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Student Loan Refinancing Act of 2026
Introduced Jun 4, 2026 · Last action Jun 4, 2026 — Referred to the House Committee on Education and Workforce.
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Summary
Families with federal student loans would be able to refinance their loans to lower interest rates, making it easier to pay off debt. This would help borrowers save money on interest and pay off their loans faster. The government would establish a program to make refinanced loans available to eligible borrowers.
Full bill text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9166 Introduced in House (IH)]
<DOC>
119th CONGRESS
2d Session
H. R. 9166
To amend the Higher Education Act of 1965 to provide for the
refinancing of certain Federal student loans, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 4, 2026
Mr. Turner of Ohio (for himself, Mr. Norcross, Mr. Fitzpatrick, and Mr.
Doggett) introduced the following bill; which was referred to the
Committee on Education and Workforce
_______________________________________________________________________
A BILL
To amend the Higher Education Act of 1965 to provide for the
refinancing of certain Federal student loans, and for other purposes.
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 ``Student Loan Refinancing Act of
2026''.
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--
(1) by striking ``and (2)'' and inserting ``(2)'';
(2) by inserting ``; and (3) to make refinanced loans under
section 460A'' after ``section 459A''; and (3) by inserting ``,
except for refinanced loans made under section 460A,'' after
``Loans made under this part''.
(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 30 days after the date
of enactment of the Student Loan Refinancing Act of 2026, the Secretary
shall establish a program under which the Secretary, upon the receipt
of an application from a borrower, makes a refinanced 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.--
``(1) Federal direct loans.--Upon application of a
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
borrower, with the proceeds of a refinanced Federal Direct
Stafford Loan, a refinanced Federal Direct Unsubsidized
Stafford Loan, a refinanced Federal Direct PLUS Loan, or a
refinanced 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.
``(2) Refinancing ffel program loans as refinanced federal
direct loans.--Upon application of a borrower with respect to a
loan with an outstanding balance that was made, insured, or
guaranteed under part B, the Secretary shall make a loan under
this part, in an amount equal to the sum of the unpaid
principal, accrued unpaid interest, and late charges of the
original loan to the borrower in accordance with the following:
``(A) The Secretary shall pay the proceeds of such
loan to the eligible lender of the loan made, insured,
or guaranteed under part B, in order to discharge the
borrower from any remaining obligation to the lender
with respect to the original loan.
``(B) A loan made under this section that was
originally a loan made, insured, or guaranteed--
``(i) under section 428 shall be a
refinanced Federal Direct Stafford Loan;
``(ii) under section 428B shall be a
refinanced Federal Direct PLUS Loan;
``(iii) under section 428H shall be a
refinanced Federal Direct Unsubsidized Stafford
Loan; and
``(iv) under section 428C shall be a
refinanced Federal Direct Consolidation Loan.
``(c) Interest Rates.--
``(1) In general.--The interest rate for refinanced Federal
Direct Stafford Loans, refinanced Federal Direct Unsubsidized
Stafford Loans, refinanced Federal Direct PLUS Loans, and
refinanced Federal Direct Consolidation Loans, shall be a rate
equal to the following:
``(A) Federal direct stafford loans.--
``(i) Rates for undergraduate fdsl.--In the
case of a refinanced Federal Direct Stafford
Loan for which the original loan was a loan
made under section 428 or a Federal Direct
Stafford Loan made under this part to an
undergraduate student, the rate of interest on
such refinanced Federal Direct Stafford Loan
shall be equal to the rate of interest for a
Federal Direct Stafford Loan made to an
undergraduate student for which the first
disbursement is made on the date on which the
refinanced Federal Direct Stafford Loan is made
under this section.
``(ii) Rates for graduate and professional
fdsl.--In the case of a refinanced Federal
Direct Stafford Loan for which the original
loan was a loan made under section 428 or a
Federal Direct Stafford Loan made under this
part to a graduate or professional student, the
rate of interest on such refinanced Federal
Direct Stafford Loan shall be equal to the rate
of interest for a Federal Direct Stafford Loan
made to a graduate or professional student, as
applicable, for which the first disbursement is
made on the date on which the refinanced
Federal Direct Stafford Loan is made under this
section.
``(B) Federal direct unsubsidized stafford loans.--
``(i) Rates for undergraduate fdusl.--In
the case of a refinanced Federal Direct
Unsubsidized Stafford Loan for which the
original loan was a loan made under section
428H or a Federal Direct Unsubsidized Stafford
Loan made under this part an undergraduate
student, the rate of interest on such
refinanced Federal Direct Unsubsidized Stafford
Loan shall be equal to the rate of interest for
a Federal Direct Unsubsidized Stafford Loan
made to an undergraduate student for which the
first disbursement is made on the date on which
the refinanced Federal Direct Unsubsidized
Stafford Loan is made under this section.
