Title: Coronavirus E-BD Act of 2020
Policy area: Education

Summary:
Coronavirus Emergency Borrower Defense Act of 2020 or the Coronavirus E-BD Act of 2020
This bill requires the Department of Education (ED) to discharge, within 30 days, the federal student loan debt of three categories of borrowers.
Specifically, ED must discharge the federal student loan debt of a borrower (1) who is covered by ED findings against an institution of higher education (IHE) for job placement rate misrepresentation; (2) for whom a state attorney general has asserted a right to borrower defense discharge; or (3) who was subject to a misrepresentation made by the IHE related to guaranteed employment or transferability of credits, and who has asserted such misrepresentation in a borrower defense application.
ED must reimburse a borrower for amounts paid toward the federal student loan.
The bill also requires ED to (1) notify borrowers of loan relief and eligibility for financial aid, and (2) report loan discharge to consumer reporting agencies.
Finally, ED must initiate a proceeding to require the IHE whose act or omission resulted in loan discharge to repay ED for such amounts.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3745 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  2d Session
                                S. 3745

To direct the Secretary of Education to provide relief to borrowers of 
       student loans for whom the Department of Education found 
  misrepresentation by the institution of higher education or a State 
  attorney general has asserted a right to borrower defense discharge.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 14, 2020

  Mr. Durbin (for himself, Mr. Brown, and Ms. Warren) introduced the 
 following bill; which was read twice and referred to the Committee on 
                 Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
To direct the Secretary of Education to provide relief to borrowers of 
       student loans for whom the Department of Education found 
  misrepresentation by the institution of higher education or a State 
  attorney general has asserted a right to borrower defense discharge.

    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 ``Coronavirus Emergency Borrower 
Defense Act of 2020'' or the ``Coronavirus E-BD Act of 2020''.

SEC. 2. EMERGENCY BORROWER DEFENSE.

