any cumulative limits on deferment or for4 bearance periods. 

5 (g) ELIGIBLE LENDER.—In this section, the term 

6 ‘‘eligible lender’’ shall include— 

7 (1) an institution of higher education in the 

8 case of a loan made under part E of the Higher 

9 Education Act of 1965 (20 U.S.C. 1087aa et seq.); 

10 and 

11 (2) an eligible lender as defined by section 

12 435(d) of the Higher Education Act of 1965 (20 

13 U.S.C. 1085). 

Æ 


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