The Act provides temporary relief for student loan borrowers with regard to federal student loans made under parts D (Federal Direct) and B (HBCUs) of the Higher Education Act. The Act:
There are two other provisions that may be pertinent to student loan servicers:
- Adjustment of Subsidized Student Loan Usage Limitation. The Act amends the Higher Education Act – 20 U.S.C. § 1087a, et. seq. – to allow the Secretary to exclude from a student’s period of enrollment any “semester (or the equivalent)” that the student did not complete due to a “Qualifying Emergency” (defined as one of several coronavirus-related declarations). However, this section will only apply “if the Secretary is able to administer such policy in a manner that limits complexity and the burden on the student.” For last-semester students, who would otherwise have graduated in the Spring or Summer of 2020, this could delay required repayment.
- Cancelation of Certain Student Loan Obligations. The Act amends the Higher Education Act –20 U.S.C. § 1001, et. seq. – to allow the Secretary of Education to cancel a borrower’s obligations to repay the “entire portion” of certain loans “associated with a payment period for a recipient of such loan who withdraws from the institution of higher education during the payment period as a result of a qualifying emergency.”
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