Student Loan Relief Act
Bill: H.R.4797 | Sponsor: Rep. Carter, Troy (D-LA)
Policy area: Education

Summary:
Student Loan Relief Act
This bill establishes a program to discharge certain federal student loan debt.
Specifically, the bill requires the Department of Education (ED) to automatically discharge (i.e., repay or cancel) up to $50,000 of outstanding student loan debt for each borrower. Members of Congress are not eligible to receive loan discharges.
Further, the bill outlines the method of loan discharge and excludes the loan discharges from taxable income.
In addition, the bill requires ED to automatically place each federal student loan borrower in administrative forbearance for the one-year period in which ED carries out the discharge of student loans. During this period, payments are not due, interest does not accrue, and ED may not pursue debt collection activities (e.g., wage garnishments).

To direct the Secretary of Education to discharge up to $50,000 of 
  Federal student loan debt for each borrower, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Student Loan Relief Act''.

SEC. 2. LOAN DISCHARGE.

    (a) In General.--Subject to subsection (f), not later than the date 
that is 12 months after the date of enactment of this Act, the 
Secretary of Education shall discharge the qualified loan amount of 
each individual, without regard to the repayment status of the loan or 
whether the loan is in default.
    (b) Qualified Loan Amount.--The qualified loan amount of an 
individual is an amount equal to the lesser of--
            (1) $50,000; and
            (2) the aggregate loan obligation on the eligible Federal 
        loans of the taxpayer that is outstanding on the date of 
        enactment of this Act.
    (c) Method of Loan Discharge.--
            (1) In general.--To provide the loan discharge required 
        under subsection (a), the Secretary is authorized to carry out 
        a program--
                    (A) through the holder of the loan, to assume the 
                obligation to repay the qualified loan amount for a 
                loan made, insured, or guaranteed under part B of title 
                IV of the Higher Education Act of 1965 (20 U.S.C. 1071 
                et seq.);
                    (B) to cancel the qualified loan amount for a loan 
                made under part D of title IV of the Higher Education 
                Act of 1965 (20 U.S.C. 1087a et seq.), or assigned, 
                referred, or transferred to, or purchased by, the 
                Secretary under such title IV (20 U.S.C. 1070 et seq.); 
                and
                    (C) through the institution of higher education 
                that made the loan from its student loan fund 
                established under part E of such title (20 U.S.C. 
                1087aa et seq.), to assume the obligation to repay the 
                qualified loan amount for such loan.
            (2) Order of loan discharge.--With respect to an individual 
        with at least 2 eligible Federal loans, the Secretary shall 
        discharge the loans of the individual as follows (except as 
        otherwise indicated by the individual):
                    (A) In the case in which the individual has loans 
                with different rates of interest, the loans should be 
                discharged in descending order by rate of interest.
                    (B) In the case in which the individual has loans 
                with the same rates of interest, the loans should be 
                discharged in descending order by amount of outstanding 
                principal.
    (d) Exclusion From Taxable Income.--For purposes of the Internal 
Revenue Code of 1986, in the case of an individual, gross income does 
not include any amount which (but for this subsection) would be 
includible in gross income by reason of the discharge (in whole or in 
part) of any loan if such discharge was pursuant to this Act.
    (e) Taxpayer Information.--
            (1) In general.--The Secretary of the Treasury may, upon 
        written request from the Secretary of Education, disclose to 
        officers and employees of the Department of Education return 
        information with respect to a taxpayer who has received 
        eligible Federal loans that are outstanding on the date of 
        enactment of this Act. Such return information shall be limited 
        to--
                    (A) taxpayer identity information with respect to 
                such taxpayer;
                    (B) the filing status of such taxpayer; and
                    (C) the adjusted gross income of such taxpayer.
            (2) Restriction on use of disclosed information.--Return 
        information disclosed under paragraph (1) may be used by 
        officers and employees of the Department of Education only for 
        the purposes of, and to the extent necessary in, establishing 
        the appropriate qualified loan amount of a taxpayer.
    (f) Long-Term Settle and Compromise Discharge Authority.--Not later 
than the date that is 24 months after the date of enactment of this 
Act, the Secretary of Education may use the authority under sections 
432(a)(6) and 468(2) of the Higher Education Act of 1965 (20 U.S.C. 
1082(a)(6); 1087hh(2)) to discharge loans under this section beyond the 
period described in subsection (a) for--
            (1) an individual who, through an appeals process 
        established by the Secretary, successfully appeals a loan 
        discharge determination by the Secretary under this section;
            (2) an individual who, due to special circumstances, misses 
        a deadline established by the Secretary in the administration 
        of loan discharges under this section; or
            (3) an individual (or a group of individuals) who the 
        Secretary determines should have received a loan discharge or a 
        discharge amount that is different from the amount of loan 
        discharge received under this section, except that a loan 
        discharge amount received under this subsection may not exceed 
        the qualified loan amount determined for the individual (or the 
        group of individuals) under subsection (b).
    (g) Credit Reporting.--In the case of a borrower of an eligible 
Federal loan that was in default prior to being discharged under this 
section and on which, as a result of such loan discharge, there is no 
outstanding balance of principal or interest, the Secretary, guaranty 
agency or other holder of the loan shall request any consumer reporting 
agency to which the Secretary, guaranty agency or holder, as 
applicable, reported the default of the loan, to remove the record of 
the default from the borrower's credit history.
    (h) Members of Congress.--In this section, the terms ``individual'' 
and ``taxpayer'' do not include a Member of Congress.

SEC. 3. AUTOMATIC ADMINISTRATIVE FORBEARANCE; HALTING OF WAGE 
              GARNISHMENT.

    During the period beginning on the date of enactment of this Act 
and ending on the date that is 12 months after such date of enactment, 
the Secretary of Education--
            (1) shall place each borrower of an eligible Federal loan 
        with an outstanding balance, without any further action 
        required by the borrower (except that the borrower may opt-out 
        of this section), on an administrative forbearance during which 
        periodic installments of principal need not be paid, and 
        interest shall not accrue, on such loan; and
            (2) may not issue an order for wage garnishment or 
        withholding under section 488A of the Higher Education Act of 
        1965 (20 U.S.C. 1095a) or section 3720D of title 31, United 
        States Code, initiate proceedings to collect debt through 
        deductions from pay under such section 488A or 3720D, or 
        enforce or otherwise require compliance with a wage garnishment 
        or withholding order issued under such section 488A or 3720D 
        before the date of enactment of this Act (which shall include 
        staying any related proceedings).

SEC. 4. STAYING AND PROHIBITION ON COMMENCEMENT OF ACTIONS FOR 
              COLLECTION.

    Until 12 months after the date of enactment of this Act, no 
eligible Federal loan may be referred to the Attorney General for any 
action seeking collection of any amount owed on that loan and any 
action pending as of the date of enactment of this Act shall be stayed.

SEC. 5. INELIGIBILITY FOR TREASURY OFFSET.

    Until 12 months after the date of enactment of this Act, no claim 
pertaining to an eligible Federal loan may be certified under section 
3716(c)(1) of title 31, United States Code.
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