Interest-free deferment during periods when the national unemployment rate exceeds 7 percent

(a)

FFEL subsidized loan deferment

Section 428(b)(1)(M) of the Higher Education Act of 1965 (20 U.S.C. 1078(b)(1)(M)) is amended— (1)by striking or at the end of clause (iii); (2)by adding or at the end of clause (iv); and (3)by adding at the end the following new clause:

(v)in a case of a borrower who is between the ages of 21 and 25, inclusive, and a recent college student, as defined in section 455(f)(5), with respect to loans made under this section to such borrower for a period of enrollment during which the borrower was pursuing a degree described in subparagraph (A) of such section 455(f)(5)— (I)beginning as soon as practicable after the last day of the second consecutive month for which the Bureau of Labor Statistics of the Department of Labor (in this paragraph referred to as the Bureau) publishes a national unemployment rate that exceeds 7 percent, and ending as soon as practicable after the Bureau publishes a national unemployment rate that is 7 percent or lower, except that such period shall not exceed 5 years; or (II)beginning as soon as practicable after the last day of the second consecutive month for which the Bureau publishes a national unemployment rate for individuals ages 21 through 25 years old that exceeds 9 percent, and ending as soon as practicable after the Bureau publishes a national unemployment rate for such individuals that is 9 percent or lower, except that such period shall not exceed 5 years.

(b)

Treatment of consolidation loans

Section 428C(b)(4)(C)(ii) of the Higher Education Act of 1965 (20 U.S.C. 1078–3(b)(4)(C)(ii)) is amended— (1)by striking or at the end of subclause (II); (2)by redesignating subclause (III) as subclause (IV); (3)by inserting after subclause (II) the following:

(III)in the case of a borrower who is between the ages of 21 and 25, inclusive, and a recent college student, as defined in section 455(f)(5), by the Secretary, in the case of a consolidation loan made to the borrower for a period of enrollment during which the borrower was pursuing a degree described in subparagraph (A) of such section 455(f)(5) and for which the application is received on or after the date of enactment of the U.S. Leads Act, except that in the case of a deferral under clause (ii) of section 428(b)(1)(M), the Secretary shall pay such interest only for a period not in excess of 3 years for which a borrower would be eligible for such a deferral and, in the case of a deferral under clause (v) of such section, for a period not in excess of 5 years for which the borrower would be eligible for such a deferral; or

; and

(4)in subclause (IV) (as so redesignated by this subsection), by striking (I) or (II) and inserting (I), (II), or (III). (c)

FFEL unsubsidized loan deferment

(1)

In general

Section 428H(e)(2) of the Higher Education Act of 1965 (20 U.S.C. 1078–8(e)(2)) is amended— (A)in subparagraph (A), by inserting Except as provided in subparagraph (C) before Interest on; and (B)by adding at the end the following new subparagraph:

(C)In the case of a borrower who is between the ages of 21 and 25, inclusive, and a recent college student, as defined in section 455(f)(5), interest on loans made under this section to the borrower for a period of enrollment during which the borrower was pursuing a degree described in subparagraph (A) of such section 455(f)(5) and for which payments are deferred— (i)under clause (i), (iii), or (iv) of section 428(b)(1)(M), for a period of deferment granted to such borrower on or after the date of enactment of the U.S. Leads Act, shall accrue and be paid by the Secretary during any period during which the loans are so deferred; (ii)under clause (ii) of section 428(b)(1)(M), for a period of deferment granted to such borrower on or after the date of enactment of the U.S. Leads Act, shall accrue and be paid by the Secretary during any period during which the loans are so deferred, not in excess of 3 years; and (iii)under clause (v) of section 428(b)(1)(M), for a period of deferment granted to such borrower on or after the date of enactment of the U.S. Leads Act, shall accrue and be paid by the Secretary during any period during which the loans are so deferred, not in excess of 5 years.

(2)

Conforming amendment

Section 428(b)(1)(Y)(iii) of the Higher Education Act of 1965 (20 U.S.C. 1078(b)(1)(Y)(iii)) is amended by inserting (other than a deferment under such subparagraph granted to a borrower described in section 428H(e)(2)(C) on or after the date of enactment of the U.S. Leads Act) after of this paragraph. (d)

Direct loan deferment

Section 455(f) of the Higher Education Act of 1965 (20 U.S.C. 1087(f)) is amended— (1)in paragraph (1)— (A)in subparagraph (A)— (i)by striking or at the end of clause (i); and (ii)by adding at the end the following:

(iii)Federal Direct Unsubsidized Stafford Loan or Federal Direct Consolidation Loan made to a borrower for a period of enrollment during which the borrower was pursuing a degree described in paragraph (5)(A) and the borrower is between the ages of 21 and 25, inclusive, and a recent college student, as defined in paragraph (5); or

; and

(B)in subparagraph (B)— (i)by inserting not described in subparagraph (A)(iii) after Unsubsidized Stafford Loan; and (ii)by striking subparagraph (A)(ii) and inserting clause (ii) or (iii) of subparagraph (A); (2)in paragraph (2)— (A)by striking or at the end of subparagraph (C); (B)by striking the period at the end of subparagraph (D) and inserting ; or; and (C)by adding at the end the following new subparagraph:

(E)in a case of a borrower who is between the ages of 21 and 25, inclusive, and a recent college student, as defined in paragraph (5), with respect to loans made under this part to such borrower for a period of enrollment during which the borrower was pursuing a degree described in subparagraph (A) of such paragraph (5)— (i)beginning as soon as practicable after the last day of the second consecutive month for which the Bureau of Labor Statistics of the Department of Labor (in this paragraph referred to as the Bureau) publishes a national unemployment rate that exceeds 7 percent, and ending as soon as practicable after the Bureau publishes a national unemployment rate that is 7 percent or lower, except that such period shall not exceed 5 years; or (ii)beginning as soon as practicable after the last day of the second consecutive month for which the Bureau publishes a national unemployment rate for individuals ages 21 through 25 years old that exceeds 9 percent, and ending as soon as practicable after the Bureau publishes a national unemployment rate for such individuals that is 9 percent or lower, except that such period shall not exceed 5 years.

; and

(3)by adding at the end the following new paragraph:

(5)

Definition of recent college student

For the purpose of this subsection, the term recent college student means a borrower who— (A)who has received a baccalaureate degree from an institution of higher education within 48 months prior to the date of enactment of the U.S. Leads Act; and (B)who has not previously received any such baccalaureate degree.