II 

117TH CONGRESS 

1ST SESSION S. 603 

To amend the Higher Education Act of 1965 to provide for the refinancing 

of certain Federal student loans, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 4, 2021 

Mr. WARNER introduced the following bill; which was read twice and referred 

to the Committee on Health, Education, Labor, and Pensions 

A BILL 

To amend the Higher Education Act of 1965 to provide 

for the refinancing of certain Federal student loans, and 

for other purposes. 

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 ‘‘Coronavirus Emer5 gency Student Loan Refinancing Act’’. 

6 SEC. 2. REFINANCING PROGRAMS. 

7 (a) PROGRAM AUTHORITY.—Section 451(a) of the 

8 Higher Education Act of 1965 (20 U.S.C. 1087a(a)) is 

9 amended— 


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1 (1) by striking ‘‘and (2)’’ and inserting ‘‘(2)’’; 

2 and 

3 (2) by inserting ‘‘; and (3) to make loans under 

4 section 460A’’ after ‘‘section 459A’’. 

5 (b) REFINANCING PROGRAM.—Part D of title IV of 

6 the Higher Education Act of 1965 (20 U.S.C. 1087a et 

7 seq.) is amended by adding at the end the following: 

8 ‘‘SEC. 460A. REFINANCING FFEL AND FEDERAL DIRECT 

9 LOANS. 

10 ‘‘(a) IN GENERAL.—Beginning not later than 30 

11 days after the date of enactment of the Coronavirus Emer12 gency Student Loan Refinancing Act, the Secretary shall 

13 establish a program under which the Secretary, upon the 

14 receipt of an application from a qualified borrower, makes 

15 a loan under this part, in accordance with the provisions 

16 of this section, in order to permit the borrower to obtain 

17 the interest rate provided under subsection (c). 

18 ‘‘(b) REFINANCING DIRECT LOANS.— 

19 ‘‘(1) FEDERAL DIRECT LOANS.—Upon applica20 tion of a qualified borrower, the Secretary shall 

21 repay a Federal Direct Stafford Loan, a Federal Di22 rect Unsubsidized Stafford Loan, a Federal Direct 

23 PLUS Loan, or a Federal Direct Consolidation 

24 Loan of the qualified borrower, with the proceeds of 

25 a refinanced Federal Direct Stafford Loan, a FedVerDate Sep 11 2014 04:42 Apr 02, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S603.IS S603

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1 eral Direct Unsubsidized Stafford Loan, a Federal 

2 Direct PLUS Loan, or a Federal Direct Consolida3 tion Loan, respectively, issued to the borrower in an 

4 amount equal to the sum of the unpaid principal, ac5 crued unpaid interest, and late charges of the origi6 nal loan. 

7 ‘‘(2) REFINANCING FFEL PROGRAM LOANS AS

8 REFINANCED FEDERAL DIRECT LOANS.—Upon ap9 plication of a qualified borrower for any loan that 

10 was made, insured, or guaranteed under part B, the 

11 Secretary shall make a loan under this part, in an 

12 amount equal to the sum of the unpaid principal, ac13 crued unpaid interest, and late charges of the origi14 nal loan to the borrower in accordance with the fol15 lowing: 

16 ‘‘(A) The Secretary shall pay the proceeds 

17 of such loan to the eligible lender of the loan 

18 made, insured, or guaranteed under part B, in 

19 order to discharge the borrower from any re20 maining obligation to the lender with respect to 

21 the original loan. 

22 ‘‘(B) A loan made under this section that 

23 was originally a loan made, insured, or guaran24 teed— 


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1 ‘‘(i) under section 428 shall be a Fed2 eral Direct Stafford Loan; 

3 ‘‘(ii) under section 428B shall be a 

4 Federal Direct PLUS Loan; 

5 ‘‘(iii) under section 428H shall be a 

6 Federal Direct Unsubsidized Stafford 

7 Loan; and 

8 ‘‘(iv) under section 428C shall be a 

9 Federal Direct Consolidation Loan. 

10 ‘‘(3) APPLICABLE INTEREST RATE.—The inter11 est rate for each loan made by the Secretary under 

12 this subsection shall be the rate provided under sub13 section (c). 

