,,ii #aaeth ,,congress #ast ,session ,s4 #aeba ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,july #aj1 #bjag ,mr4 ,nelson introduced the following bill2 which was read twice and referred to the ,committee on ,health1 ,education1 ,labor1 and ,pensions ,a ,,bill ,to amend the ,higher ,education ,act of #aife to reduce the interest rate caps for ,federal ,direct student loans1 to eliminate loan origination fees on all ,federal ,direct student loans1 and to provide for refinancing of ,federal ,direct student loans and ,federal family education loans4 #a4 ,short title ,this ,act may be cited as the ,student ,loan ,relief ,act of #bjag4 #b4 ,reduction of interest rates for federal direct student loans ,section #dee7;b7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;e7b77 is amended by adding at the end the following3 7#aa7 ,interest rate provisions for new loans on or after july #a1 #bjah 7,a7 ,rates for undergraduate fdsl and fdusl ,notwithstanding the preceding paragraphs of this subsection1 for ,federal ,direct ,stafford ,loans and ,federal ,direct ,unsubsidized ,stafford ,loans issued to undergraduate students1 for which the first disbursement is made on or after ,july #a1 #bjah1 the applicable rate of interest shall1 for loans disbursed during any #ab-month period beginning on ,july #a and ending on ,june #cj1 be determined on the preceding ,june #a and be equal to the lesser of-- 7i7 a rate equal to the high yield of the #aj-year ,treasury note auctioned at the final auction held prior to such ,june #a plus the ,federal ,reserve discount rate charged for primary credit on the date of such auction1 as authorized under section #ad7;d7 of the ,federal ,reserve ,act 7#ab ,u4,s4,c4 #ceg72 or 7ii7 #d percent4 7,b7 ,rates for graduate and professional fdusl ,notwithstanding the preceding paragraphs of this subsection1 for ,federal ,direct ,unsubsidized ,stafford ,loans issued to graduate or professional students1 for which the first disbursement is made on or after ,july #a1 #bjah1 the applicable rate of interest shall1 for loans disbursed during any #ab-month period beginning on ,july #a and ending on ,june #cj1 be determined on the preceding ,june #a and be equal to the lesser of-- 7i7 a rate equal to the high yield of the #aj-year ,treasury note auctioned at the final auction held prior to such ,june #a plus the ,federal ,reserve discount rate charged for primary credit on the date of such auction1 as authorized under section #ad7;d7 of the ,federal ,reserve ,act 7#ab ,u4,s4,c4 #ceg72 or 7ii7 #e percent4 7,c7 ,plus loans ,notwithstanding the preceding paragraphs of this subsection1 for ,federal ,direct ,,plus ,loans1 for which the first disbursement is made on or after ,july #a1 #bjah1 the applicable rate of interest shall1 for loans disbursed during any #ab-month period beginning on ,july #a and ending on ,june #cj1 be determined on the preceding ,june #a and be equal to the lesser of-- 7i7 a rate equal to the high yield of the #aj-year ,treasury note auctioned at the final auction held prior to such ,june #a plus the ,federal ,reserve discount rate charged for primary credit on the date of such auction1 as authorized under section #ad7;d7 of the ,federal ,reserve ,act 7#ab ,u4,s4,c4 #ceg72 or 7ii7 #f percent4 7,d7 ,consolidation loans ,notwithstanding the preceding paragraphs of this subsection1 any ,federal ,direct ,consolidation ,loan for which the application is received on or after ,july #a1 #bjah1 shall bear interest at an annual rate on the unpaid principal balance of the loan that is equal to the weighted average of the interest rates on the loans consolidated1 rounded to the nearest higher one-eighth of one percent4 7,e7 ,consultation ,the ,secretary shall determine the applicable rate of interest under this paragraph after consultation with the ,secretary of the ,treasury and the ,chairman of the ,board of ,governors of the ,federal ,reserve ,system and shall publish such rate in the ,federal ,register as soon as practicable after the date of determination4 7,f7 ,rate ,the applicable rate of interest determined under this paragraph for a ,federal ,direct ,stafford ,loan1 a ,federal ,direct ,unsubsidized ,stafford ,loan1 or a ,federal ,direct ,,plus ,loan shall be fixed for the period of the loan4 4 #c4 ,elimination of the loan origination fees on federal direct student loans ,section #dee7;c7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;e7c77 is amended by adding at the end the following3 7#c7 ,sunset ,the ,secretary may not charge the borrower of a loan under this part for which the first disbursement is made on or after ,july #a1 #bjah1 an origination fee4 4 #d4 ,refinancing ,,ffel and federal direct loans ,part ,d of title ,,iv of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;a et seq47 is amended by adding at the end the following3 #dfj;,a4 ,refinancing ,,ffel and federal direct loans 7a7 ,in general ,beginning not later than #ahj days after the date of enactment of the ,student ,loan ,relief ,act of #bjag1 the ,secretary shall establish a program under which the ,secretary1 upon the receipt of an application from a qualified borrower1 makes a loan under this part1 in accordance with the provisions of this section1 in order to permit the borrower to obtain the interest rate provided under subsection 7c74 7b7 ,refinancing direct loans 7#a7 ,federal direct loans ,upon application of a qualified borrower1 the ,secretary shall repay any ,federal ,direct ,stafford ,loan1 ,federal ,direct ,unsubsidized ,stafford ,loan1 ,federal ,direct ,,plus ,loan1 or ,federal ,direct ,consolidation ,loan of the qualified borrower1 for which the first disbursement was made1 or the application for the original consolidation loan was received1 before ,july #a1 #bjah1 with the proceeds of a new ,federal ,direct ,stafford ,loan1 ,federal ,direct ,unsubsidized ,stafford ,loan1 ,federal ,direct ,,plus ,loan1 or ,federal ,direct ,consolidation ,loan1 respectively1 issued to the borrower in an amount equal to the sum of the unpaid principal1 accrued unpaid interest1 and late charges of the original loan4 7#b7 ,refinancing ,,ffel program loans as refinanced ,federal ,direct ,loans ,upon application of a qualified borrower for any loan that was made1 insured1 or guaranteed under part ,b and for which the first disbursement was made1 or the application for the consolidation loan was received1 before ,july #a1 #bjaj1 the ,secretary shall make a loan under this part1 in an amount equal to the sum of the unpaid principal1 accrued unpaid interest1 and late charges of the original loan to the borrower in accordance with the following3 7,a7 ,the ,secretary shall pay the proceeds of such loan to the eligible lender of the loan made1 insured1 or guaranteed under part ,b1 in order to discharge the borrower from any remaining obligation to the lender with respect to the original loan4 7,b7 ,a loan made under this paragraph that covers-- 7i7 a loan originally made1 insured1 or guaranteed under section #dbh shall be a ,federal ,direct ,stafford ,loan2 7ii7 a loan originally made1 insured1 or guaranteed under section #dbh;,b shall be a ,federal ,direct ,,plus ,loan2 7iii7 a loan originally made1 insured1 or guaranteed under section #dbh;,h shall be a ,federal ,direct ,unsubsidized ,stafford ,loan2 and 7iv7 a loan originally made1 insured1 or guaranteed under section #dbh;,c shall be a ,federal ,direct ,consolidation ,loan4 7,c7 ,the interest rate for each loan made by the ,secretary under this paragraph shall be the applicable rate provided under subsection 7c74 7c7 ,interest rates 7#a7 ,in general ,the interest rate for the new ,federal ,direct ,stafford ,loans1 ,federal ,direct ,unsubsidized ,stafford ,loans1 ,federal ,direct ,,plus ,loans1 and ,federal ,direct ,consolidation ,loans1 shall be a rate equal to-- 7,a7 in any case where the original loan was a loan under section #dbh or #dbh;,h1 a ,federal ,direct ,stafford loan1 or a ,federal ,direct ,unsubsidized ,stafford ,loan1 that was issued to an undergraduate student1 a rate equal to the rate determined under section #dee7;b77#aa77;,a72 7,b7 in any case where the original loan was a loan under section #dbh or #dbh;,h1 a ,federal ,direct ,stafford ,loan1 or a ,federal ,direct ,unsubsidized ,stafford ,loan1 that was issued to a graduate or professional student1 a rate equal to the rate determined under section #dee7;b77#aa77;,b72 7,c7 in any case where the original loan was a loan under section #dbh;,b or a ,federal ,direct ,,plus ,loan1 a rate equal to the rate determined under section #dee7;b77#aa77;,c72 and 7,d7 in any case where the original loan was a loan under section #dbh;,c or a ,federal ,direct ,consolidation ,loan1 a rate calculated in accordance with paragraph 7#b74 7#b7 ,interest rate for consolidation loans 7,a7 ,method of calculation ,in order to determine the interest rate for any new ,federal ,direct ,consolidation ,loan under paragraph 7#a77;,d71 the ,secretary shall-- 7i7 determine