S 2235 — Student Loan Debt Relief Act of 2019

Summary

Student Loan Debt Relief Act of 2019 This bill establishes programs to cancel certain student loan debt and refinance student loans. First, the bill requires the Department of Education (ED) to automatically discharge (i.e., repay or cancel) up to $50,000 of outstanding student loan debt for each qualified borrower. Borrowers with an adjusted gross income of $100,000 or less, based on the most recent tax year, may receive the maximum loan cancellation. Borrowers with an adjusted gross income above $100,000 may receive partial loan cancellation. Members of Congress are not eligible to receive loan cancellation. Further, the bill outlines the method of loan discharge, and excludes loan cancellation from taxable income. It also requires ED to automatically place each federal student loan borrower in administrative forbearance for the one-year period in which ED carries out the cancellation of student loans. During this period, payments are not due, interest does not accrue, and ED may not pursue debt collection activities (e.g., wage garnishments). Next, the bill requires ED to carry out student loan refinancing programs for those student loans that exist after the loan cancellation period. Specifically, it directs ED to automatically refinance federal student loans at the lower interest rates offered to new federal borrowers in the 2016-2017 school year. It also allows borrowers to convert their private student loans to federal student loans, thereby allowing such borrowers to qualify for loan cancellation. It also makes student loans dischargeable in bankruptcy proceedings. Finally, the bill specifies notification requirements.

Bill Text

• Introduced Introduced in Senate Current html July 23, 2019

Compared against current U.S. Code AI-generated reading aid — verify against the official bill.

The bill introduces provisions for discharging qualified student loan amounts and implements measures for administrative forbearance and refinancing programs.

• 20 U.S.C. 1071

  (A) through the holder of the loan, to assume the obligation to repay the qualified loan amount for a loan made, insured, or guaranteed under part B of title IV of the Higher Education Act of 1965 (20 U.S.C. 1071 et seq.);

  This allows the Secretary of Education to discharge the obligation for loans made under the specified part of the Higher Education Act.

• 20 U.S.C. 1087a

  and (2) → (2)

  This change removes unnecessary language from the list of responsibilities of the Secretary regarding loan programs.

• 20 U.S.C. 1087a

  ; and (3) to make loans under section 460A and section 460B

  This expands the Secretary's authority to include making loans under new refinancing programs.

• 20 U.S.C. 1087a

  SEC. 460A. REFINANCING FFEL AND FEDERAL DIRECT LOANS.

  This establishes a new refinancing program for Federal loans.

• 20 U.S.C. 1087a

  (a) In General.--Beginning not later than 12 months after the date of enactment of the Student Loan Debt Relief Act of 2019, the Secretary shall establish a program under which the Secretary automatically refinances loans made under this part in accordance with the provisions of this section, in order to lower the rate of interest on such loans.

  This mandates the Secretary to create a program to automatically refinance loans to reduce interest rates.

Action History

1. July 23, 2019

   Introduced in Senate

2. July 23, 2019

   Read twice and referred to the Committee on Finance.

Sponsors

• Elizabeth Warren · Primary

Subjects