Sec. 8. Interest-free deferment of unsubsidized loans during periods of unemployment
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Section 428H(e)(2) of the Higher Education Act of 1965 ( 20 U.S.C. 1078–8(e)(2) ) is amended— in subparagraph (A), by inserting Except as provided in subparagraph (C), before Interest on ; and by adding at the end the following: Interest on loans made under this section for which payments are deferred under clause
(ii)of section 428(b)(1)(M), for a period of deferment granted to a borrower on or after the date of enactment of the Student Loan Fairness Act , shall accrue and be paid by the Secretary during any period during which loans are so deferred, not in excess of 3 years. . Section 428(b)(1)(Y)(iii) of the Higher Education Act of 1965 (20 U.S.C. 1078(b)(1)(Y)(iii)) is amended by inserting (other than a deferment under clause
(ii)of such subparagraph on or after the date of enactment of the after Student Loan Fairness Act ) of this paragraph . Section 455(f)(1) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(f)(1) ) is amended— in subparagraph (A)— by striking or at the end of clause (i); and by adding at the end the following: a Federal Direct Unsubsidized Stafford Loan, with respect to a period of deferment described in subparagraph
(B)of paragraph
(2)granted to a borrower on or after the date of enactment of the Student Loan Fairness Act ; or ; and in subparagraph (B), by inserting not described in subparagraph (A)(iii) after Unsubsidized Stafford Loan . Section 428C(b)(4)(C)(ii) of the Higher Education Act of 1965 (20 U.S.C. 1078–3(b)(4)(C)(ii)) is amended— by striking or at the end of subclause (II); by redesignating subclause
(III)as subclause (IV); by inserting after subclause
(II)the following: by the Secretary, in the case of a consolidation loan for which the application is received on or after the date of enactment of the Student Loan Fairness Act , except that the Secretary shall pay such interest only for a period not in excess of 3 years for which the borrower would be eligible for a deferral under clause
(ii)of section 428(b)(1)(M); or ; and in subclause
(IV)(as so redesignated by this subsection), by striking
(I)or
(II)and inserting (I), (II), or
(III). Section 493C(b) of the Higher Education Act of 1965 ( 20 U.S.C. 10983(b) )— in paragraph (3)— in subparagraph (A), by striking and after the semicolon; by redesignating subparagraph
(B)as subparagraph (C); by inserting after subparagraph
(A)the following: shall, on subsidized and unsubsidized loans, be paid by the Secretary for a period of not more than 3 years during which the borrower is eligible for a deferment due to unemployment described in section 455(f)(2)(B) (regardless of whether the student is in such a deferment), except that— this subparagraph shall only apply to periods during which the borrower is eligible for such a deferment on or after the date of enactment of the Student Loan Fairness Act ; and in the case of a subsidized loan, such period shall not include any period described in subparagraph
(A)or any period during which the borrower is in deferment due to an economic hardship described in section 435(o); and ; and in subparagraph
(C)(as so redesignated by paragraph
(2))— in clause (i), by striking subparagraph
(A)and inserting subparagraphs
(A)and
(B); and in clause (ii), by inserting , subject to subparagraph (B), after unsubsidized loan ; and by striking and at the end of paragraph (8); by striking the period at the end of paragraph
(9)and inserting a semicolon; and by adding at the end the following new paragraph: the amount of the principal and interest on a borrower’s loans repaid or canceled under paragraph
(7)shall not be included in the gross income of the borrower for purposes of the Internal Revenue Code of 1986. .
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- 20 USC 1078–8(e)(2)
- 20 USC 1078–3(b)(4)(C)(ii)
- 20 USC 10983(b)
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Sec. 8
Interest-free deferment of unsubsidized loans during periods of unemployment
Cite20 USC 1078–8(e)(2)
Cite20 USC 1078–3(b)(4)(C)(ii)
Cite20 USC 10983(b)
Cites 5Cited by 0 across 0 sources