14 ‘‘(c) INTEREST RATES.— 

15 ‘‘(1) IN GENERAL.—The interest rate for the 

16 refinanced Federal Direct Stafford Loans, Federal 

17 Direct Unsubsidized Stafford Loans, Federal Direct 

18 PLUS Loans, and Federal Direct Consolidation 

19 Loans, under this section shall be a rate equal to— 

20 ‘‘(A) in any case where the original loan 

21 was a loan under section 428 or 428H, a Fed22 eral Direct Stafford loan, or a Federal Direct 

23 Unsubsidized Stafford Loan, that was issued to 

24 an undergraduate student, a rate equal to the 


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1 lowest yield on the 10-year Treasury note in the 

2 preceding 6 months plus 2.05 percent; 

3 ‘‘(B) in any case where the original loan 

4 was a loan under section 428 or 428H, a Fed5 eral Direct Stafford Loan, or a Federal Direct 

6 Unsubsidized Stafford Loan, that was issued to 

7 a graduate or professional student, a rate equal 

8 to the lowest yield on the 10-year Treasury note 

9 in the preceding 6 months plus 3.6 percent; 

10 ‘‘(C) in any case where the original loan 

11 was a loan under section 428B or a Federal Di12 rect PLUS Loan, a rate equal to the lowest 

13 yield on the 10-year Treasury note in the pre14 ceding 6 months plus 4.6 percent; and 

15 ‘‘(D) in any case where the original loan 

16 was a loan under section 428C or a Federal Di17 rect Consolidation Loan, a rate calculated in ac18 cordance with paragraph (2). 

19 ‘‘(2) INTEREST RATES FOR CONSOLIDATION

20 LOANS.— 

21 ‘‘(A) METHOD OF CALCULATION.—In 

22 order to determine the interest rate for any re23 financed Federal Direct Consolidation Loan 

24 under paragraph (1)(D) under this section, the 

25 Secretary shall— 


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1 ‘‘(i) determine each of the component 

2 loans that were originally consolidated in 

3 the loan under section 428C or the Federal 

4 Direct Consolidation Loan, and calculate 

5 the proportion of the unpaid principal bal6 ance of the loan under section 428C or the 

7 Federal Direct Consolidation Loan that 

8 each component loan represents; 

9 ‘‘(ii) use the proportions determined 

10 in accordance with clause (i) and the inter11 est rate applicable for each component 

12 loan, as determined under subparagraph 

13 (B), to calculate the weighted average of 

14 the interest rates on the loans consolidated 

15 into the loan under section 428C or the 

16 Federal Direct Consolidation Loan; and 

17 ‘‘(iii) apply the weighted average cal18 culated under clause (ii) as the interest 

19 rate for the refinanced Federal Direct Con20 solidation Loan. 

21 ‘‘(B) INTEREST RATES FOR COMPONENT

22 LOANS.—The interest rates for the component 

23 loans of a loan made under section 428C or a 

24 Federal Direct Consolidation Loan shall be the 

25 following: 


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1 ‘‘(i) The interest rate for any loan 

2 under section 428 or 428H, Federal Direct 

3 Stafford Loan, or Federal Direct Unsub4 sidized Stafford Loan issued to an under5 graduate student shall be a rate equal to 

6 the lesser of— 

7 ‘‘(I) the rate for Federal Direct 

8 Stafford Loans and Federal Direct 

9 Unsubsidized Stafford Loans issued 

10 to undergraduate students for the 12- 

11 month period beginning on July 1, 

12 2020, and ending on June 30, 2021; 

13 or 

14 ‘‘(II) the original interest rate of 

15 the component loan. 

16 ‘‘(ii) The interest rate for any loan 

17 under section 428 or 428H, Federal Direct 

18 Stafford Loan, or Federal Direct Unsub19 sidized Stafford Loan issued to a graduate 

20 or professional student shall be a rate 

21 equal to the lesser of— 

22 ‘‘(I) the rate for Federal Direct 

23 Unsubsidized Stafford Loans issued 

24 to graduate or professional students 

25 for the 12-month period beginning on 


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1 July 1, 2020, and ending on June 30, 

2 2021; or 

3 ‘‘(II) the original interest rate of 

4 the component loan. 

5 ‘‘(iii) The interest rate for any loan 

6 under section 428B or Federal Direct 

7 PLUS Loan shall be a rate equal to the 

8 lesser of— 

9 ‘‘(I) the rate for Federal Direct 

10 PLUS Loans for the 12-month period 

11 beginning on July 1, 2020, and end12 ing on June 30, 2021; or 

13 ‘‘(II) the original interest rate of 

14 the component loan. 

15 ‘‘(iv) The interest rate for any compo16 nent loan that is a loan under section 

17 428C or a Federal Direct Consolidation 

18 Loan shall be the weighted average of the 

19 interest rates that would apply under this 

20 subparagraph for each loan comprising the 

21 component consolidation loan. 

22 ‘‘(v) The interest rate for any eligible 

23 loan that is a component of a loan made 

24 under section 428C or a Federal Direct 

25 Consolidation Loan and is not described in 


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1 clauses (i) through (iv) shall be the inter2 est rate on the original component loan. 

