I 
117TH CONGRESS 
2D SESSION 
H. R. 8872 
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 
SEPTEMBER 15, 2022 
Ms. WILSON of Florida (for herself, Mr. SCOTT of Virginia, Ms. ADAMS, Mr. 
SABLAN, Ms. BONAMICI, Ms. MANNING, Ms. NORTON, Mrs. HAYES, Mr. 
TAKANO, Mr. DANNY K. DAVIS of Illinois, Mrs. MCBATH, Mr. THOMP-
SON of Mississippi, Mr. SOTO, Mr. DESAULNIER, Mr. GRIJALVA, Ms. 
BARRAGA´N, Mr. CORREA, Mr. EVANS, Mrs. CHERFILUS-MCCORMICK, Mr. 
CARBAJAL, Mr. TORRES of New York, Ms. CLARKE of New York, Mrs. 
LAWRENCE, Mr. SARBANES, Ms. LEE of California, Ms. BROWN of Ohio, 
Mr. LAWSON of Florida, Mr. CARTER of Louisiana, Mr. BOWMAN, Mr. 
CARSON, Mr. ESPAILLAT, and Mr. CASTRO of Texas) introduced the fol-
lowing bill; which was referred to the Committee on Education and 
Labor, and in addition to the Committee on the Budget, for a period to 
be subsequently determined by the Speaker, in each case for consider-
ation 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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Lowering Obstacles to Achievement Now Act’’ or the 
‘‘LOAN Act’’. 
(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; 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 re-
cipients 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. 
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. Interest rate on subsidized loans for graduate and professional stu-
dents. 
Sec. 203. Repeal of origination fees. 
Sec. 204. 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 Forgive-
ness. 
Sec. 222. Loan forgiveness for teachers. 
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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, 2023. 
Sec. 402. Refinancing FFEL and Federal Direct Loans. 
Sec. 403. Refinancing private student loans. 
TITLE I—FEDERAL PELL 
GRANTS 
SEC. 101. DOUBLING FEDERAL PELL GRANTS AND PRO-
VIDING 
ALL 
FEDERAL 
PELL 
GRANTS 
THROUGH MANDATORY FUNDING. 
(a) 
AMOUNT
OF
MINIMUM
FEDERAL
PELL 
GRANTS.—Section 401 of the Higher Education Act of 
1965 (20 U.S.C. 1070a), as amended by title VII of divi-
sion FF of the FAFSA Simplification Act (Public Law 
116–260), is amended— 
(1) in subsection (a)(2)(F), by striking ‘‘10 per-
cent’’ and inserting ‘‘5 percent’’; 
(2) in subsection (b)— 
(A) in paragraph (1)(B)(i), by striking 
‘‘paragraph (5)(A)’’ and inserting ‘‘paragraph 
(5)’’; 
(B) by striking paragraph (5) and insert-
ing the following: 
‘‘(5) MAXIMUM FEDERAL PELL GRANT.— 
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‘‘(A) AWARD YEAR 2024–2025.—For award 
year 2024–2025, the total maximum Federal 
Pell Grant award shall be $9,000. 
‘‘(B) AWARD YEAR 2025–2026.—For award 
year 2025–2026, the total maximum Federal 
Pell Grant award shall be $10,000. 
‘‘(C) AWARD YEAR 2026–2027.—For award 
year 2026–2027, the total maximum Federal 
Pell Grant award shall be $11,000. 
‘‘(D) AWARD YEAR 2027–2028.—For award 
year 2027–2028, the total maximum Federal 
Pell Grant award shall be $12,000. 
‘‘(E) AWARD YEAR 2028–2029.—For award 
year 2028–2029, the total maximum Federal 
Pell Grant award shall be $13,000. 
‘‘(F) AWARD YEAR 2029–2030 AND SUBSE-
QUENT
YEARS.—For award year 2029–2030, 
and each subsequent award year, the total max-
imum Federal Pell Grant award shall be 
$13,000— 
‘‘(i) increased by the adjustment per-
centage for the award year for which the 
amount under this subparagraph is being 
determined; and 
‘‘(ii) rounded to the nearest $50. 
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‘‘(G) DEFINITION OF ADJUSTMENT PER-
CENTAGE.—In this paragraph, the term ‘adjust-
ment percentage,’ as applied to an award year, 
is equal to the percentage increase in the Con-
sumer Price Index, as defined in section 478(f), 
for the most recent calendar year ending prior 
to the beginning of the award year.’’; 
(C) by striking paragraphs (6) and (7) and 
inserting the following: 
‘‘(6) APPROPRIATION
OF
FUNDS.—There are 
authorized to be appropriated, and there are appro-
priated, out of any money in the Treasury not other-
wise appropriated, such sums as may be necessary 
for fiscal year 2024 and each subsequent fiscal year 
to provide the total maximum Federal Pell Grant for 
which a student shall be eligible under this section 
during an award year.’’; and 
(D) by redesignating paragraphs (8) and 
(9) as paragraphs (7) and (8), respectively; 
(3) in subsection (d)(5)(B)(ii)— 
(A) in subclause (I)(bb), by striking ‘‘or’’ 
after the semicolon; 
(B) in subclause (II)(bb)(CC), by striking 
the period and inserting ‘‘; or’’; and 
(C) by adding at the end the following: 
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‘‘(III) during a period for which 
the student did not receive a loan 
under this title but for which, if the 
student had received such a loan, such 
loan would have been discharged 
under the circumstances described in 
subclause (II)(bb)(CC).’’; 
(4) by striking subsections (g) and (h); and 
(5) by redesignating subsections (i) and (j) as 
subsections (g) and (h), respectively. 
(b) REPEAL OF SCORING REQUIREMENT.— 
(1) IN GENERAL.—Section 406 of H. Con. Res. 
95 (109th Congress) is amended— 
(A) by striking subsection (b); and 
(B) by striking ‘‘(a) IN GENERAL.—Upon’’ 
and inserting the following: ‘‘Upon’’. 
(2) EFFECTIVE DATE.—The amendments made 
by paragraph (1) shall take effect beginning on July 
1, 2024. 
(c) 
STUDENT
SUPPORT
SERVICES.—Section 
402D(d)(1) of the Higher Education Act of 1965 (20 
U.S.C. 1070a–14(d)(1)) is amended by striking ‘‘the min-
imum’’ and inserting ‘‘10 percent of the maximum’’. 
(d) SCHOLARSHIP COMPONENT.—Section 404E(d) of 
the Higher Education Act of 1965 (20 U.S.C. 1070a– 
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25(d)) is amended by striking ‘‘less than the minimum’’ 
and inserting ‘‘less than 10 percent of the maximum’’. 
SEC. 102. PROVIDING INCREASED FEDERAL PELL GRANTS 
AND OTHER ASSISTANCE FOR RECIPIENTS 
OF MEANS-TESTED BENEFITS. 
(a) INCREASED AMOUNT
OF MAXIMUM FEDERAL 
PELL GRANTS FOR STUDENTS WITH NEGATIVE STU-
DENT AID INDEXES.—Section 401(b)(1) of the Higher 
Education Act of 1965 (20 U.S.C. 1070a(b)(1)), as 
amended by section 2 and section 703 of the FAFSA Sim-
plification Act (Public Law 116–260), is amended— 
(1) in subparagraph (A)— 
(A) in the matter preceding clause (i), by 
striking ‘‘A student’’ and inserting ‘‘Except in 
the case of a student with a student aid index 
of less than zero, a student’’; 
(B) by striking clause (i); and 
(C) by redesignating clauses (ii) and (iii) 
as clauses (i) and (ii), respectively; 
(2) 
by 
redesignating 
subparagraphs 
(B) 
through (E) as subparagraphs (C) through (F), re-
spectively; 
(3) by inserting after subparagraph (A) the fol-
lowing: 
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‘‘(B) A student with a student aid index of 
less than zero shall be eligible for a Federal 
Pell Grant award that exceeds the total max-
imum Federal Pell Grant by an amount equal 
to the amount by which the student’s student 
aid index is less than zero.’’; 
(4) in subparagraph (C), as redesignated by 
paragraph (2)— 
(A) in the matter preceding clause (i), by 
striking ‘‘subparagraph (A) for an academic 
year,’’ and inserting ‘‘subparagraph (A), or an 
increased Federal Pell Grant under subpara-
graph (B), for an academic year,’’; and 
(B) in clause (ii), by striking ‘‘, except that 
a student aid index of less than zero shall be 
considered to be zero for the purposes of this 
clause’’; 
(5) in subparagraph (D), as redesignated by 
paragraph (2), by striking ‘‘(A) or (B)’’ and insert-
ing ‘‘(A), (B), or (C)’’; 
(6) in subparagraph (E), as redesignated by 
paragraph (2), by inserting ‘‘or an increased Federal 
Pell Grant under subparagraph (B)’’ after ‘‘subpara-
graph (A)’’; or 
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(7) in subparagraph (F), as redesignated by 
paragraph (2), by striking ‘‘or a minimum Federal 
Pell Grant under subparagraph (C)’’ and inserting 
‘‘an increased Federal Pell Grant under subpara-
graph (B), or a minimum Federal Pell Grant under 
subparagraph (D)’’. 
