I 

114TH CONGRESS 

1ST SESSION H. R. 3751 

To allow certain student loan borrowers to refinance Federal student loans. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 9, 2015 

Mr. PETERS (for himself, Ms. JUDY CHU of California, Mr. VARGAS, Mr. HIGGINS, Mr. RUSH, Mr. HONDA, Mr. BRENDAN F. BOYLE of Pennsylvania, 

Ms. JACKSON LEE, Mr. CROWLEY, and Mr. POCAN) introduced the following bill; which was referred to the Committee on Education and the 

Workforce 

A BILL 

To allow certain student loan borrowers to refinance Federal 

student loans. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Federal Student Loan 

5 Refinancing Act’’. 

6 SEC. 2. STUDENT LOAN CONSOLIDATION. 

7 Section 459B of the Higher Education Act of 1965 

8 (20 U.S.C. 1087i–2) is amended— 


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1 (1) in subsection (a)(3), by striking ‘‘section’’ 

2 and inserting ‘‘subsection’’; 

3 (2) in subsection (b), by striking ‘‘this section’’ 

4 and inserting ‘‘subsection (a)’’ each place the term 

5 appears; and 

6 (3) by inserting at the end the following: 

7 ‘‘(c) TEMPORARY LOAN CONSOLIDATION AUTHORITY

8 FOR CERTAIN LOANS MADE AFTER JULY 1, 2006.— 

9 ‘‘(1) LOAN CONSOLIDATION AUTHORITY.— 

10 ‘‘(A) IN GENERAL.—A borrower who has 1 

11 or more loans in a category described in sub12 paragraph (B) may consolidate all of the loans 

13 of the borrower that are described in subpara14 graph (B) into a Federal Direct Consolidation 

15 Loan during the period described in subpara16 graph (C). 

17 ‘‘(B) CATEGORIES OF LOANS THAT MAY BE

18 CONSOLIDATED.—The categories of loans that 

19 may be consolidated under subparagraph (A) 

20 are loans made on or after July 1, 2006, that 

21 are— 

22 ‘‘(i) loans made under this part; 

23 ‘‘(ii) loans purchased by the Secretary 

24 pursuant to section 459A; and 


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1 ‘‘(iii) loans made under part B that 

2 are held by an eligible lender, as such term 

3 is defined in section 435(d). 

4 ‘‘(C) TIME PERIOD IN WHICH LOANS MAY

5 BE CONSOLIDATED.— 

6 ‘‘(i) FEDERAL DIRECT LOANS.—In the 

7 case of a borrower who has 1 or more 

8 loans described under subparagraph (B)(i), 

9 the Secretary shall— 

10 ‘‘(I) consolidate the loans de11 scribed under subparagraph (B)(i) not 

12 later than 90 days after the date of 

13 enactment of the Federal Student 

14 Loan Refinancing Act; and 

15 ‘‘(II) notify the borrower, in writ16 ing, prior to such consolidation that— 

17 ‘‘(aa) the borrower’s loans 

18 under this part have been con19 solidated at a lower interest rate; 

20 and 

21 ‘‘(bb) the borrower’s repay22 ment plan and the other terms 

23 and conditions of the borrower’s 

24 loan remain unchanged. 


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1 ‘‘(ii) OTHER LOANS.—In the case of a 

2 borrower who has 1 or more loans de3 scribed under clause (ii) or (iii) of subpara4 graph (B), the Secretary shall— 

5 ‘‘(I) initiate the loan consolida6 tion process for the loans described 

7 under clause (ii) or (iii) of subpara8 graph (B), not later than 90 days 

9 after the date of enactment of the 

10 Federal Student Loan Refinancing 

11 Act, by sending a completed loan con12 solidation application to the borrower; 

13 ‘‘(II) notify the borrower, as part 

14 of such application, that a fee will be 

15 assessed and that the interest rate of 

16 the Federal Direct Consolidation 

17 Loan will be set in accordance with 

18 paragraph (2); and 

19 ‘‘(III) notify the borrower, as 

20 part of such application, that if the 

21 borrower wishes to consolidate in ac22 cordance with the completed applica23 tion, the borrower must endorse the 

24 application and submit the application 

25 to the Secretary not more than 6 


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1 months after receipt of the applica2 tion. 

3 ‘‘(2) TERMS OF LOANS.—The following terms 

4 and conditions shall apply to a Federal Direct Con5 solidation Loan made under this subsection: 

6 ‘‘(A) The applicable rate of interest on a 

7 Federal Direct Consolidation Loan made under 

8 this subsection shall be— 

9 ‘‘(i) 4 percent; or 

10 ‘‘(ii) in a case in which the weighted 

11 average of the interest rates on the out12 standing loans of a borrower that will be 

13 consolidated is less than 4 percent, the 

14 lesser of— 

15 ‘‘(I) the weighted average of the 

16 interest rates on the outstanding 

17 loans of a borrower that will be con18 solidated; or 

19 ‘‘(II) a rate of interest equal to— 

20 ‘‘(aa) 4 percent; minus 

21 ‘‘(bb) 0.4 percent of the 

22 principal balance of the consoli23 dation loan, at the time of con24 solidation. 


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1 ‘‘(B) In the case of a loan consolidated 

2 under paragraph (1)(C)(ii), an origination fee 

3 equal to 0.4 percent of the principal balance of 

4 the consolidation loan, at the time of consolida5 tion, will be added to the principal balance of 

6 the loan, and the Secretary shall use the fee to 

7 cover the cost of making and servicing the loan. 

8 ‘‘(C) If 1 or more of the loans being con9 solidated is a loan described under paragraph 

10 (1)(B)(iii), the interest rate on the Federal Di11 rect Consolidation Loan under this subsection 

12 shall be reduced by 0.25 percent. 

13 ‘‘(D) Any benefit a borrower is receiving or 

14 earning at the time a Federal Direct Consolida15 tion Loan is issued under this subsection shall 

16 not be affected by consolidation under this sec17 tion, including benefits such as a deferment or 

18 forbearance, accumulation of monthly payments 

19 as part of the public service loan forgiveness 

20 program under section 455(m), accumulation of 

21 monthly payments toward a loan discharge 

22 under the income-based repayment plan under 

23 section 493C, participation in a particular re24 payment plan, and other benefits to the bor25 rower.’’. 


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1 SEC. 3. EXEMPTIONS FROM OTHER LAWS. 

2 (a) EXEMPTION FROM THE PAPERWORK REDUCTION

3 ACT.—Chapter 35 of title 44, United States Code, shall 

4 not apply to this Act. 

5 (b) INAPPLICABILITY OF RULEMAKING REQUIRE6 MENTS.—Sections 482(c) and 492 of the Higher Edu7 cation Act of 1965 (20 U.S.C. 1089(c), 1098a) and sec8 tion 553 of title 5, United States Code, shall not apply 

9 to the amendments made by this Act, or to any regulations 

10 promulgated under such amendments. 

Æ 


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