Student Debt Emergency Relief Act

To amend the Higher Education Act of 1965 to halt collection of certain student loans, and for other purposes. 1. Short title This Act may be cited as the Student Debt Emergency Relief Act 2. Payments for student loan borrowers as a result of a national emergency (a) Payments for student loan borrowers during a national emergency (1) In general Part G of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1088 493E. Payments for student loan borrowers during a national emergency (a) Definitions In this section: (1) Coronavirus The term coronavirus Public Law 116–123 (2) Income-driven repayment The term income-driven repayment (A) income-based repayment authorized under section 493C for loans made, insured, or guaranteed under part B or part D; or (B) income contingent repayment authorized under section 455(e) for loans made under part D. (3) Involuntary collection The term involuntary collection (A) a wage garnishment authorized under section 488A of this Act or section 3720D of title 31, United States Code; (B) a reduction of tax refund by amount of debt authorized under section 3720A of title 31, United States Code; (C) a reduction of any other Federal benefit payment by administrative offset authorized under section 3716 of title 31, United States Code (including a benefit payment due to an individual under the Social Security Act or any other provision described in subsection (c)(3)(A)(i) of such section); and (D) any other involuntary collection activity. (4) National emergency The term national emergency (A) a public health emergency related to the coronavirus that is declared by the Secretary of Health and Human Services pursuant to section 319 of the Public Health Service Act ( 42 U.S.C. 247d (B) a national emergency related to the coronavirus declared by the President under the National Emergencies Act ( 50 U.S.C. 1601 (b) National emergency student loan repayment assistance (1) Authority Upon the declaration of a national emergency, the Secretary shall for each borrower of a loan made, insured, or guaranteed under part B, D, or E, pay the total amount due for such month on the loan, based on the payment plan selected by the borrower or the borrower’s loan status. (2) No capitalization of interest With respect to any loan during a national emergency period, interest due on loans made, insured, or guaranteed under part B, D, or E during such period shall not be capitalized at any time during or after the national emergency. (3) Applicability of payments Any payment made by the Secretary under this section shall be considered by the Secretary, or by a lender with respect to a loan made, insured, or guaranteed under part B— (A) as a qualifying payment under the public service loan forgiveness program under section 455(m), if the borrower would otherwise qualify under such section; (B) in the case of a borrower enrolled in an income-driven repayment plan, as a qualifying payment for the purpose of calculating eligibility for loan forgiveness for the borrower in accordance with section 493C(b)(7) or section 455(d)(1)(D), as the case may be; and (C) in the case of a borrower in default, as an on-time monthly payment for purposes of loan rehabilitation pursuant to section 428F(a). (4) Reporting to consumer reporting agencies During the period in which the Secretary is making payments on a loan under paragraph (1), the Secretary shall ensure that, for the purpose of reporting information about the loan to a consumer reporting agency, any payment made by the Secretary is treated as if it were a regularly scheduled payment made by a borrower. (5) Notice of payments and program Not later than 15 days following the date of enactment of the Student Debt Emergency Relief Act, and monthly thereafter during the period of a national emergency, the Secretary shall provide a notice to all borrowers of loans made, insured, or guaranteed under part B, D, or E— (A) informing borrowers of the actions taken under this section; (B) providing borrowers with an easily accessible method to opt out of the benefits provided under this section; and (C) notifying the borrower that the program under this section is a temporary program and will end after the national emergency ends. (6) Suspension of involuntary collection In the event of a national emergency, the Secretary, or other holder of a loan made, insured, or guaranteed under part B, D, or E, shall immediately take action to halt all involuntary collection related to the loan. (7) Mandatory Forbearance During the period in which the Secretary is making payments on a loan under paragraph (1), the Secretary, or a lender or guaranty agency for a loan made under part B, shall grant the borrower forbearance, in the form of a temporary cessation of all payments on the loan other than the payments of interest and principal on the loan that are made under that paragraph. In the case of a borrower who is delinquent but who is not yet in default prior to the time when the Secretary begins making payments under paragraph (1), the Secretary, or a lender or guaranty agency for a loan made under part B, shall grant the borrower forbearance retroactively to address any such delinquency. (c) Waiver of interest during national emergency Notwithstanding any other provision of law, the Secretary shall pay any interest that would otherwise be charged or accrue during a national emergency on any loan made, insured, or guaranteed under part B, D, or E. (d) Termination and transition period Secretary shall make payments on a loan under subsection (b)(1) until the Secretary is authorized by Congress to cease making such payments and to terminate the program. Upon the termination of the authority of the Secretary to make payments on