I 

118TH CONGRESS 

1ST SESSION H. R. 5710 

To provide for the refinancing and recalculation of certain Federal student 

loans, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 26, 2023 

Mr. GARAMENDI (for himself and Mr. FITZPATRICK) introduced the following 

bill; which was referred to the Committee on Education and the Workforce 

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’’. 

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 180 

11 days after the date of enactment of the Student Loan Re12 financing and Recalculation Act, the Secretary shall estab13 lish a program under which the Secretary, upon the re14 ceipt of an application from a qualified borrower, reissues 

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

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

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

18 the interest rate provided under subsection (c). 

19 ‘‘(b) REISSUING LOANS.— 

20 ‘‘(1) FEDERAL DIRECT LOANS.—Upon applica21 tion of a qualified borrower, the Secretary shall re22 issue a Federal Direct Stafford Loan, a Federal Di23 rect Unsubsidized Stafford Loan, a Federal Direct 

24 PLUS Loan, or a Federal Direct Consolidation 

25 Loan of the qualified borrower, for which the first 


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1 disbursement was made, or the application for the 

2 reissuance of a loan under this section was received 

3 before July 1, 2024, in an amount equal to the sum 

4 of— 

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

6 interest, and late charges of the original loan; 

7 and 

8 ‘‘(B) the administrative fee under sub9 section (d)(3). 

10 ‘‘(2) DISCHARGING AND REISSUING FFEL PRO11 GRAM LOANS AS REFINANCED FEDERAL DIRECT

12 LOANS.—Upon application of a qualified borrower 

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

14 under part B and for which the first disbursement 

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

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

17 amount equal to the sum of the unpaid principal, ac18 crued unpaid interest, and late charges of the origi19 nal loan and the administrative fee under subsection 

20 (d)(3), to the borrower in accordance with the fol21 lowing: 

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

23 of such reissued loan to the eligible lender of 

24 the loan made, insured, or guaranteed under 

25 part B, in order to discharge the borrower from 


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1 any remaining obligation to the lender with re2 spect to the original loan. 

3 ‘‘(B) The Secretary shall reissue— 

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

5 or guaranteed under section 428 as a Fed6 eral Direct Stafford Loan; 

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

8 or guaranteed under section 428B as a 

9 Federal Direct PLUS Loan; 

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

11 or guaranteed under section 428H as a 

12 Federal Direct Unsubsidized Stafford 

13 Loan; and 

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

15 or guaranteed under section 428C as a 

16 Federal Direct Consolidation Loan. 

17 ‘‘(C) The interest rate for each loan re18 issued under this paragraph shall be the rate 

19 provided under subsection (c). 

20 ‘‘(c) INTEREST RATE.— 

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

22 reissued Federal Direct Stafford Loans, Federal Di23 rect Unsubsidized Stafford Loans, Federal Direct 

24 PLUS Loans, and Federal Direct Consolidation 

25 Loans, shall be a rate equal to— 


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1 ‘‘(A) the high yield of the 10-year Treas2 ury note auctioned at the final auction held 

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

4 application for reissuance under this section is 

5 received, plus 

6 ‘‘(B) 1.0 percent. 

7 ‘‘(2) FIXED RATE.—The applicable rate of in8 terest determined under paragraph (1) for a re9 issued loan under this section shall be fixed for the 

10 period of the loan. 

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

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

13 under this section shall have the same terms and 

14 conditions as the original loan, except as otherwise 

15 provided in this section. 

16 ‘‘(2) NO AUTOMATIC EXTENSION OF REPAY17 MENT PERIOD.—Reissuing a loan under this section 

18 shall not result in the extension of the duration of 

19 the repayment period of the loan, and the borrower 

20 shall retain the same repayment term that was in ef21 fect on the original loan. Nothing in this paragraph 

22 shall be construed to prevent a borrower from elect23 ing a different repayment plan at any time in ac24 cordance with section 455(d)(3). 


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

2 shall charge the borrower of a loan reissued under 

3 this section an administrative fee of not more than 

4 0.5 percent of the sum of the unpaid principal, ac5 crued unpaid interest, and late charges, of the origi6 nal loan. 

