Title: If It's Good Enough For the Banks, It's Good Enough For Students Act
Policy area: Education

Summary:
If It's Good Enough For the Banks, It's Good Enough For Students Act
This bill establishes a program that allows qualified borrowers to refinance their Federal Direct Loans down to the lower interest rates offered to banks by the Federal Reserve System (i.e., through the discount window). The refinanced interest rate is fixed for the period of the loan.
The bill also directs the Department of Education and the Consumer Financial Protection Bureau to carry out a campaign to notify qualified borrowers who are not in default on their loans that they are eligible to apply for refinancing under the program within a two-year period.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1845 Introduced in Senate (IS)]

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116th CONGRESS
  1st Session
                                S. 1845

 To enable borrowers of Federal student loans to refinance those loans 
 at interest rates that are equivalent to the interest rates at which 
  the Federal Government provides loans to banks through the discount 
             window operated by the Federal Reserve System.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 13, 2019

 Mr. Merkley (for himself, Mr. Booker, and Mrs. Gillibrand) introduced 
the following bill; which was read twice and referred to the Committee 
               on Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
 To enable borrowers of Federal student loans to refinance those loans 
 at interest rates that are equivalent to the interest rates at which 
  the Federal Government provides loans to banks through the discount 
             window operated by the Federal Reserve System.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``If It's Good Enough For the Banks, 
It's Good Enough For Students Act''.

SEC. 2. STUDENT LOAN REFINANCING.

    (a) Program Authority.--Section 451(a) of the Higher Education Act 
of 1965 (20 U.S.C. 1087a(a)) is amended--
            (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 FEDERAL DIRECT LOANS AT LOWER INTEREST RATES.

    ``(a) In General.--Beginning on the date of enactment of this 
section, the Secretary shall establish a program under which the 
Secretary, upon the receipt of an application from a qualified 
borrower, makes 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) Refinancing Direct Loans.--Upon application of a qualified 
borrower, the Secretary shall repay a Federal Direct Stafford Loan, a 
Federal Direct Unsubsidized Stafford Loan, a Federal Direct PLUS Loan, 
or a Federal Direct Consolidation Loan of the qualified borrower, for 
which the first disbursement was made, or the application for the 
consolidation loan was received, before the date of enactment of this 
section, with the proceeds of a refinanced Federal Direct Stafford 
Loan, a Federal Direct Unsubsidized Stafford Loan, a Federal Direct 
PLUS Loan, or a Federal Direct Consolidation Loan, respectively, issued 
to the borrower in an amount equal to the sum of the unpaid principal, 
accrued unpaid interest, and late charges of the original loan.
    ``(c) Interest Rates.--
            ``(1) In general.--The interest rate for the refinanced 
        Federal Direct Stafford Loans, Federal Direct Unsubsidized 
        Stafford Loans, Federal Direct PLUS Loans, and Federal Direct 
        Consolidation Loans, shall be a rate equal to the interest rate 
        described in subsection (a) of section 201.51 of title 12, Code 
        of Federal Regulations (or successor regulations).
            ``(2) Fixed rate.--The applicable rate of interest 
        determined under paragraph (1) for a refinanced 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 refinanced under this 
        section shall have the same terms and conditions as the 
        original loan, except as otherwise provided in this section.
            ``(2) Repayment period.--Refinancing 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 effect on the original 
        loan. Nothing in this paragraph shall be construed to prevent a 
        borrower from electing a different repayment plan at any time 
        in accordance with section 455(d)(3).
    ``(e) Definition of Qualified Borrower.--For purposes of this 
section, the term `qualified borrower' means a borrower--
            ``(1) of a loan under this part for which the first 
        disbursement was made, or the application for a consolidation 
        loan was received before the date of enactment of this section;
            ``(2) who submits an application under this section not 
        later than 2 years after the date of enactment of this section; 
        and
            ``(3) who is not in default on the loan the borrower seeks 
        to refinance.
    ``(f) Notification to Borrowers.--The Secretary, in coordination 
with the Director of the Bureau of Consumer Financial Protection, shall 
carry out a campaign to alert borrowers of loans that are eligible for 
refinancing under this section that the borrowers are eligible to apply 
for such refinancing. The campaign shall include the following 
activities:
            ``(1) Developing consumer information materials about the 
        availability of Federal student loan refinancing.
            ``(2) Requiring servicers of loans under this part to 
        provide such consumer information to borrowers in a manner 
        determined appropriate by the Secretary, in consultation with 
        the Director of the Bureau of Consumer Financial Protection.''.
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