(b) SPECIAL STUDENT AID INDEX RULE FOR RE-
CIPIENTS OF MEANS-TESTED BENEFITS.—Section 473 of 
the Higher Education Act of 1965 (20 U.S.C. 1087mm), 
as amended by section 702(b) of the FAFSA Simplifica-
tion Act (Public Law 116–260), is amended by adding at 
the end the following: 
‘‘(d) SPECIAL RULE FOR MEANS-TESTED BENEFIT 
RECIPIENTS.—Notwithstanding subsection (b), for an ap-
plicant (or, as applicable, an applicant and spouse, or an 
applicant’s parents) who, at any time during the previous 
24-month period, received a benefit under a means-tested 
Federal benefit program (or whose parent or spouse re-
ceived such a benefit, as applicable), the Secretary shall 
for the purposes of this title consider the student aid index 
as equal to –$1,500 for the applicant.’’. 
SEC. 103. FEDERAL AID ELIGIBILITY FOR DREAMER STU-
DENTS. 
Section 484 of the Higher Education Act of 1965 (20 
U.S.C. 1091), as amended by section 702(n) of the 
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FAFSA Simplification Act (Public Law 116–260), is 
amended— 
(1) in subsection (a)(5), by inserting ‘‘, or be a 
Dreamer student, as defined in subsection (u)’’ after 
‘‘becoming a citizen or permanent resident’’; and 
(2) by adding at the end the following: 
‘‘(u) DREAMER STUDENTS.— 
‘‘(1) IN GENERAL.—In this section, the term 
‘Dreamer student’ means an individual who— 
‘‘(A)(i) is not a citizen or national of the 
United States; and 
‘‘(ii) is inadmissible or deportable under 
the Immigration and Nationality Act (8 U.S.C. 
1101 et seq.)); and 
‘‘(B)(i) in the case of such an individual 
who was younger than 18 years of age on the 
date on which the individual initially entered 
the United States— 
‘‘(I) has earned a high school diploma, 
the recognized equivalent of such diploma 
from a secondary school, or a high school 
equivalency diploma recognized by State 
law, or is scheduled to complete the re-
quirements for such a diploma or equiva-
lent before the next academic year begins; 
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‘‘(II) is enrolled at an institution of 
higher education pursuant to subsection 
(d); 
‘‘(III) has served in the uniformed 
services (as such term is defined in section 
101 of title 10, United States Code) for 
not less than 2 years and, if discharged, 
received an honorable discharge; 
‘‘(IV) has acquired a degree, certifi-
cate, or recognized postsecondary creden-
tial from an institution of higher education 
or area career and technical education 
school (as such term is defined in section 
3 of the Carl D. Perkins Career and Tech-
nical Education Act of 2006 (20 U.S.C. 
2302)); or 
‘‘(V) has completed not less than 2 
years in a postsecondary program at an in-
stitution of higher education, or area ca-
reer and technical education school, in the 
United States and has made satisfactory 
academic progress, as defined in subsection 
(c), during such time period; or 
‘‘(ii)(I) is, or at any time was, eligible for 
a grant of deferred action pursuant to— 
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‘‘(aa) the memorandum of the De-
partment of Homeland Security entitled 
‘Exercising Prosecutorial Discretion with 
Respect to Individuals Who Came to the 
United States as Children’ issued on June 
15, 2012; or 
‘‘(bb) the memorandum of the De-
partment of Homeland Security entitled 
‘Exercising Prosecutorial Discretion with 
Respect to Individuals Who Came to the 
United States as Children and with Re-
spect to Certain Individuals Who Are the 
Parents of U.S. Citizens or Permanent 
Residents’ issued on November 20, 2014; 
or 
‘‘(II) would have been eligible for such a 
grant of deferred action if the applicable memo-
randum described in subclause (I) had been 
fully in effect since the date on which it was 
issued. 
‘‘(2) HARDSHIP
EXCEPTION.—The Secretary 
shall issue regulations that direct when the Depart-
ment shall waive the age requirement of paragraph 
(1)(B)(i) for an individual to qualify as a Dreamer 
student under such paragraph, if the individual dem-
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onstrates compelling circumstances, such as eco-
nomic hardship (as defined in section 435(o)).’’. 
SEC. 104. RESTORING THE TOTAL SEMESTERS OF FEDERAL 
PELL GRANT ELIGIBILITY. 
Section 401(d)(5)(A) of the Higher Education Act of 
1965, as added by section 703 of the FAFSA Simplifica-
tion Act (Public Law 116–260), is amended by striking 
‘‘12’’ each place the term appears and inserting ‘‘18’’. 
SEC. 105. REDUCING FINANCIAL AID PENALTIES FROM SAT-
ISFACTORY ACADEMIC PROGRESS DETER-
MINATIONS. 
Section 484(c) of the Higher Education Act of 1965 
(20 U.S.C. 1091(c)) is amended to read as follows: 
‘‘(c) SATISFACTORY PROGRESS.— 
‘‘(1) DEFINITIONS.—In this subsection: 
‘‘(A) APPEAL.—The term ‘appeal’ means a 
process by which a student who is not meeting 
the institution’s satisfactory academic progress 
standards petitions the institution for reconsid-
eration of the student’s eligibility for assistance 
under this title. 
‘‘(B) FINANCIAL
AID
PROBATION.—The 
term ‘financial aid probation’ means a status 
assigned by an institution to a student who fails 
to make satisfactory academic progress and 
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who has appealed and has had eligibility for aid 
reinstated. 
‘‘(C) FINANCIAL AID WARNING.—The term 
‘financial aid warning’ means a status assigned 
to a student who fails to make satisfactory aca-
demic progress at the end of the semester or 
equivalent period in which the student first fails 
to make such progress. 
‘‘(D) PAYMENT PERIOD.—The term ‘pay-
ment period’ means the applicable payment pe-
riod described in section 668.4 of title 34, Code 
of Federal Regulations, or any successor regula-
tion. 
‘‘(2) SATISFACTORY ACADEMIC PROGRESS POL-
ICY.—An institution shall establish a reasonable sat-
isfactory academic progress policy for determining 
whether an otherwise eligible student is making sat-
isfactory academic progress in the student’s edu-
cational program and may receive assistance under 
this title. The Secretary shall consider the institu-
tion’s policy to be reasonable if— 
‘‘(A) the policy is at least as strict as the 
policy the institution applies to a student who 
is not receiving assistance under this title; 
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‘‘(B) the policy provides for consistent ap-
plication of standards to all students, including 
full-time, part-time, undergraduate, and grad-
uate students, and all educational programs es-
tablished by the institution; 
‘‘(C)(i) the policy specifies the grade point 
average that a student must achieve at each 
evaluation, or if a grade point average is not an 
appropriate qualitative measure, a comparable 
assessment measured against a norm; and 
‘‘(ii) if a student is enrolled in an edu-
cational program of more than 2 academic 
years, the policy specifies that at the end of the 
second academic year, the student must have a 
grade point average of at least a ‘C’ or its 
equivalent, or have academic standing con-
sistent with the institution’s requirements for 
graduation; 
‘‘(D) the policy provides for measurement 
of the student’s progress at each evaluation; 
‘‘(E) the policy describes— 
‘‘(i) how a student’s grade point aver-
age and the pace at which the student pro-
gresses toward completion are affected by 
course incompletes, withdrawals, or repeti-
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tions, or transfers of credit from other in-
stitutions, including that credit hours from 
another institution that are accepted to-
ward the student’s educational program 
are counted as both attempted and com-
pleted hours; and 
‘‘(ii) how after a student reenrolls 
after the student’s satisfactory academic 
progress was reset pursuant to paragraph 
(3)(B), the student may have any credits 
that were earned before the student was 
determined not to be making satisfactory 
academic progress counted for purposes of 
determining progress when the student re-
enrolls, but any attempted hours that were 
not earned by the student (including in-
completes, withdrawn courses, and failed 
courses) before the student was determined 
not to be making satisfactory academic 
progress will not negatively impact the de-
termination of whether the student made 
satisfactory academic progress after such 
reset; 
‘‘(F) the policy provides that, except as 
provided in subparagraph (G) with respect to a 
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student placed on financial aid warning or fi-
nancial aid probation and paragraph (3), a stu-
dent is no longer eligible to receive assistance 
under this title if the student has not achieved 
the required grade point average or who is not 
making progress toward completion in the stu-
dent’s educational program— 
‘‘(i) at the time of each evaluation 
with respect to a student who is in an edu-
cational program of 2 academic years or 
less in length; or 
‘‘(ii) at the end of the second aca-
demic year with respect to a student who 
is in an educational program of more than 
2 academic years in length; 
‘‘(G) the policy describes when students 
will be placed on financial aid warning or finan-
cial aid probation, in accordance with para-
graph (4), and provides that— 
‘‘(i) a student on financial aid warn-
ing— 
‘‘(I) 
shall 
receive 
assistance 
under this title for one payment pe-
riod despite a determination that the 
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student is not making satisfactory 
academic progress; and 
‘‘(II) may be assigned such sta-
tus without an appeal or other action 
by the student; and 
‘‘(ii)(I) a student on financial aid pro-
bation may receive assistance under this 
title for one payment period and the insti-
tution may require the student to fulfill 
specific terms and conditions, such as tak-
ing a reduced course load or enrolling in 
specific courses; and 
‘‘(II) at the end of such one payment 
period, the student is required to meet the 
institution’s satisfactory academic progress 
standards, or meet the requirements of the 
academic plan developed by the institution 
and the student, in order to qualify for 
continued assistance under this title; 
‘‘(H) if the institution permits a student to 
appeal a determination by the institution that 
the student is not making satisfactory academic 
progress, the policy describes— 
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‘‘(i) how the student may reestablish 
the student’s eligibility to receive assist-
ance under this title; 
‘‘(ii) the basis on which the student 
may file an appeal, including because of 
the death of a relative, an injury or illness 
of the student, or another special cir-
cumstance; and 
‘‘(iii) information the student is re-
quired to submit regarding why the stu-
dent failed to make satisfactory academic 
progress, and what has changed in the stu-
dent’s situation that will allow the student 
to 
demonstrate 
satisfactory 
academic 
progress at the next evaluation; 
‘‘(I) if the institution does not permit a 
student to appeal a determination by the insti-
tution that the student is not making satisfac-
tory academic progress, the policy describes 
how the student may reestablish the student’s 
eligibility to receive assistance under this title; 
‘‘(J) the policy provides for notification to 
students of the results of an evaluation that im-
pacts the student’s eligibility for assistance 
under this title; and 
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‘‘(K) the policy does not impose satisfac-
tory progress limitations on need-based institu-
tional aid that are more stringent than the 
standard applied under this subsection without 
demonstrating to the Secretary the effectiveness 
of such limitations on improving student per-
sistence in, and completion of, postsecondary 
study. 
