II 

114TH CONGRESS 

1ST SESSION S. 2099 

To provide for the establishment of a mechanism to allow borrowers of 

Federal student loans to refinance their loans, to amend the Internal 

Revenue Code of 1986 to extend the exclusion for employer-provided 

educational assistance to employer payment of interest on certain refinanced student loans, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 29, 2015 

Ms. AYOTTE (for herself and Mrs. CAPITO) introduced the following bill; which 

was read twice and referred to the Committee on Finance 

A BILL 

To provide for the establishment of a mechanism to allow 

borrowers of Federal student loans to refinance their 

loans, to amend the Internal Revenue Code of 1986 

to extend the exclusion for employer-provided educational 

assistance to employer payment of interest on certain 

refinanced 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 Relief 

5 Act of 2015’’. 


SSpencer on DSK4SPTVN1PROD with BILLS
2 

•S 2099 IS

1 SEC. 2. PURPOSE. 

2 The purpose of this Act is to spur economic growth, 

3 by establishing a mechanism to allow borrowers of Federal 

4 student loans to refinance their loans in order— 

5 (1) to allow credit-worthy borrowers to get a 

6 lower interest rate than the Federal rate; 

7 (2) to encourage innovation in the education re8 financing markets; and 

9 (3) to promote the participation of private cap10 ital in the education refinancing markets. 

11 TITLE I—REFINANCING 

12 STUDENT LOANS 

13 SEC. 101. DEFINITIONS. 

14 In this title— 

15 (1) the term ‘‘Federal student loan’’ means a 

16 loan made, insured, or guaranteed under title IV of 

17 the Higher Education Act of 1965 (20 U.S.C. 1070 

18 et seq.); and 

19 (2) the term ‘‘Secretary’’ means the Secretary 

20 of the Treasury, other than in the context of the 

21 Secretary of Education. 

22 SEC. 102. TEMPORARY AUTHORITY TO CREATE A CREDIT 

23 FACILITY TO INCREASE MARKET EFFICIENCY 

24 IN THE STUDENT LOAN MARKET. 

25 (a) AUTHORITY.— 


SSpencer on DSK4SPTVN1PROD with BILLS
3 

•S 2099 IS

1 (1) IN GENERAL.—The Secretary, notwith2 standing any provision of section 484 of the Higher 

3 Education Act of 1965 (20 U.S.C. 1091), is author4 ized to facilitate Federal student loan refinancing 

5 into the private market to ensure that borrowers pay 

6 lower interest rates that are commensurate with 

7 credit risk, so that they may pursue more economi8 cally productive activities, such as home purchases 

9 and small business formation. 

10 (2) NO NET COST TO GOVERNMENT.—Mecha11 nisms established under this subsection shall not re12 sult in any net cost to the Federal Government, as 

13 determined jointly by the Secretary, the Secretary of 

14 Education, and the Director of the Office of Man15 agement and Budget. 

16 (3) FEDERAL GUARANTEE.—A private loan 

17 that results from refinancing under a program es18 tablished under the authority of this section shall re19 ceive a Federal Government guarantee of 95 percent 

20 of the private loan, including accrued interest on 

21 such loan. 

22 (4) DISCLOSURES.—Each lender of prospective 

23 borrower of a private loan that would result from re24 financing under a program established under the au25 thority of this section shall disclose to the prospecVerDate Sep 11 2014 05:04 Sep 30, 2015 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2099.IS S2099

SSpencer on DSK4SPTVN1PROD with BILLS
4 

•S 2099 IS

1 tive borrower the information described in section 

2 428C(b)(1)(F) of the Higher Education Act of 1965 

3 (20 U.S.C. 1078–3(b)(1)(F)). 

4 (b) PUBLIC AWARENESS.—The Secretary, in con5 sultation with the Secretary of Education, shall— 

6 (1) begin a national awareness campaign to 

7 alert all Federal student loan borrowers who may 

8 benefit from any program or facilities established 

9 under this section; and 

10 (2) include in the campaign under paragraph 

11 (1) a disclosure that a private loan that results from 

12 refinancing under a program established under the 

13 authority of this section is not eligible for income 

14 driven repayment or loan forgiveness. 

15 (c) EXPIRATION OF AUTHORITY.—Three years after 

16 the date on which a credit facility is established under this 

17 Act, and not later than 5 years after the date of enactment 

18 of this Act, any new lending, purchase, or other activity 

19 initiated through the facilities established by the Secretary 

20 under subsection (a) shall cease, except the Federal guar21 antee described in subsection (a)(3) shall continue for the 

22 life of the private loan. 


SSpencer on DSK4SPTVN1PROD with BILLS
5 

•S 2099 IS

1 TITLE II—EXCLUSION FOR EM2 PLOYER PAYMENT OF INTER3 EST ON CERTAIN REFI4 NANCED STUDENT LOANS 

5 SEC. 201. EXCLUSION FOR EMPLOYER PAYMENT OF INTER6 EST ON CERTAIN REFINANCED STUDENT 

7 LOANS. 

8 (a) IN GENERAL.—Paragraph (1) of section 127(c) 

9 of the Internal Revenue Code of 1986 is amended by strik10 ing ‘‘and’’ at the end of subparagraph (A), by redesig11 nating subparagraph (B) as subparagraph (C), and by in12 serting after subparagraph (A) the following new subpara13 graph: 

14 ‘‘(B) the payment by an employer, whether 

15 paid to the employee or to a lender, of any in16 debtedness of the employee under a qualified 

17 education refinance loan or any interest relating 

18 to such a loan, and’’. 

19 (b) QUALIFIED EDUCATION REFINANCE LOAN.— 

20 Subsection (c) of section 127 of the Internal Revenue Code 

21 of 1986 is amended by adding at the end the following 

22 new paragraph: 

23 ‘‘(8) QUALIFIED EDUCATION REFINANCE

24 LOAN.—The term ‘qualified education refinance 

25 loan’ means any indebtedness used solely to refiVerDate Sep 11 2014 05:04 Sep 30, 2015 Jkt 049200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2099.IS S2099

SSpencer on DSK4SPTVN1PROD with BILLS
6 

•S 2099 IS

1 nance a qualified education loan (within the meaning 

2 of section 221(d)(1)) with respect to which the lend3 er offers the borrower protection in the event of un4 employment or financial hardship (as reasonably de5 termined by the lender, including periods of forbear6 ance or career assistance).’’. 

7 (c) CONFORMING AMENDMENT; DENIAL OF DOUBLE

8 BENEFIT.—Paragraph (1) of section 221(e) of the Inter9 nal Revenue Code of 1986 is amended by inserting before 

10 the period the following: ‘‘, or for which an exclusion is 

11 allowable under section 127 to the taxpayer’s employer by 

12 reason of the payment by such employer of any indebted13 ness on a qualified education loan of the taxpayer’’. 

14 (d) EFFECTIVE DATE.—The amendments made by 

15 this section shall apply to expenses paid after December 

16 31, 2015. 

Æ 


SSpencer on DSK4SPTVN1PROD with BILLS