Section 1 Short title
This Act may be cited as the “Servicemember Student Loan Affordability Act of 2024”.
Servicemember Student Loan Affordability Act of 2024
A BILL
To amend the Servicemembers Civil Relief Act to limit the interest rate on student loans incurred by a servicemember before military service and consolidated or refinanced during military service, and for other purposes.
Sec. 2 Limitation on interest rate of student loans incurred before military service and consolidated or refinanced during military service
Establishment— Subsection (a) of section 207 of the Servicemembers Civil Relief Act (50 U.S.C. 3937) is amended—
in paragraph (1), by inserting “on debt incurred before service” after “Limitation to 6 percent”;
in paragraph (2), by inserting “or (2)” after “paragraph (1)”;
in paragraph (3), by striking “paragraph (2)” and inserting “paragraph (3)”;
by redesignating paragraphs (2) and (3), as amended, as paragraphs (3) and (4), respectively; and
by inserting, after paragraph (1), the following new paragraph (2):
“(2) Limitation to 6 percent on student loans incurred before military service and consolidated or refinanced during military service
“(A) In general—An obligation or liability bearing interest at a rate in excess of 6 percent per year that is incurred by a servicemember, or the servicemember and the servicemember's spouse jointly, during military service to consolidate or refinance a student loan incurred by the servicemember before such military service, shall not bear an interest at a rate in excess of 6 percent during the period of military service.
“(B) Exclusion—Subparagraph (A) shall apply only to the consolidation or refinancing of student loans described in such subparagraph and shall not apply to the consolidation or refinancing of any other obligation or liability.”
Effective date of limitation— Subsection (b) of such section is amended—
in paragraph (1)(A), by striking “the interest rate limitation” and inserting “an interest rate limitation”; and
in paragraph (2)—
by striking the heading and inserting “Effective date of limitation”; and
by inserting before the period at the end the following: “in the case of an obligation or liability described in paragraph (1) of such subsection, or as of the date on which the servicemember incurs (or the servicemember and spouse jointly incur) the obligation or liability described in paragraph (2) of such subsection”.
Student loan defined— Subsection (d) of such section is amended by adding at the end the following new paragraph:
“(3) Student loan—The term student loan means any of the following:
“(A) A Federal student loan made, insured, or guaranteed under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.).
“(B) A private education loan, as such term is defined in section 140(a) of the Truth in Lending Act (15 U.S.C. 1650(a)).”