Relocation and retention student loan program

Section 455 of the Higher Education Act of 1965 (20 U.S.C. 1087e) is amended by adding at the end the following:

(r)

Relocation and Retention Student Loan Repayment Program

(1)

In general

(A)

Enrolled loan amount

A borrower may elect to enroll any combination of principal and accrued interest that has not been capitalized on eligible loans not in default as an enrolled loan balance under the program under this subsection in an amount that is equal to—(i)an amount agreed to by the borrower, Secretary, and sponsoring entity (or a combination of such sponsoring entities); and(ii)except as provided in paragraph (3)(B)(ii), the lesser of the following:(I)$50,000.(II)The total amount of eligible loans of such borrower. (B)

Cancellation or repayment required

The Secretary shall cancel or repay an amount determined under paragraph (2)(A) of the balance due on any enrolled loan balance not in default for a borrower who—(i)has maintained residence in a qualifying area during a 12-month period and such borrower attests that such residence is a primary residence; and(ii)demonstrates to the Secretary in the agreement under paragraph (2)(A) that a sponsoring entity certified in accordance with paragraph (3)(A) (or a combination of such sponsoring entities) will, except as provided in paragraph (3)(B)(ii), match the amounts cancelled or repaid by the Secretary as payments made by such sponsoring entity (or a combination of such sponsoring entities) towards the repayment of the enrolled loan balance.(C)

Certification

The Secretary shall establish a user-friendly, simplified, and electronic process using the online portal required under paragraph (5)(B) through which a borrower who makes an election to enroll eligible loans into an enrolled loan balance under subparagraph (A) shall annually certify enrollment in the program under this subsection.(D)

No payments required by borrower

A borrower may not be required to make payments with respect to the enrolled loan balance (or payments on the interest that accrues on the total amount of such enrolled loan balance) during any 12-month period in which the borrower is enrolled in the program under this subsection. (2)

Schedule

(A)

Agreement

Subject to subparagraph (B), the Secretary shall enter into an agreement with a borrower and sponsoring entity (or a combination of such sponsoring entities) to cancel or repay an amount with respect to each 12-month period described under paragraph (1)(B)(i) such that over the period of 96 months the total amount of cancellation under paragraph (1) is equal to an amount that, except as provided in paragraph (3)(B)(ii), is equal to the lesser of the following:(i)$25,000 toward the enrolled loan balance, plus the interest that accrues on the total amount of the enrolled loan balance under paragraph (1)(A).(ii)Half of the total amount of the enrolled loan balance, plus the interest that accrues on the total amount of the enrolled loan balance under paragraph (1)(A).(B)

Increased cancellation amounts over time

The Secretary shall establish a standardized cancellation or repayment schedule for purposes of the program under this subsection such that over the course of 8 cancellations or repayments of the enrolled loan balance under paragraph (1), the total amount cancelled or repaid with respect to each 12-month period increases. (C)

Number of cancellations

A borrower—(i)may receive during a 12-month period for which the borrower is certified not more than one cancellation or repayment under paragraph (1); and(ii)may not receive more than 8 such cancellations or repayments.(D)

Prohibition on pressuring borrowers

(i)

In general

A private education loan debt collector or creditor may not pressure a borrower of a private loan to elect to apply any amount received pursuant to paragraph (1) to any private education loan.(ii)

Violations

A violation of this subparagraph is deemed—(I)an unfair, deceptive, or abusive act or practice under Federal law in connection with any transaction with a consumer for a consumer financial product or service under section 1031 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5531); and(II)with respect to a violation by a debt collector, an unfair or unconscionable means to collect or attempt to collect any debt under section 808 of the Federal Debt Collection Practices Act (15 U.S.C. 1692f).(iii)

Pressure defined

In this subparagraph, the term pressure means any communication, recommendation, or other similar communication, other than providing basic information about a borrower’s options, urging a borrower to make an election described in clause (i).(E)

