COVID-19 Perkins Loan Relief Act

To suspend Federal Perkins Loans repayments during the COVID–19 pandemic, and for other purposes. 1. Short title This Act may be cited as the COVID–19 Perkins Loan Relief Act 2. Lowering rates for borrowers with Federal Perkins loans (a) Suspension of interest (1) Suspension of interest The Secretary of Education shall require holders of Federal Perkins Loans to suspend the accrual of interest on such loans during the COVID–19 pandemic. (2) Requirements Under the program and effective as of March 13, 2020, all holders of Federal Perkins Loans shall— (A) provide that no interest shall accrue on Federal Perkins Loans until September 30, 2020; and (B) provide a report to the Secretary of Education not later than 30 days after the date of the enactment of this Act confirming that no interest has accrued on such loans as of March 13, 2020. (3) Repayment of interest The Secretary of Education shall make payments to the holders of Federal Perkins Loans on behalf of each borrower of such a Federal Perkins Loan in an amount equal to the total amount of the interest suspended under paragraph (1) with respect to such Federal Perkins Loan. (b) Suspension of payments (1) In general Notwithstanding any other provision of the Higher Education Act of 1965 ( 20 U.S.C. 1071 (2) Consideration of payments Notwithstanding any other provision of the Higher Education Act of 1965 ( 20 U.S.C. 1001 20 U.S.C. 1071 (3) Reporting to consumer reporting agencies During the period in which the borrower payments on a loan are suspended under this subsection, the Secretary of Education shall ensure that, for the purpose of reporting information about the loan to a consumer reporting agency, any payment that has been suspended is treated as if it were a regularly scheduled payment made by a borrower. (c) Suspension of involuntary collection (1) Collection by institutions Notwithstanding any other provision of the Higher Education Act of 1965 ( 20 U.S.C. 1071 (2) Collection by Secretary During the period beginning on the date of the enactment of this section and ending on September 30, 2020, the following provisions may not apply with respect to a Federal Perkins Loan: (A) A wage garnishment authorized under section 488A of the Higher Education Act of 1965 ( 20 U.S.C. 1095a (B) A reduction of tax refund by amount of debt authorized under section 3720A of title 31, United States Code, or section 6402(d) (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). (D) Any other involuntary collection activity by the Secretary of Education. (d) Notice to borrowers and transition period To inform borrowers of the actions taken in accordance with this section and ensure an effective transition, the Secretary of Education shall require institutions of higher education to— (1) not later than 15 days after the date of the enactment of this Act, notify borrowers— (A) of the actions taken in accordance with this section for whom payments have been suspended and no interest shall accrue; (B) of the actions taken in accordance with subsection (c) for whom collections have been suspended; (C) of the option to continue making payments toward principal; and (D) that the program under this section shall only be provided during the COVID–19 pandemic; and (2) beginning on August 1, 2020, carry out a program to provide not less than 6 notices by postal mail, telephone, or electronic communication to borrowers indicating when the borrower’s normal payment obligations will resume. (e) Waivers In carrying out this section, the Secretary of Education may waive the application of— (1) subchapter I of chapter 35 Paperwork Reduction Act (2) the master calendar requirements under section 482 of the Higher Education Act of 1965 ( 20 U.S.C. 1089 (3) negotiated rulemaking under section 492 of the Higher Education Act of 1965 ( 20 U.S.C. 1098a (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 (f) Effective date This section shall take effect as if included in the enactment of the CARES Act ( Public Law 116–136

Summary: COVID-19 Perkins Loan Relief Act This bill suspends payments and interest on Federal Perkins Loans through September 30, 2020. (Currently, payments and interest are suspended on certain Federal Direct Loans and Federal Family Education Loans through this period.) Specifically, the Department of Education (ED) must require holders of Federal Perkins Loans to (1) suspend the accrual of interest on such loans until September 30, 2020, and (2) confirm to ED that no interest has accrued on such loans as of March 13, 2020. ED must make suspended interest payments to holders of such loans on behalf of borrowers. Further, ED must require institutions of higher education to (1) suspend all payments due from borrowers through September 30, 2020; (2) suspend all involuntary collections; (3) notify borrowers, within 15 days, that their loan payments have been suspended and interest has been waived; and (4) carry out a program, beginning on August 1, 2020, to provide not fewer than six notices to borrowers that normal payment obligations will resume. Additionally, ED must deem each month for which a loan payment was suspended as if the borrower of the loan had made a payment for the purpose of any authorized loan forgiveness program or loan rehabilitation program, ensure that any suspended payment on such 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, and suspend involuntary collections related to such loans.