Bipartisan legislation recently introduced in the U.S. House of Representatives would allow eligible federal student loan borrowers to refinance their loans while remaining in the federal student loan system.
Under current law, federal student loan borrowers have limited options to refinance their loans while remaining public borrowers. Most must refinance through a private lender, a process that can require them to leave the federal system and lose access to federal borrower protections.
The Student Loan Refinancing Act of 2026 would amend the Higher Education Act of 1965 to allow eligible borrowers with federal student loans to refinance with a fixed interest rate based on the applicable federal student loan rate at the time of refinancing.
The bill would limit refinancing to no more than twice during a 10-year period, would prevent the application of a new origination fee when a borrower refinances, ensure refinancing does not automatically extend the duration of a borrower’s repayment period, protect eligible payment history under repayment plans, and preserve qualifying Public Service Loan Forgiveness payment counts for eligible refinanced loans.
The bill also would require the Department of Education, in coordination with the Consumer Financial Protection Bureau, to notify eligible borrowers about the availability of federal student loan refinancing.