Sec. 2. Availability of student loans at Federal Reserve bank discount rate
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/bill/114/hr/3675/ih/section-2·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Section 455(b) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(b) ) is amended— by redesignating paragraphs
(9)and
(10)as paragraphs
(10)and (11); and by inserting after paragraph
(8)the following new paragraph: Notwithstanding the preceding paragraphs of this subsection, if the rate of interest determined under subparagraph
(B)with respect to any loan for which the first disbursement is made on or after July 1, 2015, is less than the applicable rate of interest for the loan under paragraph (8), the applicable rate of interest for the loan shall be the rate determined under subparagraph (B). The rate of interest determined under this subparagraph is, with respect to a loan disbursed during any 12-month period beginning on July 1 and ending on June 30, the primary credit rate charged by the Federal Reserve banks on the preceding June 1 for purposes of sections 13 and 13A of the Federal Reserve Act ( 12 U.S.C. 342 et seq. ). The Secretary shall determine the rate of interest under subparagraph
(B)after consultation with the Secretary of the Treasury and shall publish such rate in the Federal Register as soon as practicable after the date of determination. The applicable rate of interest determined under this paragraph for a loan shall be fixed for the period of the loan. . Section 455(b) of such Act ( 20 U.S.C. 1087e(b) ), as amended by subsection (a), is further amended by adding at the end the following new paragraph: Notwithstanding the preceding paragraphs of this subsection, the borrower of a Federal Direct Stafford Loan, a Federal Direct Unsubsidized Stafford Loan, a Federal Direct PLUS Loan, or a Federal Direct Consolidation Loan may elect to modify the interest rate of the loan to be equal to the interest rate that would be applicable to such loan if such loan were first disbursed (or in the case of a Federal Direct Consolidation Loan, first applied for) on the date on which such borrower elects to modify the interest rate of such loan. Except as provided in subparagraph (C), an interest rate elected under subparagraph
(A)for a loan shall be fixed for the life of the loan. A borrower may elect to modify the interest rate of a loan in accordance with subparagraph
(A)at any time during the life of the loan. Nothing in this paragraph shall be construed to authorize any refunding of any repayment of a loan. .
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