Sec. 112. Student loans

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Section 140 of the Truth in Lending Act ( 15 U.S.C. 1650 ) is amended by adding at the end the following new subsection: Effective on the date of the enactment of this section, for the duration of the COVID–19 emergency period and the 6-month period immediately following, the Secretary of the Treasury shall, for each borrower of a private education loan, pay the total amount due for such month on the loan, based on the payment plan selected by the borrower or the borrower’s loan status.

With respect to any loan in repayment during the COVID–19 national emergency period and the 6-month period immediately following, interest due on a private education loan during such period shall not be capitalized at any time during the COVID–19 national emergency period and the 6-month period immediately following. During the period in which the Secretary of the Treasury is making payments on a loan under paragraph (1), the Secretary shall ensure that, for the purpose of reporting information about the loan to a consumer reporting agency, any payment made by the Secretary is treated as if it were a regularly scheduled payment made by a borrower.

Not later than 15 days following the date of enactment of this subsection, and monthly thereafter during the COVID–19 national emergency period and the 6-month period immediately following, the Secretary of the Treasury shall provide a notice to all borrowers of private education loans— informing borrowers of the actions taken under this subsection; providing borrowers with an easily accessible method to opt out of the benefits provided under this subsection; and notifying the borrower that the program under this subsection is a temporary program and will end 6 months after the COVID–19 national emergency period ends.

During the COVID–19 national emergency period and the 6-month period immediately following, the holder of a private education loan shall immediately take action to halt all involuntary collection related to the loan. During the period in which the Secretary of the Treasury is making payments on a loan under paragraph (1), the servicer of such loan shall grant the borrower forbearance as follows: A temporary cessation of all payments on the loan other than the payments of interest and principal on the loan that are made under paragraph (1).

For borrowers who are delinquent but who are not yet in default before the date on which the Secretary begins making payments under paragraph (1), the retroactive application of forbearance to address any delinquency. Holders and servicers of private education loans shall report, to the satisfaction of the Secretary of the Treasury, the information necessary to calculate the amount to be paid under this section. In this subsection, the term COVID–19 emergency period means the period that begins upon the date of the enactment of this Act and ends upon the date of the termination by the Federal Emergency Management Administration of the emergency declared on March 13, 2020, by the President under the Robert T.

Stafford Disaster Relief and Emergency Assistance Act ( 42 U.S.C. 4121 et seq.) relating to the Coronavirus Disease 2019 (COVID–19) pandemic. . Each private education loan holder who receives any monthly payment pursuant to this section must modify all private education loan contracts that it holds to provide for the same repayment plan and forgiveness terms available to Direct Loans borrowers under 34 C.F.R. § 685.209(c), in effect as of January 1, 2020. For a borrower who has defaulted on the private education loan under the terms of the promissory note prior to any loan payment made or forbearance granted under this section, no payment made or forbearance granted under this section shall be considered an event that impacts the calculation of the applicable state statutes of limitation.

A private education loan debt collector, as that term is defined in the Federal Debt Collection Practices Act, may not pressure a borrower to elect to apply the amount to any private education loan. Pressure is defined as any communication, recommendation or other similar communication, other than providing basic information about a borrower’s options, urging a borrower to make this election. Violation of this provision shall be an unfair practice in violation of 15 U.S.C. § 1692f.

A private education loan debt collector or creditor may not pressure a borrower to elect to apply the amount to any private education loan. Pressure is defined as any communication, recommendation or other similar communication, other than providing basic information about a borrower’s options, urging a borrower to make this election. Violation of this provision shall be an abusive act or practice as defined by 12 U.S.C. § 5531. For a borrower who has defaulted on the private education loan, under the terms of the promissory note, prior to any loan payment made under this section, no loan relief provided under this section shall be considered an event that impacts the calculation of the applicable state statutes of limitation.

Not later than 270 days after the last day of the COVID–19 emergency period, the Secretary of the Treasury shall carry out a program under which a qualified borrower, with respect to the private education of loans of such qualified borrower, shall receive in accordance with paragraph

(3)an amount equal to the lesser of the following: The total amount of each private education loan of the borrower; or $10,000. Not later than 270 days after the last day of the COVID–19 emergency period, the Secretary of the Treasury shall notify each qualified borrower of— the requirements to provide loan relief to such borrower under this section; and the opportunity for such borrower to make an election under paragraph (3)(A) with respect to the application of such loan relief to the covered loans and private education loans of such borrower. Not later than 45 days after a notice is sent under paragraph (2), a qualified borrower may elect to apply the amount determined with respect to such borrower under paragraph

(1)to any private education loan of the borrower. In the case of a qualified borrower who does not make an election under subparagraph

(A)before the date described in such paragraph, the Secretary of the Treasury shall apply the amount determined with respect to such borrower under paragraph

(1)in order of the private education loan of the qualified borrower with the highest interest rate. In case of two or more private education loans described in clause

(i)with equal interest rates, the Secretary of the Treasury shall apply the amount determined with respect to such borrower under paragraph

(1)first to the loan with the highest principal. In this subsection: The term covered loan means— 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.); a loan made under part D of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1087a et seq.); and a Federal Perkins Loan made pursuant to part E of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1087aa et seq.). The term COVID–19 emergency period means the period that begins upon the date of the enactment of this Act and ends upon the date of the termination by the Federal Emergency Management Administration of the emergency declared on March 13, 2020, by the President under the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( 42 U.S.C. 4121 et seq.) relating to the Coronavirus Disease 2019 (COVID–19) pandemic. The term private education loan has the meaning given the term in section 140 of the Truth in Lending Act ( 15 U.S.C. 1650 ). The term qualified borrower means a borrower of a covered loan or a private education loan. The term Secretaries concerned means— the Secretary of Education, with respect to covered loans and borrowers of such covered loans; and the Secretary of the Treasury, with respect to private education loans and borrowers of such private education loans.

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