Sec. 150117. Writing down balances for Federal student loan borrowers
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Section 3513 of division A of the Coronavirus Aid, Relief, and Economic Security Act ( Public Law 116–136 ), as amended by this part, is further amended by adding at the end the following: Not later than 30 days after the date of enactment of The Heroes Act, the Secretary shall cancel or repay an amount on the outstanding balance due (including the unpaid principal amount, any accrued interest, and any fees or charges) on the Federal student loans defined in subparagraphs
(A)and
(B)of section 3502(a)(2) of an economically distressed borrower that is equal to the lesser of— $10,000; or the total outstanding balance due on such loans of the borrower. In this subsection, the term economically distressed borrower means a borrower of a Federal student loan defined in subparagraph
(A)or
(B)of section 3502(a)(2) who, as of March 12, 2020— had a monthly payment due on such loan of $0 pursuant to an income-contingent repayment plan under section 455(d)(1)(D) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(d)(1)(D) ) or an income-based repayment plan under section 493C of such Act ( 20 U.S.C. 1098e ); was in default on such loan; had a payment due on such loan that was at least 90 days past due; or was, with respect to such loan, in— a deferment due to an economic hardship described in section 427(a)(2)(C)(iii), 428(b)(1)(M)(iv), 455(f)(2)(D), or 464(c)(2)(A)(iv) of the Higher Education Act of 1965; a deferment due to unemployment described in section 427(a)(2)(C)(ii), 428(b)(1)(M)(ii), 455(f)(2)(B), or 464(c)(2)(A)(ii) of the Higher Education Act of 1965; a deferment due to cancer treatment described in section 427(a)(2)(C)(iv), 428(b)(1)(M)(v), 455(f)(3), or 464(c)(2)(A)(vi) of the Higher Education Act of 1965; or a forbearance described in subparagraph (A)(i)(II) or
(B)of section 428(c)(3) or 464(e)(1) of the Higher Education Act of 1965. Unless otherwise requested by the borrower in writing, a cancellation or repayment under paragraph
(1)shall be applied — in the case of a borrower whose loans, as of March 12, 2020, had different applicable rates of interest, first toward the outstanding balance due on the loan with the highest applicable rate of interest among such loans; and in the case of a borrower of loans that have the same applicable rates of interest, first toward the outstanding balance of principal due on the loan with the highest principal balance among such loans. Contractors of the Secretary, and holders of Federal student loans , shall report, to the satisfaction of the Secretary the information necessary to carry out this subsection. For purposes of the Internal Revenue Code of 1986, in the case of any cancellation or repayment of indebtedness under this subsection with respect to any borrower: No amount shall be included in the gross income of such borrower by reason of such cancellation or repayment. Amounts excluded from gross income under subparagraph
(A)shall not be required to be reported (and shall not be taken into account in determining whether any reporting requirement applies) under chapter 61 of such Code. .
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Sec. 150117
Writing down balances for Federal student loan borrowers
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