a loan under subsection (b)(1), the Secretary shall carry out a program to provide for a transition period of 90 days, beginning on the day the termination of the authority of the Secretary to make payments on a loan under subsection (b)(1), during which— (1) the Secretary shall provide not less than 3 notices to borrowers indicating when the borrower’s normal payment obligations will resume; and (2) any missed payments by a borrower under part B, D, or E shall not— (A) result in fees or penalties; or (B) be reported to any consumer reporting agency or otherwise impact the borrower’s credit history. (e) Implementation in FFEL entities To facilitate implementation of this section— (1) lenders and guaranty agencies holding loans made, insured, or guaranteed under part B shall report, to the satisfaction of the Secretary, information to verify at the borrower level the amount of payments made under this section; and (2) the Secretary shall have the authority to establish a payment schedule for purposes of this section for loans made, insured, or guaranteed under part B and not held by the Secretary. (f) Waivers In carrying out this section, the Secretary may waive the application of— (1) subchapter I of chapter 35 (2) the master calendar requirements under section 482; (3) negotiated rulemaking under section 492; and (4) the requirement to publish the notices related to the system of records of the agency before implementation required under paragraphs (4) and (11) of section 552a(e) of title 5, United States Code (commonly known as the Privacy Act of 1974 (g) Authorization of mandatory funding for implementation (1) In general There are authorized to be appropriated, and there are appropriated, from amounts in the Treasury not already appropriated— (A) $50,000,000 for fiscal year 2020 for the costs associated with implementation and coordination required of this section; and (B) such sums as are necessary to provide the payments and interest cancellation provided under this section. (2) Availability Amounts made available under paragraph (1) shall— (A) be in addition to any other amounts available to carry out this section; and (B) remain available until expended. . (2) FFEL amendment Section 428(c)(8) of the Higher Education Act of 1965 ( 20 U.S.C. 1078(c)(8) and for which this subsection (b) Minimum relief for student loan borrowers as a result of a national emergency Part G of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1088 493F. Minimum relief for student loan borrowers as a result of a national emergency (a) Minimum student loan relief as a result of a national emergency Not later than 90 days after termination of the authority of the Secretary to make payments on a loan under section 493(E)(b)(1), the Secretary shall, for each borrower of a loan made under part B, D, or E, apply to the total outstanding balance due on all such loans of the borrower, an amount equal to the lesser of— (1) the difference between $30,000 and the total amount of payments made by the Secretary under section 493E(b) on such loans of the borrower during the period of time when the Secretary was authorized to make payments on a loan under section 493E(b)(1); or (2) the total amount of outstanding principal and interest due on such loans of the borrower, as of the date of the calculation under this subsection. (b) Data To implement Contractors of the Secretary and lenders and guaranty agencies holding loans made, insured, or guaranteed under part B shall report, to the satisfaction of the Secretary, the information necessary to calculate the amount to be applied under subsection (a). . 3. Exclusion from gross income (a) In general Part III of subchapter B of chapter 1 139I. Student loan payments resulting from a national emergency Gross income shall not include any payment made on behalf of the taxpayer under section 493E(b)(1) or 493F of the Higher Education Act of 1965. . (b) Clerical amendment The table of sections for part III of subchapter B of chapter 1 Sec.139I. Student loan payments resulting from a national emergency. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2019.

Summary: Student Debt Emergency Relief Act This bill establishes and provides funds for federal student loan repayment assistance programs during a national emergency, including the public health emergency caused by the coronavirus (i.e., the virus that causes COVID-19). Specifically, the bill requires the Department of Education (ED) to make monthly payments for borrowers of Federal Direct Loans, Federal Family Education Loans, and Perkins Loans during a national emergency. ED must also pay any interest on such loans during the emergency. Additionally, ED must deem each month for which ED made a payment on behalf of the borrower as a qualifying payment for the purpose of certain loan forgiveness programs or loan rehabilitation programs; ensure that any payment on such a loan is treated as a regularly scheduled payment made by a borrower for the purpose of reporting information about the loan to a consumer reporting agency; notify borrowers, within 15 days and monthly thereafter, of the benefits provided by ED during the national emergency; and suspend all involuntary collections related to such loans, including wage garnishments, reductions of tax refunds, and reductions of certain federal benefit payments, such as Social Security. ED must (1) make monthly payments until authorized by Congress to terminate the program, (2) carry out a 90-day transition period, and (3) apply a minimum amount of payments to loans for each borrower. Payments made by ED as a result of a national emergency shall be excluded from the taxpayer's gross income. Interest shall not be capitalized during or after the national emergency.