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

8 ‘‘(1) IN GENERAL.—The term ‘qualified bor9 rower’ means a borrower— 

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

11 for which the first disbursement was made, or 

12 the application for reissuance under this section 

13 was received, before July 1, 2024; and 

14 ‘‘(B) who meets the eligibility requirements 

15 based on income or debt-to-income ratio estab16 lished by the Secretary. 

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

18 180 days after the date of enactment of the Student 

19 Loan Refinancing and Recalculation Act, the Sec20 retary shall establish eligibility requirements based 

21 on income or debt-to-income ratio that take into con22 sideration providing access to refinancing under this 

23 section for borrowers with the greatest financial 

24 need. 


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

2 authority to reissue loans under this section shall expire 

3 on the date that is determined in accordance with section 

4 4(c) of the Student Loan Refinancing and Recalculation 

5 Act.’’. 

6 (c) AMENDMENTS TO PUBLIC SERVICE REPAYMENT

7 PLAN PROVISIONS.—Section 455(m) of the Higher Edu8 cation Act of 1965 (20 U.S.C. 1087e(m)) is amended— 

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

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

11 (2) by inserting after paragraph (2) the fol12 lowing: 

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

14 LOANS.— 

15 ‘‘(A) REFINANCED FEDERAL DIRECT

16 LOANS.—Notwithstanding paragraph (1), in de17 termining the number of monthly payments 

18 that meet the requirements of such paragraph 

19 for an eligible Federal Direct Loan reissued 

20 under section 460A that was originally a loan 

21 under this part, the Secretary shall include all 

22 monthly payments made on the original loan 

23 that meet the requirements of such paragraph. 

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

25 case of an eligible Federal Direct Loan reissued 


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1 under section 460A that was originally a loan 

2 under part B, only monthly payments made 

3 after the date on which the loan was reissued 

4 may be included for purposes of paragraph 

5 (1).’’; and 

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

7 paragraph (1) of this subsection), by inserting ‘‘(in8 cluding any Federal Direct Stafford Loan, Federal 

9 Direct PLUS Loan, Federal Direct Unsubsidized 

10 Stafford Loan, or Federal Direct Consolidation 

11 Loan reissued under section 460A)’’ before the pe12 riod at the end. 

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

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

15 amended by adding at the end the following: 

16 ‘‘(f) REFINANCED FEDERAL DIRECT AND FFEL 

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

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

19 has made monthly payments for purposes of subsection 

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

21 monthly payments made for the original loan, and all 

22 monthly payments made for the reissued loan, that other23 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, 2024.— 

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, 2024, 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, 2024, 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, 2024, 

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, 2024, 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, 2024. 


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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. 

17 SEC. 5. ELIMINATION OF INTEREST CAPITALIZATION. 

18 (a) FEDERAL PLUS LOANS.—Section 428B(d)(2) of 

19 the Higher Education Act of 1965 (20 U.S.C. 1078– 

20 2(d)(2)) is amended to read as follows: 

21 ‘‘(2) NO CAPITALIZATION OF INTEREST.—Inter22 est on loans made under this section for which pay23 ments of principal are deferred pursuant to para24 graph (1) shall be paid monthly or quarterly, if 

25 agreed upon by the borrower and the lender and 

26 shall not be capitalized.’’. 


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1 (b) FEDERAL CONSOLIDATION LOANS DEFER2 RALS.—Section 428C(b)(4)(C)(ii)(III) of the Higher Edu3 cation Act of 1965 (20 U.S.C. 1078–3(b)(4)(C)(III)) is 

4 amended by striking ‘‘or capitalized,’’. 

5 (c) LOAN LIMITS FOR UNSUBSIDIZED STAFFORD

6 LOANS.—Section 428H(d)(5) of the Higher Education 

7 Act of 1965 (20 U.S.C. 1078–8(d)(5)) is amended by in8 serting ‘‘before the date of enactment of the Student Loan 

9 Refinancing and Recalculation Act’’ after ‘‘Interest cap10 italized’’. 

11 (d) UNSUBSIDIZED STAFFORD LOANS FOR MIDDLE

12 INCOME BORROWERS.—Section 428H(e)(2) of the Higher 

13 Education Act of 1965 (20 U.S.C. 1078–8(e)(2)) is 

14 amended— 

15 (1) in the header, by striking ‘‘CAPITALIZA16 TION’’ and inserting ‘‘NO CAPITALIZATION’’; 

17 (2) in subparagraph (A), in the matter before 

18 clause (i), by striking ‘‘, if agreed upon by the bor19 rower and the lender’’ and all that follows through 

20 clause (ii)(IV) and inserting ‘‘be paid monthly or 

21 quarterly, if agreed upon by the borrower and the 

22 lender and shall not be capitalized.’’; 

23 (3) by striking subparagraph (B); and 

24 (4) by redesignating subparagraph (C) as sub25 paragraph (B). 