‘‘(3) REGAINING ELIGIBILITY.— 
‘‘(A) 
STUDENTS
WHO
REMAIN
IN 
SCHOOL.—Whenever a student fails to meet the 
eligibility requirements of subsection (a)(2) as a 
result of the application of this subsection and, 
subsequent to that failure, the student has aca-
demic standing for any grading period con-
sistent with the requirements for staying on 
track to graduate within 150 percent of the 
published length of the educational program, as 
determined by the institution, the student shall 
again be eligible under subsection (a)(2) for a 
grant, loan, or work assistance under this title, 
as long as the student maintains satisfactory 
academic progress under paragraph (2) begin-
ning on and after the date that the student re-
gains eligibility. 
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‘‘(B) STUDENTS WHO LEAVE SCHOOL.— 
‘‘(i) IN GENERAL.—If a student has 
not been enrolled in any institution of 
higher education for the immediately pre-
ceding 2 years, any previous failure to 
meet the eligibility requirements of sub-
section (a)(2) shall not be used in any de-
termination of eligibility of such student 
under such subsection. Such student shall, 
on the date of enrollment subsequent to 
such 2-year period, have the student’s eli-
gibility for a grant, loan, or work assist-
ance under this title reset and be deemed 
as meeting the requirements described in 
paragraph (2). Beginning on and after 
such date, the student’s satisfactory aca-
demic progress shall be determined in ac-
cordance with paragraph (2)(E)(ii). 
‘‘(ii) 
MAXIMUM
NUMBER
OF 
RESETS.—A student shall be eligible for a 
reset of eligibility pursuant to this sub-
paragraph not more than 2 times. 
‘‘(C) DUTIES OF THE SECRETARY.—The 
Secretary shall— 
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‘‘(i) send, to each student who failed 
to meet the eligibility requirements of sub-
section (a)(2) and who has not regained 
eligibility for a grant, loan, or work assist-
ance under subparagraph (A), a notice, 
two years after such failure, that in-
cludes— 
‘‘(I) a notification that, if the 
student has not been enrolled in any 
institution of higher education for the 
preceding two years and has not re-
ceived two resets of eligibility under 
subparagraph (B), the student may 
use grant, loan, or work assistance 
under this title for enrollment at any 
eligible institution, including an insti-
tution other than the institution in 
which the student was previously en-
rolled; 
‘‘(II) a notification that, if the 
student has remained enrolled, or re-
sumed enrollment, at an institution of 
higher education, the student may be 
eligible for a grant, loan, or work as-
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sistance under this title subject to the 
requirements of subparagraph (A); 
‘‘(III) information on how many 
semesters of eligibility for a grant, 
loan, or work assistance under this 
title to which the student still has ac-
cess; and 
‘‘(IV) a notification that the stu-
dent should ask any prospective eligi-
ble institution how many of the stu-
dent’s previously completed credits the 
student would be able to transfer; and 
‘‘(ii) submit an annual report to Con-
gress on the outcomes of students who 
have received a reset of eligibility pursuant 
to this paragraph, including— 
‘‘(I) the number of students who 
reenroll in an eligible institution after 
such reset, disaggregated by race or 
ethnicity, sex, age, socioeconomic sta-
tus, and disability status; 
‘‘(II) the 250 eligible institutions 
with the highest numbers of enrolled 
students receiving grant, loan, or 
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work assistance under this title after 
such a reset; 
‘‘(III) the 250 eligible institu-
tions with the highest share of en-
rolled students receiving grant, loan, 
or work assistance under this title 
after such a reset; and 
‘‘(IV) the average completion 
rate and time to completion for stu-
dents who reenroll in an eligible insti-
tution after such reset, disaggregated 
by institution. 
‘‘(4) EVALUATION OF ACADEMIC PROGRESS.— 
‘‘(A) IN
GENERAL.—An institution that 
determines that a student is not making satis-
factory academic progress under its policy may 
disburse funds provided through student finan-
cial assistance programs under this title (in-
cluding work-study programs under subtitle C) 
to the student in accordance with subpara-
graphs (B), (C), and (D). 
‘‘(B) PAYMENT PERIOD FOLLOWING NOT 
MAKING SATISFACTORY ACADEMIC PROGRESS.— 
For the payment period following the payment 
period in which a student did not make satis-
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factory academic progress, the institution shall 
place the student on financial aid warning and 
disburse funds under this title to the student. 
‘‘(C) PAYMENT
PERIOD
FOLLOWING
FI-
NANCIAL AID WARNING.—For the payment pe-
riod following a payment period during which a 
student was on financial aid warning, the insti-
tution may place the student on financial aid 
probation, and disburse funds under this title to 
the student if— 
‘‘(i) the institution evaluates the stu-
dent’s progress and determines that stu-
dent did not make satisfactory academic 
progress during the payment period the 
student was on financial aid warning; 
‘‘(ii) the student appeals the deter-
mination; and 
‘‘(iii)(I) the institution determines 
that the student should be able to meet the 
institution’s satisfactory academic progress 
standards by the end of the subsequent 
payment period; or 
‘‘(II) the institution develops an aca-
demic plan for the student that, if fol-
lowed, will ensure that the student is able 
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to meet the institution’s satisfactory aca-
demic progress standards by a specific 
point in time. 
‘‘(D) PAYMENT
PERIOD
FOLLOWING
FI-
NANCIAL AID PROBATION.—A student on finan-
cial aid probation for a payment period may not 
receive funds under this title for the subsequent 
payment period unless the student makes satis-
factory academic progress or the institution de-
termines that the student met the requirements 
specified by the institution in the academic plan 
for the student developed under subparagraph 
(C)(iii)(II). 
‘‘(E) FREQUENCY OF ACADEMIC PROGRESS 
EVALUATION AND COMMUNICATION.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii), for the purpose of determining wheth-
er presently enrolled students are main-
taining satisfactory progress, each institu-
tion of higher education that enrolls stu-
dents who receive any grant, loan, or work 
assistance under this title shall review the 
progress of such students at the end of 
each payment period. 
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‘‘(ii) SHORTER PAYMENT PERIODS.— 
For each institution described in clause (i) 
that has payment periods that are shorter 
than on the semester system basis (such as 
on a quarterly or trimester system basis or 
by clock hour program or non-term pro-
gram), such institution shall review the 
progress of presently enrolled students at 
the end of each semester or equivalent pe-
riod of 12 to 18 weeks. 
‘‘(iii) FINANCIAL
AID
WARNING.—At 
the end of each payment period (or, in the 
case of an institution described in clause 
(ii), at the end of each semester or equiva-
lent period), each institution shall send a 
financial aid warning to presently enrolled 
students that do not meet the grade point 
average requirement described in para-
graph (2), or its equivalent or academic 
standing consistent with the requirements 
for graduation, as determined by the insti-
tution, that informs the students of their 
risk of being determined to not be main-
taining satisfactory progress and therefore 
losing eligibility for grant, loan, or work 
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assistance under this title and provides in-
formation on— 
‘‘(I) the specific criteria of the in-
stitution’s academic requirements that 
the student is not meeting and the 
specific improvements needed to meet 
the requirements; and 
‘‘(II) how to meet with the stu-
dent’s academic advisor to get the 
academic support the student needs. 
‘‘(5) DETAILING
REQUIREMENTS
TO
STU-
DENTS.—Each institution of higher education that 
enrolls students who receive any grant, loan, or work 
assistance under this title shall detail the institu-
tion’s requirements regarding students maintaining 
satisfactory academic progress— 
‘‘(A) to such students before the students 
begin classes at the institution through a de-
tailed communication that may be separate 
from a financial aid offer; and 
‘‘(B) on the financial aid webpage of the 
website of the institution. 
‘‘(6) CONSUMER TESTING.—The Secretary— 
‘‘(A) shall conduct consumer testing to de-
velop exemplary practices and templates— 
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‘‘(i) to support institutions of higher 
education in carrying out paragraph (5); 
and 
‘‘(ii) which shall be available as re-
sources for institutions of higher edu-
cation; and 
‘‘(B) shall not require the use of such 
practices and templates by institutions of high-
er education.’’. 
SEC. 106. FEDERAL PELL GRANTS FOR GRADUATE STU-
DENTS. 