each of the component loans that were originally consolidated in the loan under section #dbh;,c or the ,federal ,direct ,consolidation ,loan1 and calculate the proportion of the unpaid principal balance of the loan under section #dbh;,c or the ,federal ,direct ,consolidation ,loan that each component loan represents2 7ii7 use the proportions determined in accordance with clause 7i7 and the interest rate applicable for each component loan1 as determined under subparagraph 7,b71 to calculate the weighted average of the interest rates on the loans consolidated into the loan under section #dbh;,c or the ,federal ,direct ,consolidation ,loan2 and 7iii7 apply the weighted average calculated under clause 7ii7 as the interest rate for the new ,federal ,direct ,consolidation ,loan4 7,b7 ,interest rates for component loans ,the interest rates for the component loans of a loan made under section #dbh;,c or a ,federal ,direct ,consolidation ,loan shall be the following3 7i7 ,the interest rate for any loan under section #dbh or #dbh;,h1 ,federal ,direct ,stafford ,loan1 or ,federal ,direct ,unsubsidized ,stafford ,loan issued to an undergraduate student shall be a rate equal to the rate for ,federal ,direct ,stafford ,loans and ,federal ,direct ,unsubsidized ,stafford ,loans issued to undergraduate students that is applicable on the date of the application for the new ,federal ,direct ,consolidation ,loan4 7ii7 ,the interest rate for any loan under section #dbh or #dbh;,h1 ,federal ,direct ,stafford ,loan1 or ,federal ,direct ,unsubsidized ,stafford ,loan issued to a graduate or professional student shall be a rate equal to the rate for ,federal ,direct ,unsubsidized ,stafford ,loans issued to graduate or professional students that is applicable on the date of the application for the new ,federal ,direct ,consolidation ,loan4 7iii7 ,the interest rate for any loan under section #dbh;,b or ,federal ,direct ,,plus ,loan shall be a rate equal to the rate for ,federal ,direct ,,plus ,loans that is applicable on the date of the application for the new ,federal ,direct ,consolidation ,loan4 7iv7 ,the interest rate for any component loan that is a loan under section #dbh;,c 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 loan4 7v7 ,the interest rate for any eligible loan that is a component of a loan made under section #dbh;,c or a ,federal ,direct ,consolidation ,loan and is not described in clauses 7i7 through 7iv7 shall be the interest rate on the original component loan4 7d7 ,terms and conditions of loans 7#a7 ,in general ,a loan that is refinanced under this section shall have the same terms and conditions as the original loan1 except as otherwise provided in this section4 7#b7 ,no automatic extension of repayment period ,refinancing a loan under this section shall not require the extension of the duration of the repayment period of the loan1 and the borrower shall retain the right to use the same repayment term that was in effect on the original loan4 ,nothing in this paragraph shall be construed to prevent a borrower from electing a different repayment plan at any time in accordance with section #dee7;d77#c74 7e7 ,definition of qualified borrower 7#a7 ,in general ,for purposes of this section1 the term qualified borrower means a borrower-- 7,a7 of a loan under this part or part ,b for which the first disbursement was made1 or the application for a consolidation loan was received1 before ,july #a1 #bjah2 and 7,b7 who meets the eligibility requirements established under paragraph 7#b74 7#b7 ,income requirements ,not later than #ahj days after the date of enactment of the ,student ,loan ,relief ,act of #bjag1 the ,secretary shall establish eligibility requirements based on income or debt-to-income ratio that take into consideration providing access to refinancing under this section for borrowers with the greatest financial need4 7f7 ,notification to borrowers ,the ,secretary1 in coordination with the ,director of the ,bureau of ,consumer ,financial ,protection1 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 refinancing4 ,the campaign shall include the following activities3 7#a7 ,developing consumer information materials about the availability of ,federal student loan refinancing4 7#b7 ,requiring servicers of loans under this part or part ,b to provide such consumer information to borrowers in a manner determined appropriate by the ,secretary1 in consultation with the ,director of the ,bureau of ,consumer ,financial ,protection4 4