I 

117TH CONGRESS 

1ST SESSION H. R. 1918 

To provide for the refinancing and recalculation of certain Federal student 

loans, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 16, 2021 

Mr. GARAMENDI (for himself, Mr. FITZPATRICK, Mr. BRENDAN F. BOYLE of 

Pennsylvania, Mrs. BUSTOS, Mr. CARBAJAL, Mr. COHEN, Ms. MENG, 

Miss RICE of New York, Mr. SAN NICOLAS, Mr. SIRES, Mr. TONKO, Mr. 

HARDER of California, Ms. CRAIG, Mr. KATKO, Mr. KRISHNAMOORTHI, 

and Mr. VICENTE GONZALEZ of Texas) introduced the following bill; 

which was referred to the Committee on Education and Labor 

A BILL 

To provide for the refinancing and recalculation 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 ‘‘Student Loan Refi5 nancing and Recalculation Act’’. 


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1 SEC. 2. REFINANCING PROGRAMS. 

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

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

4 amended— 

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

6 and 

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

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

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

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

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

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

13 LOANS. 

14 ‘‘(a) IN GENERAL.—Beginning not later than 180 

15 days after the date of enactment of the Student Loan Re16 financing and Recalculation Act, the Secretary shall estab17 lish a program under which the Secretary, upon the re18 ceipt of an application from a qualified borrower, reissues 

19 the borrower’s original loan under this part or part B as 

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

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

22 the interest rate provided under subsection (c). 

23 ‘‘(b) REISSUING LOANS.— 

24 ‘‘(1) FEDERAL DIRECT LOANS.—Upon applica25 tion of a qualified borrower, the Secretary shall re26 issue a Federal Direct Stafford Loan, a Federal DiVerDate Sep 11 2014 22:24 May 11, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1918.IH H1918

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1 rect Unsubsidized Stafford Loan, a Federal Direct 

2 PLUS Loan, or a Federal Direct Consolidation 

3 Loan of the qualified borrower, for which the first 

4 disbursement was made, or the application for the 

5 reissuance of a loan under this section was received 

6 before July 1, 2021, in an amount equal to the sum 

7 of— 

8 ‘‘(A) the unpaid principal, accrued unpaid 

9 interest, and late charges of the original loan; 

10 and 

11 ‘‘(B) the administrative fee under sub12 section (d)(3). 

13 ‘‘(2) DISCHARGING AND REISSUING FFEL PRO14 GRAM LOANS AS REFINANCED FEDERAL DIRECT

15 LOANS.—Upon application of a qualified borrower 

16 for any loan that was made, insured, or guaranteed 

17 under part B and for which the first disbursement 

18 was made before July 1, 2010, the Secretary shall 

19 reissue such loan as a loan under this part, in an 

20 amount equal to the sum of the unpaid principal, ac21 crued unpaid interest, and late charges of the origi22 nal loan and the administrative fee under subsection 

23 (d)(3), to the borrower in accordance with the fol24 lowing: 


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

2 of such reissued loan to the eligible lender of 

3 the loan made, insured, or guaranteed under 

4 part B, in order to discharge the borrower from 

5 any remaining obligation to the lender with re6 spect to the original loan. 

7 ‘‘(B) The Secretary shall reissue— 

8 ‘‘(i) a loan originally made, insured, 

9 or guaranteed under section 428 as a Fed10 eral Direct Stafford Loan; 

11 ‘‘(ii) a loan originally made, insured, 

12 or guaranteed under section 428B as a 

13 Federal Direct PLUS Loan; 

14 ‘‘(iii) a loan originally made, insured, 

15 or guaranteed under section 428H as a 

16 Federal Direct Unsubsidized Stafford 

17 Loan; and 

18 ‘‘(iv) a loan originally made, insured, 

19 or guaranteed under section 428C as a 

20 Federal Direct Consolidation Loan. 

21 ‘‘(C) The interest rate for each loan re22 issued under this paragraph shall be the rate 

23 provided under subsection (c). 

24 ‘‘(c) INTEREST RATE.— 


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

2 reissued Federal Direct Stafford Loans, Federal Di3 rect Unsubsidized Stafford Loans, Federal Direct 

4 PLUS Loans, and Federal Direct Consolidation 

5 Loans, shall be a rate equal to— 

6 ‘‘(A) the high yield of the 10-year Treas7 ury note auctioned at the final auction held 

8 prior to the first day of the month in which the 

9 application for reissuance under this section is 

10 received, plus 

11 ‘‘(B) 1.0 percent. 

12 ‘‘(2) FIXED RATE.—The applicable rate of in13 terest determined under paragraph (1) for a re14 issued loan under this section shall be fixed for the 

15 period of the loan. 

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

17 ‘‘(1) IN GENERAL.—A loan that is reissued 

18 under this section shall have the same terms and 

19 conditions as the original loan, except as otherwise 

20 provided in this section. 