Section 401 of the Higher Education Act of 1965 (20 
U.S.C. 1070a), as amended by title VII of division FF 
of the FAFSA Simplification Act (Public Law 116–260), 
is amended— 
(1) in subsection (b)(8)(A), by inserting ‘‘or as 
a postbaccalaureate student in accordance with sub-
section (d)(1)’’ after ‘‘as an undergraduate’’; and 
(2) in subsection (d)— 
(A) by amending paragraph (1) to read as 
follows: 
‘‘(1) IN GENERAL.—The period during which a 
student may receive Federal Pell Grants shall be the 
period required for the completion of the first under-
graduate baccalaureate course of study being pur-
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sued by that student at the institution at which the 
student is in attendance except that— 
‘‘(A) any 1-year period during which the 
student is enrolled in a noncredit or remedial 
course of study as defined in paragraph (2) 
shall not be counted for the purpose of this 
paragraph; and 
‘‘(B) the period during which a student 
may receive Federal Pell Grants shall also in-
clude the period required for the completion of 
the first postbaccalaureate course of study in a 
case in which— 
‘‘(i) the student received a Federal 
Pell Grant during the period required for 
the completion of the student’s first under-
graduate baccalaureate course of study for 
at least 1 but fewer than 18 semesters, or 
the equivalent of at least 1 but fewer than 
18 semesters, as determined under para-
graph (5); 
‘‘(ii) the student would otherwise be 
eligible for a Federal Pell Grant, but for 
the completion of such baccalaureate 
course of study; and 
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‘‘(iii) the period during which the stu-
dent receives Federal Pell Grants does not 
exceed the student’s duration limits under 
paragraph (5).’’; and 
(B) in paragraph (2), by striking ‘‘or cer-
tificate’’ and inserting ‘‘, certificate, or first 
postbaccalaureate degree’’. 
TITLE 
II—AMENDMENTS 
TO 
TERMS AND CONDITIONS OF 
LOANS 
AND 
REPAYMENT 
PLANS 
PART A—DIRECT LOANS 
SEC. 201. SUBSIDIZED LOANS FOR GRADUATE AND PROFES-
SIONAL STUDENTS. 
Section 455(a)(3) of the Higher Education Act of 
1965 (20 U.S.C. 1087e(a)(3)) is amended— 
(1) in subparagraph (A), in the matter pre-
ceding clause (i), by striking ‘‘subparagraph (B)’’ 
and inserting ‘‘subparagraphs (B) and (C)’’; and 
(2) by adding at the end the following: 
‘‘(C) AUTHORITY TO MAKE INTEREST SUB-
SIDIZED
LOANS
TO
GRADUATE
AND
PROFES-
SIONAL STUDENTS.—For any period of instruc-
tion at an institution of higher education (as 
defined in section 101 or section 102(a)(1)(C), 
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except that a graduate medical school, nursing 
school, or a veterinary school, located outside 
the United States that does not meet the re-
quirements of section 101(a)(4) shall be ex-
cluded) beginning on or after July 1, 2023, a 
graduate or professional student shall be eligi-
ble to receive a Federal Direct Stafford loan 
under this part.’’. 
SEC. 202. INTEREST RATE ON SUBSIDIZED LOANS FOR 
GRADUATE AND PROFESSIONAL STUDENTS. 
Section 455(b)(8)(B) of the Higher Education Act of 
1965 (20 U.S.C. 1087e(b)(8)(B)) is amended— 
(1) in the heading for subparagraph (B), by 
striking ‘‘FDUSL’’ and inserting ‘‘FDSL AND FDUSL’’; 
and 
(2) by inserting ‘‘and Federal Direct Stafford 
Loans’’ after ‘‘Federal Direct Unsubsidized Stafford 
Loans’’. 
SEC. 203. REPEAL OF ORIGINATION FEES. 
Section 455(c)(2) of the Higher Education Act of 
1965 (20 U.S.C. 1087e(c)(2)) is amended— 
(1) by striking ‘‘and’’ at the end of subpara-
graph (D); and 
(2) by adding at the end the following: 
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‘‘(E) by substituting ‘0.0 percent’ for ‘4.0 
percent’ with respect to loans for which the first 
disbursement of principal is made on or after 
July 1, 2023.’’. 
SEC. 204. PREPAYMENT AMOUNTS. 
Section 455(d) of the Higher Education Act of 1965 
(20 U.S.C. 1087e(d)) is amended by adding at the end 
the following: 
‘‘(6) 
APPLICATION
OF
PREPAYMENT 
AMOUNTS.— 
‘‘(A) REQUIREMENT FOR ELIGIBLE BOR-
ROWERS.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
any other provision of this subsection or 
any other provision of law— 
‘‘(I) with respect to loans made 
to an eligible borrower under this part 
or part B, which are held by the same 
holder and which have different appli-
cable rates of interest, the holder of 
such loans shall, unless otherwise re-
quested by the borrower in writing, 
apply 
the 
borrower’s 
prepayment 
amount (within the meaning of sec-
tion 682.209(b) of title 34, Code of 
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Federal Regulations, or a successor 
regulation) for one or more of such 
loans, first toward the outstanding 
balance of principal due on the loan 
with the highest applicable rate of in-
terest among such loans; and 
‘‘(II) except as provided in sub-
clause (I), with respect to loans made 
to an eligible borrower under this part 
or part B, which are held by the same 
holder and which have the same appli-
cable rates of interest, the holder of 
such loans shall, unless otherwise re-
quested by the borrower in writing, 
apply 
the 
borrower’s 
prepayment 
amount (within the meaning of sec-
tion 682.209(b) of title 34, Code of 
Federal Regulations, or a successor 
regulation) for one or more of such 
loans, first toward the outstanding 
balance of principal due on the loan 
with the highest principal balance 
among such loans. 
‘‘(ii) 
ELIGIBLE
BORROWER
DE-
FINED.—For purposes of this paragraph, 
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the term ‘eligible borrower’ means a bor-
rower with no outstanding balance of fees, 
including collection costs and authorized 
late charges, due on any loan made under 
this part or part B. 
‘‘(B) REQUIREMENT
FOR
OTHER
BOR-
ROWERS.—A prepayment amount (as described 
in subparagraph (A)(i)) made by a borrower 
who is not an eligible borrower to a holder shall 
be applied first toward the borrower’s out-
standing balance of fees, including collection 
costs and authorized late charges, due on any 
loan made under this part or part B held by 
such holder.’’. 
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. 
Section 455(d) of the Higher Education Act of 1965 
(20 U.S.C. 1087e(d)), as amended by this Act, is further 
amended by adding at the end the following: 
‘‘(9) NOTIFICATION AND AUTOMATIC ENROLL-
MENT PROCEDURES FOR BORROWERS WHO ARE DE-
LINQUENT ON LOANS.— 
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‘‘(A) AUTHORITY TO OBTAIN INCOME IN-
FORMATION.—The Secretary shall establish and 
implement, with respect to any borrower de-
scribed in subparagraph (B), procedures to— 
‘‘(i) use return information of the bor-
rower (and the borrower’s spouse, if appli-
cable) disclosed under section 6103(l)(13) 
of the Internal Revenue Code of 1986, pur-
suant to approval provided under section 
494, to determine the income and family 
size of the borrower (and the borrower’s 
spouse, if applicable) without further ac-
tion by the borrower; 
‘‘(ii) allow the borrower (or the spouse 
of the borrower), at any time, to opt out 
of 
disclosure 
under 
such 
section 
6103(l)(13) and instead provide such infor-
mation as the Secretary may require to de-
termine the income and family size of the 
borrower (and the borrower’s spouse, if ap-
plicable); and 
‘‘(iii) provide the borrower with an op-
portunity to update the return information 
so disclosed before the determination of the 
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income and family size of the borrower for 
purposes of this paragraph. 
‘‘(B) BORROWER NOTIFICATION.—With re-
spect to each borrower of a covered loan who is 
at least 31 days delinquent on such loan and 
who has not been subject to the procedures 
under this paragraph for such loan in the pre-
ceding 62 days, the Secretary shall, as soon as 
practicable after such 31-day delinquency, pro-
vide to the borrower the following: 
‘‘(i) Notification that the borrower is 
at least 31 days delinquent on at least 1 
covered loan, and a description of all delin-
quent covered loans, nondelinquent covered 
loans, and noncovered loans of the bor-
rower. 
‘‘(ii) A brief description of the repay-
ment plans for which the borrower is eligi-
ble and the covered loans and noncovered 
loans of the borrower that may be eligible 
for such plans, based on information avail-
able to the Secretary. 
‘‘(iii) The amount of monthly pay-
ments for the covered and noncovered 
loans under each repayment plan identified 
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under clause (ii), based on information 
available to the Secretary, including, if the 
income information of the borrower is 
available to the Secretary under subpara-
graph (A), the income, family size, tax fil-
ing status, and tax year information on 
which each such monthly payment is 
based. 
‘‘(iv) Clear and simple instructions on 
how to select the repayment plans. 
