,,ii #aacth ,,congress #ast ,session ,s4 #abff ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,june #bg1 #bjac ,mr4 ,brown 7for himself1 ,ms4 ,heitkamp1 ,mr4 ,durbin1 ,mrs4 ,murray1 and ,mrs4 ,gillibrand7 introduced the following bill2 which was read twice and referred to the ,committee on ,health1 ,education1 ,labor1 and ,pensions ,a ,,bill ,to provide for the establishment of a mechanism to allow borrowers of private education loans to refinance their loans1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,refinancing ,education ,funding to ,invest 7,,refi7 for the ,future ,act of #bjac4 #b4 ,findings and purpose 7a7 ,findings ,congress finds that-- 7#a7 there is approximately #a1ajj1jjj1jjj1jjj of outstanding student loan debt in the ,united ,states1 including more than #aej1jjj1jjj1jjj in private education loans2 7#b7 as of #bjjh1 #ha percent of individuals graduating with an undergraduate degree with more than #dj1jjj in student loans had a private education loan2 7#c7 the limited number of lenders in the private education loan marketplace reduce the ability of borrowers with private education loans to restructure1 refinance1 or negotiate repayment terms for their current loans1 leading to excessive debt burdens and potential default2 and 7#d7 excessive student indebtedness reduces economic activity1 threatens homeownership1 hurts small business growth1 and limits opportunities for economic expansion in rural communities4 7b7 ,purpose ,the purpose of this ,act is to spur economic growth1 by establishing a mechanism to allow borrowers of private education loans to refinance their loans in order-- 7#a7 to facilitate greater competition in the private education lending and refinancing markets2 7#b7 to address inefficiencies in the private education lending and refinancing markets2 7#c7 to encourage innovation in the private education refinancing markets2 and 7#d7 to promote the participation of private capital in the private education refinancing markets4 #c4 ,definitions ,in this ,act-- 7#a7 the term private education loan has the same meaning as in section #adj7;a7 of the ,truth in ,lending ,act 7#ae ,u4,s4,c4 #afej7;a772 and 7#b7 the term ,secretary means the ,secretary of the ,treasury1 other than in the context of the ,secretary of ,education4 #d4 ,temporary authority to create a credit facility to increase market efficiency in the student loan market 7a7 ,authority 7#a7 ,in general 7,a7 ,credit facilities authorization ,upon a determination by the ,secretary that borrowers are unable to secure adequate credit accommodations with existing private education loans1 the ,secretary1 notwithstanding any provision of section #dhd of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajia71 is authorized to establish lending1 purchase1 and other credit facilities to-- 7i7 accommodate reasonable refinancing opportunities or other loan adjustments that-- 7,i7 improve the sustainability of payments for the borrower2 and 7,,ii7 reduce the likelihood of delinquency and default on private education loans2 7ii7 benefit borrowers that are most likely to have private student debt service obligations that represent a disproportionate share of their income2 and 7iii7 ensure that borrowers pay lower interest rates that are commensurate with credit risk1 so that they may pursue more economically productive activities1 such as home purchases and small business formation4 7,b7 ,consultation 7i7 ,in general ,any determination under subparagraph 7,a7 shall be made jointly with the ,secretary of ,education and the ,director of the ,bureau of ,consumer ,financial ,protection4 7ii7 ,compliance system ,prior to establishing a facility under this subsection1 the ,secretary1 or any administrator designated by the ,secretary to establish a program to carry out the authority provided in this subsection1 shall establish a compliance system in consultation with the ,bureau of ,consumer ,financial ,protection4 7#b7 ,no net cost to ,government ,mechanisms established under this subsection shall not result in any net cost to the ,federal ,government1 as determined jointly by the ,secretary1 the ,secretary of ,education1 and the ,director of the ,office of ,management and ,budget4 7b7 ,federal ,register notice ,prior to exercising any authority provided under subsection 7a71 the ,secretary shall publish a notice in the ,federal ,register to seek comment from interested parties on its proposed exercise of such authority1 including-- 7#a7 the terms and conditions governing the lending1 purchases1 or other credit facilities authorized by subsection 7a72 7#b7 an outline of methodology and factors considered in the purchase or restructuring of private education loans2 7#c7 private education loan modification options that may be available for existing loans2 7#d7 how they will ensure that borrowers whose education debt service obligations represent a disproportionate share of their income will be provided relief2 and 7#e7 how the use of the methodology and factors1 as proposed in the notice1 will be used to ensure that any exercise of authority by the ,secretary will result in no net cost to the ,federal ,government4 7c7 ,initial report ,not later than #ij days after the date of enactment of this ,act1 the ,secretary shall submit to the appropriate committees of ,congress a report that includes-- 7#a7 a plan of the ,secretary to implement credit mechanisms under the authority of this ,act2 7#b7 a description of macroeconomic benefits of increased efficiency and refinance activity in the student loan market2 and 7#c7 a description of the benefits through the use of such authority to private education loan borrowers1 including how any incidental net gain from the credit mechanism would be used to benefit student borrowers4 7d7 ,annual reports ,beginning #a year after the date of the first use of the authority provided under this section1 the ,secretary shall provide an annual report to the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,committee on ,financial ,services of the ,house of ,representatives describing the utilization1 impact1 and financial performance of any program established under the authority of this section4 7e7 ,public awareness ,not later than #fj days after the date of publication of a notice in the ,federal ,register pursuant to subsection 7b71 the ,secretary1 in consultation with the ,secretary of ,education and the ,director of the ,bureau of ,consumer ,financial ,protection1 shall begin a national awareness campaign to alert all private education loan borrowers who may benefit from any program or facilities established under this section4 ,such campaign shall include outreach to targeted populations of borrowers that are most likely to have private education loan debt service obligations that represent a disproportionate share of their income4 7f7 ,expiration of authority ,three years after the date on which a credit facility is established under this ,act1 and not later than #e years after the date of enactment of this ,act1 any new lending1 purchase1 or other activity initiated through the facilities established by the ,secretary under subsection 7a7 shall cease4 #e4 ,sense of ,congress ,it is the sense of ,congress that the ,federal financial institutions1 such as the ,federal ,financing ,bank and the ,federal ,reserve banks1 and federally chartered private entities1 such as the ,federal home loan banks1 should consider1 in consultation with the ,secretary and the ,secretary of ,education1 using available authorities in a timely manner1 if needed1 to assist in ensuring that borrowers of private education loans can secure credit accommodations to refinance existing loans1 in a manner that results in no increased costs to taxpayers4