Title: Student Loan Fairness Act
Policy area: Education

Summary:
Student Loan Fairness Act
This bill establishes a temporary program to suspend payments and interest through September 30, 2020, on Federal Family Education Loans and Federal Perkins Loans that are not held by the Department of Education.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 4237 Introduced in Senate (IS)]

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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.

    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 Fairness Act''.

SEC. 2. ASSISTANCE FOR BORROWERS WITH FEDERAL FAMILY EDUCATION LOANS 
              AND FEDERAL PERKINS LOANS.

    (a) Temporary Program of Assistance for Borrowers With Federal 
Family Education Loans and Federal Perkins Loans.--Notwithstanding any 
other provision of the Higher Education Act of 1965 (20 U.S.C. 1071 et 
seq.), the Secretary of Education shall carry out a temporary program 
to make interest payments on behalf of borrowers on loans made under 
part B of the Higher Education Act of 1965 (20 U.S.C. 1071 et seq.) or 
loans under part E of the Higher Education Act of 1965 (20 U.S.C. 
1087aa et seq.), that are not held by the Federal Government (referred 
to in this section as ``qualifying loans'') to assist such borrowers 
during the period of response and recovery relating to the novel 
coronavirus disease (COVID-19) outbreak.
            (1) Under the program, the Secretary shall enter into 
        agreements, expeditiously, but not later than 30 days after the 
        date of enactment of this Act, with eligible lenders and 
        guaranty agencies under which the Secretary shall make interest 
        payments to such eligible lenders and guaranty agencies on 
        behalf of all borrowers of all qualifying loans in accordance 
        with this section. Under such agreements--
                    (A) the Secretary shall--
                            (i) make payments on behalf of each 
                        borrower of qualifying loans whose loans are 
                        held by such eligible lender or guaranty agency 
                        equal to the total amount of the interest on 
                        the unpaid principal amount of such loans, 
                        calculated at the borrower interest rates 
                        established under section 427A of the Higher 
                        Education Act of 1965 (20 U.S.C. 1077a) (or at 
                        a lesser rate as established under section 
                        427A(m) of such Act, if applicable) for loans 
                        under part B of such Act and calculated at the 
                        borrower interest rates established under 
                        section 464 of such Act (20 U.S.C. 1087dd) for 
                        loans under part E of such Act; and
                            (ii) make such payments to an eligible 
                        lender or guaranty agency on a monthly basis, 
                        for the period beginning on March 13, 2020, and 
                        ending on September 30, 2020 (referred to in 
                        this section as the ``applicable period''); and
                    (B) each eligible lender and guaranty agency who 
                has entered into an agreement with the Secretary under 
                this subsection shall--
                            (i) credit the interest payments paid by 
                        the Secretary under this subsection as full 
                        satisfaction of the obligation of the borrowers 
                        to pay interest during the applicable period;
                            (ii) credit the account of a borrower, as 
                        an amount paid on the principal or interest of 
                        the qualifying loan in addition to the amounts 
                        credited under clause (i), in the case of a 
                        borrower who has made an interest payment for 
                        the applicable period; and
                            (iii) not later than 30 days from the date 
                        of such agreement, provide a report to the 
                        Secretary confirming that such borrowers have 
                        been or will be credited in accordance with 
                        this subparagraph.
            (2) For purposes of this subsection, an eligible lender 
        includes the holder of the loan or, if the holder acts as 
        eligible lender trustee for the beneficial owner of the loan, 
        the beneficial owner of the loan.
            (3) Nothing in this subsection shall affect payment 
        calculations under section 438 of the Higher Education Act of 
        1965 (20 U.S.C. 1087).
            (4) The Secretary shall ensure that each agreement under 
        this subsection includes every qualifying loan held by the 
        eligible lender or guaranty agency.
    (b) Temporary Postponement of Part B and Part E Loan Payments.--
Notwithstanding any other provision of the Higher Education Act of 1965 
(20 U.S.C. 1071 et seq.), the Secretary shall require eligible lenders 
and guaranty agencies with agreements with the Secretary under 
subsection (a) to suspend all payments due from borrowers on qualifying 
loans through September 30, 2020.
            (1) Consideration of payments.--Notwithstanding any other 
        provision of the Higher Education Act of 1965 (20 U.S.C. 1001 
        et seq.), the Secretary shall deem each month for which a loan 
        payment was suspended under this subsection as if the borrower 
        of the loan had made a qualified payment for the purpose of any 
        loan forgiveness program and loan rehabilitation program 
        authorized under the Higher Education Act of 1965 (20 U.S.C. 
        1071 et seq.).
            (2) Reporting to consumer reporting agencies.--During the 
        period in which the borrower payments on a loan are suspended 
        under this subsection, the Secretary 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) Suspending Involuntary Collection.--Notwithstanding any other 
provision of the Higher Education Act of 1965 (20 U.S.C. 1071 et seq.), 
the Secretary shall suspend, and shall require guaranty agencies with 
agreements with the Secretary under subsection (a) to suspend, all 
involuntary collection related to the qualifying loan, through 
September 30, 2020. Such efforts shall include--
            (1) a wage garnishment authorized under section 488A of the 
        Higher Education Act of 1965 (20 U.S.C. 1095a) or section 3720D 
        of title 31, United States Code;
            (2) a reduction of tax refund by amount of debt authorized 
        under section 3720A of title 31, United States Code, or section 
        6402(d) of the Internal Revenue Code of 1986;
            (3) 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
            (4) any other involuntary collection activity by the 
        Secretary.
    (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 shall require eligible lenders and 
guaranty agencies with agreements under subsection (a) to--
            (1) not later than 15 days after entering into such 
        agreement, notify borrowers--
                    (A) of the actions taken in accordance with this 
                section for whom payments have been suspended and 
                interest paid by the Secretary on behalf of that 
                borrower;
                    (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 is a 
                temporary program; 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--
                    (A) when the borrower's normal payment obligations 
                will resume; and
                    (B) any options the borrower may have for income-
                driven repayment or forgiveness.
    (e) Waivers.--In carrying out this section, the Secretary may waive 
the application of--
            (1) subchapter I of chapter 35 of title 44, United States 
        Code (commonly known as the ``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); 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''), except that the notices shall be published not later 
        than 180 days after the date of enactment of this Act.
    (f) Deferment or Forbearance.--The Secretary shall require eligible 
lenders and guaranty agencies with agreements with the Secretary under 
subsection (a) to ensure that any period of deferment or forbearance on 
a qualifying loan during the period beginning on March 13, 2020, and 
ending on September 30, 2020, shall not be counted toward any 
cumulative limits on deferment or forbearance periods.
    (g) Eligible Lender.--In this section, the term ``eligible lender'' 
shall include--
            (1) an institution of higher education in the case of a 
        loan made under part E of the Higher Education Act of 1965 (20 
        U.S.C. 1087aa et seq.); and
            (2) an eligible lender as defined by section 435(d) of the 
        Higher Education Act of 1965 (20 U.S.C. 1085).
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