3 ‘‘(3) FIXED RATE.—The applicable rate of in4 terest determined under paragraph (1) for a refi5 nanced loan under this section shall be fixed for the 

6 period of the loan. 

7 ‘‘(d) TERMS AND CONDITIONS OF LOANS.— 

8 ‘‘(1) IN GENERAL.—A loan that is refinanced 

9 under this section shall have the same terms and 

10 conditions as the original loan, except as otherwise 

11 provided in this section. 

12 ‘‘(2) NO AUTOMATIC EXTENSION OF REPAY13 MENT PERIOD.—Refinancing a loan under this sec14 tion shall not result in the extension of the duration 

15 of the repayment period of the loan, and the bor16 rower shall retain the same repayment term that 

17 was in effect on the original loan. Nothing in this 

18 paragraph shall be construed to prevent a borrower 

19 from electing a different repayment plan at any time 

20 in accordance with section 455(d)(3). 

21 ‘‘(e) DEFINITION OF QUALIFIED BORROWER.— 

22 ‘‘(1) IN GENERAL.—For purposes of this sec23 tion, the term ‘qualified borrower’ means a bor24 rower— 


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1 ‘‘(A) of a loan under this part or part B; 

2 and 

3 ‘‘(B) who meets the eligibility requirements 

4 based on income or debt-to-income ratio estab5 lished by the Secretary. 

6 ‘‘(2) INCOME REQUIREMENTS.—Not later than 

7 30 days after the date of enactment of the 

8 Coronavirus Emergency Student Loan Refinancing 

9 Act, the Secretary shall establish eligibility require10 ments based on income or debt-to-income ratio that 

11 take into consideration providing access to refi12 nancing under this section for borrowers with the 

13 greatest financial need. 

14 ‘‘(f) NOTIFICATION TO BORROWERS.—The Secretary, 

15 in coordination with the Director of the Bureau of Con16 sumer Financial Protection, shall undertake a campaign 

17 to alert borrowers of loans that are eligible for refinancing 

18 under this section that the borrowers are eligible to apply 

19 for such refinancing. The campaign shall include the fol20 lowing activities: 

21 ‘‘(1) Developing consumer information mate22 rials about the availability of Federal student loan 

23 refinancing. 

24 ‘‘(2) Requiring servicers of loans under this 

25 part or part B to provide such consumer information 


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1 to borrowers in a manner determined appropriate by 

2 the Secretary, in consultation with the Director of 

3 the Bureau of Consumer Financial Protection.’’. 

4 (c) AMENDMENTS TO PUBLIC SERVICE REPAYMENT

5 PLAN PROVISIONS.—Section 455(m) of the Higher Edu6 cation Act of 1965 (20 U.S.C. 1087e(m)) is amended— 

7 (1) by redesignating paragraphs (3) and (4) as 

8 paragraphs (4) and (5), respectively; 

9 (2) by inserting after paragraph (2) the fol10 lowing: 

11 ‘‘(3) SPECIAL RULES FOR SECTION 460A

12 LOANS.— 

13 ‘‘(A) REFINANCED FEDERAL DIRECT

14 LOANS.—Notwithstanding paragraph (1), in de15 termining the number of monthly payments 

16 that meet the requirements of such paragraph 

17 for an eligible Federal Direct Loan refinanced 

18 under section 460A that was originally a loan 

19 under this part, the Secretary shall include all 

20 monthly payments made on the original loan 

21 that meet the requirements of such paragraph. 

22 ‘‘(B) REFINANCED FFEL LOANS.—In the 

23 case of an eligible Federal Direct Loan refi24 nanced under section 460A that was originally 

25 a loan under part B, only monthly payments 


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1 made after the date on which the loan was refi2 nanced may be included for purposes of para3 graph (1).’’; and 

4 (3) in paragraph (4)(A) (as redesignated by 

5 paragraph (1)), by inserting ‘‘(including any Federal 

6 Direct Stafford Loan, Federal Direct PLUS Loan, 

7 Federal Direct Unsubsidized Stafford Loan, or Fed8 eral Direct Consolidation Loan refinanced under sec9 tion 460A)’’ before the period at the end. 

10 (d) INCOME-BASED REPAYMENT.—Section 493C of 

11 the Higher Education Act of 1965 (20 U.S.C. 1098e) is 

12 amended by adding at the end the following: 

13 ‘‘(f) SPECIAL RULE FOR REFINANCED LOANS.—In 

14 calculating the period of time during which a borrower of 

15 a loan that is refinanced under section 460A has made 

16 monthly payments for purposes of subsection (b)(7), the 

17 Secretary shall deem the period to include all monthly pay18 ments made for the original loan, and all monthly pay19 ments made for the refinanced loan, that otherwise meet 

20 the requirements of this section.’’. 

Æ 


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