Bipartisan groups of House and Senate lawmakers have sent letters to the Treasury Department and the Internal Revenue Service (IRS), asking for guidance to facilitate the refinancing of student loans.
In similar letters from the House and Senate, lawmakers appreciated the guidance from Treasury and IRS in Notice 2015-78, which clarified that tax-exempt bonds can be used for a wide range of refinancings to allow student loan borrowers to take advantage of lower rates.
However, the lawmakers asked for further guidance on three issues: 1) guidance that bonds issued for refinancing purposes not be considered refunding bonds; 2) guidance for issuers to help them determine that the original student loans met loan size limitations for tax-exempt financing; and 3) guidance that a former student can refinance an original loan that was a parent loan and vice versa and that parents’ current state of residence is not an impediment to refinancing.
The letter from the House members is available here. The letter from the Senators is available here.