21 ‘‘(2) NO AUTOMATIC EXTENSION OF REPAY22 MENT PERIOD.—Reissuing a loan under this section 

23 shall not result in the extension of the duration of 

24 the repayment period of the loan, and the borrower 

25 shall retain the same repayment term that was in efVerDate Sep 11 2014 22:24 May 11, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H1918.IH H1918

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1 fect on the original loan. Nothing in this paragraph 

2 shall be construed to prevent a borrower from elect3 ing a different repayment plan at any time in ac4 cordance with section 455(d)(3). 

5 ‘‘(3) ADMINISTRATIVE FEE.—The Secretary 

6 shall charge the borrower of a loan reissued under 

7 this section an administrative fee of not more than 

8 0.5 percent of the sum of the unpaid principal, ac9 crued unpaid interest, and late charges, of the origi10 nal loan. 

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

12 ‘‘(1) IN GENERAL.—The term ‘qualified bor13 rower’ means a borrower— 

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

15 for which the first disbursement was made, or 

16 the application for reissuance under this section 

17 was received, before July 1, 2021; and 

18 ‘‘(B) who meets the eligibility requirements 

19 based on income or debt-to-income ratio estab20 lished by the Secretary. 

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

22 180 days after the date of enactment of the Student 

23 Loan Refinancing and Recalculation Act, the Sec24 retary shall establish eligibility requirements based 

25 on income or debt-to-income ratio that take into conVerDate Sep 11 2014 22:24 May 11, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1918.IH H1918

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1 sideration providing access to refinancing under this 

2 section for borrowers with the greatest financial 

3 need. 

4 ‘‘(f) EXPIRATION OF AUTHORITY.—The Secretary’s 

5 authority to reissue loans under this section shall expire 

6 on the date that is determined in accordance with section 

7 4 of the Fairness in Student Loan Lending Act.’’. 

8 (c) AMENDMENTS TO PUBLIC SERVICE REPAYMENT

9 PLAN PROVISIONS.—Section 455(m) of the Higher Edu10 cation Act of 1965 (20 U.S.C. 1087e(m)) is amended— 

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

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

13 (2) by inserting after paragraph (2) the fol14 lowing: 

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

16 LOANS.— 

17 ‘‘(A) REFINANCED FEDERAL DIRECT

18 LOANS.—Notwithstanding paragraph (1), in de19 termining the number of monthly payments 

20 that meet the requirements of such paragraph 

21 for an eligible Federal Direct Loan reissued 

22 under section 460A that was originally a loan 

23 under this part, the Secretary shall include all 

24 monthly payments made on the original loan 

25 that meet the requirements of such paragraph. 


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

2 case of an eligible Federal Direct Loan reissued 

3 under section 460A that was originally a loan 

4 under part B, only monthly payments made 

5 after the date on which the loan was reissued 

6 may be included for purposes of paragraph 

7 (1).’’; and 

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

9 paragraph (1) of this subsection), by inserting ‘‘(in10 cluding any Federal Direct Stafford Loan, Federal 

11 Direct PLUS Loan, Federal Direct Unsubsidized 

12 Stafford Loan, or Federal Direct Consolidation 

13 Loan reissued under section 460A)’’ before the pe14 riod at the end. 

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

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

17 amended by adding at the end the following: 

18 ‘‘(f) REFINANCED FEDERAL DIRECT AND FFEL 

19 LOANS.—In calculating the period of time during which 

20 a borrower of a loan that is reissued under section 460A 

21 has made monthly payments for purposes of subsection 

22 (b)(7), the Secretary shall deem the period to include all 

23 monthly payments made for the original loan, and all 

24 monthly payments made for the reissued loan, that other25 wise meet the requirements of this section.’’. 


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1 SEC. 3. INTEREST RATES. 

2 (a) INTEREST RATES.—Section 455(b) of the Higher 

3 Education Act of 1965 (20 U.S.C. 1087e(b)) is amend4 ed— 

5 (1) by redesignating paragraphs (9) and (10) 

6 as paragraphs (10) and (11), respectively; and 

7 (2) by inserting after paragraph (8) the fol8 lowing: 

9 ‘‘(9) INTEREST RATE PROVISIONS FOR NEW

10 LOANS ON OR AFTER JULY 1, 2021.— 

11 ‘‘(A) RATES FOR UNDERGRADUATE FDSL

12 AND FDUSL.—Notwithstanding the preceding 

13 paragraphs of this subsection, for Federal Di14 rect Stafford Loans and Federal Direct Unsub15 sidized Stafford Loans issued to undergraduate 

16 students, for which the first disbursement is 

17 made on or after July 1, 2021, the applicable 

18 rate of interest shall, for loans disbursed during 

19 any 12-month period beginning on July 1 and 

20 ending on June 30, be determined on the pre21 ceding June 1 and be equal to the lesser of— 

22 ‘‘(i) a rate equal to— 

23 ‘‘(I) the high yield of the 10-year 

24 Treasury note auctioned at the final 

25 auction held prior to such June 1, 

26 plus 


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1 ‘‘(II) 1 percent; or 

2 ‘‘(ii) 8.25 percent. 

