Student Loan Refinancing Act of 2026
- Bill Number
- H.R. 9166
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Education
- Status
- Introduced
- Latest Action
- 2026-06-04: Referred to the House Committee on Education and Workforce.
- Last Updated
- 2026-06-23T22:08:19Z
AI-Generated Summary
Summary of H.R. 9166: Student Loan Refinancing Act of 2026
Purpose
This bill amends the Higher Education Act of 1965 to create a federal program allowing borrowers to refinance certain existing student loans at current interest rates. The goal is to help borrowers access lower rates without creating new loans that reset repayment terms or limits.
Key Provisions
- Refinancing Authority: Establishes a program under a new Section 460A where the Secretary of Education can issue refinanced Federal Direct Loans to replace original loans, effective within 30 days of enactment.
- Eligible Loans:
- Federal Direct Stafford Loans, Unsubsidized Stafford Loans, PLUS Loans, and Consolidation Loans.
- Loans from the Federal Family Education Loan (FFEL) program under Part B of the Act, which are converted to equivalent Direct Loans.
- Interest Rates:
- Set to the rate applicable to new loans of the same type on the refinancing date.
- For Consolidation Loans, a weighted average of component loan rates is used, with each component capped at the lesser of the current refinancing rate or the original rate.
- Rates are fixed for the loan's duration.
- Loan Terms:
- Refinanced loans retain the original loan's terms, conditions, repayment plans, and any payment suspensions (such as those from the CARES Act).
- No origination fees apply, and refinanced amounts do not count toward loan limits.
- Refinancing is limited to no more than twice in any 10-year period.
- Protections for Forgiveness Programs:
- For income-contingent repayment and income-based repayment, payments made on the original loan count toward forgiveness eligibility.
- For Public Service Loan Forgiveness, original payments count for Direct Loans, but only post-refinancing payments count for FFEL loans.
- Borrower Notification: Requires the Department of Education to coordinate with the Bureau of Consumer Financial Protection on a public awareness campaign, including materials and requirements for loan servicers.
Significant Changes to Existing Law
- Adds explicit authority for refinancing within the Direct Loan program (Part D), previously unavailable for rate adjustments on existing loans.
- Modifies repayment calculation rules in Sections 455(e), 455(m), and 493C to preserve progress toward forgiveness, avoiding resets that could delay relief.
- Treats refinanced FFEL loans as Direct Loans for future servicing and benefits, while maintaining original repayment terms.
Potential Impacts
- On Citizens: Borrowers with high-rate loans could reduce interest costs and monthly payments, though repayment duration and plans remain unchanged unless voluntarily adjusted.
- On Government Agencies: The Department of Education would administer the program, including loan discharges and notifications, potentially increasing administrative workload for the Office of Federal Student Aid and servicers.
- On International Relations: No direct effects identified.
Main Stakeholders Affected
- Student loan borrowers with eligible federal loans.
- The Department of Education and its loan servicers.
- The Bureau of Consumer Financial Protection.
- Indirectly, institutions of higher education through borrower interactions.
Notable Legal, Constitutional, or Political Implications
- The bill operates within existing federal authority under the Higher Education Act, with no apparent constitutional conflicts.
- It introduces targeted relief for borrowers while limiting repeated refinancing to prevent program abuse.
- Politically, it focuses on interest rate adjustments rather than broad forgiveness, preserving the structure of existing repayment and forgiveness programs.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Turner, Michael R. [R-OH-10]
Cosponsors (3)
Rep. Norcross, Donald [D-NJ-1], Rep. Fitzpatrick, Brian K. [R-PA-1], Rep. Doggett, Lloyd [D-TX-37]
Recent Actions
- 2026-06-04: Referred to the House Committee on Education and Workforce.
- 2026-06-04: Introduced in House
- 2026-06-04: Introduced in House
Bill Versions
- Student Loan Refinancing Act of 2026 — issued 2026-06-04 — PDF (18 pages)