‘‘(v) An explanation that, in the case 
of a borrower for whom adjusted gross in-
come is unavailable— 
‘‘(I) if the borrower selects to 
repay the covered loans of such bor-
rower pursuant to an income-driven 
repayment plan that defines discre-
tionary income in such a manner that 
an individual not required under sec-
tion 6012(a)(1) of the Internal Rev-
enue Code of 1986 to file a return 
with respect to income taxes imposed 
by subtitle A of such Code may have 
a calculated monthly payment greater 
than $0, the borrower will be required 
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to provide the Secretary with other 
documentation of income satisfactory 
to the Secretary, which documentation 
the Secretary may use to determine 
an appropriate repayment schedule; 
and 
‘‘(II) if the borrower selects to 
repay such loans pursuant to an in-
come-driven repayment plan that is 
not described in subclause (I), the 
borrower will not be required to pro-
vide the Secretary with such other 
documentation of income, and the bor-
rower will have a calculated monthly 
payment of $0. 
‘‘(vi) An explanation that the Sec-
retary shall take the actions under sub-
paragraph (C) with respect to such bor-
rower, if— 
‘‘(I) the borrower is 80 days de-
linquent on 1 or more covered loans 
and has not selected a new repayment 
plan for the covered loans of the bor-
rower; and 
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‘‘(II) in the case of such a bor-
rower whose existing repayment plan 
for the covered loans of the borrower 
is not an income-driven repayment 
plan, the monthly payments under 
such existing repayment plan are 
higher than such monthly payments 
would be under an income-driven re-
payment plan. 
‘‘(vii) Instructions on updating the in-
formation of the borrower obtained under 
subparagraph (A). 
‘‘(C) 
SECRETARY’S
SELECTION
OF
A 
PLAN.—With respect to each borrower de-
scribed in subparagraph (B) whose existing re-
payment plan for the covered loans of the bor-
rower is described in clause (vi)(II) of subpara-
graph (B), and who has not selected a new re-
payment plan for such loans in accordance with 
the notice received under such subparagraph 
and who is at least 80 days delinquent on such 
a loan, the Secretary shall, as soon as prac-
ticable— 
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‘‘(i) in a case in which any of the bor-
rower’s covered loans are eligible for an in-
come-driven repayment plan— 
‘‘(I)(aa) provide the borrower 
with the income-driven repayment 
plan that requires the lowest monthly 
payment amount for each covered loan 
of the borrower, compared to any 
other such plan for which the bor-
rower is eligible; or 
‘‘(bb) if more than one income- 
driven repayment plan would offer the 
borrower the same lowest monthly 
payment amount, provide the bor-
rower with the income-driven repay-
ment plan that has the most favorable 
terms for the borrower; 
‘‘(II) if the plan selected under 
subclause (I) is not the income-driven 
repayment plan that would have the 
lowest monthly payment amount if the 
borrower were eligible for such plan 
for the borrower’s covered loans and 
noncovered loans, notify the borrower 
of the actions, if any, the borrower 
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may take to become eligible for such 
income-driven repayment plan; and 
‘‘(III) authorize the borrower to 
change the Secretary’s selection of a 
plan under this clause to any plan de-
scribed in paragraph (1) for which the 
borrower is eligible; and 
‘‘(ii) in a case in which none of the 
borrower’s covered loans are eligible for an 
income-driven repayment plan, notify the 
borrower of the actions, if any, the bor-
rower may take for such loans to become 
eligible for such a plan.’’. 
SEC. 212. NOTIFICATION AND AUTOMATIC ENROLLMENT 
PROCEDURES FOR BORROWERS WHO ARE 
REHABILITATING DEFAULTED LOANS. 
Section 455(d) of the Higher Education Act of 1965 
(20 U.S.C. 1087e(d)), as amended by this Act, is further 
amended by adding at the end the following: 
‘‘(10) NOTIFICATION AND AUTOMATIC ENROLL-
MENT PROCEDURES FOR BORROWERS WHO ARE RE-
HABILITATING DEFAULTED LOANS.— 
‘‘(A) AUTHORITY TO OBTAIN INCOME IN-
FORMATION.—The Secretary shall establish and 
implement, with respect to any borrower who is 
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rehabilitating a covered loan pursuant to sec-
tion 428F(a), procedures to— 
‘‘(i) use return information of the bor-
rower (and the borrower’s spouse, if appli-
cable) disclosed section 6103(l)(13) of the 
Internal Revenue Code of 1986, pursuant 
to approval provided under section 494, to 
obtain such information as is reasonably 
necessary regarding the income and family 
size of the borrower (and the borrower’s 
spouse, if applicable); 
‘‘(ii) allow the borrower (or the spouse 
of the borrower), at any time, to opt out 
of 
disclosure 
under 
such 
section 
6103(l)(13) and instead provide such infor-
mation as the Secretary may require to ob-
tain such information; and 
‘‘(iii) provide the borrower with an op-
portunity to update the return information 
so disclosed before the determination of in-
come and family size of the borrower (and 
the borrower’s spouse, if applicable) for 
purposes of this paragraph. 
‘‘(B) 
BORROWER
NOTIFICATION.—Not 
later than 30 days after a borrower makes the 
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6th payment required on such covered loan for 
the loan rehabilitation described in subpara-
graph (A), the Secretary shall notify the bor-
rower of the process under subparagraph (C) 
with respect to such loan. 
‘‘(C) SECRETARY’S SELECTION OF PLAN.— 
With respect to each borrower who has made 
the 9th payment required on such covered loan 
for the loan rehabilitation described in subpara-
graph (A), the Secretary shall, as soon as prac-
ticable after such payment, carry out the proce-
dures described in clauses (i) and (ii) of para-
graph (9)(C) with respect to such loan.’’. 
SEC. 213. COVERED LOAN, INCOME-DRIVEN REPAYMENT 
PLAN, AND NON-COVERED LOAN DEFINED. 
Section 455(d) of the Higher Education Act of 1965 
(20 U.S.C. 1087e(d)), as amended by this Act, is further 
amended by adding at the end the following: 
‘‘(11) DEFINITIONS.—In this subsection: 
‘‘(A) COVERED LOAN.—The term ‘covered 
loan’ means— 
‘‘(i) a loan made under this part; 
‘‘(ii) a loan purchased under section 
459A; or 
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‘‘(iii) a loan that has been assigned to 
the Secretary under subsection (c)(8) or 
(j)(3)(B) of section 428, or subsection 
(a)(1)(A)(ii) or (a)(1)(G) of section 428F. 
‘‘(B) 
INCOME-DRIVEN
REPAYMENT 
PLAN.—The term ‘income-driven repayment 
plan’ means a repayment plan described in sub-
paragraph (D) or (E) of paragraph (1). 
‘‘(C) 
NONCOVERED
LOAN.—The 
term 
‘noncovered loan’ means a loan made, insured, 
or guaranteed under this title that is not a cov-
ered loan.’’. 
SEC. 214. AUTOMATIC RECERTIFICATION OF INCOME FOR 
INCOME-DRIVEN REPAYMENT PLANS. 
(a) INCOME-CONTINGENT REPAYMENT PLANS.—Sec-
tion 455(e)(8)(A) of the Higher Education Act of 1965 
(20 U.S.C. 1087e(e)(8)(A)) is amended— 
(1) by striking ‘‘and’’ at the end of clause (ii); 
(2) by redesignating clause (iii) as clause (iv); 
(3) in clause (iv) (as so redesignated), by strik-
ing the period at the end and inserting ‘‘; and’’; and 
(4) by inserting after clause (ii), the following: 
‘‘(iii) in the case of a borrower who 
has selected to repay a loan made under 
this part pursuant to an income contingent 
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repayment plan that defines discretionary 
income in such a manner that the borrower 
would have a calculated monthly payment 
equal to $0, not require the borrower to 
provide the Secretary the information de-
scribed in clause (i) or (ii), and ensure that 
the borrower will have a calculated month-
ly payment of $0; and’’. 
(b) INCOME-BASED REPAYMENT PLANS.—Section 
493C(c)(2)(B) of the Higher Education Act of 1965 (20 
U.S.C. 1098e(c)(2)(B)) is amended by striking ‘‘any loan 
made under part D (other than an excepted PLUS loan 
or excepted consolidation loan)’’ and inserting ‘‘any cov-
ered loan (as defined in section 455(d)(11))’’. 
SEC. 215. PROCEDURE AND REQUIREMENT FOR REQUEST-
ING TAX RETURN INFORMATION FROM THE 
IRS. 
Section 494(a) of the Higher Education Act of 1965 
(20 U.S.C. 1098h(a)) is amended— 
(1) in paragraph (2)— 
(A) in subparagraph (A), in the matter 
preceding clause (i), by striking ‘‘a loan under 
part D’’ and inserting ‘‘a covered loan (as de-
fined in section 455(d)(11))’’; and 
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(B) in subparagraph (B), by striking ‘‘a 
loan under part D’’ and inserting ‘‘a covered 
loan (as defined in section 455(d)(11))’’; and 
(2) by adding at the end the following: 
‘‘(4) LOAN
DELINQUENCY
AND
REHABILITA-
TION.— 
‘‘(A) 
BORROWERS
DELINQUENT
ON 
LOANS.—In the case of an individual who is a 
borrower of a covered loan and who is at least 
31 days delinquent on such loan, the Secretary, 
with respect to such individual and any spouse 
of such individual, shall— 
‘‘(i) provide to such individuals the 
notification 
described 
in 
paragraph 
(1)(A)(i); and 
‘‘(ii) require, as a condition of eligi-
bility for the notification and automatic en-
rollment 
procedures 
under 
section 
455(d)(9), that such individuals— 
‘‘(I) affirmatively approve the 
disclosure described in paragraph 
(1)(A)(i) and agree that such approval 
shall serve as an ongoing approval of 
such disclosure until the date on 
which the individual elects to opt out 
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of such disclosure under section 
455(d)(9)(A)(ii); or 
‘‘(II) provide such information as 
the Secretary may require to carry 
out the procedures under section 
455(d)(9) with respect to such indi-
vidual. 
