Title: Equity in Student Loan Relief Act
Policy area: Education

Summary:
Equity in Student Loan Relief Act
This bill establishes a temporary program to suspend payments and interest through September 30, 2020, on Federal Family Education Loans (FFELs) that are not held by the Department of Education (ED). (Currently, payments and interest are suspended through this period on certain Federal Direct Loans and FFELs held by ED.)
Specifically, ED must (1) enter into agreements with eligible lenders and guaranty agencies to reduce the interest rate to 0% on FFELs, and (2) make monthly payments to lenders and guaranty agencies to offset the cost of the reduced interest rate.
A lender or guaranty agency that enters into an agreement with ED must (1) temporarily waive interest and 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.
Finally, ED must ensure that any suspended 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.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6597 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 6597

To extend zero interest rate benefits and payment suspension to certain 
        Federal student loan borrowers, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 22, 2020

 Ms. Stefanik (for herself, Mrs. Trahan, Mr. Smucker, Ms. Adams, Mrs. 
  Lee of Nevada, Mr. Welch, Mr. Fitzpatrick, and Mrs. Watson Coleman) 
 introduced the following bill; which was referred to the Committee on 
                          Education and Labor

_______________________________________________________________________

                                 A BILL


 
To extend zero interest rate benefits and payment suspension to certain 
        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 ``Equity in Student Loan Relief Act''.

SEC. 2. LOWERING RATES FOR BORROWERS WITH FEDERAL FAMILY EDUCATION 
              LOANS.

    (a) Temporary Program of Federal Subsidy Payments To Defray 
Borrower Interest Costs on Federal Family Education 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 concerning the novel coronavirus virus disease 
(COVID-19) outbreak to provide payment relief to borrowers with loans 
made under part B of the Higher Education Act of 1965 (20 U.S.C. 1071 
et seq.), that are not held by the Federal Government.
            (1) Under the program, the Secretary is directed to enter 
        into agreements expeditiously with eligible lenders and 
        guaranty agencies to reduce interest rates to 0.00 percent on 
        such loans and shall make payments, as set forth below, to such 
        eligible lenders and guaranty agencies to offset the cost of 
        the reduced interest rates. Under such agreements, the 
        Secretary shall--
                    (A) make Federal interest subsidy payments on 
                behalf of each borrower 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 the loans, calculated at the borrower interest rates 
                established under section 427A of the Higher Education 
                Act of 1965 (20 U.S.C. 1077a); and
                    (B) make these Federal interest subsidy payments to 
                an eligible lender or guaranty agency on a monthly 
                basis, beginning as of March 13, 2020.
            (2) Under the program and effective as of March 13, 2020, 
        all eligible lenders and guaranty agencies who have entered 
        agreements with the Secretary under this subsection shall--
                    (A) temporarily waive interest, effectively 
                reducing the interest rates charged to borrowers on 
                loans made under this part to 0.00 percent;
                    (B) provide a report to the Secretary no later than 
                30 days from the date of such agreement confirming that 
                such interest rates have been reduced to 0.00 percent 
                effective as of March 13, 2020; and
                    (C) continue such reduction in interest rates 
                through September 30, 2020.
            (3) For purposes of this paragraph, 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.
            (4) Nothing in this paragraph shall affect payment 
        calculations under section 438 of the Higher Education Act of 
        1965 (20 U.S.C. 1087).
    (b) Temporary Postponement of Part B 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 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 require guaranty agencies with agreements with the 
Secretary under subsection (a) to suspend all involuntary collection 
related to the 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 waived;
                    (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) that the borrower has the option to apply for 
                income-driven repayment or other repayment or 
                forgiveness programs, including a brief description of 
                such options.
    (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.
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