I 

118TH CONGRESS 

1ST SESSION H. R. 1731 

To amend the Higher Education Act of 1965 to double the Pell Grant 

award amount, improve the Public Service Loan Forgiveness program, 

and reduce interest rates, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 22, 2023 

Ms. WILSON of Florida (for herself, Mrs. MCBATH, Mr. COURTNEY, Mr. 

SABLAN, Ms. BONAMICI, Mr. GRIJALVA, Ms. ADAMS, and Mr. TAKANO) 

introduced the following bill; which was referred to the Committee on 

Education and the Workforce, and in addition to the Committee on the 

Budget, for a period to be subsequently determined by the Speaker, in 

each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Higher Education Act of 1965 to double 

the Pell Grant award amount, improve the Public Service 

Loan Forgiveness program, and reduce interest rates, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE; EFFECTIVE DATE; TABLE OF 

2 CONTENTS. 

3 (a) SHORT TITLE.—This Act may be cited as the 

4 ‘‘Lowering Obstacles to Achievement Now Act’’ or the 

5 ‘‘LOAN Act’’. 

6 (b) EFFECTIVE DATE.—Except as otherwise ex7 pressly provided herein, any amendment made by this Act 

8 to section 401, 473, or 484 of the Higher Education Act 

9 of 1965 (20 U.S.C. 1070a; 1087mm; 1091), as amended 

10 by the FAFSA Simplification Act (title VII of division FF 

11 of Public Law 116–260), shall take effect as if included 

12 in the FAFSA Simplification Act and subject to the effec13 tive date of section 701(b) of such FAFSA Simplification 

14 Act, as amended by section 102(a) of the FAFSA Sim15 plification Act Technical Corrections Act (division R of 

16 Public Law 117–103) (including the authorization pro17 vided under section 102(c)(1)(A) of such Act). 

18 (c) TABLE OF CONTENTS.—The table of contents of 

19 this Act is as follows: 

Sec. 1. Short title; effective date; table of contents. 

TITLE I—FEDERAL PELL GRANTS 

Sec. 101. Doubling Federal Pell Grants and providing all Federal Pell Grants 

through mandatory funding. 

Sec. 102. Providing increased Federal Pell Grants and other assistance for recipients of means-tested benefits. 

Sec. 103. Federal aid eligibility for dreamer students. 

Sec. 104. Restoring the total semesters of Federal Pell Grant eligibility. 

Sec. 105. Reducing financial aid penalties from satisfactory academic progress 

determinations. 

Sec. 106. Federal Pell Grants for graduate students. 


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TITLE II—AMENDMENTS TO TERMS AND CONDITIONS OF LOANS 

AND REPAYMENT PLANS 

PART A—DIRECT LOANS

Sec. 201. Subsidized loans for graduate and professional students. 

Sec. 202. Repeal of origination fees. 

Sec. 203. Prepayment amounts. 

PART B—AUTOMATIC ENROLLMENT IN INCOME-DRIVEN REPAYMENT FOR

CERTAIN BORROWERS

Sec. 211. Notification and automatic enrollment procedures for borrowers who 

are delinquent on loans. 

Sec. 212. Notification and automatic enrollment procedures for borrowers who 

are rehabilitating defaulted loans. 

Sec. 213. Covered loan, income-driven repayment plan, and non-covered loan 

defined. 

Sec. 214. Automatic recertification of income for income-driven repayment 

plans. 

Sec. 215. Procedure and requirement for requesting tax return information 

from the IRS. 

PART C—AMENDMENTS TO CERTAIN LOAN FORGIVENESS PROGRAMS

Sec. 221. Amendments to terms and conditions of Public Service Loan Forgiveness. 

Sec. 222. Loan forgiveness for teachers. 

TITLE III—INTEREST CAPITALIZATION 

Sec. 301. Elimination of interest capitalization. 

Sec. 302. Elimination of disclosure requirements relating to capitalization. 

TITLE IV—INTEREST RATES 

Sec. 401. Interest rate provisions for new Federal student loans on or after 

July 1, 2024. 

Sec. 402. Refinancing FFEL and Federal Direct Loans. 

Sec. 403. Refinancing private student loans. 

1 TITLE I—FEDERAL PELL 

2 GRANTS 

3 SEC. 101. DOUBLING FEDERAL PELL GRANTS AND PRO4 VIDING ALL FEDERAL PELL GRANTS 

5 THROUGH MANDATORY FUNDING. 

6 (a) AMOUNT OF MINIMUM FEDERAL PELL

7 GRANTS.—Section 401 of the Higher Education Act of 

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1 sion FF of the FAFSA Simplification Act (Public Law 

2 116–260), is amended— 

3 (1) in subsection (a)(2)(F), by striking ‘‘10 per4 cent’’ and inserting ‘‘5 percent’’; 

5 (2) in subsection (b)— 

6 (A) in paragraph (1)(B)(i), by striking 

7 ‘‘paragraph (5)(A)’’ and inserting ‘‘paragraph 

8 (5)’’; 

9 (B) by striking paragraph (5) and insert10 ing the following: 

11 ‘‘(5) TOTAL MAXIMUM FEDERAL PELL

12 GRANT.— 

13 ‘‘(A) AWARD YEAR 2024–2025.—For award 

14 year 2024–2025, the total maximum Federal 

15 Pell Grant award shall be $10,000. 

16 ‘‘(B) AWARD YEAR 2025–2026.—For award 

17 year 2025–2026, the total maximum Federal 

18 Pell Grant award shall be $11,000. 

19 ‘‘(C) AWARD YEAR 2026–2027.—For award 

20 year 2026–2027, the total maximum Federal 

21 Pell Grant award shall be $12,000. 

22 ‘‘(D) AWARD YEAR 2027–2028.—For award 

23 year 2027–2028, the total maximum Federal 

24 Pell Grant award shall be $13,000. 


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1 ‘‘(E) AWARD YEAR 2028–2029.—For award 

2 year 2028–2029, the total maximum Federal 

3 Pell Grant award shall be $14,000. 

4 ‘‘(F) AWARD YEAR 2029–2030 AND SUBSE5 QUENT YEARS.—For award year 2029–2030, 

6 and each subsequent award year, the total max7 imum Federal Pell Grant award shall be 

8 $14,000— 

9 ‘‘(i) increased by the adjustment per10 centage for the award year for which the 

11 amount under this subparagraph is being 

12 determined; and 

13 ‘‘(ii) rounded to the nearest $50. 

14 ‘‘(G) DEFINITION OF ADJUSTMENT PER15 CENTAGE.—In this paragraph, the term ‘adjust16 ment percentage,’ as applied to an award year, 

17 is equal to the percentage increase in the Con18 sumer Price Index, as defined in section 478(f), 

19 for the most recent calendar year ending prior 

20 to the beginning of the award year.’’; 

21 (C) by striking paragraphs (6) and (7) and 

22 inserting the following: 

23 ‘‘(6) APPROPRIATION OF FUNDS.—There are 

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1 wise appropriated, such sums as may be necessary 

2 for fiscal year 2024 and each subsequent fiscal year 

3 to provide the total maximum Federal Pell Grant for 

4 which a student shall be eligible under this section 

5 during an award year.’’; and 

6 (D) by redesignating paragraphs (8) and 

7 (9) as paragraphs (7) and (8), respectively; 

8 (3) in subsection (d)(5)(B)(ii)— 

9 (A) in subclause (I)(bb), by striking ‘‘or’’ 

10 after the semicolon; 

11 (B) in subclause (II)(bb)(CC), by striking 

12 the period and inserting ‘‘; or’’; and 

13 (C) by adding at the end the following: 

14 ‘‘(III) during a period for which 

15 the student did not receive a loan 

16 under this title but for which, if the 

17 student had received such a loan, such 

18 loan would have been discharged 

19 under the circumstances described in 

20 subclause (II)(bb)(CC).’’; 

21 (4) by striking subsections (g) and (h); and 

22 (5) by redesignating subsections (i) and (j) as 

23 subsections (g) and (h), respectively. 

24 (b) REPEAL OF SCORING REQUIREMENT.— 


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1 (1) IN GENERAL.—Section 406 of H. Con. Res. 

2 95 (109th Congress) is amended— 

3 (A) by striking subsection (b); and 

4 (B) by striking ‘‘(a) IN GENERAL.—Upon’’ 

5 and inserting the following: ‘‘Upon’’. 

6 (2) EFFECTIVE DATE.—The amendments made 

7 by paragraph (1) shall take effect beginning on July 

8 1, 2024. 

9 (c) STUDENT SUPPORT SERVICES.—Section 

10 402D(d)(1) of the Higher Education Act of 1965 (20 

11 U.S.C. 1070a–14(d)(1)) is amended by striking ‘‘the min12 imum’’ and inserting ‘‘10 percent of the maximum’’. 

13 (d) SCHOLARSHIP COMPONENT.—Section 404E(d) of 

14 the Higher Education Act of 1965 (20 U.S.C. 1070a– 

15 25(d)) is amended by striking ‘‘less than the minimum’’ 

16 and inserting ‘‘less than 10 percent of the maximum’’. 

17 SEC. 102. PROVIDING INCREASED FEDERAL PELL GRANTS 

18 AND OTHER ASSISTANCE FOR RECIPIENTS 

19 OF MEANS-TESTED BENEFITS. 

20 (a) INCREASED AMOUNT OF MAXIMUM FEDERAL

21 PELL GRANTS FOR STUDENTS WITH NEGATIVE STU22 DENT AID INDEXES.—Section 401(b)(1) of the Higher 

23 Education Act of 1965 (20 U.S.C. 1070a(b)(1)), as 

24 amended by section 101 of this Act and section 703 of 


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1 the FAFSA Simplification Act (Public Law 116–260), is 

2 amended— 

3 (1) in subparagraph (A)— 

4 (A) in the matter preceding clause (i), by 

5 striking ‘‘A student’’ and inserting ‘‘Except in 

6 the case of a student with a student aid index 

7 of less than zero, a student’’; 

8 (B) by striking clause (i); and 

9 (C) by redesignating clauses (ii) and (iii) 

10 as clauses (i) and (ii), respectively; 

11 (2) by redesignating subparagraphs (B) 

12 through (E) as subparagraphs (C) through (F), re13 spectively; 

14 (3) by inserting after subparagraph (A) the fol15 lowing: 

16 ‘‘(B) A student with a student aid index of 

17 less than zero shall be eligible for a Federal 

18 Pell Grant award that exceeds the total max19 imum Federal Pell Grant by an amount equal 

20 to the amount by which the student’s student 

21 aid index is less than zero.’’; 

22 (4) in subparagraph (C), as redesignated by 

23 paragraph (2)— 

24 (A) in the matter preceding clause (i), by 

25 striking ‘‘subparagraph (A) for an academic 


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1 year,’’ and inserting ‘‘subparagraph (A), or an 

2 increased Federal Pell Grant under subpara3 graph (B), for an academic year,’’; and 

4 (B) in clause (ii), by striking ‘‘, except that 

5 a student aid index of less than zero shall be 

6 considered to be zero for the purposes of this 

7 clause’’; 

8 (5) in subparagraph (D), as redesignated by 

9 paragraph (2), by striking ‘‘(A) or (B)’’ and insert10 ing ‘‘(A), (B), or (C)’’; 

11 (6) in subparagraph (E), as redesignated by 

12 paragraph (2), by inserting ‘‘or an increased Federal 

13 Pell Grant under subparagraph (B)’’ after ‘‘subpara14 graph (A)’’; or 

15 (7) in subparagraph (F), as redesignated by 

16 paragraph (2), by striking ‘‘or a minimum Federal 

17 Pell Grant under subparagraph (C)’’ and inserting 

18 ‘‘an increased Federal Pell Grant under subpara19 graph (B), or a minimum Federal Pell Grant under 

20 subparagraph (D)’’. 

21 (b) SPECIAL STUDENT AID INDEX RULE FOR RE22 CIPIENTS OF MEANS-TESTED BENEFITS.—Section 473 of 

23 the Higher Education Act of 1965 (20 U.S.C. 1087mm), 

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1 tion Act (Public Law 116–260), is amended by adding at 

2 the end the following: 

3 ‘‘(d) SPECIAL RULE FOR MEANS-TESTED BENEFIT

4 RECIPIENTS.—Notwithstanding subsection (b), for an ap5 plicant (or, as applicable, an applicant and spouse, or an 

6 applicant’s parents) who, at any time during the previous 

7 24-month period, received a benefit under a means-tested 

8 Federal benefit program (or whose parent or spouse re9 ceived such a benefit, as applicable), the Secretary shall 

10 for the purposes of this title consider the student aid index 

11 as equal to –$1,500 for the applicant.’’. 