‘‘(B) LOAN REHABILITATION.—In the case 
of any written or electronic application by an 
individual for the rehabilitation of a covered 
loan pursuant to section 428F(a), the Sec-
retary, with respect to such individual and any 
spouse of such individual, shall— 
‘‘(i) provide to such individuals the 
notification 
described 
in 
paragraph 
(1)(A)(i); and 
‘‘(ii) require, as a condition of eligi-
bility for loan rehabilitation pursuant to 
section 428F(a), that such individuals— 
‘‘(I) affirmatively approve the 
disclosure described in paragraph 
(1)(A)(i) and agree that such approval 
shall serve as an ongoing approval of 
such disclosure until the date on 
which the individual elects to opt out 
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of such disclosure under section 
455(d)(10)(A)(ii); or 
‘‘(II) provide such information as 
the Secretary may require to carry 
out the procedures under section 
455(d)(10) with respect to such indi-
vidual. 
‘‘(C) COVERED
LOAN
DEFINED.—In this 
paragraph, the term ‘covered loan’ has the 
meaning given the term in section 455(d)(11).’’. 
PART C—AMENDMENTS TO CERTAIN LOAN 
FORGIVENESS PROGRAMS 
SEC. 221. AMENDMENTS TO TERMS AND CONDITIONS OF 
PUBLIC SERVICE LOAN FORGIVENESS. 
(a) NUMBER OF MONTHLY PAYMENTS; REPAYMENT 
PLANS.—Paragraph (1) of section 455(m) of the Higher 
Education Act of 1965 (20 U.S.C. 1087e(m)) is amend-
ed— 
(1) in subparagraph (A)— 
(A) in the matter preceding clause (i), by 
striking ‘‘120’’ and inserting ‘‘96’’; 
(B) by striking ‘‘or’’ at the end of clause 
(iii); 
(C) in clause (iv), by striking ‘‘and’’ and 
inserting ‘‘or’’; and 
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(D) by adding at the end the following: 
‘‘(v) in lieu of such a payment, has 
been in— 
‘‘(I) cancer treatment deferment 
under 
section 
427(a)(2)(C)(iv), 
428(b)(1)(M)(v), or 455(f)(3); 
‘‘(II) rehabilitation training pro-
gram 
deferment 
under 
section 
427(a)(2)(C)(i)(II), 
428(b)(1)(M)(i)(II), 
or 
455(f)(2)(A)(ii); 
‘‘(III) military service deferment 
under section 428(b)(1)(M)(iii) or 
455(f)(2)(C); 
‘‘(IV) unemployment deferment 
under 
section 
427(a)(2)(C)(ii), 
428(b)(1)(M)(ii), 428B(d)(1)(A)(i), or 
455(f)(2)(B); 
‘‘(V) deferment due to an eco-
nomic hardship described in section 
427(a)(2)(C)(iii), 
section 
428(b)(1)(M)(iv), 
section 
428B(d)(1)(A)(i), section 435(o), or 
section 455(f)(2)(D); 
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‘‘(VI) 
Peace 
Corps 
service 
deferment 
under 
section 
682.210(b)(2)(ii) or 682.210(k) of 
title 34, Code of Federal Regulations 
(or successor regulations), as made 
applicable to Direct Loan borrowers 
under section 685.204(j) of such title 
34; 
‘‘(VII) has been in post-active- 
duty student deferment under section 
493D; 
‘‘(VIII) AmeriCorps forbearance 
under section 428(c)(3)(A)(i)(III); 
‘‘(IX) National Guard Duty for-
bearance 
under 
section 
682.211(h)(2)(iii) or 685.205(a)(7) of 
title 34, Code of Federal Regulations 
(or successor regulations); 
‘‘(X) Department of Defense stu-
dent loan repayment program forbear-
ance 
under 
section 
428(c)(3)(A)(i)(IV); 
‘‘(XI) Administrative forbearance 
or mandatory administrative forbear-
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ance under section 428(c)(3)(D) or 
428H(e)(7); or 
‘‘(XII) Student loan debt burden 
forbearance 
under 
section 
428(c)(3)(A)(i)(II); and’’; and 
(2) in subparagraph (B), by striking ‘‘(i) is em-
ployed’’ and all that follows through ‘‘has been’’ and 
inserting ‘‘has been’’. 
(b) AUTOMATIC CANCELLATION.—Paragraph (2) of 
section 455(m) of the Higher Education Act of 1965 (20 
U.S.C. 1087e(m)(2)) is amended by adding at the end the 
following: ‘‘In the case of a borrower who meets the re-
quirements under paragraph (1) for such cancellation, 
such cancellation shall occur without further action by the 
borrower.’’. 
(c) TREATMENT OF REFINANCED LOANS; ON-LINE 
PORTAL; DATABASE OF PUBLIC SERVICE JOBS.—Section 
455(m) of such Act (20 U.S.C. 1087e(m)) is further 
amended— 
(1) by redesignating paragraphs (3) and (4) as 
paragraphs (6) and (7), respectively; and 
(2) by inserting after paragraph (2) the fol-
lowing: 
‘‘(3) TREATMENT
OF
LOANS
REFINANCED 
UNDER SECTIONS 460A.—In the case of an eligible 
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refinanced Federal Direct Loan under section 460A, 
any monthly payment pursuant to any repayment 
plan listed in paragraph (1)(A) (including a period 
of deferment or forbearance described in paragraph 
(1)(A)(v)) made on a loan, for which the liability has 
been discharged by such refinanced loan and without 
regard to whether such loan is an eligible Federal 
Direct Loan, shall be treated as a monthly payment 
under paragraph (1)(A) on the portion of such refi-
nanced loan that is attributable to such discharged 
loan. 
‘‘(4) ON-LINE PORTAL.— 
‘‘(A) BORROWERS.—The Secretary shall 
ensure that borrowers have access to an on-line 
portal that provides each borrower who signs on 
to such portal with the following: 
‘‘(i) Instructions on how to access the 
database under paragraph (5) so that the 
borrower can determine whether the bor-
rower is employed in a public service job. 
‘‘(ii) An identification of the loans of 
the borrower that are eligible Federal Di-
rect Loans. 
‘‘(iii) With respect to each such eligi-
ble Federal Direct Loan, the number of 
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monthly payments on such loan that qual-
ify as a monthly payment under paragraph 
(1)(A), and the estimated number of 
monthly payments under paragraph (1)(A) 
remaining on such loan before the bor-
rower may be eligible for loan cancellation 
under this subsection. 
‘‘(iv) With respect to each loan of the 
borrower that is not eligible for loan can-
cellation under this subsection, an expla-
nation of why the loan is not so eligible 
and instructions on how what, if anything, 
the borrower may do to make the loan so 
eligible. 
‘‘(v) Instructions for the submission of 
any forms associated with such loan can-
cellation, and an ability for the borrower to 
use the portal to electronically sign and 
submit such forms. 
‘‘(vi) In the case of a borrower who 
disputes a determination of the Secretary 
relating to the entitlement of the borrower 
to loan cancellation under paragraph (2)— 
‘‘(I) an ability for the borrower 
to file a claim with the Secretary to 
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dispute such determination through 
the portal; and 
‘‘(II) in the case of such a claim 
that has been filed, the status of such 
claim, for which updates shall be pro-
vided not fewer than once every 90 
days. 
‘‘(B) EMPLOYERS.—The Secretary shall 
ensure that an employer of a borrower has the 
option to electronically sign and submit any 
forms associated with loan cancellation under 
this subsection. 
‘‘(C) INFORMATION.—The Secretary shall 
ensure that any information provided through 
the on-line portal described in this paragraph is 
up-to-date information. 
‘‘(5) DATABASE OF PUBLIC SERVICE JOBS.— 
‘‘(A) IN GENERAL.—The Secretary, in con-
sultation with the Secretary of Labor, shall es-
tablish and regularly update a database that 
lists public service jobs. 
‘‘(B) PUBLIC
AVAILABILITY.—The data-
base established under subparagraph (A) shall 
be made available on a publicly accessible 
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website of the Department in an easily search-
able format.’’. 
(d) DEFINITIONS.—Section 455(m) of such Act is 
further amended in paragraph (6)(A) (as so redesignated 
by subsection (c))— 
(1) by inserting before the period at the end the 
following: ‘‘(including any Federal Direct Stafford 
Loan, Federal Direct PLUS Loan, Federal Direct 
Unsubsidized Stafford Loan, or Federal Direct Con-
solidation Loan refinanced under section 460A)’’; 
(2) by striking ‘‘The term’’ and inserting the 
following: 
‘‘(i) IN GENERAL.—The term’’; and 
(3) by adding at the end the following: 
‘‘(ii) TREATMENT OF CERTAIN CON-
SOLIDATION
LOAN
PAYMENTS.—In the 
case of an eligible Federal Direct Loan 
that is a Federal Direct Consolidation 
Loan made on or after the date of enact-
ment of the LOAN Act, any monthly pay-
ment pursuant to any repayment plan list-
ed in paragraph (1)(A) (including a period 
of deferment or forbearance described in 
paragraph (1)(A)(v)) made on a loan, for 
which the liability has been discharged by 
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graph (1) shall be paid by the borrower and shall 
not be capitalized.’’. 