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1 (e) INCOME CONTINGENT REPAYMENT.—Section 

2 455(e)(5) of the Higher Education Act of 1965 (20 U.S.C. 

3 1087e(e)(5)) is amended by striking the last sentence and 

4 inserting ‘‘No interest may be capitalized on such loan on 

5 or after the date of the enactment of the Student Loan 

6 Refinancing and Recalculation Act, and the Secretary 

7 shall promulgate regulations with respect to the treatment 

8 of accrued interest that is not capitalized.’’. 

9 (f) EFFECT OF DEFERMENT ON PRINCIPAL AND IN10 TEREST.—Section 455(f)(1)(B) of the Higher Education 

11 Act of 1965 (20 U.S.C. 1087e(f)(1)(B)) is amended by 

12 striking ‘‘capitalized or’’. 

13 (g) INCOME-BASED REPAYMENT PROGRAM.—Section 

14 493C(b)(3) of the Higher Education Act of 1965 (20 

15 U.S.C. 1098e(b)(3)) is amended to read as follows: 

16 ‘‘(3) on subsidized loans, any interest due and 

17 not paid under paragraph (2) shall be paid by the 

18 Secretary for a period of not more than 3 years 

19 after the date of the borrower’s election under para20 graph (1), except that such period shall not include 

21 any period during which the borrower is in 

22 deferment due to an economic hardship described in 

23 section 435(o);’’. 

24 (h) NOTES AND INSURANCE CERTIFICATES IN COM25 BINED PAYMENT PLANS.—Section 485A(f) of the Higher 


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1 Education Act of 1965 (20 U.S.C. 1092a(f)) is amended 

2 by adding at the end the following new paragraph: 

3 ‘‘(3) TREATMENT OF INTEREST.—Not withstanding 

4 paragraphs (1) and (2), beginning on the date of enact5 ment of the Student Loan Refinancing and Recalculation 

6 Act, interest on a loan reissued under subsection (e) shall 

7 not be capitalized, and interest shall only accrue on the 

8 percentage of such reissued loan that is equal to— 

9 ‘‘(A) the amount of the outstanding principal 

10 on the original loan on the date it was reissued; di11 vided by 

12 ‘‘(B) the total amount of such reissued loan on 

13 the date such loan was reissued.’’. 

14 (i) DEFAULT REDUCTION PROGRAM.—Section 

15 428F(a)(1)(E) of the Higher Education Act of 1965 (20 

16 U.S.C. 1078–6(a)(1)(E)) is amended— 

17 (1) in clause (i), by striking ‘‘and’’ at the end; 

18 (2) in clause (ii), by striking the period at the 

19 end and inserting a semicolon; and 

20 (3) by adding to the end the following: 

21 ‘‘(iii) for a loan assigned on or after 

22 the date of enactment of the Student Loan 

23 Refinancing and Recalculation Act, the in24 terest outstanding at the time of the as25 signment of such loan, and any interest acVerDate Sep 11 2014 23:19 Sep 28, 2023 Jkt 039200 PO 00000 Frm 00017 Fmt 6652 Sfmt 6201 E:\BILLS\H5710.IH H5710

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1 cruing after such time, shall not be capital2 ized; and 

3 ‘‘(iv) beginning on the date of enact4 ment of the Student Loan Refinancing and 

5 Recalculation Act, interest shall only ac6 crue on the percentage of such a loan that 

7 is equal to— 

8 ‘‘(I) the amount of the out9 standing principal on the original loan 

10 on the date it was assigned; divided 

11 by 

12 ‘‘(II) the total amount of such 

13 assigned loan, including interest out14 standing at the time of the assign15 ment of such loan and the amount 

16 added by the guaranty agency in ac17 cordance with clause (i), on the date 

18 such loan was assigned.’’. 

Æ 


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