Unenrollment

A borrower who no longer resides in a qualifying area after receiving a cancellation or repayment under this subsection shall be unenrolled from the program under this subsection and the remaining enrolled loan balance of such borrower shall be included in the eligible loans from which such enrolled loan balance derived. Such unenrollment shall not preclude a borrower from enrolling the eligible loans of the borrower into an appropriate loan forgiveness or repayment program, including such a program in which the borrower is, at the time of such unenrollment, already enrolled or participating in. (F)

Regulations

The Secretary shall issue such regulations as are necessary to allow borrowers to concurrently enroll in the program under this subsection with respect to an enrolled loan balance and a loan forgiveness or repayment program with respect to the other eligible loans of the borrower not so enrolled. In the case of a borrower described in subparagraph (E), the Secretary shall establish through regulation a process by which the remaining enrolled loan balance of such borrower is included in to the eligible loans from which such enrolled loan balance derived and may be enrolled in an appropriate loan forgiveness or repayment program if the borrower would otherwise be eligible for such program. (3)

Sponsoring entities

(A)

In general

The Secretary, in consultation with the Secretary of Commerce and the Secretary of Labor, shall carry out a program to certify States, counties, localities, territories, Tribes, nonprofit entities, and qualifying partnerships that are able to provide funding to borrowers for purposes of this subsection. Such program shall include standard requirements relating to the treatment of default by a sponsoring entity and the ability of a sponsoring entity to be certified or recertified after such a default. (B)

Matching funds

(i)

In general

Except as provided in clause (ii), a sponsoring entity (or a combination of such sponsoring entities) shall match (except with respect to the interest that accrues on the total amount of the enrolled loan balance under paragraph (1)(A)) the amounts cancelled or repaid by the Secretary under paragraph (1) as payments made by such sponsoring entity towards the repayment of the enrolled loan balance.(ii)

Exceptions

(I)

Extreme financial hardship

In the case of a sponsoring entity (or a combination of such sponsoring entities) with an extreme financial hardship that demonstrates such hardship to the Secretary, through a process determined by the Secretary, the sponsoring entity and the Secretary may agree to match amounts such that the total amount repaid or cancelled under this subsection is less than the amount described in paragraph (1)(A), so long as the total amount repaid with respect to each 12-month period increases. (II)

Additional payments

A sponsoring entity (or a combination of such sponsoring entities) may provide more than the match required under clause (i) if the Secretary determines that, over the course of providing more than the matching amount of the repayments or cancellations under paragraph (1), the total amount repaid by such sponsoring entity with respect to each 12-month period increases.(iii)

Interest

The Secretary shall cancel or repay the interest that accrues on the total amount of the enrolled loan balance under paragraph (1)(A), regardless of whether an exception under clause (ii) applies with respect to such an enrolled loan balance. (C)

Default

In the case of a borrower for which a sponsoring entity (or a combination of such sponsoring entities) offers to provide loan cancellation or repayment under this subsection and subsequently defaults on such offer, such borrower may not be held responsible for repayment of the amount such sponsoring entity (or a combination of such sponsoring entities) offered to provide such borrower.(D)

Rules of construction

Nothing in this subsection shall preclude—(i)the Secretary from establishing a process to financially assist a sponsoring entity (or a combination of such sponsoring entities) that defaults on loan cancellation or repayment (as described in subparagraph (C)) so long as such process does not hold a borrower responsible for any repayments with respect to such a default; or(ii)a sponsoring entity (or a combination of such sponsoring entities) from establishing reciprocal agreements, partnering, collaborating, or otherwise coordinating with other sponsoring entities to provide matching funds as required under subparagraph (B)(i) and avoid default. (E)

Guidance

The Secretary shall issue guidance to assist sponsoring entities (or a combination of such sponsoring entities) with establishing preference and developing criteria to select borrowers for sponsorship under this subsection and to select borrowers to receive additional payments under subparagraph (B)(ii)(II).(4)

