H.R. 9166

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9166 Introduced in House (IH)]

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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.''.
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