12 SEC. 103. FEDERAL AID ELIGIBILITY FOR DREAMER STU13 DENTS. 

14 Section 484 of the Higher Education Act of 1965 (20 

15 U.S.C. 1091), as amended by section 702(n) of the 

16 FAFSA Simplification Act (Public Law 116–260), is 

17 amended— 

18 (1) in subsection (a)(5), by inserting ‘‘, or be a 

19 Dreamer student, as defined in subsection (u)’’ after 

20 ‘‘becoming a citizen or permanent resident’’; and 

21 (2) by adding at the end the following: 

22 ‘‘(u) DREAMER STUDENTS.— 

23 ‘‘(1) IN GENERAL.—In this section, the term 

24 ‘Dreamer student’ means an individual who— 


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1 ‘‘(A)(i) is not a citizen or national of the 

2 United States; and 

3 ‘‘(ii) is inadmissible or deportable under 

4 the Immigration and Nationality Act (8 U.S.C. 

5 1101 et seq.)); and 

6 ‘‘(B)(i) in the case of such an individual 

7 who was younger than 18 years of age on the 

8 date on which the individual initially entered 

9 the United States— 

10 ‘‘(I) has earned a high school diploma, 

11 the recognized equivalent of such diploma 

12 from a secondary school, or a high school 

13 equivalency diploma recognized by State 

14 law, or is scheduled to complete the re15 quirements for such a diploma or equiva16 lent before the next academic year begins; 

17 ‘‘(II) is enrolled at an institution of 

18 higher education pursuant to subsection 

19 (d); 

20 ‘‘(III) has served in the uniformed 

21 services (as such term is defined in section 

22 101 of title 10, United States Code) for 

23 not less than 2 years and, if discharged, 

24 received an honorable discharge; 


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1 ‘‘(IV) has acquired a degree, certifi2 cate, or recognized postsecondary creden3 tial from an institution of higher education 

4 or area career and technical education 

5 school (as such term is defined in section 

6 3 of the Carl D. Perkins Career and Tech7 nical Education Act of 2006 (20 U.S.C. 

8 2302)); or 

9 ‘‘(V) has completed not less than 2 

10 years in a postsecondary program at an in11 stitution of higher education, or area ca12 reer and technical education school, in the 

13 United States and has made satisfactory 

14 academic progress, as defined in subsection 

15 (c), during such time period; or 

16 ‘‘(ii)(I) is, or at any time was, eligible for 

17 a grant of deferred action pursuant to— 

18 ‘‘(aa) the memorandum of the De19 partment of Homeland Security entitled 

20 ‘Exercising Prosecutorial Discretion with 

21 Respect to Individuals Who Came to the 

22 United States as Children’ issued on June 

23 15, 2012; or 

24 ‘‘(bb) the memorandum of the De25 partment of Homeland Security entitled 


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1 ‘Exercising Prosecutorial Discretion with 

2 Respect to Individuals Who Came to the 

3 United States as Children and with Re4 spect to Certain Individuals Who Are the 

5 Parents of U.S. Citizens or Permanent 

6 Residents’ issued on November 20, 2014; 

7 or 

8 ‘‘(II) would have been eligible for such a 

9 grant of deferred action if the applicable memo10 randum described in subclause (I) had been 

11 fully in effect since the date on which it was 

12 issued. 

13 ‘‘(2) HARDSHIP EXCEPTION.—The Secretary 

14 shall issue regulations that direct when the Depart15 ment shall waive the age requirement of paragraph 

16 (1)(B)(i) for an individual to qualify as a Dreamer 

17 student under such paragraph, if the individual dem18 onstrates compelling circumstances, such as eco19 nomic hardship (as defined in section 435(o)).’’. 

20 SEC. 104. RESTORING THE TOTAL SEMESTERS OF FEDERAL 

21 PELL GRANT ELIGIBILITY. 

22 Section 401(d)(5)(A) of the Higher Education Act of 

23 1965, as added by section 703 of the FAFSA Simplifica24 tion Act (Public Law 116–260), is amended by striking 

25 ‘‘12’’ each place the term appears and inserting ‘‘18’’. 


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1 SEC. 105. REDUCING FINANCIAL AID PENALTIES FROM SAT2 ISFACTORY ACADEMIC PROGRESS DETER3 MINATIONS. 

4 Section 484(c) of the Higher Education Act of 1965 

5 (20 U.S.C. 1091(c)) is amended to read as follows: 

6 ‘‘(c) SATISFACTORY PROGRESS.— 

7 ‘‘(1) DEFINITIONS.—In this subsection: 

8 ‘‘(A) APPEAL.—The term ‘appeal’ means a 

9 process by which a student who is not meeting 

10 the institution’s satisfactory academic progress 

11 standards petitions the institution for reconsid12 eration of the student’s eligibility for assistance 

13 under this title. 

14 ‘‘(B) FINANCIAL AID PROBATION.—The 

15 term ‘financial aid probation’ means a status 

16 assigned by an institution to a student who fails 

17 to make satisfactory academic progress and 

18 who has appealed and has had eligibility for aid 

19 reinstated. 

20 ‘‘(C) FINANCIAL AID WARNING.—The term 

21 ‘financial aid warning’ means a status assigned 

22 to a student who fails to make satisfactory aca23 demic progress at the end of the semester or 

24 equivalent period in which the student first fails 

25 to make such progress. 


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1 ‘‘(D) PAYMENT PERIOD.—The term ‘pay2 ment period’ means the applicable payment pe3 riod described in section 668.4 of title 34, Code 

4 of Federal Regulations, or any successor regula5 tion. 

6 ‘‘(2) SATISFACTORY ACADEMIC PROGRESS POL7 ICY.—An institution shall establish a reasonable sat8 isfactory academic progress policy for determining 

9 whether an otherwise eligible student is making sat10 isfactory academic progress in the student’s edu11 cational program and may receive assistance under 

12 this title. The Secretary shall consider the institu13 tion’s policy to be reasonable if— 

14 ‘‘(A) the policy is at least as strict as the 

15 policy the institution applies to a student who 

16 is not receiving assistance under this title; 

17 ‘‘(B) the policy provides for consistent ap18 plication of standards to all students, including 

19 full-time, part-time, undergraduate, and grad20 uate students, and all educational programs es21 tablished by the institution; 

22 ‘‘(C)(i) the policy specifies the grade point 

23 average that a student must achieve at each 

24 evaluation, or if a grade point average is not an 


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1 appropriate qualitative measure, a comparable 

2 assessment measured against a norm; and 

3 ‘‘(ii) if a student is enrolled in an edu4 cational program of more than 2 academic 

5 years, the policy specifies that at the end of the 

6 second academic year, the student must have a 

7 grade point average of at least a ‘C’ or its 

8 equivalent, or have academic standing con9 sistent with the institution’s requirements for 

10 graduation; 

11 ‘‘(D) the policy provides for measurement 

12 of the student’s progress at each evaluation; 

13 ‘‘(E) the policy describes— 

14 ‘‘(i) how a student’s grade point aver15 age and the pace at which the student pro16 gresses toward completion are affected by 

17 course incompletes, withdrawals, or repeti18 tions, or transfers of credit from other in19 stitutions, including that credit hours from 

20 another institution that are accepted to21 ward the student’s educational program 

22 are counted as both attempted and com23 pleted hours; and 

24 ‘‘(ii) how after a student reenrolls 

25 after the student’s satisfactory academic 


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1 progress was reset pursuant to paragraph 

2 (3)(B), the student may have any credits 

3 that were earned before the student was 

4 determined not to be making satisfactory 

5 academic progress counted for purposes of 

6 determining progress when the student re7 enrolls, but any attempted hours that were 

8 not earned by the student (including in9 completes, withdrawn courses, and failed 

10 courses) before the student was determined 

11 not to be making satisfactory academic 

12 progress will not negatively impact the de13 termination of whether the student made 

14 satisfactory academic progress after such 

15 reset; 

16 ‘‘(F) the policy provides that, except as 

17 provided in subparagraph (G) with respect to a 

18 student placed on financial aid warning or fi19 nancial aid probation and paragraph (3), a stu20 dent is no longer eligible to receive assistance 

21 under this title if the student has not achieved 

22 the required grade point average or who is not 

23 making progress toward completion in the stu24 dent’s educational program— 


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1 ‘‘(i) at the time of each evaluation 

2 with respect to a student who is in an edu3 cational program of 2 academic years or 

4 less in length; or 

5 ‘‘(ii) at the end of the second aca6 demic year with respect to a student who 

7 is in an educational program of more than 

8 2 academic years in length; 

9 ‘‘(G) the policy describes when students 

10 will be placed on financial aid warning or finan11 cial aid probation, in accordance with para12 graph (4), and provides that— 

13 ‘‘(i) a student on financial aid warn14 ing— 

15 ‘‘(I) shall receive assistance 

16 under this title for one payment pe17 riod despite a determination that the 

18 student is not making satisfactory 

19 academic progress; and 

20 ‘‘(II) may be assigned such sta21 tus without an appeal or other action 

22 by the student; and 

23 ‘‘(ii)(I) a student on financial aid pro24 bation may receive assistance under this 

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1 tution may require the student to fulfill 

2 specific terms and conditions, such as tak3 ing a reduced course load or enrolling in 

4 specific courses; and 

5 ‘‘(II) at the end of such one payment 

6 period, the student is required to meet the 

7 institution’s satisfactory academic progress 

8 standards, or meet the requirements of the 

9 academic plan developed by the institution 

10 and the student, in order to qualify for 

11 continued assistance under this title; 

12 ‘‘(H) if the institution permits a student to 

13 appeal a determination by the institution that 

14 the student is not making satisfactory academic 

15 progress, the policy describes— 

16 ‘‘(i) how the student may reestablish 

17 the student’s eligibility to receive assist18 ance under this title; 

19 ‘‘(ii) the basis on which the student 

20 may file an appeal, including because of 

21 the death of a relative, an injury or illness 

22 of the student, or another special cir23 cumstance; and 

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1 dent failed to make satisfactory academic 

2 progress, and what has changed in the stu3 dent’s situation that will allow the student 

4 to demonstrate satisfactory academic 

5 progress at the next evaluation; 

6 ‘‘(I) if the institution does not permit a 

7 student to appeal a determination by the insti8 tution that the student is not making satisfac9 tory academic progress, the policy describes 

10 how the student may reestablish the student’s 

11 eligibility to receive assistance under this title; 

12 ‘‘(J) the policy provides for notification to 

13 students of the results of an evaluation that im14 pacts the student’s eligibility for assistance 

15 under this title; and 

16 ‘‘(K) the policy does not impose satisfac17 tory progress limitations on need-based institu18 tional aid that are more stringent than the 

19 standard applied under this subsection without 

20 demonstrating to the Secretary the effectiveness 

21 of such limitations on improving student per22 sistence in, and completion of, postsecondary 

23 study. 

24 ‘‘(3) REGAINING ELIGIBILITY.— 


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1 ‘‘(A) STUDENTS WHO REMAIN IN

2 SCHOOL.—Whenever a student fails to meet the 

3 eligibility requirements of subsection (a)(2) as a 

4 result of the application of this subsection and, 

5 subsequent to that failure, the student has aca6 demic standing for any grading period con7 sistent with the requirements for staying on 

8 track to graduate within 150 percent of the 

9 published length of the educational program, as 

10 determined by the institution, the student shall 

11 again be eligible under subsection (a)(2) for a 

12 grant, loan, or work assistance under this title, 

13 as long as the student maintains satisfactory 

14 academic progress under paragraph (2) begin15 ning on and after the date that the student re16 gains eligibility. 

17 ‘‘(B) STUDENTS WHO LEAVE SCHOOL.— 

18 ‘‘(i) IN GENERAL.—If a student has 

19 not been enrolled in any institution of 

20 higher education for the immediately pre21 ceding 2 years, any previous failure to 

22 meet the eligibility requirements of sub23 section (a)(2) shall not be used in any de24 termination of eligibility of such student 

25 under such subsection. Such student shall, 


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1 on the date of enrollment subsequent to 

2 such 2-year period, have the student’s eli3 gibility for a grant, loan, or work assist4 ance under this title reset and be deemed 

5 as meeting the requirements described in 

6 paragraph (2). Beginning on and after 

7 such date, the student’s satisfactory aca8 demic progress shall be determined in ac9 cordance with paragraph (2)(E)(ii). 