Tax treatment of cancelled or repaid amounts

For purpose of the Internal Revenue Code of 1986, no amount shall be included in any person’s gross income by reason of the discharge under this subsection of any indebtedness.(5)

Department activities

(A)

Information for borrowers

The Secretary shall establish on the public website of the Department of Education, and periodically update—(i)a list of qualifying areas;(ii)a list of sponsoring entities certified under paragraph (3)(A) available with respect to such qualifying areas; and(iii)contact information for such sponsoring entities.(B)

Online portal

The Secretary shall establish an online portal through the public website of the Department of Education for borrowers to—(i)certify enrollment in the program under this section;(ii)check the status of an enrollment certification under this section and the deadlines with respect to such certifications;(iii)check the enrollment status of such borrower with respect to the program under this section; and(iv)view the amount of assistance the borrower has received or will receive with respect to the enrolled loan balance of the borrower and the dates on which such amounts were received or will be received.(C)

Outreach

The Secretary shall develop and implement an outreach plan to notify—(i)potential sponsoring entities of the certification process under paragraph (3)(A);(ii)sponsoring entities of recertification requirements under this subsection; and(iii)borrowers (including prospective borrowers) of eligible loans of the program under this subsection, including the benefits of such program and how to meet the requirements to participate in such program. (6)

Definitions

In this subsection:(A)

Eligible loan

The term eligible loan means a Federal Direct Stafford Loan, Federal Direct PLUS Loan, or Federal Direct Unsubsidized Stafford Loan, a Federal Direct Consolidation Loan, Federal Family Education Loan, Federal Perkins Loan, or a private education loan.(B)

Private education loan

The term private education loan has the meaning given the term in section 140 of the Truth in Lending Act (15 U.S.C. 1650). (C)

Qualifying area

The term qualifying area means—(i)any city or town which has a population of less than 20,000 inhabitants other than a city or town in a densely settled area or adjacent to, or closely associated with, one or more cities or towns which, considered collectively, do not meet the criteria of this subparagraph;(ii)any city or town which has a population of greater than or equal to 20,000 inhabitants and less than 100,000 inhabitants that with respect to which, during the most recent 10-year period, the net population loss from the area equals or exceeds 0 percent of the population of the area other than a city or town in a densely settled area or adjacent to, or closely associated with, one or more cities or towns which, considered collectively, do not meet the criteria of this subparagraph; (iii)any city or town which has a population of greater than or equal to 100,000 inhabitants and less than 150,000 inhabitants that—(I)with respect to which, during the most recent 10-year period, the net population loss from the area equals or exceeds 0 percent of the population of the area; (II)the Secretary of Education, in consultation with the Secretary of Commerce, determines would economically benefit from serving as a qualifying geographic area; and(III)is not in a densely settled area or adjacent to, or closely associated with, one or more cities or towns which, considered collectively, do not meet the criteria of this subparagraph; or(iv)any city or town not described in clauses (i) through (iii) which has a population of less than 300,000 inhabitants—(I)that is included in a major disaster declared by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170) (not including the major disaster declared by reason of the novel coronavirus (COVID–19)) during the five-year period preceding the date on which a borrower is enrolled in the program under this subsection;(II)that—(aa)the Secretary of Education, in consultation with the Secretary of Commerce, determines would economically benefit from serving as a qualifying geographic area; or(bb)the Secretary of Education, in consultation with the Secretary of Commerce and the Secretary of Housing and Urban Development, determines would support community recovery by serving as a qualifying geographic area; and(III)is not adjacent to, or closely associated with, one or more cities or towns which, considered collectively, do not meet the criteria of this subparagraph.(D)

Fair Debt Collection Practices Act terms

The terms creditor and debt collector have the meaning given those terms, respectively, under section 803 of the Fair Debt Collection Practices Act (15 U.S.C. 1692a).