``(ii) Rates for graduate and professional
fdusl.--In the case of a refinanced Federal
Direct Unsubsidized Stafford Loan for which the
original loan was a loan made under section
428H or a Federal Direct Unsubsidized Stafford
Loan made under this part to a graduate or
professional student, the rate of interest on
such refinanced Federal Direct Unsubsidized
Stafford Loan shall be equal to the rate of
interest for a Federal Direct Unsubsidized
Stafford Loan made to a graduate or
professional student, as applicable, for which
the first disbursement is made on the date on
which the refinanced Federal Direct
Unsubsidized Stafford Loan is made under this
section.
``(C) Federal direct plus loans.--In the case of a
refinanced Federal Direct PLUS Loan for which the
original loan was a loan made under section 428B or a
Federal Direct PLUS Loan made under this part, the rate
of interest on such refinanced Federal Direct PLUS loan
shall be equal to the rate of interest for a Federal
Direct PLUS loan for which the first disbursement is
made on the date on which the refinanced Federal Direct
PLUS loan is made under this section.
``(D) Consolidation loans.--In the case of a
refinanced Federal Direct Consolidation Loan for which
the original loan was a loan under section 428C or a
Federal Direct Consolidation Loan under this part, the
rate of interest of such refinanced Federal Direct
Consolidation Loan shall be equal to the rate
calculated in accordance with paragraph (2).
``(2) Interest rates for consolidation loans.--
``(A) Method of calculation.--In order to determine
the interest rate for any refinanced Federal Direct
Consolidation Loan under paragraph (1)(D), the
Secretary shall--
``(i) determine each of the component loans
that were originally consolidated in the loan
under section 428C or the Federal Direct
Consolidation Loan, and calculate the
proportion of the unpaid principal balance of
the loan under section 428C or the Federal
Direct Consolidation Loan that each component
loan represents;
``(ii) use the proportions determined in
accordance with clause (i) and the interest
rate applicable for each component loan, as
determined under subparagraph (B), to calculate
the weighted average of the interest rates on
the loans consolidated into the loan under
section 428C or the Federal Direct
Consolidation Loan; and
``(iii) apply the weighted average
calculated under clause (ii) as the interest
rate for the refinanced Federal Direct
Consolidation Loan.
``(B) Interest rates for component loans.--The
interest rates for the component loans of a loan made
under section 428C or a Federal Direct Consolidation
Loan shall be the following:
``(i) Federal direct stafford loans.--
``(I) Undergraduate fdsl.--The
interest rate for any component loan
that is a loan under section 428 or a
Federal Direct Stafford Loan made to an
undergraduate student shall be a rate
equal to the lesser of--
``(aa) the rate of interest
for a refinanced Federal Direct
Stafford Loan determined under
paragraph (1)(A)(i) if such
loan were made on the date on
which the refinanced Federal
Direct Consolidation Loan is
made under this section; or
``(bb) the original
interest rate of the component
loan.
``(II) Graduate or professional
fdsl.--The interest rate for any
component loan that is a loan under
section 428 or a Federal Direct
Stafford Loan made to a graduate or
professional student shall be a rate
equal to the lesser of--
``(aa) the rate of interest
for a refinanced Federal Direct
Stafford Loan determined under
paragraph (1)(A)(ii) if such
loan were made on the date on
which the refinanced Federal
Direct Consolidation Loan is
made under this section; or
``(bb) the original
interest rate of the component
loan.
``(ii) Federal direct unsubsidized stafford
loans.--
``(I) Undergraduate fdusl.--The
interest rate for any component loan
that is a loan under section 428H or a
Federal Direct Unsubsidized Stafford
Loan made to an undergraduate student
shall be a rate equal to the lesser
of--
``(aa) the rate of interest
for a refinanced Federal Direct
Unsubsidized Stafford Loan
determined under paragraph
(1)(B)(i) if such loan were
made on the date on which the
refinanced Federal Direct
Consolidation Loan is made
under this section; or
``(bb) the original
interest rate of the component
loan.
``(II) Graduate fdusl.--The
interest rate for any component loan
that is a loan under section 428H or a
Federal Direct Unsubsidized Stafford
Loan made to a graduate or professional
student shall be a rate equal to the
lesser of--
``(aa) the rate of interest
for a refinanced Federal Direct
Unsubsidized Stafford Loan
determined under paragraph
(1)(B)(ii) if such loan were
made on the date on which the
refinanced Federal Direct
Consolidation Loan is made
under this section; or
``(bb) the original
interest rate of the component
loan.