10 ‘‘(ii) MAXIMUM NUMBER OF

11 RESETS.—A student shall be eligible for a 

12 reset of eligibility pursuant to this sub13 paragraph not more than 2 times. 

14 ‘‘(C) DUTIES OF THE SECRETARY.—The 

15 Secretary shall— 

16 ‘‘(i) send, to each student who failed 

17 to meet the eligibility requirements of sub18 section (a)(2) and who has not regained 

19 eligibility for a grant, loan, or work assist20 ance under subparagraph (A), a notice, 

21 two years after such failure, that in22 cludes— 

23 ‘‘(I) a notification that, if the 

24 student has not been enrolled in any 

25 institution of higher education for the 


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1 preceding two years and has not re2 ceived two resets of eligibility under 

3 subparagraph (B), the student may 

4 use grant, loan, or work assistance 

5 under this title for enrollment at any 

6 eligible institution, including an insti7 tution other than the institution in 

8 which the student was previously en9 rolled; 

10 ‘‘(II) a notification that, if the 

11 student has remained enrolled, or re12 sumed enrollment, at an institution of 

13 higher education, the student may be 

14 eligible for a grant, loan, or work as15 sistance under this title subject to the 

16 requirements of subparagraph (A); 

17 ‘‘(III) information on how many 

18 semesters of eligibility for a grant, 

19 loan, or work assistance under this 

20 title to which the student still has ac21 cess; and 

22 ‘‘(IV) a notification that the stu23 dent should ask any prospective eligi24 ble institution how many of the stuVerDate Sep 11 2014 05:16 Apr 06, 2023 Jkt 039200 PO 00000 Frm 00023 Fmt 6652 Sfmt 6201 E:\BILLS\H1731.IH H1731

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1 dent’s previously completed credits the 

2 student would be able to transfer; and 

3 ‘‘(ii) submit an annual report to Con4 gress on the outcomes of students who 

5 have received a reset of eligibility pursuant 

6 to this paragraph, including— 

7 ‘‘(I) the number of students who 

8 reenroll in an eligible institution after 

9 such reset, disaggregated by race or 

10 ethnicity, sex, age, socioeconomic sta11 tus, and disability status; 

12 ‘‘(II) the 250 eligible institutions 

13 with the highest numbers of enrolled 

14 students receiving grant, loan, or 

15 work assistance under this title after 

16 such a reset; 

17 ‘‘(III) the 250 eligible institu18 tions with the highest share of en19 rolled students receiving grant, loan, 

20 or work assistance under this title 

21 after such a reset; and 

22 ‘‘(IV) the average completion 

23 rate and time to completion for stu24 dents who reenroll in an eligible instiVerDate Sep 11 2014 05:16 Apr 06, 2023 Jkt 039200 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 E:\BILLS\H1731.IH H1731

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1 tution after such reset, disaggregated 

2 by institution. 

3 ‘‘(4) EVALUATION OF ACADEMIC PROGRESS.— 

4 ‘‘(A) IN GENERAL.—An institution that 

5 determines that a student is not making satis6 factory academic progress under its policy may 

7 disburse funds provided through student finan8 cial assistance programs under this title (in9 cluding work-study programs under subtitle C) 

10 to the student in accordance with subpara11 graphs (B), (C), and (D). 

12 ‘‘(B) PAYMENT PERIOD FOLLOWING NOT

13 MAKING SATISFACTORY ACADEMIC PROGRESS.— 

14 For the payment period following the payment 

15 period in which a student did not make satis16 factory academic progress, the institution shall 

17 place the student on financial aid warning and 

18 disburse funds under this title to the student. 

19 ‘‘(C) PAYMENT PERIOD FOLLOWING FI20 NANCIAL AID WARNING.—For the payment pe21 riod following a payment period during which a 

22 student was on financial aid warning, the insti23 tution may place the student on financial aid 

24 probation, and disburse funds under this title to 

25 the student if— 


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1 ‘‘(i) the institution evaluates the stu2 dent’s progress and determines that stu3 dent did not make satisfactory academic 

4 progress during the payment period the 

5 student was on financial aid warning; 

6 ‘‘(ii) the student appeals the deter7 mination; and 

8 ‘‘(iii)(I) the institution determines 

9 that the student should be able to meet the 

10 institution’s satisfactory academic progress 

11 standards by the end of the subsequent 

12 payment period; or 

13 ‘‘(II) the institution develops an aca14 demic plan for the student that, if fol15 lowed, will ensure that the student is able 

16 to meet the institution’s satisfactory aca17 demic progress standards by a specific 

18 point in time. 

19 ‘‘(D) PAYMENT PERIOD FOLLOWING FI20 NANCIAL AID PROBATION.—A student on finan21 cial aid probation for a payment period may not 

22 receive funds under this title for the subsequent 

23 payment period unless the student makes satis24 factory academic progress or the institution de25 termines that the student met the requirements 


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1 specified by the institution in the academic plan 

2 for the student developed under subparagraph 

3 (C)(iii)(II). 

4 ‘‘(E) FREQUENCY OF ACADEMIC PROGRESS

5 EVALUATION AND COMMUNICATION.— 

6 ‘‘(i) IN GENERAL.—Subject to clause 

7 (ii), for the purpose of determining wheth8 er presently enrolled students are main9 taining satisfactory progress, each institu10 tion of higher education that enrolls stu11 dents who receive any grant, loan, or work 

12 assistance under this title shall review the 

13 progress of such students at the end of 

14 each payment period. 

15 ‘‘(ii) SHORTER PAYMENT PERIODS.— 

16 For each institution described in clause (i) 

17 that has payment periods that are shorter 

18 than on the semester system basis (such as 

19 on a quarterly or trimester system basis or 

20 by clock hour program or non-term pro21 gram), such institution shall review the 

22 progress of presently enrolled students at 

23 the end of each semester or equivalent pe24 riod of 12 to 18 weeks. 


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1 ‘‘(iii) FINANCIAL AID WARNING.—At 

2 the end of each payment period (or, in the 

3 case of an institution described in clause 

4 (ii), at the end of each semester or equiva5 lent period), each institution shall send a 

6 financial aid warning to presently enrolled 

7 students that do not meet the grade point 

8 average requirement described in para9 graph (2), or its equivalent or academic 

10 standing consistent with the requirements 

11 for graduation, as determined by the insti12 tution, that informs the students of their 

13 risk of being determined to not be main14 taining satisfactory progress and therefore 

15 losing eligibility for grant, loan, or work 

16 assistance under this title and provides in17 formation on— 

18 ‘‘(I) the specific criteria of the in19 stitution’s academic requirements that 

20 the student is not meeting and the 

21 specific improvements needed to meet 

22 the requirements; and 

23 ‘‘(II) how to meet with the stu24 dent’s academic advisor to get the 

25 academic support the student needs. 


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1 ‘‘(5) DETAILING REQUIREMENTS TO STU2 DENTS.—Each institution of higher education that 

3 enrolls students who receive any grant, loan, or work 

4 assistance under this title shall detail the institu5 tion’s requirements regarding students maintaining 

6 satisfactory academic progress— 

7 ‘‘(A) to such students before the students 

8 begin classes at the institution through a de9 tailed communication that may be separate 

10 from a financial aid offer; and 

11 ‘‘(B) on the financial aid webpage of the 

12 website of the institution. 

13 ‘‘(6) CONSUMER TESTING.—The Secretary— 

14 ‘‘(A) shall conduct consumer testing to de15 velop exemplary practices and templates— 

16 ‘‘(i) to support institutions of higher 

17 education in carrying out paragraph (5); 

18 and 

19 ‘‘(ii) which shall be available as re20 sources for institutions of higher edu21 cation; and 

22 ‘‘(B) shall not require the use of such 

23 practices and templates by institutions of high24 er education.’’. 


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1 SEC. 106. FEDERAL PELL GRANTS FOR GRADUATE STU2 DENTS. 

3 Section 401 of the Higher Education Act of 1965 (20 

4 U.S.C. 1070a), as amended by title VII of division FF 

5 of the FAFSA Simplification Act (Public Law 116–260), 

6 is amended— 

7 (1) in subsection (b)(8)(A), by inserting ‘‘or as 

8 a postbaccalaureate student in accordance with sub9 section (d)(1)’’ after ‘‘as an undergraduate’’; and 

10 (2) in subsection (d)— 

11 (A) by amending paragraph (1) to read as 

12 follows: 

13 ‘‘(1) IN GENERAL.—The period during which a 

14 student may receive Federal Pell Grants shall be the 

15 period required for the completion of the first under16 graduate baccalaureate course of study being pur17 sued by that student at the institution at which the 

18 student is in attendance except that— 

19 ‘‘(A) any 1-year period during which the 

20 student is enrolled in a noncredit or remedial 

21 course of study as defined in paragraph (2) 

22 shall not be counted for the purpose of this 

23 paragraph; and 

24 ‘‘(B) the period during which a student 

25 may receive Federal Pell Grants shall also in26 clude the period required for the completion of 


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1 the first postbaccalaureate course of study in a 

2 case in which— 

3 ‘‘(i) the student received a Federal 

4 Pell Grant during the period required for 

5 the completion of the student’s first under6 graduate baccalaureate course of study for 

7 at least 1 but fewer than 18 semesters, or 

8 the equivalent of at least 1 but fewer than 

9 18 semesters, as determined under para10 graph (5); 

11 ‘‘(ii) the student would otherwise be 

12 eligible for a Federal Pell Grant, but for 

13 the completion of such baccalaureate 

14 course of study; and 

15 ‘‘(iii) the period during which the stu16 dent receives Federal Pell Grants does not 

17 exceed the student’s duration limits under 

18 paragraph (5).’’; and 

19 (B) in paragraph (2), by striking ‘‘or cer20 tificate’’ and inserting ‘‘, certificate, or first 

21 postbaccalaureate degree’’. 


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1 TITLE II—AMENDMENTS TO 

2 TERMS AND CONDITIONS OF 

3 LOANS AND REPAYMENT 

4 PLANS 

5 PART A—DIRECT LOANS 

6 SEC. 201. SUBSIDIZED LOANS FOR GRADUATE AND PROFES7 SIONAL STUDENTS. 

8 Section 455(a)(3) of the Higher Education Act of 

9 1965 (20 U.S.C. 1087e(a)(3)) is amended— 

10 (1) in subparagraph (A), in the matter pre11 ceding clause (i), by striking ‘‘subparagraph (B)’’ 

12 and inserting ‘‘subparagraphs (B) and (C)’’; and 

13 (2) by adding at the end the following: 

14 ‘‘(C) AUTHORITY TO MAKE INTEREST SUB15 SIDIZED LOANS TO GRADUATE AND PROFES16 SIONAL STUDENTS.—For any period of instruc17 tion at an institution of higher education (as 

18 defined in section 101 or section 102(a)(1)(C), 

19 except that a graduate medical school, nursing 

20 school, or a veterinary school, located outside 

21 the United States that does not meet the re22 quirements of section 101(a)(4) shall be ex23 cluded) beginning on or after July 1, 2024, a 

24 graduate or professional student shall be eligiVerDate Sep 11 2014 05:16 Apr 06, 2023 Jkt 039200 PO 00000 Frm 00032 Fmt 6652 Sfmt 6201 E:\BILLS\H1731.IH H1731

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1 ble to receive a Federal Direct Stafford loan 

2 under this part.’’. 

