H.R. 4286 (112th): Student Loan Grace Period Extension Act

112th Congress, 2011–2013. Text as of Mar 28, 2012 (Introduced).

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I

112th CONGRESS

2d Session

H. R. 4286

IN THE HOUSE OF REPRESENTATIVES

March 28, 2012

introduced the following bill; which was referred to the Committee on Education and the Workforce

A BILL

To restore and extend the grace period before repayment begins on Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans.

1.

Short title

This Act may be cited as the Student Loan Grace Period Extension Act.

2.

Restoration and extension of the start of the repayment period for certain Federal Direct Loans

(a)

Restoration of interest subsidy during grace period

Section 309(d) of title III of division F of Public Law 112–74 (amending section 428(a)(3)(A)(i)(I) of the Higher Education Act of 1965 (20 U.S.C. 1078(a)(3)(A)(i)(I))) is repealed, and the provisions of law amended by such section are restored or revived as if such section had not been enacted.

(b)

Grace period extension

(1)

Amendment

Section 428(b)(7) of the Higher Education Act of 1965 (20 U.S.C. 1078(b)(7)) is amended—

(A)

in subparagraph (A), by striking 6 months and inserting 12 months; and

(B)

in subparagraph (D), by striking 6-month period and inserting 12-month period.

(2)

Effective date and application

The amendments made by paragraph (1) shall take effect on the date of enactment of this section, and shall apply with respect to—

(A)

Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans made on or after such date of enactment;

(B)

Federal Direct Stafford Loans made before such date of enactment to borrowers who have not yet entered repayment on such loans on such date of enactment; and

(C)

Federal Direct Unsubsidized Stafford Loans made before such date of enactment to borrowers who—

(i)

have not yet entered repayment on such loans on the date that is 60 days after such date of enactment; and

(ii)

elect a 12-month grace period in accordance with paragraph (3).

(3)

Election of extended grace period for certain FDUS Loans

The Secretary of Education shall provide an opportunity for each borrower who has a Federal Direct Unsubsidized Stafford Loan that was made before the date of enactment of this section and who has not yet entered repayment on such loan on the date that is 60 days after such date of enactment to elect a 12-month grace period, in accordance with section 428(b)(7) of the Higher Education Act of 1965, as amended by this subsection, before beginning repayment. The Secretary shall—

(A)

notify each such borrower of the opportunity for such an election not later than 30 days after such date of enactment;

(B)

advise each such borrower of the financial consequences of electing such 12-month grace period;

(C)

not require such a borrower to accept a 12-month grace period in accordance with section 428(b)(7) of the Higher Education Act of 1965 (as amended by this subsection), unless the borrower specifically elects such 12-month grace period during the 90-day period beginning on the day the Secretary notifies such borrower of the option to elect such a 12-month grace period, except that a borrower shall make such an election no later than 10 days before the start of the borrower’s repayment period, as determined under section 428(b)(7) of the Higher Education Act of 1965 as in effect on the day before the date of enactment of this section; and

(D)

in the case of such a borrower who does not elect such a 12-month grace period during the period described in subparagraph (C), determine the start of the borrower’s repayment period in accordance with section 428(b)(7) of the Higher Education Act of 1965 as in effect on the day before the date of enactment of this section.