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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Student Loan Refi-
nancing and Recalculation Act’’. 
SEC. 2. REFINANCING PROGRAMS. 
(a) PROGRAM AUTHORITY.—Section 451(a) of the 
Higher Education Act of 1965 (20 U.S.C. 1087a(a)) is 
amended— 
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(1) by striking ‘‘and (2)’’ and inserting ‘‘(2)’’; 
and 
(2) by inserting ‘‘; and (3) to make loans under 
section 460A’’ after ‘‘section 459A’’. 
(b) REFINANCING PROGRAM.—Part D of title IV of 
the Higher Education Act of 1965 (20 U.S.C. 1087a et 
seq.) is amended by adding at the end the following: 
‘‘SEC. 460A. REFINANCING FFEL AND FEDERAL DIRECT 
LOANS. 
‘‘(a) IN GENERAL.—Beginning not later than 180 
days after the date of enactment of the Student Loan Re-
financing and Recalculation Act, the Secretary shall estab-
lish a program under which the Secretary, upon the re-
ceipt of an application from a qualified borrower, reissues 
the borrower’s original loan under this part or part B as 
a loan under this part, in accordance with the provisions 
of this section, in order to permit the borrower to obtain 
the interest rate provided under subsection (c). 
‘‘(b) REISSUING LOANS.— 
‘‘(1) FEDERAL DIRECT LOANS.—Upon applica-
tion of a qualified borrower, the Secretary shall re-
issue a Federal Direct Stafford Loan, a Federal Di-
rect Unsubsidized Stafford Loan, a Federal Direct 
PLUS Loan, or a Federal Direct Consolidation 
Loan of the qualified borrower, for which the first 
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disbursement was made, or the application for the 
reissuance of a loan under this section was received 
before July 1, 2024, in an amount equal to the sum 
of— 
‘‘(A) the unpaid principal, accrued unpaid 
interest, and late charges of the original loan; 
and 
‘‘(B) the administrative fee under sub-
section (d)(3). 
‘‘(2) DISCHARGING AND REISSUING FFEL PRO-
GRAM
LOANS
AS
REFINANCED
FEDERAL
DIRECT 
LOANS.—Upon application of a qualified borrower 
for any loan that was made, insured, or guaranteed 
under part B and for which the first disbursement 
was made before July 1, 2010, the Secretary shall 
reissue such loan as a loan under this part, in an 
amount equal to the sum of the unpaid principal, ac-
crued unpaid interest, and late charges of the origi-
nal loan and the administrative fee under subsection 
(d)(3), to the borrower in accordance with the fol-
lowing: 
‘‘(A) The Secretary shall pay the proceeds 
of such reissued loan to the eligible lender of 
the loan made, insured, or guaranteed under 
part B, in order to discharge the borrower from 
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‘‘(A) the high yield of the 10-year Treas-
ury note auctioned at the final auction held 
prior to the first day of the month in which the 
application for reissuance under this section is 
received, plus 
‘‘(B) 1.0 percent. 
‘‘(2) FIXED RATE.—The applicable rate of in-
terest determined under paragraph (1) for a re-
issued loan under this section shall be fixed for the 
period of the loan. 
‘‘(d) TERMS AND CONDITIONS OF LOANS.— 
‘‘(1) IN
GENERAL.—A loan that is reissued 
under this section shall have the same terms and 
conditions as the original loan, except as otherwise 
provided in this section. 
‘‘(2) NO
AUTOMATIC
EXTENSION
OF
REPAY-
MENT PERIOD.—Reissuing a loan under this section 
shall not result in the extension of the duration of 
the repayment period of the loan, and the borrower 
shall retain the same repayment term that was in ef-
fect on the original loan. Nothing in this paragraph 
shall be construed to prevent a borrower from elect-
ing a different repayment plan at any time in ac-
cordance with section 455(d)(3). 
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‘‘(3) ADMINISTRATIVE
FEE.—The Secretary 
shall charge the borrower of a loan reissued under 
this section an administrative fee of not more than 
0.5 percent of the sum of the unpaid principal, ac-
crued unpaid interest, and late charges, of the origi-
nal loan. 
‘‘(e) DEFINITION OF QUALIFIED BORROWER.— 
‘‘(1) IN
GENERAL.—The term ‘qualified bor-
rower’ means a borrower— 
‘‘(A) of a loan under this part or part B 
for which the first disbursement was made, or 
the application for reissuance under this section 
was received, before July 1, 2024; and 
‘‘(B) who meets the eligibility requirements 
based on income or debt-to-income ratio estab-
lished by the Secretary. 
