Sec. 133. No interest accrual

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Section 3513(b) of division A of the Coronavirus Aid, Relief, and Economic Security Act ( Public Law 116–136 ) is amended to read as follows: During the period described in subparagraph (D), interest on a Federal student loan shall not accrue or shall be paid by the Secretary (or the Secretary of Health and Human Services) during— the repayment period of such loan; any period excluded from the repayment period of such loan (including any period of deferment or forbearance); any period in which the borrower of such loan is in a grace period; or any period in which the borrower of such loan is in default on such loan.

For purposes of subparagraph (A), interest shall not accrue on a Federal student loan defined in section 3502(a)(2)(A). For purposes of subparagraph (A)— in the case of a Federal student loan defined in section 3502(a)(2)(B), the Secretary shall pay, on a monthly basis, the amount of interest due on the unpaid principal of such loan to the holder of such loan, except that any payments made under this clause shall not affect payment calculations under section 438 of the Higher Education Act of 1965 ( 20 U.S.C. 1087–1 ); and in the case of a Federal student loan defined in section 3502(a)(2)(C), the Secretary of Health and Human Services shall pay, on a monthly basis, the amount of interest due on the unpaid principal of such loan to the holder of such loan.

The period described in this clause is the period beginning on March 13, 2020, and ending on the later of— September 30, 2021; or the day following the date of enactment of the Pandemic Education Response Act that is 2 months after the national U–5 measure of labor underutilization shows initial signs of recovery. In this subparagraph: The term national U–5 measure of labor underutilization means the seasonally-adjusted, monthly U–5 measure of labor underutilization published by the Bureau of Labor Statistics.

The term initial signs of recovery means that the average national U–5 measure of labor underutilization for months in the most recent 3-consecutive-month period for which data are available— is lower than the highest value of the average national U–5 measure of labor underutilization for a 3-consecutive-month period during the period beginning in March 2020 and the most recent month for which data from the Bureau of Labor Statistics are available by an amount that is equal to or greater than one-third of the difference between— the highest value of the average national U–5 measure of labor underutilization for a 3-consecutive-month period during such period; and the value of the average national U–5 measure of labor underutilization for the 3-consecutive-month period ending in February 2020; and has decreased for each month during the most recent 2 consecutive months for which data from the Bureau of Labor Statistics are available.

In this paragraph: The term default — in the case of a Federal student loan made, insured, or guaranteed under part B or D of the Higher Education Act of 1965, has the meaning given such term in section 435(l) of the Higher Education Act of 1965 ( 20 U.S.C. 1085 ); in the case of a Federal student loan made under part E of the Higher Education Act of 1965, has the meaning given such term in section 674.2 of title 34, Code of Federal Regulations (or successor regulations); or in the case of a Federal student loan defined in section 3502(a)(2)(C), has the meaning given such term in section 721 or 835 of the Public Health Service Act ( 42 U.S.C. 292q , 297a), as applicable.

The term grace period means— in the case of a Federal student loan made, insured, or guaranteed under part B or D of the Higher Education Act of 1965, the 6-month period after the date the student ceases to carry at least one-half the normal full-time academic workload, as described in section 428(b)(7) of the Higher Education Act of 1965 ( 20 U.S.C. 1078(b)(7) ); in the case of a Federal student loan made under part E of the Higher Education Act of 1965, the 9-month period after the date on which a student ceases to carry at least one-half the normal full-time academic workload, as described in section 464(c)(1)(A) of the Higher Education Act of 1965 ( 20 U.S.C. 1087dd(c)(1)(A) ); and in the case of a Federal student loan defined in section 3502(a)(2)(C), the 1-year period described in section 722(c) of the Public Health Service Act ( 42 U.S.C. 292r(c) ) or the 9-month period described in section 836(b)(2) of such Act ( 42 U.S.C. 297b(b)(2) ), as applicable.

The term repayment period means— in the case of a Federal student loan made, insured, or guaranteed under part B or D of the Higher Education Act of 1965, the repayment period described in section 428(b)(7) of the Higher Education Act of 1965 ( 20 U.S.C. 1078(b)(7) ); in the case of a Federal student loan made under part E of the Higher Education Act of 1965, the repayment period described in section 464(c)(4) of the Higher Education Act of 1965 ( 20 U.S.C. 1087dd(c)(4) ); or in the case of a Federal student loan defined in section 3502(a)(2)(C), the repayment period described in section 722(c) or 836(b)(2) of the Public Health Service Act ( 42 U.S.C. 292r(c) , 297b(b)(2)), as applicable.

By not later than 60 days after the date of enactment of the Pandemic Education Response Act, the Secretary or, as applicable, the Secretary of Health and Human Services, shall, for each Federal student loan defined in subparagraph

(B)or

(C)of section 3502(a)(2) for which interest was not paid by such Secretary pursuant to paragraph

(1)during the period beginning on March 13, 2020 and ending on such date of enactment— determine the amount of interest due (or that would have been due in the absence of being voluntarily paid by the holder of such loan) on such loan during the period beginning March 13, 2020, and ending on such date of enactment; and refund the amount of interest calculated under subparagraph (A), by— paying the holder of the loan the amount of the interest calculated under subparagraph (A), to be applied to the loan balance for the borrower of such loan; or if there is no outstanding balance or payment due on the loan as of the date on which the refund is to be provided, providing a payment in the amount of the interest calculated under subparagraph

(A)directly to the borrower. With respect to any Federal student loan, interest that accrued but had not been paid prior to March 13, 2020, and had not been capitalized as of such date, shall not be capitalized. The Secretary or, as applicable, the Secretary of Health and Human Services, shall ensure that any interest on a Federal student loan that had been capitalized in violation of subparagraph

(A)is corrected and the balance of principal and interest due for the Federal student loan is adjusted accordingly. .

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