(b) FEDERAL
CONSOLIDATION
LOANS
DEFER-
RALS.—Section 428C(b)(4)(C)(ii)(III) of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1078–3(b)(4)(C)(III)) is 
amended by striking ‘‘or capitalized,’’. 
(c) 
DEFAULT
REDUCTION
PROGRAM.—Section 
428F(a)(1)(E) of such Act of 1965 (20 U.S.C. 1078– 
6(a)(1)(E)) is amended to read as follows: 
‘‘(E) DUTIES
UPON
ASSIGNMENT.—With 
respect to a loan assigned under subparagraph 
(A)(ii)— 
‘‘(i) the guaranty agency shall add to 
the principal and interest outstanding at 
the time of the assignment of such loan an 
amount equal to the amount described in 
subparagraph (D)(i)(II)(aa); 
‘‘(ii) the Secretary shall pay the guar-
anty agency, for deposit in the agency’s 
Operating Fund established pursuant to 
section 422B, an amount equal to the 
amount added to the principal and interest 
outstanding at the time of the assignment 
in accordance with clause (i); 
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‘‘(iii) for a loan assigned on or after 
the date of enactment of the LOAN Act, 
the interest outstanding at the time of the 
assignment of such loan, and any interest 
accruing after such time, shall not be cap-
italized; and 
‘‘(iv) beginning on the date of enact-
ment of LOAN Act, interest shall only ac-
crue on the percentage of such a loan that 
is equal to— 
‘‘(I) the amount of the out-
standing principal on the original loan 
on the date it was assigned; divided 
by 
‘‘(II) the total amount of such 
assigned loan, including interest out-
standing at the time of the assign-
ment of such loan and the amount 
added by the guaranty agency in ac-
cordance with clause (i), on the date 
such loan was assigned.’’. 
(d) LOAN LIMITS
FOR UNSUBSIDIZED STAFFORD 
LOANS.—Section 428H(d)(5) of the Higher Education 
Act of 1965 (20 U.S.C. 1078–8(d)(5)) is amended by in-
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serting ‘‘before the date of enactment of the LOAN Act’’ 
after ‘‘Interest capitalized’’. 
(e) UNSUBSIDIZED STAFFORD LOANS FOR MIDDLE 
INCOME BORROWERS.—Section 428H(e)(2) of the Higher 
Education Act of 1965 (20 U.S.C. 1078–8(e)(2)) is 
amended— 
(1) in the header, by striking ‘‘CAPITALIZA-
TION’’ and inserting ‘‘NO CAPITALIZATION’’; 
(2) in subparagraph (A), in the matter before 
clause (i), by striking ‘‘, if agreed upon by the bor-
rower and the lender’’ and all that follows through 
clause (ii)(IV) and inserting ‘‘be paid by the bor-
rower and shall not be capitalized.’’; 
(3) by striking subparagraph (B); and 
(4) by redesignating subparagraph (C) as sub-
paragraph (B). 
(f) INCOME
CONTINGENT
REPAYMENT.—Section 
455(e)(5) of the Higher Education Act of 1965 (20 U.S.C. 
1087e(e)(5)) is amended by striking the last sentence and 
inserting ‘‘No interest may be capitalized on such loan on 
or after the date of the enactment of the LOAN Act, and 
the Secretary shall promulgate regulations with respect to 
the treatment of accrued interest that is not capitalized’’. 
(g) DEFERMENT AND FORBEARANCE.— 
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(1) IN GENERAL.—Section 455(f) of the Higher 
Education Act of 1965 (20 U.S.C. 1087e(f)) is 
amended— 
(A) in the subsection heading, by inserting 
at the end the following: ‘‘AND FORBEARANCE’’; 
(B) in subparagraph (B), by striking ‘‘cap-
italized or’’; and 
(C) by adding at the end the following: 
‘‘(6) FORBEARANCE.—At the expiration of a 
period of forbearance, interest shall not be capital-
ized on any loans made under this part.’’. 
(2) 
APPLICATION
OF
AMENDMENT.—The 
amendments made by paragraph (1) shall apply to 
any deferment or forbearance period in effect on the 
date of enactment of this Act, or any deferment or 
forbearance period beginning on or after such date 
of enactment. 
(h) INCOME-BASED REPAYMENT PROGRAM.—Section 
493C(b)(3) of the Higher Education Act of 1965 (20 
U.S.C. 1098e(b)(3)) is amended to read as follows: 
‘‘(3) on subsidized loans, any interest due and 
not paid under paragraph (2) shall be paid by the 
Secretary for a period of not more than 3 years 
after the date of the borrower’s election under para-
graph (1), except that such period shall not include 
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any period during which the borrower is in 
deferment due to an economic hardship described in 
section 435(o);’’. 
(i) NOTES AND INSURANCE CERTIFICATES IN COM-
BINED PAYMENT PLANS.—Section 485A(f) of the Higher 
Education Act of 1965 (20 U.S.C. 1092a(f)) is amended 
by adding at the end the following new paragraph: 
‘‘(3) TREATMENT
OF
INTEREST.—Not with-
standing paragraphs (1) and (2), beginning on the 
date of enactment of the LOAN Act, interest on a 
loan reissued under subsection (e) shall not be cap-
italized, and interest shall only accrue on the per-
centage of such reissued loan that is equal to— 
‘‘(A) the amount of the outstanding prin-
cipal on the original loan on the date it was re-
issued; divided by 
‘‘(B) the total amount of such reissued 
loan on the date such loan was reissued.’’. 
SEC. 302. ELIMINATION OF DISCLOSURE REQUIREMENTS 
RELATING TO CAPITALIZATION. 
(a) INSURANCE PROGRAM AGREEMENTS TO QUAL-
IFY
LOANS
FOR
INTEREST
SUBSIDIES.—Section 
428(b)(1)(Y) of the Higher Education Act of 1965 (20 
U.S.C. 1078(b)(1)(Y)) is amended— 
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(1) in clause (i)(IV), by inserting ‘‘and’’ after 
the semicolon; 
(2) in clause (ii), by striking ‘‘; and’’ and in-
serting a period; and 
(3) by striking clause (iii). 
(b) FORBEARANCE.—Section 428(c)(3)(C) of such 
Act of 1965 (20 U.S.C. 1078(c)(3)(C)) is amended— 
(1) in clause (ii), by inserting ‘‘and’’ after the 
semicolon; and 
(2) by striking clauses (iii) and (iv) and insert-
ing the following: 
‘‘(iii) the lender shall contact the bor-
rower not less often than once every 180 
days during the period of forbearance to 
inform the borrower of— 
‘‘(I) the amount of unpaid prin-
cipal and the amount of interest that 
has accrued since the last statement 
of such amounts provided to the bor-
rower by the lender; 
‘‘(II) the fact that interest will 
accrue on the loan for the period of 
forbearance; 
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(20 U.S.C. 1083(b)(3)) is amended by striking ‘‘(includ-
ing, if applicable, the estimated amount of interest to be 
capitalized)’’. 
(e) SPECIAL DISCLOSURE RULES ON PLUS LOANS 
AND UNSUBSIDIZED LOANS.—Section 433(d) of the High-
er Education Act of 1965 (20 U.S.C. 1083(d)) is amend-
ed— 
(1) in the matter preceding paragraph (1)— 
(A) by striking ‘‘resulting from capitaliza-
tion of interest’’; and 
(B) by striking ‘‘borrower of—’’ and in-
serting ‘‘borrower of paying the interest as the 
interest accrues.’’; and 
(2) by striking paragraphs (1) and (2). 
(f) DISCLOSURE REQUIRED PRIOR TO PERKINS RE-
PAYMENT.—Section 463A(b)(3) of the Higher Education 
Act of 1965 (20 U.S.C. 1087cc–1(b)(3)) is amended by 
striking ‘‘(including, if applicable, the estimated amount 
of interest to be capitalized)’’. 
(g) DEPARTMENTAL
PUBLICATION
OF
DESCRIP-
TIONS OF ASSISTANCE PROGRAMS.—Section 485(d)(1) of 
the Higher Education Act of 1965 (20 U.S.C. 1092(d)(1)) 
is amended by striking ‘‘, including the increase in debt 
that results from capitalization of interest’’. 
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(h) INFORMATION TO BE PROVIDED DURING EN-
TRANCE
COUNSELING
FOR
BORROWERS.—Section 
485(l)(2)(C) of the Higher Education Act of 1965 (20 
U.S.C. 1092(l)(2)) is amended by striking ‘‘and is capital-
ized’’. 
TITLE IV—INTEREST RATES 
SEC. 401. INTEREST RATE PROVISIONS FOR NEW FEDERAL 
STUDENT LOANS ON OR AFTER JULY 1, 2023. 