‘‘(2) INCOME REQUIREMENTS.—Not later than 
180 days after the date of enactment of the Student 
Loan Refinancing and Recalculation Act, the Sec-
retary shall establish eligibility requirements based 
on income or debt-to-income ratio that take into con-
sideration providing access to refinancing under this 
section for borrowers with the greatest financial 
need. 
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‘‘(f) EXPIRATION OF AUTHORITY.—The Secretary’s 
authority to reissue loans under this section shall expire 
on the date that is determined in accordance with section 
4(c) of the Student Loan Refinancing and Recalculation 
Act.’’. 
(c) AMENDMENTS TO PUBLIC SERVICE REPAYMENT 
PLAN PROVISIONS.—Section 455(m) of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1087e(m)) is amended— 
(1) by redesignating paragraphs (3) and (4) as 
paragraphs (4) and (5), respectively; 
(2) by inserting after paragraph (2) the fol-
lowing: 
‘‘(3) SPECIAL
RULES
FOR
SECTION
460A 
LOANS.— 
‘‘(A) 
REFINANCED
FEDERAL
DIRECT 
LOANS.—Notwithstanding paragraph (1), in de-
termining the number of monthly payments 
that meet the requirements of such paragraph 
for an eligible Federal Direct Loan reissued 
under section 460A that was originally a loan 
under this part, the Secretary shall include all 
monthly payments made on the original loan 
that meet the requirements of such paragraph. 
‘‘(B) REFINANCED FFEL LOANS.—In the 
case of an eligible Federal Direct Loan reissued 
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under section 460A that was originally a loan 
under part B, only monthly payments made 
after the date on which the loan was reissued 
may be included for purposes of paragraph 
(1).’’; and 
(3) in paragraph (4)(A) (as redesignated by 
paragraph (1) of this subsection), by inserting ‘‘(in-
cluding any Federal Direct Stafford Loan, Federal 
Direct PLUS Loan, Federal Direct Unsubsidized 
Stafford Loan, or Federal Direct Consolidation 
Loan reissued under section 460A)’’ before the pe-
riod at the end. 
(d) INCOME-BASED REPAYMENT.—Section 493C of 
the Higher Education Act of 1965 (20 U.S.C. 1098e) is 
amended by adding at the end the following: 
‘‘(f) REFINANCED FEDERAL DIRECT
AND FFEL 
LOANS.—In calculating the period of time during which 
a borrower of a loan that is reissued under section 460A 
has made monthly payments for purposes of subsection 
(b)(7), the Secretary shall deem the period to include all 
monthly payments made for the original loan, and all 
monthly payments made for the reissued loan, that other-
wise meet the requirements of this section.’’. 
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SEC. 3. INTEREST RATES. 
(a) INTEREST RATES.—Section 455(b) of the Higher 
Education Act of 1965 (20 U.S.C. 1087e(b)) is amend-
ed— 
(1) by redesignating paragraphs (9) and (10) 
as paragraphs (10) and (11), respectively; and 
(2) by inserting after paragraph (8) the fol-
lowing: 
‘‘(9) INTEREST
RATE
PROVISIONS
FOR
NEW 
LOANS ON OR AFTER JULY 1, 2024.— 
‘‘(A) RATES FOR UNDERGRADUATE FDSL 
AND
FDUSL.—Notwithstanding the preceding 
paragraphs of this subsection, for Federal Di-
rect Stafford Loans and Federal Direct Unsub-
sidized Stafford Loans issued to undergraduate 
students, for which the first disbursement is 
made on or after July 1, 2024, the applicable 
rate of interest shall, for loans disbursed during 
any 12-month period beginning on July 1 and 
ending on June 30, be determined on the pre-
ceding June 1 and be equal to the lesser of— 
‘‘(i) a rate equal to— 
‘‘(I) the high yield of the 10-year 
Treasury note auctioned at the final 
auction held prior to such June 1, 
plus 
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‘‘(II) 1 percent; or 
‘‘(ii) 8.25 percent. 
‘‘(B) RATES FOR GRADUATE AND PROFES-
SIONAL
FDUSL.—Notwithstanding 
the 
pre-
ceding paragraphs of this subsection, for Fed-
eral Direct Unsubsidized Stafford Loans issued 
to graduate or professional students, for which 
the first disbursement is made on or after July 
1, 2024, the applicable rate of interest shall, for 
loans disbursed during any 12-month period be-
ginning on July 1 and ending on June 30, be 
determined on the preceding June 1 and be 
equal to the lesser of— 
‘‘(i) a rate equal to— 
‘‘(I) the high yield of the 10-year 
Treasury note auctioned at the final 
auction held prior to such June 1, 
plus 
‘‘(II) 1 percent; or 
‘‘(ii) 9.5 percent. 