``(iii) Federal direct plus loans.--The
interest rate for any component loan that is a
loan under section 428B or a Federal Direct
PLUS Loan shall be a rate equal to the lesser
of--
``(I) the rate of interest for a
refinanced Federal Direct PLUS loan
determined under paragraph (1)(C) if
such loan were made on the date on
which the refinanced Federal Direct
Consolidation Loan is made under this
section; or
``(II) the original interest rate
of the component loan.
``(iv) Federal direct consolidation loan.--
The interest rate for any component loan that
is a loan under section 428C or a Federal
Direct Consolidation Loan shall be the weighted
average of the interest rates that would apply
under this subparagraph for each loan
comprising the component consolidation loan.
``(v) Other loans.--The interest rate for
any eligible loan that is a component of a loan
made under section 428C or a Federal Direct
Consolidation Loan and is not described in
clauses (i) through (iv) shall be the interest
rate on the original component loan.
``(3) 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.--Except as otherwise provided in this
section, a loan that is refinanced under this section--
``(A) shall, with respect to the application of
terms and conditions under this title, be considered to
be a loan made, insured, or guaranteed under this title
on the date of the original loan and shall not be
considered to be a new loan made on the date of
refinancing; and
``(B) shall have the same terms and conditions as
the original loan, including any suspensions of
payments or interest accrual under section 3513 of the
Coronavirus Aid, Relief, and Economic Security Act (20
U.S.C. 1001 note), or any extensions of such
suspensions, except that in the case of an original
loan made, insured, or guaranteed under part B that is
refinanced under this section, such refinanced loan
shall be considered a Federal Direct loan and shall
have the same terms and conditions as a Federal Direct
loan under part D that corresponds to the type of the
original part B loan and that was made on the same date
as such original part B loan.
``(2) No automatic extension of 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 and plan
that was in effect on the original loan on the day before the
date the loan is refinanced. 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)
or section 455(d)(7)(D), as applicable based on the date of the
original loan.
``(3) Origination fees and loan limits.--Refinancing a loan
under this section shall not result in the application of an
origination fee under section 455(c), and the refinanced loan
amount shall not be subject to any annual, aggregate, or
lifetime aggregate maximum loan limit under part B or this
part.
``(4) Limit on refinancing.--A loan made, insured, or
guaranteed under this title may not be refinanced under this
section more than twice during a 10-year period.
``(e) Notification to Borrowers.--The Secretary, in coordination
with the Director of the Bureau of Consumer Financial Protection, shall
undertake 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 and part
B 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.''.
(c) Income-Contingent Repayment.--Section 455(e) of the Higher
Education Act of 1965 (20 U.S.C. 1087e(e)) is amended by adding at the
end the following:
``(9) Special rule for refinanced loans.--In calculating
the period of time during which a borrower of a loan that is
refinanced under section 460A before July 1, 2028, has made
monthly payments for purposes of paragraph (7), the Secretary
shall deem the period to include all monthly payments made for
the original loan, and all monthly payments made for the
refinanced loan, that otherwise meet the requirements of this
subsection.''.
(d) Amendments to Public Service Repayment Plan Provisions.--
Section 455(m) of the Higher Education 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 following:
``(3) Special rules for section 460a loans.--
``(A) Refinanced federal direct loans.--
Notwithstanding paragraph (1), in determining the
number of monthly payments that meet the requirements
of such paragraph for an eligible Federal Direct Loan
refinanced 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 refinanced under section
460A that was originally a loan under part B, only
monthly payments made after the date on which the loan
was refinanced may be included for purposes of
paragraph (1).''; and
(3) in paragraph (4)(A) (as redesignated by paragraph (1)),
by inserting ``(including any Federal Direct Stafford Loan,
Federal Direct PLUS Loan, Federal Direct Unsubsidized Stafford
Loan, or Federal Direct Consolidation Loan refinanced under
section 460A)'' before the period at the end.
(e) 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) Special Rule for Refinanced Loans.--In calculating the period
of time during which a borrower of a loan that is refinanced 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 refinanced loan, that otherwise meet the requirements of this
section.''.
<all>Official legislative text sourced from the public record (cached on CivicsHQ).
Official source
View the original bill, actions, and full legislative record on Congress.gov.
Status
In Committee
- 1Introduced
- 2Committee
- 3Floor
- 4Passed
- 5Signed
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Topics
Education
Sponsors
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