Sec. 2. Lowering rates for borrowers with Federal Perkins loans
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The Secretary of Education shall require holders of Federal Perkins Loans to suspend the accrual of interest on such loans during the COVID–19 pandemic. Under the program and effective as of March 13, 2020, all holders of Federal Perkins Loans shall— provide that no interest shall accrue on Federal Perkins Loans until September 30, 2020; and provide a report to the Secretary of Education not later than 30 days after the date of the enactment of this Act confirming that no interest has accrued on such loans as of March 13, 2020.
The Secretary of Education shall make payments to the holders of Federal Perkins Loans on behalf of each borrower of such a Federal Perkins Loan in an amount equal to the total amount of the interest suspended under paragraph
(1)with respect to such Federal Perkins Loan. Notwithstanding any other provision of the Higher Education Act of 1965 ( 20 U.S.C. 1071 et seq.), the Secretary of Education shall require institutions of higher education to suspend all payments due from borrowers through September 30, 2020. Notwithstanding any other provision of the Higher Education Act of 1965 ( 20 U.S.C. 1001 et seq.), the Secretary of Education 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.). During the period in which the borrower payments on a loan are suspended under this subsection, the Secretary of Education 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. Notwithstanding any other provision of the Higher Education Act of 1965 ( 20 U.S.C. 1071 et seq.), the Secretary of Education shall require that institutions of higher education to suspend all involuntary collection related to Federal Perkins Loans, through September 30, 2020, including collecting a past due Federal Perkins Loan, assign any Federal Perkins Loan to a collection agency, or litigating with respect to such loan. During the period beginning on the date of the enactment of this section and ending on September 30, 2020, the following provisions may not apply with respect to a Federal Perkins Loan: 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. 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. 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). Any other involuntary collection activity by the Secretary of Education. To inform borrowers of the actions taken in accordance with this section and ensure an effective transition, the Secretary of Education shall require institutions of higher education to— not later than 15 days after the date of the enactment of this Act, notify borrowers— of the actions taken in accordance with this section for whom payments have been suspended and no interest shall accrue; of the actions taken in accordance with subsection
(c)for whom collections have been suspended; of the option to continue making payments toward principal; and that the program under this section shall only be provided during the COVID–19 pandemic; and 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 when the borrower’s normal payment obligations will resume. In carrying out this section, the Secretary of Education may waive the application of— subchapter I of chapter 35 of title 44, United States Code (commonly known as the Paperwork Reduction Act ); the master calendar requirements under section 482 of the Higher Education Act of 1965 ( 20 U.S.C. 1089 ); negotiated rulemaking under section 492 of the Higher Education Act of 1965 ( 20 U.S.C. 1098a ); and 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. This section shall take effect as if included in the enactment of the CARES Act ( Public Law 116–136 ).
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Sec. 2
Lowering rates for borrowers with Federal Perkins loans
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