‘‘(C) PLUS LOANS.—Notwithstanding the 
preceding paragraphs of this subsection, for 
Federal Direct PLUS Loans, for which the first 
disbursement is made on or after July 1, 2024, 
the applicable rate of interest shall, for loans 
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disbursed during any 12-month period begin-
ning on July 1 and ending on June 30, be de-
termined on the preceding June 1 and be equal 
to the lesser of— 
‘‘(i) a rate equal to— 
‘‘(I) the high yield of the 10-year 
Treasury note auctioned at the final 
auction held prior to such June 1, 
plus 
‘‘(II) 1 percent; or 
‘‘(ii) 10.5 percent. 
‘‘(D) CONSOLIDATION
LOANS.—Notwith-
standing the preceding paragraphs of this sub-
section, any Federal Direct Consolidation Loan 
for which the application is received on or after 
July 1, 2024, shall bear interest at an annual 
rate on the unpaid principal balance of the loan 
that is equal to the weighted average of the in-
terest rates on the loans consolidated, rounded 
to the nearest higher one-eighth of one percent. 
‘‘(E) CONSULTATION.—The Secretary shall 
determine the applicable rate of interest under 
this paragraph after consultation with the Sec-
retary of the Treasury and shall publish such 
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rate in the Federal Register as soon as prac-
ticable after the date of determination. 
‘‘(F) RATE.—The applicable rate of inter-
est determined under this paragraph for a Fed-
eral Direct Stafford Loan, a Federal Direct Un-
subsidized Stafford Loan, or a Federal Direct 
PLUS Loan shall be fixed for the period of the 
loan.’’. 
(b) IN SCHOOL DEFERMENT.—Section 455(f) of the 
Higher Education Act of 1965 (20 U.S.C. 1087e(f)) is 
amended— 
(1) in paragraph (1), in the matter preceding 
subparagraph (A), by striking ‘‘A borrower’’ and in-
serting ‘‘Except as provided in paragraph (5), a bor-
rower’’; 
(2) in paragraph (2)(A)— 
(A) by striking the matter following clause 
(ii); 
(B) in clause (ii), by striking the comma at 
the end and inserting ‘‘; or’’; and 
(C) by adding at the end the following: 
‘‘(iii) is serving in a medical, veteri-
nary, or dental internship or residency pro-
gram;’’; and 
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(3) by adding at the end the following new 
paragraph: 
‘‘(6) 
SPECIAL
RULE
FOR
IN
SCHOOL 
DEFERMENT.—Notwithstanding any other provision 
of this Act, a borrower described in paragraph 
(2)(A) shall be eligible for a deferment, during which 
periodic installments of principal need not be paid, 
and interest— 
‘‘(A) shall not accrue, in the case of a bor-
rower with an expected family contribution of 
not more than $10,000 (computed in accord-
ance with part F of this title); and 
‘‘(B) shall accrue at the rate equal to the 
high yield of the 10-year Treasury note applica-
ble to such loan under subsection (b)(9), in the 
case of a borrower of an unsubsidized loan with 
an expected family contribution of more than 
$10,000 (computed in accordance with part F 
of this title).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
subsections (a) and (b) shall take effect on July 1, 2024. 
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SEC. 4. ELIMINATION OF ORIGINATION FEES FOR FEDERAL 
DIRECT LOANS. 
(a) SENSE OF CONGRESS.—It is the sense of Con-
gress that no origination fees should be charged on any 
future Federal Direct Loans. 
(b) REPEAL OF ORIGINATION FEES.—Subsection (c) 
of section 455 of the Higher Education Act of 1965 (20 
U.S.C. 1087e(c)) is repealed. 
(c) EFFECTIVE DATE.—The amendment made by 
subsection (b) shall apply with respect to loans made 
under part D of title IV of the Higher Education Act of 
1965 (20 U.S.C. 1087a et seq.) for which the first dis-
bursement of principal is made, or, in the case of a Fed-
eral Direct Consolidation Loan, the application is received, 
on the first July 1 after the date of enactment of this 
Act. 
SEC. 5. ELIMINATION OF INTEREST CAPITALIZATION. 
(a) FEDERAL PLUS LOANS.—Section 428B(d)(2) of 
the Higher Education Act of 1965 (20 U.S.C. 1078– 
2(d)(2)) is amended to read as follows: 
‘‘(2) NO CAPITALIZATION OF INTEREST.—Inter-
est on loans made under this section for which pay-
ments of principal are deferred pursuant to para-
graph (1) shall be paid monthly or quarterly, if 
agreed upon by the borrower and the lender and 
shall not be capitalized.’’. 
