[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3448 Introduced in House (IH)]
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116th CONGRESS
1st Session
H. R. 3448
To forgive outstanding Federal and private student loans.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 24, 2019
Ms. Omar (for herself, Ms. Jayapal, Ms. Jackson Lee, Ms. Tlaib, Ms.
Norton, Mr. Thompson of Mississippi, Ms. Lee of California, Mr. Garcia
of Illinois, and Ms. Ocasio-Cortez) introduced the following bill;
which was referred to the Committee on Education and Labor, and in
addition to the Committees on Financial Services, and Ways and Means,
for a period to be subsequently determined by the Speaker, in each case
for consideration of such provisions as fall within the jurisdiction of
the committee concerned
_______________________________________________________________________
A BILL
To forgive outstanding Federal and private student loans.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Student Debt Cancellation Act of
2019''.
SEC. 2. FORGIVENESS OF OUTSTANDING FEDERAL STUDENT LOANS.
(a) Forgiveness Required.--Notwithstanding any other provision of
law, not later than 180 days after the date of the enactment of this
Act, the Secretary of Education shall forgive the outstanding balance
of interest and principal due on all eligible Federal student loans.
(b) Definition of Eligible Federal Student Loan.--In this Act, the
term ``eligible Federal student loan'' means any loan made, insured, or
guaranteed under part B, part D, or part E of title IV of the Higher
Education Act of 1965 before the date of enactment of this Act,
including--
(1) loans made to a parent borrower on behalf of a
dependent student under part B or part D of such Act;
(2) consolidation loans made under such Act; and
(3) any grant treated as a loan under such part D in
accordance with section 258(e), section 420M(c), or section
807(d) of such Act.
(c) Method of Loan Forgiveness.--To provide the loan forgiveness
required under subsection (a), the Secretary of Education is authorized
to carry out a program--
(1) through the holder of a loan, to assume the obligation
to repay the outstanding balance of interest and principal due
on loans made, insured, or guaranteed under part B of title IV
of the Higher Education Act of 1965 (20 U.S.C. 1071 et seq.);
and
(2) to cancel the outstanding balance of interest and
principal due on loans made under part D or part E of such
title.
(d) Repayment Refunds.--
(1) Prior repayment.--Nothing in this section shall be
construed to authorize any refunding of any eligible Federal
student loan repayment made before the date of enactment of
this Act.
(2) Payments made after enactment.--The Secretary shall
refund to each borrower who receives forgiveness under this
section the amount of any payments the borrower makes on an
eligible Federal student loan during the period beginning on
the date of the enactment of this Act and ending on the date on
which the Secretary forgives the outstanding balance of such
eligible Federal student loan.
(e) Exclusion From Taxable Income.--The amount of a borrower's
eligible Federal student loans forgiven under this section, and the
amount of any repayments to a borrower under subsection (d)(2), shall
not be included in the gross income of the borrower for purposes of the
Internal Revenue Code of 1986.
SEC. 3. PURCHASE AND FORGIVENESS OF OUTSTANDING PRIVATE STUDENT LOANS.
(a) In General.--Part D of title IV of the Higher Education Act of
1965 (20 U.S.C. 1087a et seq.) is amended by inserting after section
459B the following:
``SEC. 459C. TEMPORARY AUTHORITY TO PURCHASE AND FORGIVE ELIGIBLE
PRIVATE STUDENT LOANS.
``(a) Private Education Loan Purchase and Forgiveness.--
Notwithstanding any other provision of law, not later than 180 days
after the date of enactment of the Student Debt Cancellation Act of
2019, the Secretary, in consultation with the Secretary of the
Treasury, shall carry out a program under which the Secretary shall
purchase, and then forgive, the outstanding balance of interest and
principal due on eligible private student loans.
``(b) Definitions.--In this section:
``(1) Eligible private student loan.--In this section, the
term `eligible private student loan' means a private education
loan, as defined in section 140(a) of the Truth in Lending Act
(15 U.S.C. 1650(a)), that was expressly for the cost of
attendance (as defined in section 472) at an institution of
higher education participating in a loan program under part B,
part D, or part E of title IV of the Higher Education Act of
1965 (20 U.S.C. 1070 et seq.), as of the date that the loan was
disbursed, and that was made before the date of enactment of
the Student Debt Cancellation Act of 2019.
``(2) Private educational lender.--The term private
educational lender has the meaning given the term in section
140(a) of the Truth in Lending Act (15 U.S.C. 1650(a)).
``(c) Method of Loan Purchase and Forgiveness.--The Secretary, in
consultation with the Secretary of the Treasury, shall carry out a
program under which the Secretary, upon application by a borrower who
has an eligible private student loan, shall purchase the eligible
private student loans of the borrower, issue such borrower a loan under
this section, and forgive such loan, in accordance with the following:
``(1) The Secretary shall pay to the private educational
lender of the eligible private student loan an amount equal to
the sum of the unpaid principal, accrued unpaid interest, and
late charges of the eligible private student loan, as
calculated on the date of the purchase of such loan, in order
to discharge the borrower from any remaining obligation to the
private educational lender with respect to the eligible private
student loan.
``(2) The Secretary shall issue to the borrower a loan,
known as a Federal Direct Forgiveness Loan, in an amount equal
to the sum of the amount paid to the private educational lender
of the eligible private student loan of the borrower that was
purchased by the Secretary in accordance with paragraph (1).
``(3) The Secretary shall, immediately upon issuance of a
Federal Direct Forgiveness Loan, cancel the outstanding balance
of interest and principal due on such loan.
``(d) Repayment Refunds Prohibited.--Nothing in this section shall
be construed to authorize any refunding of any repayment of a loan.
``(e) Exclusion From Taxable Income.--The amount of a borrower's
Federal Direct Forgiveness Loans forgiven under this section shall not
be included in the gross income of the borrower for purposes of the
Internal Revenue Code of 1986.''.
(b) Notice to Borrowers.--Section 128(e) of the Truth in Lending
Act (15 U.S.C. 1638(e)) is amended by adding at the end the following
new paragraph:
``(12) Notice required along with billing statements.--
Along with each billing statement sent to the borrower during
the six-month period beginning on the day after the date of
enactment of the Student Debt Cancellation Act of 2019, the
private educational lender shall include a statement informing
the borrower that--
``(A) the borrower may be eligible for loan
forgiveness of eligible private student loans under
section 459C of the Higher Education Act of 1965; and
``(B) to be eligible for such loan forgiveness, the
borrower must apply to the Secretary of Education no
later than the date that is 180 days after the date of
enactment of the Student Debt Cancellation Act of
2019.''.
SEC. 4. NOTICE TO THE PUBLIC.
Not later than 15 days after the date of enactment of this Act, the
Secretary of Education, in consultation with institutions of higher
education and lenders of Federal student loans and private education
loans, shall take such actions as may be necessary to ensure that
borrowers who have outstanding eligible Federal student loans or
outstanding eligible private student loans (as defined in section 459C
of the Higher Education Act of 1965, as added by this Act) are aware of
the loan forgiveness programs authorized by this Act. Such information
shall--
(1) be presented in a form that is widely available to the
public, especially to borrowers with outstanding Federal and
private student loans;
(2) be easily understandable; and
(3) clearly notify borrowers of eligible private student
loans--
(A) that borrowers must apply for loan forgiveness
under this Act, and must do so no later than the date
that is 180 days after the date of enactment of this
Act; and
(B) of the application process and requirements to
apply for forgiveness of eligible private student loans
in accordance with this Act.
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