3 SEC. 202. REPEAL OF ORIGINATION FEES. 

4 Section 455(c)(2) of the Higher Education Act of 

5 1965 (20 U.S.C. 1087e(c)(2)) is amended— 

6 (1) by striking ‘‘and’’ at the end of subpara7 graph (D); and 

8 (2) by adding at the end the following: 

9 ‘‘(E) by substituting ‘0.0 percent’ for ‘4.0 

10 percent’ with respect to loans for which the first 

11 disbursement of principal is made on or after 

12 July 1, 2024.’’. 

13 SEC. 203. PREPAYMENT AMOUNTS. 

14 Section 455(d) of the Higher Education Act of 1965 

15 (20 U.S.C. 1087e(d)) is amended by adding at the end 

16 the following: 

17 ‘‘(6) APPLICATION OF PREPAYMENT

18 AMOUNTS.— 

19 ‘‘(A) REQUIREMENT FOR ELIGIBLE BOR20 ROWERS.— 

21 ‘‘(i) IN GENERAL.—Notwithstanding 

22 any other provision of this subsection or 

23 any other provision of law— 

24 ‘‘(I) with respect to loans made 

25 to an eligible borrower under this part 


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1 or part B, which are held by the same 

2 holder and which have different appli3 cable rates of interest, the holder of 

4 such loans shall, unless otherwise re5 quested by the borrower in writing, 

6 apply the borrower’s prepayment 

7 amount (within the meaning of sec8 tion 682.209(b) of title 34, Code of 

9 Federal Regulations, or a successor 

10 regulation) for one or more of such 

11 loans, first toward the outstanding 

12 balance of principal due on the loan 

13 with the highest applicable rate of in14 terest among such loans; and 

15 ‘‘(II) except as provided in sub16 clause (I), with respect to loans made 

17 to an eligible borrower under this part 

18 or part B, which are held by the same 

19 holder and which have the same appli20 cable rates of interest, the holder of 

21 such loans shall, unless otherwise re22 quested by the borrower in writing, 

23 apply the borrower’s prepayment 

24 amount (within the meaning of sec25 tion 682.209(b) of title 34, Code of 


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1 Federal Regulations, or a successor 

2 regulation) for one or more of such 

3 loans, first toward the outstanding 

4 balance of principal due on the loan 

5 with the highest principal balance 

6 among such loans. 

7 ‘‘(ii) ELIGIBLE BORROWER DE8 FINED.—For purposes of this paragraph, 

9 the term ‘eligible borrower’ means a bor10 rower with no outstanding balance of fees, 

11 including collection costs and authorized 

12 late charges, due on any loan made under 

13 this part or part B. 

14 ‘‘(B) REQUIREMENT FOR OTHER BOR15 ROWERS.—A prepayment amount (as described 

16 in subparagraph (A)(i)) made by a borrower 

17 who is not an eligible borrower to a holder shall 

18 be applied first toward the borrower’s out19 standing balance of fees, including collection 

20 costs and authorized late charges, due on any 

21 loan made under this part or part B held by 

22 such holder.’’. 


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1 PART B—AUTOMATIC ENROLLMENT IN INCOME2 DRIVEN REPAYMENT FOR CERTAIN BORROWERS 

3 SEC. 211. NOTIFICATION AND AUTOMATIC ENROLLMENT 

4 PROCEDURES FOR BORROWERS WHO ARE 

5 DELINQUENT ON LOANS. 

6 Section 455(d) of the Higher Education Act of 1965 

7 (20 U.S.C. 1087e(d)), as amended by this Act, is further 

8 amended by adding at the end the following: 

9 ‘‘(9) NOTIFICATION AND AUTOMATIC ENROLL10 MENT PROCEDURES FOR BORROWERS WHO ARE DE11 LINQUENT ON LOANS.— 

12 ‘‘(A) AUTHORITY TO OBTAIN INCOME IN13 FORMATION.—The Secretary shall establish and 

14 implement, with respect to any borrower de15 scribed in subparagraph (B), procedures to— 

16 ‘‘(i) use return information of the bor17 rower (and the borrower’s spouse, if appli18 cable) disclosed under section 6103(l)(13) 

19 of the Internal Revenue Code of 1986, pur20 suant to approval provided under section 

21 494, to determine the income and family 

22 size of the borrower (and the borrower’s 

23 spouse, if applicable) without further ac24 tion by the borrower; 

25 ‘‘(ii) allow the borrower (or the spouse 

26 of the borrower), at any time, to opt out 


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1 of disclosure under such section 

2 6103(l)(13) and instead provide such infor3 mation as the Secretary may require to de4 termine the income and family size of the 

5 borrower (and the borrower’s spouse, if ap6 plicable); and 

7 ‘‘(iii) provide the borrower with an op8 portunity to update the return information 

9 so disclosed before the determination of the 

10 income and family size of the borrower for 

11 purposes of this paragraph. 

12 ‘‘(B) BORROWER NOTIFICATION.—With re13 spect to each borrower of a covered loan who is 

14 at least 31 days delinquent on such loan and 

15 who has not been subject to the procedures 

16 under this paragraph for such loan in the pre17 ceding 62 days, the Secretary shall, as soon as 

18 practicable after such 31-day delinquency, pro19 vide to the borrower the following: 

20 ‘‘(i) Notification that the borrower is 

21 at least 31 days delinquent on at least 1 

22 covered loan, and a description of all delin23 quent covered loans, nondelinquent covered 

24 loans, and noncovered loans of the bor25 rower. 


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1 ‘‘(ii) A brief description of the repay2 ment plans for which the borrower is eligi3 ble and the covered loans and noncovered 

4 loans of the borrower that may be eligible 

5 for such plans, based on information avail6 able to the Secretary. 

7 ‘‘(iii) The amount of monthly pay8 ments for the covered and noncovered 

9 loans under each repayment plan identified 

10 under clause (ii), based on information 

11 available to the Secretary, including, if the 

12 income information of the borrower is 

13 available to the Secretary under subpara14 graph (A), the income, family size, tax fil15 ing status, and tax year information on 

16 which each such monthly payment is 

17 based. 

18 ‘‘(iv) Clear and simple instructions on 

19 how to select the repayment plans. 

20 ‘‘(v) An explanation that, in the case 

21 of a borrower for whom adjusted gross in22 come is unavailable— 

23 ‘‘(I) if the borrower selects to 

24 repay the covered loans of such bor25 rower pursuant to an income-driven 


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1 repayment plan that defines discre2 tionary income in such a manner that 

3 an individual not required under sec4 tion 6012(a)(1) of the Internal Rev5 enue Code of 1986 to file a return 

6 with respect to income taxes imposed 

7 by subtitle A of such Code may have 

8 a calculated monthly payment greater 

9 than $0, the borrower will be required 

10 to provide the Secretary with other 

11 documentation of income satisfactory 

12 to the Secretary, which documentation 

13 the Secretary may use to determine 

14 an appropriate repayment schedule; 

15 and 

16 ‘‘(II) if the borrower selects to 

17 repay such loans pursuant to an in18 come-driven repayment plan that is 

19 not described in subclause (I), the 

20 borrower will not be required to pro21 vide the Secretary with such other 

22 documentation of income, and the bor23 rower will have a calculated monthly 

24 payment of $0. 


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1 ‘‘(vi) An explanation that the Sec2 retary shall take the actions under sub3 paragraph (C) with respect to such bor4 rower, if— 

5 ‘‘(I) the borrower is 80 days de6 linquent on 1 or more covered loans 

7 and has not selected a new repayment 

8 plan for the covered loans of the bor9 rower; and 

10 ‘‘(II) in the case of such a bor11 rower whose existing repayment plan 

12 for the covered loans of the borrower 

13 is not an income-driven repayment 

14 plan, the monthly payments under 

15 such existing repayment plan are 

16 higher than such monthly payments 

17 would be under an income-driven re18 payment plan. 

19 ‘‘(vii) Instructions on updating the in20 formation of the borrower obtained under 

21 subparagraph (A). 

22 ‘‘(C) SECRETARY’S SELECTION OF A

23 PLAN.—With respect to each borrower de24 scribed in subparagraph (B) whose existing re25 payment plan for the covered loans of the borVerDate Sep 11 2014 05:16 Apr 06, 2023 Jkt 039200 PO 00000 Frm 00040 Fmt 6652 Sfmt 6201 E:\BILLS\H1731.IH H1731

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1 rower is described in clause (vi)(II) of subpara2 graph (B), and who has not selected a new re3 payment plan for such loans in accordance with 

4 the notice received under such subparagraph 

5 and who is at least 80 days delinquent on such 

6 a loan, the Secretary shall, as soon as prac7 ticable— 

8 ‘‘(i) in a case in which any of the bor9 rower’s covered loans are eligible for an in10 come-driven repayment plan— 

11 ‘‘(I)(aa) provide the borrower 

12 with the income-driven repayment 

13 plan that requires the lowest monthly 

14 payment amount for each covered loan 

15 of the borrower, compared to any 

16 other such plan for which the bor17 rower is eligible; or 

18 ‘‘(bb) if more than one income19 driven repayment plan would offer the 

20 borrower the same lowest monthly 

21 payment amount, provide the bor22 rower with the income-driven repay23 ment plan that has the most favorable 

24 terms for the borrower; 


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1 ‘‘(II) if the plan selected under 

2 subclause (I) is not the income-driven 

3 repayment plan that would have the 

4 lowest monthly payment amount if the 

5 borrower were eligible for such plan 

6 for the borrower’s covered loans and 

7 noncovered loans, notify the borrower 

8 of the actions, if any, the borrower 

9 may take to become eligible for such 

10 income-driven repayment plan; and 

11 ‘‘(III) authorize the borrower to 

12 change the Secretary’s selection of a 

13 plan under this clause to any plan de14 scribed in paragraph (1) for which the 

15 borrower is eligible; and 

16 ‘‘(ii) in a case in which none of the 

17 borrower’s covered loans are eligible for an 

18 income-driven repayment plan, notify the 

19 borrower of the actions, if any, the bor20 rower may take for such loans to become 

21 eligible for such a plan.’’. 


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1 SEC. 212. NOTIFICATION AND AUTOMATIC ENROLLMENT 

2 PROCEDURES FOR BORROWERS WHO ARE 

3 REHABILITATING DEFAULTED LOANS. 

4 Section 455(d) of the Higher Education Act of 1965 

5 (20 U.S.C. 1087e(d)), as amended by this Act, is further 

6 amended by adding at the end the following: 

7 ‘‘(10) NOTIFICATION AND AUTOMATIC ENROLL8 MENT PROCEDURES FOR BORROWERS WHO ARE RE9 HABILITATING DEFAULTED LOANS.— 

10 ‘‘(A) AUTHORITY TO OBTAIN INCOME IN11 FORMATION.—The Secretary shall establish and 

12 implement, with respect to any borrower who is 

13 rehabilitating a covered loan pursuant to sec14 tion 428F(a), procedures to— 

15 ‘‘(i) use return information of the bor16 rower (and the borrower’s spouse, if appli17 cable) disclosed section 6103(l)(13) of the 

18 Internal Revenue Code of 1986, pursuant 

19 to approval provided under section 494, to 

20 obtain such information as is reasonably 

21 necessary regarding the income and family 

22 size of the borrower (and the borrower’s 

23 spouse, if applicable); 

24 ‘‘(ii) allow the borrower (or the spouse 

25 of the borrower), at any time, to opt out 

26 of disclosure under such section 


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1 6103(l)(13) and instead provide such infor2 mation as the Secretary may require to ob3 tain such information; and 

4 ‘‘(iii) provide the borrower with an op5 portunity to update the return information 

6 so disclosed before the determination of in7 come and family size of the borrower (and 

8 the borrower’s spouse, if applicable) for 

9 purposes of this paragraph. 

10 ‘‘(B) BORROWER NOTIFICATION.—Not 

11 later than 30 days after a borrower makes the 

12 6th payment required on such covered loan for 

13 the loan rehabilitation described in subpara14 graph (A), the Secretary shall notify the bor15 rower of the process under subparagraph (C) 

16 with respect to such loan. 

17 ‘‘(C) SECRETARY’S SELECTION OF PLAN.— 

18 With respect to each borrower who has made 

19 the 9th payment required on such covered loan 

20 for the loan rehabilitation described in subpara21 graph (A), the Secretary shall, as soon as prac22 ticable after such payment, carry out the proce23 dures described in clauses (i) and (ii) of para24 graph (9)(C) with respect to such loan.’’. 


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1 SEC. 213. COVERED LOAN, INCOME-DRIVEN REPAYMENT 

2 PLAN, AND NON-COVERED LOAN DEFINED. 

3 Section 455(d) of the Higher Education Act of 1965 

4 (20 U.S.C. 1087e(d)), as amended by this Act, is further 

5 amended by adding at the end the following: 

6 ‘‘(11) DEFINITIONS.—In this subsection: 

7 ‘‘(A) COVERED LOAN.—The term ‘covered 

8 loan’ means— 

9 ‘‘(i) a loan made under this part; 

10 ‘‘(ii) a loan purchased under section 

11 459A; or 

12 ‘‘(iii) a loan that has been assigned to 

13 the Secretary under subsection (c)(8) or 

14 (j)(3)(B) of section 428, or subsection 

15 (a)(1)(A)(ii) or (a)(1)(G) of section 428F. 