    (a) Emergency Borrower Defense.--An eligible borrower, or parent 
borrower who took out an eligible loan on behalf of an eligible 
borrower, shall be entitled to relief on such loan pursuant to this 
section.
    (b) Eligible Borrower; Eligible Loan.--In this section:
            (1) Eligible borrower.--
                    (A) In general.--The term ``eligible borrower'' 
                means--
                            (i) a borrower covered by Department of 
                        Education findings made on or before the date 
                        of enactment of this section against an 
                        institution of higher education for job 
                        placement rate misrepresentation;
                            (ii) a borrower on whose behalf a State 
                        attorney general has asserted a right to 
                        borrower defense discharge if the assertion was 
                        made by the State attorney general to the 
                        Secretary of Education on or before the date of 
                        enactment of this section; or
                            (iii) a borrower who--
                                    (I) was subject to a 
                                misrepresentation made by the 
                                institution of higher education that 
                                the borrower attended related to 
                                guaranteed employment or 
                                transferability of credits where such 
                                misrepresentation was established by 
                                the Department of Education in findings 
                                made on or before the date of enactment 
                                of this section; and
                                    (II) has asserted being subject to 
                                such misrepresentation in a borrower 
                                defense application to the Secretary of 
                                Education.
                    (B) Eligibility.--A borrower--
                            (i) described in clause (i) or (ii) of 
                        subparagraph (A), shall be an eligible borrower 
                        whether or not the borrower has applied for 
                        borrower defense and whether or not the 
                        borrower's claim has been adjudicated, if the 
                        borrower has not previously received complete 
                        relief on the eligible loan based on the 
                        borrower defense; and
                            (ii) described in subparagraph (A)(iii), 
                        shall be an eligible borrower whether or not 
                        the borrower's claim has been adjudicated, so 
                        long as they have not previously received 
                        complete relief on their Federal student loans 
                        based on their borrower defense.
            (2) Eligible loan.--The term ``eligible loan'' means a loan 
        made, insured, or guaranteed under part B or D of title IV of 
        the Higher Education Act of 1965 (20 U.S.C. 1071 et seq.; 1087a 
        et seq.).
    (c) Relief.--With respect to--
            (1) an eligible borrower described in clause (i) or (ii) of 
        subsection (b)(1)(A), or an eligible borrower described in 
        subsection (b)(1)(A)(iii) who applied for borrower defense 
        prior to the date of enactment of this section, the Secretary 
        of Education shall--
                    (A) not later than 30 days after the date of 
                enactment of this section, discharge the borrower, or 
                parent borrower who took out an eligible loan on behalf 
                of such borrower, of the full obligation to repay the 
                eligible loan (including associated interest, costs, 
                and fees that the borrower or parent borrower would 
                otherwise be obligated to pay);
                    (B) not later than 45 days after the date of 
                enactment of this section, reimburse the borrower, or 
                parent borrower who took out an eligible loan on behalf 
                of such borrower, for amounts paid toward the loan 
                voluntarily or through enforced collection;
                    (C) not later than 60 days after the date of 
                enactment of this section, report the discharge under 
                this section to all consumer reporting agencies to 
                which the Secretary previously reported the status of 
                the loan, so as to delete all adverse credit history 
                assigned to the loan; and
                    (D) not later than 60 days after the date of 
                enactment of this section, no longer consider a 
                borrower, or parent borrower who took out a loan on 
                behalf of such borrower, who has defaulted on a loan 
                discharged under this section to be in default on the 
                discharged loan; and
            (2) an eligible borrower described in subsection 
        (b)(1)(A)(iii) who did not apply for borrower defense prior to 
        the date of enactment of this section, the Secretary of 
        Education shall--
                    (A) not later than 30 days after the date such 
                borrower applies for borrower defense, discharge the 
                borrower, or parent borrower who took out an eligible 
                loan on behalf of such borrower, of the full obligation 
                to repay the eligible loan (including associated 
                interest, costs, and fees that the borrower or parent 
                borrower would otherwise be obligated to pay);
                    (B) not later than 45 days after such borrower 
                applies for borrower defense, reimburse the borrower, 
                or parent borrower who took out an eligible loan on 
                behalf of such borrower, for amounts paid toward the 
                loan voluntarily or through enforced collection;
                    (C) not later than 60 days after such borrower 
                applies for borrower defense, report the discharge 
                under this section to all consumer reporting agencies 
                to which the Secretary previously reported the status 
                of the loan, so as to delete all adverse credit history 
                assigned to the loan; and
                    (D) not later than 60 days after such borrower 
                applies for borrower defense, no longer consider a 
                borrower, or parent borrower who took out a loan on 
                behalf of such borrower, who has defaulted on a loan 
                discharged under this section to be in default on the 
                discharged loan.
    (d) Notification.--With respect to--
            (1) an eligible borrower described in clause (i) or (ii) of 
        subsection (b)(1)(A), an eligible borrower described in 
        subsection (b)(1)(A)(iii) who applied for borrower defense 
        prior to the date of enactment of this section, or a parent 
        borrower who took out an eligible loan on behalf of such an 
        eligible borrower, the Secretary of Education shall, not later 
        than 20 days after the date of enactment of this section, 
        notify such borrower or parent borrower in writing of--
                    (A) the relief to which the borrower is entitled 
                pursuant to subsection (c);
                    (B) the time in which such relief will be provided 
                pursuant to subsection (c);
                    (C) the borrower's eligibility to receive 
                assistance under title IV of the Higher Education Act 
                of 1965 (20 U.S.C. 1070 et seq.) after receiving relief 
                pursuant to subsection (c); and
                    (D) any further relief to such borrower or parent 
                borrower as the Secretary of Education determines is 
                appropriate; and
            (2) an eligible borrower described in subsection 
        (b)(1)(A)(iii) who did not apply for borrower defense prior to 
        the date of enactment of this section, or a parent borrower who 
        took out an eligible loan on behalf of such an eligible 
        borrower, the Secretary of Education shall, not later than 20 
        days after such borrower applies for borrower defense, notify 
        such borrower or parent borrower in writing of--
                    (A) the relief to which the borrower is entitled 
                pursuant to subsection (c);
                    (B) the time in which such relief will be provided 
                pursuant to subsection (c);
                    (C) the borrower's eligibility to receive 
                assistance under title IV of the Higher Education Act 
                of 1965 (20 U.S.C. 1070 et seq.) after receiving relief 
                pursuant to subsection (c); and
                    (D) any further relief to such borrower or parent 
                borrower as the Secretary of Education determines is 
                appropriate.
    (e) Institutional Accountability.--For a discharge granted under 
this section, the Secretary of Education shall, as applicable, initiate 
an appropriate proceeding to require the institution of higher 
education whose act or omission resulted in the discharge to repay to 
the Secretary of Education the amount discharged whether by offset, 
claim on a letter of credit, or other protection provided by the 
institution of higher education.
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