II 114th CONGRESS 1st Session S. 2099 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. Short title This Act may be cited as the Student Loan Relief Act of 2015 . 2. Purpose The purpose of this Act is to spur economic growth, by establishing a mechanism to allow borrowers of Federal student loans to refinance their loans in order— (1) to allow credit-worthy borrowers to get a lower interest rate than the Federal rate; (2) to encourage innovation in the education refinancing markets; and (3) to promote the participation of private capital in the education refinancing markets. I Refinancing student loans 101. Definitions In this title— (1) the term Federal student loan means a loan made, insured, or guaranteed under title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq. ); and (2) the term Secretary means the Secretary of the Treasury, other than in the context of the Secretary of Education. 102. Temporary authority to create a credit facility to increase market efficiency in the student loan market (a) Authority (1) In general The Secretary, notwithstanding any provision of section 484 of the Higher Education Act of 1965 ( 20 U.S.C. 1091 ), is authorized to facilitate Federal student loan refinancing into the private market to ensure that borrowers pay lower interest rates that are commensurate with credit risk, so that they may pursue more economically productive activities, such as home purchases and small business formation. (2) No net cost to Government Mechanisms established under this subsection shall not result in any net cost to the Federal Government, as determined jointly by the Secretary, the Secretary of Education, and the Director of the Office of Management and Budget. (3) Federal guarantee A private loan that results from refinancing under a program established under the authority of this section shall receive a Federal Government guarantee of 95 percent of the private loan, including accrued interest on such loan. (4) Disclosures Each lender of prospective borrower of a private loan that would result from refinancing under a program established under the authority of this section shall disclose to the prospective borrower the information described in section 428C(b)(1)(F) of the Higher Education Act of 1965 ( 20 U.S.C. 1078–3(b)(1)(F) ). (b) Public awareness The Secretary, in consultation with the Secretary of Education, shall— (1) begin a national awareness campaign to alert all Federal student loan borrowers who may benefit from any program or facilities established under this section; and (2) include in the campaign under paragraph (1) a disclosure that a private loan that results from refinancing under a program established under the authority of this section is not eligible for income driven repayment or loan forgiveness. (c) Expiration of authority Three years after the date on which a credit facility is established under this Act, and not later than 5 years after the date of enactment of this Act, any new lending, purchase, or other activity initiated through the facilities established by the Secretary under subsection (a) shall cease, except the Federal guarantee described in subsection (a)(3) shall continue for the life of the private loan. II Exclusion for employer payment of interest on certain refinanced student loans 201. Exclusion for employer payment of interest on certain refinanced student loans (a) In general Paragraph (1) of section 127(c) of the Internal Revenue Code of 1986 is amended by striking and at the end of subparagraph (A), by redesignating subparagraph (B) as subparagraph (C), and by inserting after subparagraph (A) the following new subparagraph: (B) the payment by an employer, whether paid to the employee or to a lender, of any indebtedness of the employee under a qualified education refinance loan or any interest relating to such a loan, and . (b) Qualified education refinance loan Subsection (c) of section 127 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (8) Qualified education refinance loan The term qualified education refinance loan means any indebtedness used solely to refinance a qualified education loan (within the meaning of section 221(d)(1)) with respect to which the lender offers the borrower protection in the event of unemployment or financial hardship (as reasonably determined by the lender, including periods of forbearance or career assistance). . (c) Conforming amendment; denial of double benefit Paragraph (1) of section 221(e) of the Internal Revenue Code of 1986 is amended by inserting before the period the following: , or for which an exclusion is allowable under section 127 to the taxpayer's employer by reason of the payment by such employer of any indebtedness on a qualified education loan of the taxpayer . (d) Effective date The amendments made by this section shall apply to expenses paid after December 31, 2015.