16 ‘‘(B) INCOME-DRIVEN REPAYMENT

17 PLAN.—The term ‘income-driven repayment 

18 plan’ means a repayment plan described in sub19 paragraph (D) or (E) of paragraph (1). 

20 ‘‘(C) NONCOVERED LOAN.—The term 

21 ‘noncovered loan’ means a loan made, insured, 

22 or guaranteed under this title that is not a cov23 ered loan.’’. 


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1 SEC. 214. AUTOMATIC RECERTIFICATION OF INCOME FOR 

2 INCOME-DRIVEN REPAYMENT PLANS. 

3 (a) INCOME-CONTINGENT REPAYMENT PLANS.—Sec4 tion 455(e)(8)(A) of the Higher Education Act of 1965 

5 (20 U.S.C. 1087e(e)(8)(A)) is amended— 

6 (1) by striking ‘‘and’’ at the end of clause (ii); 

7 (2) by redesignating clause (iii) as clause (iv); 

8 (3) in clause (iv) (as so redesignated), by strik9 ing the period at the end and inserting ‘‘; and’’; and 

10 (4) by inserting after clause (ii), the following: 

11 ‘‘(iii) in the case of a borrower who 

12 has selected to repay a loan made under 

13 this part pursuant to an income contingent 

14 repayment plan that defines discretionary 

15 income in such a manner that the borrower 

16 would have a calculated monthly payment 

17 equal to $0, not require the borrower to 

18 provide the Secretary the information de19 scribed in clause (i) or (ii), and ensure that 

20 the borrower will have a calculated month21 ly payment of $0; and’’. 

22 (b) INCOME-BASED REPAYMENT PLANS.—Section 

23 493C(c)(2)(B) of the Higher Education Act of 1965 (20 

24 U.S.C. 1098e(c)(2)(B)) is amended by striking ‘‘any loan 

25 made under part D (other than an excepted PLUS loan 


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1 or excepted consolidation loan)’’ and inserting ‘‘any cov2 ered loan (as defined in section 455(d)(11))’’. 

3 SEC. 215. PROCEDURE AND REQUIREMENT FOR REQUEST4 ING TAX RETURN INFORMATION FROM THE 

5 IRS. 

6 Section 494(a) of the Higher Education Act of 1965 

7 (20 U.S.C. 1098h(a)) is amended— 

8 (1) in paragraph (2)— 

9 (A) in subparagraph (A), in the matter 

10 preceding clause (i), by striking ‘‘a loan under 

11 part D’’ and inserting ‘‘a covered loan (as de12 fined in section 455(d)(11))’’; and 

13 (B) in subparagraph (B), by striking ‘‘a 

14 loan under part D’’ and inserting ‘‘a covered 

15 loan (as defined in section 455(d)(11))’’; and 

16 (2) by adding at the end the following: 

17 ‘‘(4) LOAN DELINQUENCY AND REHABILITA18 TION.— 

19 ‘‘(A) BORROWERS DELINQUENT ON

20 LOANS.—In the case of an individual who is a 

21 borrower of a covered loan and who is at least 

22 31 days delinquent on such loan, the Secretary, 

23 with respect to such individual and any spouse 

24 of such individual, shall— 


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1 ‘‘(i) provide to such individuals the 

2 notification described in paragraph 

3 (1)(A)(i); and 

4 ‘‘(ii) require, as a condition of eligi5 bility for the notification and automatic en6 rollment procedures under section 

7 455(d)(9), that such individuals— 

8 ‘‘(I) affirmatively approve the 

9 disclosure described in paragraph 

10 (1)(A)(i) and agree that such approval 

11 shall serve as an ongoing approval of 

12 such disclosure until the date on 

13 which the individual elects to opt out 

14 of such disclosure under section 

15 455(d)(9)(A)(ii); or 

16 ‘‘(II) provide such information as 

17 the Secretary may require to carry 

18 out the procedures under section 

19 455(d)(9) with respect to such indi20 vidual. 

21 ‘‘(B) LOAN REHABILITATION.—In the case 

22 of any written or electronic application by an 

23 individual for the rehabilitation of a covered 

24 loan pursuant to section 428F(a), the SecVerDate Sep 11 2014 05:16 Apr 06, 2023 Jkt 039200 PO 00000 Frm 00048 Fmt 6652 Sfmt 6201 E:\BILLS\H1731.IH H1731

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1 retary, with respect to such individual and any 

2 spouse of such individual, shall— 

3 ‘‘(i) provide to such individuals the 

4 notification described in paragraph 

5 (1)(A)(i); and 

6 ‘‘(ii) require, as a condition of eligi7 bility for loan rehabilitation pursuant to 

8 section 428F(a), that such individuals— 

9 ‘‘(I) affirmatively approve the 

10 disclosure described in paragraph 

11 (1)(A)(i) and agree that such approval 

12 shall serve as an ongoing approval of 

13 such disclosure until the date on 

14 which the individual elects to opt out 

15 of such disclosure under section 

16 455(d)(10)(A)(ii); or 

17 ‘‘(II) provide such information as 

18 the Secretary may require to carry 

19 out the procedures under section 

20 455(d)(10) with respect to such indi21 vidual. 

22 ‘‘(C) COVERED LOAN DEFINED.—In this 

23 paragraph, the term ‘covered loan’ has the 

24 meaning given the term in section 455(d)(11).’’. 


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1 PART C—AMENDMENTS TO CERTAIN LOAN 

2 FORGIVENESS PROGRAMS 

3 SEC. 221. AMENDMENTS TO TERMS AND CONDITIONS OF 

4 PUBLIC SERVICE LOAN FORGIVENESS. 

5 (a) NUMBER OF MONTHLY PAYMENTS; REPAYMENT

6 PLANS.—Paragraph (1) of section 455(m) of the Higher 

7 Education Act of 1965 (20 U.S.C. 1087e(m)) is amend8 ed— 

9 (1) in subparagraph (A)— 

10 (A) in the matter preceding clause (i), by 

11 striking ‘‘120’’ and inserting ‘‘96’’; 

12 (B) by striking ‘‘or’’ at the end of clause 

13 (iii); 

14 (C) in clause (iv), by striking ‘‘and’’ and 

15 inserting ‘‘or’’; and 

16 (D) by adding at the end the following: 

17 ‘‘(v) in lieu of such a payment, has 

18 been in— 

19 ‘‘(I) cancer treatment deferment 

20 under section 427(a)(2)(C)(iv), 

21 428(b)(1)(M)(v), or 455(f)(3); 

22 ‘‘(II) rehabilitation training pro23 gram deferment under section 

24 427(a)(2)(C)(i)(II), 

25 428(b)(1)(M)(i)(II), or 

26 455(f)(2)(A)(ii); 


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1 ‘‘(III) military service deferment 

2 under section 428(b)(1)(M)(iii) or 

3 455(f)(2)(C); 

4 ‘‘(IV) unemployment deferment 

5 under section 427(a)(2)(C)(ii), 

6 428(b)(1)(M)(ii), 428B(d)(1)(A)(i), or 

7 455(f)(2)(B); 

8 ‘‘(V) deferment due to an eco9 nomic hardship described in section 

10 427(a)(2)(C)(iii), section 

11 428(b)(1)(M)(iv), section 

12 428B(d)(1)(A)(i), section 435(o), or 

13 section 455(f)(2)(D); 

14 ‘‘(VI) Peace Corps service 

15 deferment under section 

16 682.210(b)(2)(ii) or 682.210(k) of 

17 title 34, Code of Federal Regulations 

18 (or successor regulations), as made 

19 applicable to Direct Loan borrowers 

20 under section 685.204(j) of such title 

21 34; 

22 ‘‘(VII) has been in post-active23 duty student deferment under section 

24 493D; 


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1 ‘‘(VIII) AmeriCorps forbearance 

2 under section 428(c)(3)(A)(i)(III); 

3 ‘‘(IX) National Guard Duty for4 bearance under section 

5 682.211(h)(2)(iii) or 685.205(a)(7) of 

6 title 34, Code of Federal Regulations 

7 (or successor regulations); 

8 ‘‘(X) Department of Defense stu9 dent loan repayment program forbear10 ance under section 

11 428(c)(3)(A)(i)(IV); 

12 ‘‘(XI) Administrative forbearance 

13 or mandatory administrative forbear14 ance under section 428(c)(3)(D) or 

15 428H(e)(7); or 

16 ‘‘(XII) Student loan debt burden 

17 forbearance under section 

18 428(c)(3)(A)(i)(II); and’’; and 

19 (2) in subparagraph (B), by striking ‘‘(i) is em20 ployed’’ and all that follows through ‘‘has been’’ and 

21 inserting ‘‘has been’’. 

22 (b) AUTOMATIC CANCELLATION.—Paragraph (2) of 

23 section 455(m) of the Higher Education Act of 1965 (20 

24 U.S.C. 1087e(m)(2)) is amended by adding at the end the 

25 following: ‘‘In the case of a borrower who meets the reVerDate Sep 11 2014 05:16 Apr 06, 2023 Jkt 039200 PO 00000 Frm 00052 Fmt 6652 Sfmt 6201 E:\BILLS\H1731.IH H1731

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1 quirements under paragraph (1) for such cancellation, 

2 such cancellation shall occur without further action by the 

3 borrower.’’. 

4 (c) TREATMENT OF REFINANCED LOANS; ON-LINE

5 PORTAL; DATABASE OF PUBLIC SERVICE JOBS.—Section 

6 455(m) of such Act (20 U.S.C. 1087e(m)) is further 

7 amended— 

8 (1) by redesignating paragraphs (3) and (4) as 

9 paragraphs (6) and (7), respectively; and 

10 (2) by inserting after paragraph (2) the fol11 lowing: 

12 ‘‘(3) TREATMENT OF LOANS REFINANCED

13 UNDER SECTIONS 460A.—In the case of an eligible 

14 refinanced Federal Direct Loan under section 460A, 

15 any monthly payment pursuant to any repayment 

16 plan listed in paragraph (1)(A) (including a period 

17 of deferment or forbearance described in paragraph 

18 (1)(A)(v)) made on a loan, for which the liability has 

19 been discharged by such refinanced loan and without 

20 regard to whether such loan is an eligible Federal 

21 Direct Loan, shall be treated as a monthly payment 

22 under paragraph (1)(A) on the portion of such refi23 nanced loan that is attributable to such discharged 

24 loan. 

25 ‘‘(4) ON-LINE PORTAL.— 


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1 ‘‘(A) BORROWERS.—The Secretary shall 

2 ensure that borrowers have access to an on-line 

3 portal that provides each borrower who signs on 

4 to such portal with the following: 

5 ‘‘(i) Instructions on how to access the 

6 database under paragraph (5) so that the 

7 borrower can determine whether the bor8 rower is employed in a public service job. 

9 ‘‘(ii) An identification of the loans of 

10 the borrower that are eligible Federal Di11 rect Loans. 

12 ‘‘(iii) With respect to each such eligi13 ble Federal Direct Loan, the number of 

14 monthly payments on such loan that qual15 ify as a monthly payment under paragraph 

16 (1)(A), and the estimated number of 

17 monthly payments under paragraph (1)(A) 

18 remaining on such loan before the bor19 rower may be eligible for loan cancellation 

20 under this subsection. 

21 ‘‘(iv) With respect to each loan of the 

22 borrower that is not eligible for loan can23 cellation under this subsection, an expla24 nation of why the loan is not so eligible 

25 and instructions on how what, if anything, 


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1 the borrower may do to make the loan so 

2 eligible. 

3 ‘‘(v) Instructions for the submission of 

4 any forms associated with such loan can5 cellation, and an ability for the borrower to 

6 use the portal to electronically sign and 

7 submit such forms. 

8 ‘‘(vi) In the case of a borrower who 

9 disputes a determination of the Secretary 

10 relating to the entitlement of the borrower 

11 to loan cancellation under paragraph (2)— 

12 ‘‘(I) an ability for the borrower 

13 to file a claim with the Secretary to 

14 dispute such determination through 

15 the portal; and 

16 ‘‘(II) in the case of such a claim 

17 that has been filed, the status of such 

18 claim, for which updates shall be pro19 vided not fewer than once every 90 

20 days. 