3 ‘‘(B) RATES FOR GRADUATE AND PROFES4 SIONAL FDUSL.—Notwithstanding the pre5 ceding paragraphs of this subsection, for Fed6 eral Direct Unsubsidized Stafford Loans issued 

7 to graduate or professional students, for which 

8 the first disbursement is made on or after July 

9 1, 2021, the applicable rate of interest shall, for 

10 loans disbursed during any 12-month period be11 ginning on July 1 and ending on June 30, be 

12 determined on the preceding June 1 and be 

13 equal to the lesser of— 

14 ‘‘(i) a rate equal to— 

15 ‘‘(I) the high yield of the 10-year 

16 Treasury note auctioned at the final 

17 auction held prior to such June 1, 

18 plus 

19 ‘‘(II) 1 percent; or 

20 ‘‘(ii) 9.5 percent. 

21 ‘‘(C) PLUS LOANS.—Notwithstanding the 

22 preceding paragraphs of this subsection, for 

23 Federal Direct PLUS Loans, for which the first 

24 disbursement is made on or after July 1, 2021, 

25 the applicable rate of interest shall, for loans 


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1 disbursed during any 12-month period begin2 ning on July 1 and ending on June 30, be de3 termined on the preceding June 1 and be equal 

4 to the lesser of— 

5 ‘‘(i) a rate equal to— 

6 ‘‘(I) the high yield of the 10-year 

7 Treasury note auctioned at the final 

8 auction held prior to such June 1, 

9 plus 

10 ‘‘(II) 1 percent; or 

11 ‘‘(ii) 10.5 percent. 

12 ‘‘(D) CONSOLIDATION LOANS.—Notwith13 standing the preceding paragraphs of this sub14 section, any Federal Direct Consolidation Loan 

15 for which the application is received on or after 

16 July 1, 2021, shall bear interest at an annual 

17 rate on the unpaid principal balance of the loan 

18 that is equal to the weighted average of the in19 terest rates on the loans consolidated, rounded 

20 to the nearest higher one-eighth of one percent. 

21 ‘‘(E) CONSULTATION.—The Secretary shall 

22 determine the applicable rate of interest under 

23 this paragraph after consultation with the Sec24 retary of the Treasury and shall publish such 


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1 rate in the Federal Register as soon as prac2 ticable after the date of determination. 

3 ‘‘(F) RATE.—The applicable rate of inter4 est determined under this paragraph for a Fed5 eral Direct Stafford Loan, a Federal Direct Un6 subsidized Stafford Loan, or a Federal Direct 

7 PLUS Loan shall be fixed for the period of the 

8 loan.’’. 

9 (b) IN SCHOOL DEFERMENT.—Section 455(f) of the 

10 Higher Education Act of 1965 (20 U.S.C. 1087e(f)) is 

11 amended— 

12 (1) in paragraph (1), in the matter preceding 

13 subparagraph (A), by striking ‘‘A borrower’’ and in14 serting ‘‘Except as provided in paragraph (5), a bor15 rower’’; 

16 (2) in paragraph (2)(A)— 

17 (A) by striking the matter following clause 

18 (ii); 

19 (B) in clause (ii), by striking the comma at 

20 the end and inserting ‘‘; or’’; and 

21 (C) by adding at the end the following: 

22 ‘‘(iii) is serving in a medical, veteri23 nary, or dental internship or residency pro24 gram;’’; and 


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1 (3) by adding at the end the following new 

2 paragraph: 

3 ‘‘(6) SPECIAL RULE FOR IN SCHOOL

4 DEFERMENT.—Notwithstanding any other provision 

5 of this Act, a borrower described in paragraph 

6 (2)(A) shall be eligible for a deferment, during which 

7 periodic installments of principal need not be paid, 

8 and interest— 

9 ‘‘(A) shall not accrue, in the case of a bor10 rower with an expected family contribution of 

11 not more than $10,000 (computed in accord12 ance with part F of this title); and 

13 ‘‘(B) shall accrue at the rate equal to the 

14 high yield of the 10-year Treasury note applica15 ble to such loan under subsection (b)(9), in the 

16 case of a borrower of an unsubsidized loan with 

17 an expected family contribution of more than 

18 $10,000 (computed in accordance with part F 

19 of this title).’’. 

20 (c) EFFECTIVE DATE.—The amendments made by 

21 subsections (a) and (b) shall take effect on July 1, 2021. 


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1 SEC. 4. ELIMINATION OF ORIGINATION FEES FOR FEDERAL 

2 DIRECT LOANS. 

3 (a) SENSE OF CONGRESS.—It is the sense of Con4 gress that no origination fees should be charged on any 

5 future Federal Direct Loans. 

6 (b) REPEAL OF ORIGINATION FEES.—Subsection (c) 

7 of section 455 of the Higher Education Act of 1965 (20 

8 U.S.C. 1087e(c)) is repealed. 

9 (c) EFFECTIVE DATE.—The amendment made by 

10 subsection (b) shall apply with respect to loans made 

11 under part D of title IV of the Higher Education Act of 

12 1965 (20 U.S.C. 1087a et seq.) for which the first dis13 bursement of principal is made, or, in the case of a Fed14 eral Direct Consolidation Loan, the application is received, 

15 on the first July 1 after the date of enactment of this 

16 Act. 

Æ 


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