Student Loan Relief Act of 2015

Summary: Student Loan Relief Act of 2015 This bill authorizes the Department of the Treasury to establish a temporary three-year program to facilitate federal student loan refinancing into the private market, at no cost to the federal government, to ensure payment of lower interest rates on student loans. Private lenders under such refinancing program shall be eligible to receive a federal government guarantee of 95% of loans. Treasury shall, in consultation with the Department of Education, begin a national awareness campaign to alert student loan borrowers about such refinancing program with a disclosure that a private loan that results from such refinancing is not eligible for income driven repayment or loan forgivingness. The bill amends the Internal Revenue Code to allow an exclusion from gross income for the payment of an employer, either to an employee or a lender, of any indebtedness of an employee under a qualified education refinance loan or any interest relating to such a loan. The term &quot;qualified education refinance loan&quot; means any indebtedness used solely to refinance a qualified education loan with respect to which the lender offers the borrower protection in the event of unemployment or financial hardship. 

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Student Loan Relief Act of 2015''.

SEC. 2. PURPOSE.

    The purpose of this Act is to spur economic growth, by establishing 
a mechanism to allow borrowers of Federal student loans to refinance 
their loans in order--
            (1) to allow credit-worthy borrowers to get a lower 
        interest rate than the Federal rate;
            (2) to encourage innovation in the education refinancing 
        markets; and
            (3) to promote the participation of private capital in the 
        education refinancing markets.

                   TITLE I--REFINANCING STUDENT LOANS

SEC. 101. DEFINITIONS.

    In this title--
            (1) the term ``Federal student loan'' means a loan made, 
        insured, or guaranteed under title IV of the Higher Education 
        Act of 1965 (20 U.S.C. 1070 et seq.); and
            (2) the term ``Secretary'' means the Secretary of the 
        Treasury, other than in the context of the Secretary of 
        Education.

SEC. 102. TEMPORARY AUTHORITY TO CREATE A CREDIT FACILITY TO INCREASE 
              MARKET EFFICIENCY IN THE STUDENT LOAN MARKET.

    (a) Authority.--
            (1) In general.--The Secretary, notwithstanding any 
        provision of section 484 of the Higher Education Act of 1965 
        (20 U.S.C. 1091), is authorized to facilitate Federal student 
        loan refinancing into the private market to ensure that 
        borrowers pay lower interest rates that are commensurate with 
        credit risk, so that they may pursue more economically 
        productive activities, such as home purchases and small 
        business formation.
            (2) No net cost to government.--Mechanisms established 
        under this subsection shall not result in any net cost to the 
        Federal Government, as determined jointly by the Secretary, the 
        Secretary of Education, and the Director of the Office of 
        Management and Budget.
            (3) Federal guarantee.--A private loan that results from 
        refinancing under a program established under the authority of 
        this section shall receive a Federal Government guarantee of 95 
        percent of the private loan, including accrued interest on such 
        loan.
            (4) Disclosures.--Each lender of prospective borrower of a 
        private loan that would result from refinancing under a program 
        established under the authority of this section shall disclose 
        to the prospective borrower the information described in 
        section 428C(b)(1)(F) of the Higher Education Act of 1965 (20 
        U.S.C. 1078-3(b)(1)(F)).
    (b) Public Awareness.--The Secretary, in consultation with the 
Secretary of Education, shall--
            (1) begin a national awareness campaign to alert all 
        Federal student loan borrowers who may benefit from any program 
        or facilities established under this section; and
            (2) include in the campaign under paragraph (1) a 
        disclosure that a private loan that results from refinancing 
        under a program established under the authority of this section 
        is not eligible for income driven repayment or loan 
        forgiveness.
    (c) Expiration of Authority.--Three years after the date on which a 
credit facility is established under this Act, and not later than 5 
years after the date of enactment of this Act, any new lending, 
purchase, or other activity initiated through the facilities 
established by the Secretary under subsection (a) shall cease, except 
the Federal guarantee described in subsection (a)(3) shall continue for 
the life of the private loan.

    TITLE II--EXCLUSION FOR EMPLOYER PAYMENT OF INTEREST ON CERTAIN 
                        REFINANCED STUDENT LOANS

SEC. 201. EXCLUSION FOR EMPLOYER PAYMENT OF INTEREST ON CERTAIN 
              REFINANCED STUDENT LOANS.

    (a) In General.--Paragraph (1) of section 127(c) of the Internal 
Revenue Code of 1986 is amended by striking ``and'' at the end of 
subparagraph (A), by redesignating subparagraph (B) as subparagraph 
(C), and by inserting after subparagraph (A) the following new 
subparagraph:
                    ``(B) the payment by an employer, whether paid to 
                the employee or to a lender, of any indebtedness of the 
                employee under a qualified education refinance loan or 
                any interest relating to such a loan, and''.
    (b) Qualified Education Refinance Loan.--Subsection (c) of section 
127 of the Internal Revenue Code of 1986 is amended by adding at the 
end the following new paragraph:
            ``(8) Qualified education refinance loan.--The term 
        `qualified education refinance loan' means any indebtedness 
        used solely to refinance a qualified education loan (within the 
        meaning of section 221(d)(1)) with respect to which the lender 
        offers the borrower protection in the event of unemployment or 
        financial hardship (as reasonably determined by the lender, 
        including periods of forbearance or career assistance).''.
    (c) Conforming Amendment; Denial of Double Benefit.--Paragraph (1) 
of section 221(e) of the Internal Revenue Code of 1986 is amended by 
inserting before the period the following: ``, or for which an 
exclusion is allowable under section 127 to the taxpayer's employer by 
reason of the payment by such employer of any indebtedness on a 
qualified education loan of the taxpayer''.
    (d) Effective Date.--The amendments made by this section shall 
apply to expenses paid after December 31, 2015.