21 ‘‘(B) EMPLOYERS.—The Secretary shall 

22 ensure that an employer of a borrower has the 

23 option to electronically sign and submit any 

24 forms associated with loan cancellation under 

25 this subsection. 


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1 ‘‘(C) INFORMATION.—The Secretary shall 

2 ensure that any information provided through 

3 the on-line portal described in this paragraph is 

4 up-to-date information. 

5 ‘‘(5) DATABASE OF PUBLIC SERVICE JOBS.— 

6 ‘‘(A) IN GENERAL.—The Secretary, in con7 sultation with the Secretary of Labor, shall es8 tablish and regularly update a database that 

9 lists public service jobs. 

10 ‘‘(B) PUBLIC AVAILABILITY.—The data11 base established under subparagraph (A) shall 

12 be made available on a publicly accessible 

13 website of the Department in an easily search14 able format.’’. 

15 (d) DEFINITIONS.—Section 455(m) of such Act is 

16 further amended in paragraph (6)(A) (as so redesignated 

17 by subsection (c))— 

18 (1) by inserting before the period at the end the 

19 following: ‘‘(including any Federal Direct Stafford 

20 Loan, Federal Direct PLUS Loan, Federal Direct 

21 Unsubsidized Stafford Loan, or Federal Direct Con22 solidation Loan refinanced under section 460A)’’; 

23 (2) by striking ‘‘The term’’ and inserting the 

24 following: 

25 ‘‘(i) IN GENERAL.—The term’’; and 


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1 (3) by adding at the end the following: 

2 ‘‘(ii) TREATMENT OF CERTAIN CON3 SOLIDATION LOAN PAYMENTS.—In the 

4 case of an eligible Federal Direct Loan 

5 that is a Federal Direct Consolidation 

6 Loan made on or after the date of enact7 ment of the LOAN Act, any monthly pay8 ment pursuant to any repayment plan list9 ed in paragraph (1)(A) (including a period 

10 of deferment or forbearance described in 

11 paragraph (1)(A)(v)) made on a loan, for 

12 which the liability has been discharged by 

13 the proceeds of such Federal Direct Con14 solidation Loan and without regard to 

15 whether the loan is an eligible Federal Di16 rect Loan, shall be treated as a monthly 

17 payment under paragraph (1)(A) on the 

18 portion of such Federal Direct Consolida19 tion Loan that is attributable to such dis20 charged loan, except that in a case of a 

21 borrower who previously received a Federal 

22 Direct Consolidation Loan, any monthly 

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1 ed as a monthly payment on a portion of 

2 the subsequent Federal Direct Consolida3 tion Loan made on or after such date of 

4 enactment.’’. 

5 (e) TREATMENT OF DOUBLE BENEFITS.—Section 

6 455(m) of such Act is further amended in paragraph (7) 

7 (as so redesignated by subsection (c)) by striking ‘‘both 

8 this subsection and section 428J, 428K, 428L, or 460’’ 

9 and inserting ‘‘both this subsection and section 428K or 

10 428L’’. 

11 SEC. 222. LOAN FORGIVENESS FOR TEACHERS. 

12 The Higher Education Act of 1965 (20 U.S.C. 1001 

13 et seq.) is further amended— 

14 (1) in section 428J(g)(2) (20 U.S.C. 1078– 

15 10(g)(2))— 

16 (A) in subparagraph (A), by inserting ‘‘or’’ 

17 after the semicolon at the end; 

18 (B) by striking subparagraph (B); and 

19 (C) by redesignating subparagraph (C) as 

20 subparagraph (B); and 

21 (2) in section 460(g)(2) (20 U.S.C. 

22 1087j(g)(2))— 

23 (A) in subparagraph (A), by inserting ‘‘or’’ 

24 after the semicolon at the end; 

25 (B) by striking subparagraph (B); and 


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1 (C) by redesignating subparagraph (C) as 

2 subparagraph (B). 

3 TITLE III—INTEREST 

4 CAPITALIZATION 

5 SEC. 301. ELIMINATION OF INTEREST CAPITALIZATION. 

6 (a) FEDERAL PLUS LOANS.—Section 428B(d)(2) of 

7 the Higher Education Act of 1965 (20 U.S.C. 1078– 

8 2(d)(2)) is amended to read as follows: 

9 ‘‘(2) NO CAPITALIZATION OF INTEREST.—Inter10 est on loans made under this section for which pay11 ments of principal are deferred pursuant to para12 graph (1) shall be paid by the borrower and shall 

13 not be capitalized.’’. 

14 (b) FEDERAL CONSOLIDATION LOANS DEFER15 RALS.—Section 428C(b)(4)(C)(ii)(III) of the Higher Edu16 cation Act of 1965 (20 U.S.C. 1078–3(b)(4)(C)(III)) is 

17 amended by striking ‘‘or capitalized,’’. 

18 (c) DEFAULT REDUCTION PROGRAM.—Section 

19 428F(a)(1)(E) of such Act of 1965 (20 U.S.C. 1078– 

20 6(a)(1)(E)) is amended to read as follows: 

21 ‘‘(E) DUTIES UPON ASSIGNMENT.—With 

22 respect to a loan assigned under subparagraph 

23 (A)(ii)— 

24 ‘‘(i) the guaranty agency shall add to 

25 the principal and interest outstanding at 


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1 the time of the assignment of such loan an 

2 amount equal to the amount described in 

3 subparagraph (D)(i)(II)(aa); 

4 ‘‘(ii) the Secretary shall pay the guar5 anty agency, for deposit in the agency’s 

6 Operating Fund established pursuant to 

7 section 422B, an amount equal to the 

8 amount added to the principal and interest 

9 outstanding at the time of the assignment 

10 in accordance with clause (i); 

11 ‘‘(iii) for a loan assigned on or after 

12 the date of enactment of the LOAN Act, 

13 the interest outstanding at the time of the 

14 assignment of such loan, and any interest 

15 accruing after such time, shall not be cap16 italized; and 

17 ‘‘(iv) beginning on the date of enact18 ment of LOAN Act, interest shall only ac19 crue on the percentage of such a loan that 

20 is equal to— 

21 ‘‘(I) the amount of the out22 standing principal on the original loan 

23 on the date it was assigned; divided 

24 by 


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1 ‘‘(II) the total amount of such 

2 assigned loan, including interest out3 standing at the time of the assign4 ment of such loan and the amount 

5 added by the guaranty agency in ac6 cordance with clause (i), on the date 

7 such loan was assigned.’’. 

8 (d) LOAN LIMITS FOR UNSUBSIDIZED STAFFORD

9 LOANS.—Section 428H(d)(5) of the Higher Education 

10 Act of 1965 (20 U.S.C. 1078–8(d)(5)) is amended by in11 serting ‘‘before the date of enactment of the LOAN Act’’ 

12 after ‘‘Interest capitalized’’. 

13 (e) UNSUBSIDIZED STAFFORD LOANS FOR MIDDLE

14 INCOME BORROWERS.—Section 428H(e)(2) of the Higher 

15 Education Act of 1965 (20 U.S.C. 1078–8(e)(2)) is 

16 amended— 

17 (1) in the header, by striking ‘‘CAPITALIZA18 TION’’ and inserting ‘‘NO CAPITALIZATION’’; 

19 (2) in subparagraph (A), in the matter before 

20 clause (i), by striking ‘‘, if agreed upon by the bor21 rower and the lender’’ and all that follows through 

22 clause (ii)(IV) and inserting ‘‘be paid by the bor23 rower and shall not be capitalized.’’; 

24 (3) by striking subparagraph (B); and 


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1 (4) by redesignating subparagraph (C) as sub2 paragraph (B). 

3 (f) INCOME CONTINGENT REPAYMENT.—Section 

4 455(e)(5) of the Higher Education Act of 1965 (20 U.S.C. 

5 1087e(e)(5)) is amended by striking the last sentence and 

6 inserting ‘‘No interest may be capitalized on such loan on 

7 or after the date of the enactment of the LOAN Act, and 

8 the Secretary shall promulgate regulations with respect to 

9 the treatment of accrued interest that is not capitalized’’. 

10 (g) DEFERMENT AND FORBEARANCE.— 

11 (1) IN GENERAL.—Section 455(f) of the Higher 

12 Education Act of 1965 (20 U.S.C. 1087e(f)) is 

13 amended— 

14 (A) in the subsection heading, by inserting 

15 at the end the following: ‘‘AND FORBEARANCE’’; 

16 (B) in subparagraph (B), by striking ‘‘cap17 italized or’’; and 

18 (C) by adding at the end the following: 

19 ‘‘(6) FORBEARANCE.—At the expiration of a 

20 period of forbearance, interest shall not be capital21 ized on any loans made under this part.’’. 

22 (2) APPLICATION OF AMENDMENT.—The 

23 amendments made by paragraph (1) shall apply to 

24 any deferment or forbearance period in effect on the 

25 date of enactment of this Act, or any deferment or 


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1 forbearance period beginning on or after such date 

2 of enactment. 

3 (h) INCOME-BASED REPAYMENT PROGRAM.—Section 

4 493C(b)(3) of the Higher Education Act of 1965 (20 

5 U.S.C. 1098e(b)(3)) is amended to read as follows: 

6 ‘‘(3) on subsidized loans, any interest due and 

7 not paid under paragraph (2) shall be paid by the 

8 Secretary for a period of not more than 3 years 

9 after the date of the borrower’s election under para10 graph (1), except that such period shall not include 

11 any period during which the borrower is in 

12 deferment due to an economic hardship described in 

13 section 435(o);’’. 

14 (i) NOTES AND INSURANCE CERTIFICATES IN COM15 BINED PAYMENT PLANS.—Section 485A(f) of the Higher 

16 Education Act of 1965 (20 U.S.C. 1092a(f)) is amended 

17 by adding at the end the following new paragraph: 

18 ‘‘(3) TREATMENT OF INTEREST.—Not with19 standing paragraphs (1) and (2), beginning on the 

20 date of enactment of the LOAN Act, interest on a 

21 loan reissued under subsection (e) shall not be cap22 italized, and interest shall only accrue on the per23 centage of such reissued loan that is equal to— 


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1 ‘‘(A) the amount of the outstanding prin2 cipal on the original loan on the date it was re3 issued; divided by 

4 ‘‘(B) the total amount of such reissued 

5 loan on the date such loan was reissued.’’. 

6 SEC. 302. ELIMINATION OF DISCLOSURE REQUIREMENTS 

7 RELATING TO CAPITALIZATION. 

8 (a) INSURANCE PROGRAM AGREEMENTS TO QUAL9 IFY LOANS FOR INTEREST SUBSIDIES.—Section 

10 428(b)(1)(Y) of the Higher Education Act of 1965 (20 

11 U.S.C. 1078(b)(1)(Y)) is amended— 

12 (1) in clause (i)(IV), by inserting ‘‘and’’ after 

13 the semicolon; 

14 (2) in clause (ii), by striking ‘‘; and’’ and in15 serting a period; and 

16 (3) by striking clause (iii). 

17 (b) FORBEARANCE.—Section 428(c)(3)(C) of such 

18 Act of 1965 (20 U.S.C. 1078(c)(3)(C)) is amended— 

19 (1) in clause (ii), by inserting ‘‘and’’ after the 

20 semicolon; and 

21 (2) by striking clauses (iii) and (iv) and insert22 ing the following: 

23 ‘‘(iii) the lender shall contact the bor24 rower not less often than once every 180 


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1 days during the period of forbearance to 

2 inform the borrower of— 

3 ‘‘(I) the amount of unpaid prin4 cipal and the amount of interest that 

5 has accrued since the last statement 

6 of such amounts provided to the bor7 rower by the lender; 

8 ‘‘(II) the fact that interest will 

9 accrue on the loan for the period of 

10 forbearance; 

11 ‘‘(III) the responsibility of the 

12 borrower to pay the interest that has 

13 accrued; and 

14 ‘‘(IV) the borrower’s option to 

15 discontinue the forbearance at any 

16 time; and’’. 

