Treatment of loans for SBA disaster loan recipients

(a)

Discharge for SBA disaster loan recipients

(1)

FFEL and Federal Direct loans

Section 437 of the Higher Education Act of 1965 (20 U.S.C. 1087) is amended—(A)in the section header, by inserting

; Other repayment

before the period; and(B)by adding at the end the following new subsection:

(e)

Loans of SBA disaster loan recipients

If a borrower who received a loan made, insured, or guaranteed under this part also received, on or after January 1, 2020, a loan made under section 7(b) of the Small Business Act (15 U.S.C. 636(b)), the Secretary shall discharge the borrower’s liability on the loan under this part by repaying the lesser of—(1)the amount owed on the loan under this part; or(2)an amount owed on the loan under this part that is equal to the amount of the loan received by the borrower that is made under section 7(b) of the Small Business Act (15 U.S.C. 636(b)).

(2)

Perkins loans

Section 464(c)(1)(F) of the Higher Education Act of 1965 (20 U.S.C. 1087dd(c)(1)(F)) is amended—(A)by moving clauses (i) through (iv) two ems to the left;(B)by striking or at the end of clause (iii);(C)by inserting or after the semicolon in clause (iv); and(D)by adding at the end the following new clause:

(v)if the borrower received, on or after January 1, 2020, a loan made under section 7(b) of the Small Business Act (15 U.S.C. 636(b)), except that the amount of liability to repay a loan that is cancelled under this clause shall not exceed the amount of the loan made under section 7(b) of the Small Business Act (15 U.S.C. 636(b)) that is received by the borrower;

(b)

Procedures for discharge for SBA disaster loan recipients

Part G of title IV of the Higher Education Act of 1965 (20 U.S.C. 1088 et seq.) is amended by inserting after section 493D the following:

493E.

Procedures for discharge for SBA disaster loan recipients

(a)

Procedures

The Secretary, in consultation with the Administrator of the Small Business Administration, shall develop and implement a procedure to—(1)identify borrowers of loans under part B, part D, and part E of this title who have received, on or after January 1, 2020, a loan made under section 7(b) of the Small Business Act (15 U.S.C. 636(b)); (2)provide any certifications or affidavits needed to enable such borrowers to document eligibility for discharge or cancellation of student loans made, insured, or guaranteed under part B, part D, or part E of this title in accordance with section 437 or section 464(c); and(3)discharge or cancel student loans made, insured, or guaranteed under part B, part D, and part E of this title, in accordance section 437 or section 464(c), as soon as practicable after the date of enactment of the No Double Debt for Disaster Survivors Act of 2021, or, in the case of a borrower who receives a loan made under section 7(b) of the Small Business Act (15 U.S.C. 636(b)) after the date of enactment of such Act, the date on which the borrower receives such loan.(b)

Reports

(1)

Initial report

Not later than 6 months after the date of enactment of the No Double Debt for Disaster Survivors Act of 2021, the Secretary and the Administrator of the Small Business Administration jointly shall report and provide feedback to Congress on the progress made in developing and implementing the procedures required under subsection (a), including how such procedures will reduce waste, fraud, and abuse.(2)

Annual reports

Not later than one year after the date of enactment of the No Double Debt for Disaster Survivors Act of 2021 and annually thereafter, the Secretary shall report to Congress on—(A)the number of individuals with loans discharged under section 437(e), cancelled under section 464(c)(1)(F)(v), or both; and(B)the total dollar amount of loans discharged or cancelled in accordance with such sections.