I 112th CONGRESS 2d Session H. R. 5895 IN THE HOUSE OF REPRESENTATIVES June 5, 2012 Ms. Bass of California (for herself, Mr. Hinojosa, Mr. McDermott, Mr. Towns, Ms. DeLauro, Mr. Thompson of Mississippi, Mr. Cicilline, Mr. Conyers, Mr. Clarke of Michigan, Mr. Jackson of Illinois, Ms. Bordallo, Mr. Lewis of Georgia, Mr. Kucinich, Mr. Johnson of Georgia, Mr. Hinchey, Mr. Carson of Indiana, Mr. Davis of Illinois, Mr. Sablan, Mr. Rangel, Mr. Honda, Ms. Richardson, Ms. Sewell, Mr. Olver, Ms. Norton, Ms. Hahn, Mr. Nadler, Ms. Lee of California, Mr. Reyes, and Mr. Tonko) introduced the following bill; which was referred to the Committee on Education and the Workforce A BILL To provide interest-free deferment on unsubsidized student loans during periods of unemployment, and for other purposes.

1.

Short title

This Act may be cited as the Graduate Success Act.

2.

Interest-free deferment of unsubsidized loans during periods of unemployment

(a)

FFEL Unsubsidized loan deferment

(1)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: (C)Interest on loans made under this section for which payments are deferred under clause (ii) of section 428(b)(1)(M), for a period of deferment granted to a borrower on or after the date of enactment of the Graduate Success Act, shall accrue and be paid by the Secretary during any period during which loans are so deferred, not in excess of 3 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 clause (ii) of such subparagraph on or after the date of enactment of the Graduate Success Act) after of this paragraph. (b)

Direct Unsubsidized loan deferment

Section 455(f)(1) of the Higher Education Act of 1965 (20 U.S.C. 1087e(f)(1)) is amended— (1)in subparagraph (A)— (A)by striking or at the end of clause (i); and (B)by adding at the end the following: (iii)a Federal Direct Unsubsidized Stafford Loan, with respect to a period of deferment described in subparagraph (B) of paragraph (2) granted to a borrower on or after the date of enactment of the Graduate Success Act; or ; and (2)in subparagraph (B), by inserting not described in subparagraph (A)(iii) after Unsubsidized Stafford Loan. (c)

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)by the Secretary, in the case of a consolidation loan for which the application is received on or after the date of enactment of the Graduate Success Act, except that the Secretary shall pay such interest only for a period not in excess of 3 years for which the borrower would be eligible for a deferral under clause (ii) of section 428(b)(1)(M); or ; and (4)in subclause (IV) (as so redesignated by this subsection), by striking (I) or (II) and inserting (I), (II), or (III). (d)

Income-Based repayment

Section 493C(b)(3) of the Higher Education Act of 1965 (20 U.S.C. 10983(b)(3)) is amended— (1)in subparagraph (A), by striking and after the semicolon; (2)by redesignating subparagraph (B) as subparagraph (C); (3)by inserting after subparagraph (A) the following: (B)shall, on subsidized and unsubsidized loans, be paid by the Secretary for a period of not more than 3 years during which the borrower is eligible for a deferment due to unemployment described in section 455(f)(2)(B) (regardless of whether the student is in such a deferment), except that— (i)this subparagraph shall only apply to periods during which the borrower is eligible for a such deferment on or after the date of enactment of the Graduate Success Act; and (ii)in the case of a subsidized loan, such period shall not include any period described in subparagraph (A) or any period during which the borrower is in deferment due to an economic hardship described in section 435(o); and ; and (4)in subparagraph (C) (as so redesignated by paragraph (2))— (A)in clause (i), by striking subparagraph (A) and inserting subparagraphs (A) and (B); and (B)in clause (ii), by inserting , subject to subparagraph (B), after unsubsidized loan.