17 (c) REQUIRED DISCLOSURE BEFORE DISBURSE18 MENT.—Section 433(a) of the Higher Education Act of 

19 1965 (20 U.S.C. 1083(a)) is amended— 

20 (1) by amending paragraph (6) to read as fol21 lows: 

22 ‘‘(6) for loans made under section 428H or to 

23 a student borrower under section 428B, an expla24 nation that the borrower has the option to pay the 

25 interest that accrues on the loan while the borrower 


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1 is a student at an institution of higher education;’’; 

2 and 

3 (2) in paragraph (7)— 

4 (A) in subparagraph (A), by inserting 

5 ‘‘and’’ after the semicolon; 

6 (B) by striking subparagraph (B); and 

7 (C) by redesignating subparagraph (C) as 

8 subparagraph (B). 

9 (d) REQUIRED DISCLOSURE BEFORE REPAYMENT.— 

10 Section 433(b)(3) of the Higher Education Act of 1965 

11 (20 U.S.C. 1083(b)(3)) is amended by striking ‘‘(includ12 ing, if applicable, the estimated amount of interest to be 

13 capitalized)’’. 

14 (e) SPECIAL DISCLOSURE RULES ON PLUS LOANS

15 AND UNSUBSIDIZED LOANS.—Section 433(d) of the High16 er Education Act of 1965 (20 U.S.C. 1083(d)) is amend17 ed— 

18 (1) in the matter preceding paragraph (1)— 

19 (A) by striking ‘‘resulting from capitaliza20 tion of interest’’; and 

21 (B) by striking ‘‘borrower of—’’ and in22 serting ‘‘borrower of paying the interest as the 

23 interest accrues.’’; and 

24 (2) by striking paragraphs (1) and (2). 


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1 (f) DISCLOSURE REQUIRED PRIOR TO PERKINS RE2 PAYMENT.—Section 463A(b)(3) of the Higher Education 

3 Act of 1965 (20 U.S.C. 1087cc–1(b)(3)) is amended by 

4 striking ‘‘(including, if applicable, the estimated amount 

5 of interest to be capitalized)’’. 

6 (g) DEPARTMENTAL PUBLICATION OF DESCRIP7 TIONS OF ASSISTANCE PROGRAMS.—Section 485(d)(1) of 

8 the Higher Education Act of 1965 (20 U.S.C. 1092(d)(1)) 

9 is amended by striking ‘‘, including the increase in debt 

10 that results from capitalization of interest’’. 

11 (h) INFORMATION TO BE PROVIDED DURING EN12 TRANCE COUNSELING FOR BORROWERS.—Section 

13 485(l)(2)(C) of the Higher Education Act of 1965 (20 

14 U.S.C. 1092(l)(2)) is amended by striking ‘‘and is capital15 ized’’. 

16 TITLE IV—INTEREST RATES 

17 SEC. 401. INTEREST RATE PROVISIONS FOR NEW FEDERAL 

18 STUDENT LOANS ON OR AFTER JULY 1, 2024. 

19 Section 455(b) of the Higher Education Act of 1965 

20 (20 U.S.C. 1087e(b)) is amended— 

21 (1) in paragraph (8)— 

22 (A) in the paragraph heading, by inserting 

23 ‘‘, AND BEFORE JULY 1, 2024’’ before the period; 

24 and 


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1 (B) by inserting ‘‘and before July 1, 

2 2024,’’ after ‘‘July 1, 2013,’’ each place it ap3 pears; 

4 (2) by redesignating paragraphs (9) and (10) 

5 as paragraphs (10) and (11), respectively; and 

6 (3) by inserting after paragraph (8) the fol7 lowing new paragraph: 

8 ‘‘(9) INTEREST RATE PROVISIONS FOR NEW

9 LOANS ON OR AFTER JULY 1, 2024.— 

10 ‘‘(A) RATE FOR FDSL, FDUSL, AND PLUS

11 LOANS.—Notwithstanding the preceding para12 graphs of this subsection, for Federal Direct 

13 Stafford Loans, Federal Direct Unsubsidized 

14 Stafford Loans, and Federal Direct PLUS 

15 Loans, for which the first disbursement is made 

16 on or after July 1, 2024, the applicable rate of 

17 interest shall, for loans disbursed during any 

18 12-month period beginning on July 1 and end19 ing on June 30, be determined on the preceding 

20 June 1 and be equal to the lesser of— 

21 ‘‘(i) a rate equal to the high yield of 

22 the 10-year Treasury note auctioned at the 

23 final auction held prior to such June 1; or 

24 ‘‘(ii) 5.0 percent. 


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1 ‘‘(B) CONSOLIDATION LOANS.—Notwith2 standing the preceding paragraphs of this sub3 section, any Federal Direct Consolidation Loan 

4 for which the application is received on or after 

5 July 1, 2024, shall— 

6 ‘‘(i) bear interest at an annual rate on 

7 the unpaid principal balance of the loan 

8 that is equal to the lesser of— 

9 ‘‘(I) the weighted average of the 

10 interest rates on the loans consoli11 dated, rounded to the nearest higher 

12 one-eighth of one percent; or 

13 ‘‘(II) 5.0 percent; and 

14 ‘‘(ii) only accrue interest on the per15 centage of such Federal Direct Consolida16 tion Loan that is equal to— 

17 ‘‘(I) the amount of the sum of 

18 the unpaid principal on the loans con19 solidated; divided by 

20 ‘‘(II) the total amount of such 

21 Federal Direct Consolidation Loan. 

22 ‘‘(C) CONSULTATION.—The Secretary shall 

23 determine the applicable rate of interest under 

24 this paragraph after consultation with the Sec25 retary of the Treasury and shall publish such 


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1 rate in the Federal Register as soon as prac2 ticable after the date of determination. 

3 ‘‘(D) FIXED RATE.—The applicable rate of 

4 interest determined under this paragraph for a 

5 Federal Direct Stafford Loan, a Federal Direct 

6 Unsubsidized Stafford Loan, a Federal Direct 

7 PLUS Loan, or a Federal Direct Consolidation 

8 Loan shall be fixed for the period of the loan.’’. 

9 SEC. 402. REFINANCING FFEL AND FEDERAL DIRECT 

10 LOANS. 

11 Part D of title IV of the Higher Education Act of 

12 1965 (20 U.S.C. 1087a et seq.) is amended by adding at 

13 the end the following: 

14 ‘‘SEC. 460A. REFINANCING FFEL AND FEDERAL DIRECT 

15 LOANS. 

16 ‘‘(a) IN GENERAL.—The Secretary shall establish a 

17 program under which the Secretary, upon the receipt of 

18 an application from a qualified borrower, makes a loan 

19 under this part, in accordance with the provisions of this 

20 section, in order to permit the borrower to obtain the in21 terest rate provided under subsection (c). 

22 ‘‘(b) REFINANCING DIRECT LOANS.— 

23 ‘‘(1) FEDERAL DIRECT LOANS.—Upon applica24 tion of a qualified borrower, the Secretary shall 

25 repay a Federal Direct Stafford Loan, a Federal DiVerDate Sep 11 2014 05:16 Apr 06, 2023 Jkt 039200 PO 00000 Frm 00070 Fmt 6652 Sfmt 6201 E:\BILLS\H1731.IH H1731

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1 rect Unsubsidized Stafford Loan, a Federal Direct 

2 PLUS Loan, or a Federal Direct Consolidation 

3 Loan of the qualified borrower, for which the first 

4 disbursement was made, or the application for the 

5 consolidation loan was received, before July 1, 2024, 

6 with the proceeds of a refinanced Federal Direct 

7 Stafford Loan, a Federal Direct Unsubsidized Staf8 ford Loan, a Federal Direct PLUS Loan, or a Fed9 eral Direct Consolidation Loan, respectively, issued 

10 to the borrower in an amount equal to the sum of 

11 the unpaid principal, accrued unpaid interest, and 

12 late charges of the original loan. 

13 ‘‘(2) REFINANCING FFEL PROGRAM LOANS AS

14 REFINANCED FEDERAL DIRECT LOANS.—Upon ap15 plication of a qualified borrower for any loan that 

16 was made, insured, or guaranteed under part B and 

17 for which the first disbursement was made, or the 

18 application for the consolidation loan was received, 

19 before July 1, 2010, the Secretary shall make a loan 

20 under this part, in an amount equal to the sum of 

21 the unpaid principal, accrued unpaid interest, and 

22 late charges of the original loan to the borrower in 

23 accordance with the following: 

24 ‘‘(A) The Secretary shall pay the proceeds 

25 of such loan to the eligible lender of the loan 


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1 made, insured, or guaranteed under part B, in 

2 order to discharge the borrower from any re3 maining obligation to the lender with respect to 

4 the original loan. 

5 ‘‘(B) A loan made under this section that 

6 was originally— 

7 ‘‘(i) a loan originally made, insured, 

8 or guaranteed under section 428 shall be a 

9 Federal Direct Stafford Loan; 

10 ‘‘(ii) a loan originally made, insured, 

11 or guaranteed under section 428B shall be 

12 a Federal Direct PLUS Loan; 

13 ‘‘(iii) a loan originally made, insured, 

14 or guaranteed under section 428H shall be 

15 a Federal Direct Unsubsidized Stafford 

16 Loan; and 

17 ‘‘(iv) a loan originally made, insured, 

18 or guaranteed under section 428C shall be 

19 a Federal Direct Consolidation Loan. 

20 ‘‘(C) The interest rate for each loan made 

21 by the Secretary under this paragraph shall be 

22 the rate provided under subsection (c). 

23 ‘‘(c) INTEREST RATES.— 

24 ‘‘(1) IN GENERAL.—The interest rate for the 

25 refinanced Federal Direct Stafford Loans, Federal 


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1 Direct Unsubsidized Stafford Loans, Federal Direct 

2 PLUS Loans, and Federal Direct Consolidation 

3 Loans, shall be a rate equal to— 

4 ‘‘(A) in any case where the original loan 

5 was a loan under section 428, 428B, 428H, a 

6 Federal Direct Stafford loan, a Federal Direct 

7 Unsubsidized Stafford Loan, or a Federal Di8 rect PLUS Loan, a rate equal to the interest 

9 rate determined under section 455(b)(9)(A) for 

10 the date on which the refinanced loan is made; 

11 and 

12 ‘‘(B) in any case where the original loan 

13 was a loan under section 428C or a Federal Di14 rect Consolidation Loan, a rate calculated in ac15 cordance with paragraph (2). 

16 ‘‘(2) INTEREST RATES FOR CONSOLIDATION

17 LOANS.— 

18 ‘‘(A) METHOD OF CALCULATION.—In 

19 order to determine the interest rate for any re20 financed Federal Direct Consolidation Loan 

21 under paragraph (1)(B), the Secretary shall— 

22 ‘‘(i) determine each of the component 

23 loans that were originally consolidated in 

24 the loan under section 428C or the Federal 

25 Direct Consolidation Loan, and calculate 


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1 the proportion of the unpaid principal bal2 ance of the loan under section 428C or the 

3 Federal Direct Consolidation Loan that 

4 each component loan represents; 

5 ‘‘(ii) use the proportions determined 

6 in accordance with clause (i) and the inter7 est rate applicable for each component 

8 loan, as determined under subparagraph 

9 (B), to calculate the weighted average of 

10 the interest rates on the loans consolidated 

11 into the loan under section 428C or the 

12 Federal Direct Consolidation Loan; and 

13 ‘‘(iii) make the applicable interest rate 

14 for the refinanced Federal Direct Consoli15 dation Loan the lesser of— 

16 ‘‘(I) the weighted average cal17 culated under clause (ii); or 

18 ‘‘(II) 5.0 percent. 

19 ‘‘(B) INTEREST RATES FOR COMPONENT

20 LOANS.—The interest rates for the component 

21 loans of a loan made under section 428C or a 

22 Federal Direct Consolidation Loan shall be the 

23 following: 

24 ‘‘(i) The interest rate for any loan 

25 under section 428, 428B, 428H, Federal 


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1 Direct Stafford Loan, Federal Direct Un2 subsidized Stafford Loan, or Federal Di3 rect PLUS Loan shall be a rate equal to 

4 the lesser of— 

5 ‘‘(I) the interest rate determined 

6 under section 455(b)(9)(A) for the 

7 date on which the component loan is 

8 made; or 

9 ‘‘(II) the original interest rate of 

10 the component loan. 

11 ‘‘(ii) The interest rate for any compo12 nent loan that is a loan under section 

13 428C or a Federal Direct Consolidation 

14 Loan shall be the lesser of— 

15 ‘‘(I) the weighted average of the 

16 interest rates that would apply under 

17 this subparagraph for each loan com18 prising the component consolidation 

19 loan; or 

20 ‘‘(II) 5 percent. 