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(b) FEDERAL
CONSOLIDATION
LOANS
DEFER-
RALS.—Section 428C(b)(4)(C)(ii)(III) of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1078–3(b)(4)(C)(III)) is 
amended by striking ‘‘or capitalized,’’. 
(c) LOAN LIMITS
FOR UNSUBSIDIZED STAFFORD 
LOANS.—Section 428H(d)(5) of the Higher Education 
Act of 1965 (20 U.S.C. 1078–8(d)(5)) is amended by in-
serting ‘‘before the date of enactment of the Student Loan 
Refinancing and Recalculation Act’’ after ‘‘Interest cap-
italized’’. 
(d) UNSUBSIDIZED STAFFORD LOANS FOR MIDDLE 
INCOME BORROWERS.—Section 428H(e)(2) of the Higher 
Education Act of 1965 (20 U.S.C. 1078–8(e)(2)) is 
amended— 
(1) in the header, by striking ‘‘CAPITALIZA-
TION’’ and inserting ‘‘NO CAPITALIZATION’’; 
(2) in subparagraph (A), in the matter before 
clause (i), by striking ‘‘, if agreed upon by the bor-
rower and the lender’’ and all that follows through 
clause (ii)(IV) and inserting ‘‘be paid monthly or 
quarterly, if agreed upon by the borrower and the 
lender and shall not be capitalized.’’; 
(3) by striking subparagraph (B); and 
(4) by redesignating subparagraph (C) as sub-
paragraph (B). 
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(e) INCOME
CONTINGENT
REPAYMENT.—Section 
455(e)(5) of the Higher Education Act of 1965 (20 U.S.C. 
1087e(e)(5)) is amended by striking the last sentence and 
inserting ‘‘No interest may be capitalized on such loan on 
or after the date of the enactment of the Student Loan 
Refinancing and Recalculation Act, and the Secretary 
shall promulgate regulations with respect to the treatment 
of accrued interest that is not capitalized.’’. 
(f) EFFECT OF DEFERMENT ON PRINCIPAL AND IN-
TEREST.—Section 455(f)(1)(B) of the Higher Education 
Act of 1965 (20 U.S.C. 1087e(f)(1)(B)) is amended by 
striking ‘‘capitalized or’’. 
(g) INCOME-BASED REPAYMENT PROGRAM.—Section 
493C(b)(3) of the Higher Education Act of 1965 (20 
U.S.C. 1098e(b)(3)) is amended to read as follows: 
‘‘(3) on subsidized loans, any interest due and 
not paid under paragraph (2) shall be paid by the 
Secretary for a period of not more than 3 years 
after the date of the borrower’s election under para-
graph (1), except that such period shall not include 
any period during which the borrower is in 
deferment due to an economic hardship described in 
section 435(o);’’. 
(h) NOTES AND INSURANCE CERTIFICATES IN COM-
BINED PAYMENT PLANS.—Section 485A(f) of the Higher 
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Education Act of 1965 (20 U.S.C. 1092a(f)) is amended 
by adding at the end the following new paragraph: 
‘‘(3) TREATMENT OF INTEREST.—Not withstanding 
paragraphs (1) and (2), beginning on the date of enact-
ment of the Student Loan Refinancing and Recalculation 
Act, interest on a loan reissued under subsection (e) shall 
not be capitalized, and interest shall only accrue on the 
percentage of such reissued loan that is equal to— 
‘‘(A) the amount of the outstanding principal 
on the original loan on the date it was reissued; di-
vided by 
‘‘(B) the total amount of such reissued loan on 
the date such loan was reissued.’’. 
(i) 
DEFAULT
REDUCTION
PROGRAM.—Section 
428F(a)(1)(E) of the Higher Education Act of 1965 (20 
U.S.C. 1078–6(a)(1)(E)) is amended— 
(1) in clause (i), by striking ‘‘and’’ at the end; 
(2) in clause (ii), by striking the period at the 
end and inserting a semicolon; and 
(3) by adding to the end the following: 
‘‘(iii) for a loan assigned on or after 
the date of enactment of the Student Loan 
Refinancing and Recalculation Act, the in-
terest outstanding at the time of the as-
signment of such loan, and any interest ac-
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cruing after such time, shall not be capital-
ized; and 
‘‘(iv) beginning on the date of enact-
ment of the Student Loan Refinancing and 
Recalculation Act, interest shall only ac-
crue on the percentage of such a loan that 
is equal to— 
‘‘(I) the amount of the out-
standing principal on the original loan 
on the date it was assigned; divided 
by 
‘‘(II) the total amount of such 
assigned loan, including interest out-
standing at the time of the assign-
ment of such loan and the amount 
added by the guaranty agency in ac-
cordance with clause (i), on the date 
such loan was assigned.’’. 
Æ 
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