Text: H.R.3448 — 116th Congress (2019-2020)All Information (Except Text)

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Introduced in House (06/24/2019)

 
[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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