21 ‘‘(iii) The interest rate for any eligible 

22 loan that is a component of a loan made 

23 under section 428C or a Federal Direct 

24 Consolidation Loan and is not described in 

25 clause (i) or (ii) shall be the lesser of— 


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1 ‘‘(I) the interest rate on the 

2 original component loan; or 

3 ‘‘(II) 5 percent. 

4 ‘‘(3) FIXED RATE.—The applicable rate of in5 terest determined under paragraph (1) for a refi6 nanced loan under this section shall be fixed for the 

7 period of the loan. 

8 ‘‘(4) CAPITALIZED INTEREST AND FEES EX9 CLUDED.—With respect to a refinanced loan under 

10 this section, interest shall only accrue on the per11 centage of such refinanced loan that is equal to— 

12 ‘‘(A) the amount of the unpaid principal of 

13 the original loan, or in the case of a refinanced 

14 Federal Direct Consolidation Loan, the sum of 

15 the unpaid principal of all the component loans, 

16 comprising the refinanced loan; divided by 

17 ‘‘(B) the total amount of such refinanced 

18 loan. 

19 ‘‘(d) TERMS AND CONDITIONS OF LOANS.— 

20 ‘‘(1) IN GENERAL.—A loan that is refinanced 

21 under this section shall have the same terms and 

22 conditions as the original loan, except as otherwise 

23 provided in this section. 

24 ‘‘(2) NO AUTOMATIC EXTENSION OF REPAY25 MENT PERIOD.—Refinancing a loan under this secVerDate Sep 11 2014 05:16 Apr 06, 2023 Jkt 039200 PO 00000 Frm 00076 Fmt 6652 Sfmt 6201 E:\BILLS\H1731.IH H1731

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1 tion shall not result in the extension of the duration 

2 of the repayment period of the loan, and the bor3 rower shall retain the same repayment term that 

4 was in effect on the original loan. Nothing in this 

5 paragraph shall be construed to prevent a borrower 

6 from electing a different repayment plan at any time 

7 in accordance with section 455(d)(4). 

8 ‘‘(e) DEFINITION OF QUALIFIED BORROWER.—For 

9 purposes of this section, the term ‘qualified borrower’ 

10 means a borrower— 

11 ‘‘(1) of a loan under this part or part B for 

12 which the first disbursement was made, or the appli13 cation for a consolidation loan was received, before 

14 July 1, 2024; and 

15 ‘‘(2) who has one or more loans described in 

16 paragraph (1) or (2) of subsection (b) with an inter17 est rate that exceeds 5 percent. 

18 ‘‘(f) NOTIFICATION TO BORROWERS.—The Secretary, 

19 in coordination with the Director of the Bureau of Con20 sumer Financial Protection, shall undertake a campaign 

21 to alert borrowers of loans that are eligible for refinancing 

22 under this section that the borrowers are eligible to apply 

23 for such refinancing. The campaign shall include the fol24 lowing activities: 


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1 ‘‘(1) Developing consumer information mate2 rials about the availability of Federal student loan 

3 refinancing. 

4 ‘‘(2) Requiring servicers of loans under this 

5 part or part B to provide such consumer information 

6 to borrowers in a manner determined appropriate by 

7 the Secretary, in consultation with the Director of 

8 the Bureau of Consumer Financial Protection.’’. 

9 SEC. 403. REFINANCING PRIVATE STUDENT LOANS. 

10 Part D of title IV of the Higher Education Act of 

11 1965 (20 U.S.C. 1087a et seq.), as amended by section 

12 402, is further amended by adding at the end the fol13 lowing: 

14 ‘‘SEC. 460B. FEDERAL DIRECT REFINANCED PRIVATE LOAN 

15 PROGRAM. 

16 ‘‘(a) DEFINITIONS.—In this section: 

17 ‘‘(1) ELIGIBLE PRIVATE EDUCATION LOAN.— 

18 The term ‘eligible private education loan’ means a 

19 private education loan, as defined in section 140(a) 

20 of the Truth in Lending Act (15 U.S.C. 1650(a)), 

21 that— 

22 ‘‘(A) was disbursed to the borrower before 

23 July 1, 2024; and 

24 ‘‘(B) was for the borrower’s own postsec25 ondary educational expenses for an eligible proVerDate Sep 11 2014 05:16 Apr 06, 2023 Jkt 039200 PO 00000 Frm 00078 Fmt 6652 Sfmt 6201 E:\BILLS\H1731.IH H1731

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1 gram at an institution of higher education par2 ticipating in the loan program under this part, 

3 as of the date that the loan was disbursed. 

4 ‘‘(2) FEDERAL DIRECT REFINANCED PRIVATE

5 LOAN.—The term ‘Federal Direct Refinanced Pri6 vate Loan’ means a loan issued under subsection 

7 (b)(1). 

8 ‘‘(3) PRIVATE EDUCATIONAL LENDER.—The 

9 term ‘private educational lender’ has the meaning 

10 given the term in section 140(a) of the Truth in 

11 Lending Act (15 U.S.C. 1650(a)). 

12 ‘‘(4) QUALIFIED BORROWER.—The term ‘quali13 fied borrower’ means an individual who— 

14 ‘‘(A) has an eligible private education loan; 

15 ‘‘(B) has been current on payments on the 

16 eligible private education loan for the 6 months 

17 prior to the date of the qualified borrower’s ap18 plication for refinancing under this section, and 

19 is in good standing on the loan at the time of 

20 such application; 

21 ‘‘(C) is not in default on the eligible pri22 vate education loan or on any loan made, in23 sured, or guaranteed under this part or part B 

24 or E; and 


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1 ‘‘(D) meets the eligibility requirements de2 scribed in subsection (b)(2). 

3 ‘‘(b) PROGRAM AUTHORIZED.— 

4 ‘‘(1) IN GENERAL.—The Secretary, in consulta5 tion with the Secretary of the Treasury, shall carry 

6 out a program under which the Secretary, upon ap7 plication by a qualified borrower who has an eligible 

8 private education loan, shall issue such borrower a 

9 loan under this part in accordance with the fol10 lowing: 

11 ‘‘(A) The loan issued under this program 

12 shall be in an amount equal to the sum of the 

13 unpaid principal, accrued unpaid interest, and 

14 late charges of the private education loan. 

15 ‘‘(B) The Secretary shall pay the proceeds 

16 of the loan issued under this program to the 

17 private educational lender of the private edu18 cation loan, in order to discharge the qualified 

19 borrower from any remaining obligation to the 

20 lender with respect to the original loan. 

21 ‘‘(C) The Secretary shall require that the 

22 qualified borrower undergo loan counseling that 

23 provides all of the relevant information and 

24 counseling required under section 485(l)(2) be25 fore the loan is refinanced in accordance with 


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1 this section, and before the proceeds of such 

2 loan are paid to the private educational lender. 

3 ‘‘(D) The Secretary shall issue the loan as 

4 a Federal Direct Refinanced Private Loan, 

5 which shall have the same terms, conditions, 

6 and benefits as a Federal Direct Unsubsidized 

7 Stafford Loan, except as otherwise provided in 

8 this section. 

9 ‘‘(E) The interest rate for each loan made 

10 by the Secretary under this section shall be the 

11 rate provided under subsection (c). 

12 ‘‘(2) BORROWER ELIGIBILITY.—The Secretary, 

13 in consultation with the Secretary of the Treasury 

14 and the Director of the Consumer Financial Protec15 tion Bureau, shall establish eligibility require16 ments— 

17 ‘‘(A) to ensure eligibility only for borrowers 

18 in good standing; 

19 ‘‘(B) to minimize inequities between Fed20 eral Direct Refinanced Private Loans and other 

21 Federal student loans; 

22 ‘‘(C) to preclude windfall profits for pri23 vate educational lenders; and 

24 ‘‘(D) to ensure full access to the program 

25 authorized in this subsection for borrowers with 


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1 private loans who otherwise meet the criteria 

2 established in accordance with subparagraph 

3 (A). 

4 ‘‘(c) INTEREST RATE.— 

5 ‘‘(1) IN GENERAL.—The interest rate for a 

6 Federal Direct Refinanced Private Loan is a rate 

7 equal to the interest rate determined under section 

8 455(b)(9)(A) for the date on which the refinanced 

9 private loan is made. 

10 ‘‘(2) FIXED RATE.—The interest rate deter11 mined under this subsection for a Federal Direct 

12 Refinanced Private Loan shall be fixed for the pe13 riod of the loan. 

14 ‘‘(3) CAPITALIZED INTEREST AND FEES EX15 CLUDED.—With respect to a Federal Direct Refi16 nanced Private Loan under this section, interest 

17 shall only accrue on the percentage of such Refi18 nanced Private Loan that is equal to— 

19 ‘‘(A) the amount of the unpaid principal of 

20 the original loan comprising the Refinanced 

21 Private Loan on the date such original loan was 

22 refinanced; divided by 

23 ‘‘(B) the total amount of such Refinanced 

24 Private Loan. 


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1 ‘‘(d) NO INCLUSION IN AGGREGATE LIMITS.—The 

2 amount of a Federal Direct Refinanced Private Loan, or 

3 a Federal Direct Consolidated Loan to the extent such 

4 loan was used to repay a Federal Direct Refinanced Pri5 vate Loan, shall not be included in calculating a bor6 rower’s annual or aggregate loan limits under section 428 

7 or 428H. 

8 ‘‘(e) NO ELIGIBILITY FOR SERVICE-RELATED RE9 PAYMENT.—A Federal Direct Refinanced Private Loan, or 

10 any Federal Direct Consolidation Loan to the extent such 

11 loan was used to repay a Federal Direct Refinanced Pri12 vate Loan, shall not be eligible for any loan repayment 

13 or loan forgiveness program under section 428K, 428L, 

14 or 460 or for the loan cancellation repayment plan for 

15 public service employees under section 455(m). 

16 ‘‘(f) PRIVATE EDUCATIONAL LENDER REPORTING

17 REQUIREMENT.— 

18 ‘‘(1) REPORTING REQUIRED.—The Secretary, 

19 in consultation with the Secretary of the Treasury 

20 and the Director of the Bureau of Consumer Finan21 cial Protection, shall establish a requirement that, in 

22 order to allow for an assessment of the private edu23 cation loan market, private educational lenders re24 port the data described in paragraph (2) to— 

25 ‘‘(A) the Secretary; 


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1 ‘‘(B) the Secretary of the Treasury; 

2 ‘‘(C) the Director of the Consumer Finan3 cial Protection Bureau; 

4 ‘‘(D) the Committee on Education and 

5 Labor of the House of Representatives; 

6 ‘‘(E) the Committee on Financial Services 

7 of the House of Representatives; 

8 ‘‘(F) the Senate Committee on Health, 

9 Education, Labor, and Pensions; and 

10 ‘‘(G) the Senate Committee on Banking, 

11 Housing, and Urban Affairs. 

12 ‘‘(2) CONTENTS OF REPORTING.—The data 

13 that private educational lenders shall report in ac14 cordance with paragraph (1) shall include each of 

15 the following about private education loans (as de16 fined in section 140(a) of the Truth in Lending Act 

17 (15 U.S.C. 1650(a))): 

18 ‘‘(A) The total amount of private education 

19 loan debt the lender holds. 

20 ‘‘(B) The total number of private edu21 cation loan borrowers the lender serves. 

22 ‘‘(C) The average interest rate on the out23 standing private education loan debt held by the 

24 lender. 


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1 ‘‘(D) The proportion of private education 

2 loan borrowers who are in default on a loan 

3 held by the lender. 

4 ‘‘(E) The proportion of the outstanding 

5 private education loan volume held by the lend6 er that is in default. 

7 ‘‘(F) The proportions of outstanding pri8 vate education loan borrowers who are 30, 60, 

9 and 90 days delinquent. 

10 ‘‘(G) The proportions of outstanding pri11 vate education loan volume that is 30, 60, and 

12 90 days delinquent. 

13 ‘‘(g) NOTIFICATION TO BORROWERS.—The Sec14 retary, in coordination with the Secretary of the Treasury 

15 and the Director of the Consumer Financial Protection 

16 Bureau, shall undertake a campaign to alert borrowers 

17 about the availability of private student loan refinancing 

18 under this section.’’. 

Æ 


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