Section 455(b) of the Higher Education Act of 1965 
(20 U.S.C. 1087e(b)) is amended— 
(1) in paragraph (8)— 
(A) in the paragraph heading, by inserting 
‘‘AND BEFORE JULY 1, 2023’’; and 
(B) by inserting ‘‘and before July 1, 
2023,’’ after ‘‘July 1, 2013,’’ each place it ap-
pears; 
(2) by redesignating paragraphs (9) and (10) 
as paragraphs (10) and (11), respectively; and 
(3) by inserting after paragraph (8) the fol-
lowing new paragraph: 
‘‘(9) INTEREST
RATE
PROVISIONS
FOR
NEW 
LOANS ON OR AFTER JULY 1, 2023.— 
‘‘(A) RATE FOR FDSL, FDUSL, AND PLUS 
LOANS.—Notwithstanding the preceding para-
graphs of this subsection, for Federal Direct 
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Stafford Loans, Federal Direct Unsubsidized 
Stafford Loans, and Federal Direct PLUS 
Loans, for which the first disbursement is made 
on or after July 1, 2023, the applicable rate of 
interest shall, for loans disbursed during any 
12-month period beginning on July 1 and end-
ing on June 30, be determined on the preceding 
June 1 and be equal to the lesser of— 
‘‘(i) a rate equal to the high yield of 
the 10-year Treasury note auctioned at the 
final auction held prior to such June 1; or 
‘‘(ii) 5.0 percent. 
‘‘(B) CONSOLIDATION
LOANS.—Notwith-
standing the preceding paragraphs of this sub-
section, any Federal Direct Consolidation Loan 
for which the application is received on or after 
July 1, 2023, shall— 
‘‘(i) bear interest at an annual rate on 
the unpaid principal balance of the loan 
that is equal to the lesser of— 
‘‘(I) the weighted average of the 
interest rates on the loans consoli-
dated, rounded to the nearest higher 
one-eighth of one percent; or 
‘‘(II) 5.0 percent; and 
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‘‘(ii) only accrue interest on the per-
centage of such Federal Direct Consolida-
tion Loan that is equal to— 
‘‘(I) the amount of the sum of 
the unpaid principal on the loans con-
solidated; divided by 
‘‘(II) the total amount of such 
Federal Direct Consolidation Loan. 
‘‘(C) CONSULTATION.—The Secretary shall 
determine the applicable rate of interest under 
this paragraph after consultation with the Sec-
retary of the Treasury and shall publish such 
rate in the Federal Register as soon as prac-
ticable after the date of determination. 
‘‘(D) FIXED RATE.—The applicable rate of 
interest determined under this paragraph for a 
Federal Direct Stafford Loan, a Federal Direct 
Unsubsidized Stafford Loan, a Federal Direct 
PLUS Loan, or a Federal Direct Consolidation 
Loan shall be fixed for the period of the loan.’’. 
SEC. 402. REFINANCING FFEL AND FEDERAL DIRECT 
LOANS. 
Part D of title IV of the Higher Education Act of 
1965 (20 U.S.C. 1087a et seq.) is amended by adding at 
the end the following: 
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‘‘SEC. 460A. REFINANCING FFEL AND FEDERAL DIRECT 
LOANS. 
‘‘(a) IN GENERAL.—The Secretary shall establish a 
program under which the Secretary, upon the receipt of 
an application from a qualified borrower, makes a loan 
under this part, in accordance with the provisions of this 
section, in order to permit the borrower to obtain the in-
terest rate provided under subsection (c). 
‘‘(b) REFINANCING DIRECT LOANS.— 
‘‘(1) FEDERAL DIRECT LOANS.—Upon applica-
tion of a qualified borrower, the Secretary shall 
repay a Federal Direct Stafford Loan, a Federal Di-
rect Unsubsidized Stafford Loan, a Federal Direct 
PLUS Loan, or a Federal Direct Consolidation 
Loan of the qualified borrower, for which the first 
disbursement was made, or the application for the 
consolidation loan was received, before July 1, 2023, 
with the proceeds of a refinanced Federal Direct 
Stafford Loan, a Federal Direct Unsubsidized Staf-
ford Loan, a Federal Direct PLUS Loan, or a Fed-
eral Direct Consolidation Loan, respectively, issued 
to the borrower in an amount equal to the sum of 
the unpaid principal, accrued unpaid interest, and 
late charges of the original loan. 
‘‘(2) REFINANCING FFEL PROGRAM LOANS AS 
REFINANCED FEDERAL DIRECT LOANS.—Upon ap-
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plication of a qualified borrower for any loan that 
was made, insured, or guaranteed under part B and 
for which the first disbursement was made, or the 
application for the consolidation loan was received, 
before July 1, 2010, the Secretary shall make a loan 
under this part, in an amount equal to the sum of 
the unpaid principal, accrued unpaid interest, and 
late charges of the original loan to the borrower in 
accordance with the following: 
‘‘(A) The Secretary shall pay the proceeds 
of such loan to the eligible lender of the loan 
made, insured, or guaranteed under part B, in 
order to discharge the borrower from any re-
maining obligation to the lender with respect to 
the original loan. 
‘‘(B) A loan made under this section that 
was originally— 
‘‘(i) a loan originally made, insured, 
or guaranteed under section 428 shall be a 
Federal Direct Stafford Loan; 
‘‘(ii) a loan originally made, insured, 
or guaranteed under section 428B shall be 
a Federal Direct PLUS Loan; 
‘‘(iii) a loan originally made, insured, 
or guaranteed under section 428H shall be 
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a Federal Direct Unsubsidized Stafford 
Loan; and 
‘‘(iv) a loan originally made, insured, 
or guaranteed under section 428C shall be 
a Federal Direct Consolidation Loan. 
‘‘(C) The interest rate for each loan made 
by the Secretary under this paragraph shall be 
the rate provided under subsection (c). 
‘‘(c) INTEREST RATES.— 
‘‘(1) IN GENERAL.—The interest rate for the 
refinanced Federal Direct Stafford Loans, Federal 
Direct Unsubsidized Stafford Loans, Federal Direct 
PLUS Loans, and Federal Direct Consolidation 
Loans, shall be a rate equal to— 
‘‘(A) in any case where the original loan 
was a loan under section 428, 428B, 428H, a 
Federal Direct Stafford loan, a Federal Direct 
Unsubsidized Stafford Loan, or a Federal Di-
rect PLUS Loan, a rate equal to the interest 
rate determined under section 455(b)(9)(A) for 
the date on which the refinanced loan is made; 
and 
‘‘(B) in any case where the original loan 
was a loan under section 428C or a Federal Di-
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‘‘(iii) make the applicable interest rate 
for the refinanced Federal Direct Consoli-
dation Loan the lesser of— 
‘‘(I) the weighted average cal-
culated under clause (ii); or 
‘‘(II) 5.0 percent. 
‘‘(B) INTEREST
RATES
FOR
COMPONENT 
LOANS.—The interest rates for the component 
loans of a loan made under section 428C or a 
Federal Direct Consolidation Loan shall be the 
following: 
‘‘(i) The interest rate for any loan 
under section 428, 428B, 428H, Federal 
Direct Stafford Loan, Federal Direct Un-
subsidized Stafford Loan, or Federal Di-
rect PLUS Loan shall be a rate equal to 
the lesser of— 
‘‘(I) the interest rate determined 
under section 455(b)(9)(A) for the 
date on which the component loan is 
made; or 
‘‘(II) the original interest rate of 
the component loan. 
‘‘(ii) The interest rate for any compo-
nent loan that is a loan under section 
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‘‘(A) the amount of the unpaid principal of 
the original loan, or in the case of a refinanced 
Federal Direct Consolidation Loan, the sum of 
the unpaid principal of all the component loans, 
comprising the refinanced loan; divided by 
‘‘(B) the total amount of such refinanced 
loan. 
‘‘(d) TERMS AND CONDITIONS OF LOANS.— 
‘‘(1) IN GENERAL.—A loan that is refinanced 
under this section shall have the same terms and 
conditions as the original loan, except as otherwise 
provided in this section. 
‘‘(2) NO
AUTOMATIC
EXTENSION
OF
REPAY-
MENT PERIOD.—Refinancing a loan under this sec-
tion shall not result in the extension of the duration 
of the repayment period of the loan, and the bor-
rower shall retain the same repayment term that 
was in effect on the original loan. Nothing in this 
paragraph shall be construed to prevent a borrower 
from electing a different repayment plan at any time 
in accordance with section 455(d)(4). 
‘‘(e) DEFINITION OF QUALIFIED BORROWER.—For 
purposes of this section, the term ‘qualified borrower’ 
means a borrower— 
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‘‘(1) of a loan under this part or part B for 
which the first disbursement was made, or the appli-
cation for a consolidation loan was received, before 
July 1, 2023; and 
‘‘(2) who has one or more loans described in 
paragraph (1) or (2) of subsection (b) with an inter-
est rate that exceeds 5 percent. 
‘‘(f) NOTIFICATION TO BORROWERS.—The Secretary, 
in coordination with the Director of the Bureau of Con-
sumer Financial Protection, shall undertake a campaign 
to alert borrowers of loans that are eligible for refinancing 
under this section that the borrowers are eligible to apply 
for such refinancing. The campaign shall include the fol-
lowing activities: 
‘‘(1) Developing consumer information mate-
rials about the availability of Federal student loan 
refinancing. 
‘‘(2) Requiring servicers of loans under this 
part or part B to provide such consumer information 
to borrowers in a manner determined appropriate by 
the Secretary, in consultation with the Director of 
the Bureau of Consumer Financial Protection.’’. 
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SEC. 403. REFINANCING PRIVATE STUDENT LOANS. 
Part D of title IV of the Higher Education Act of 
1965 (20 U.S.C. 1087a et seq.) is amended by adding at 
the end the following: 
‘‘SEC. 460B. FEDERAL DIRECT REFINANCED PRIVATE LOAN 
PROGRAM. 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) ELIGIBLE PRIVATE EDUCATION LOAN.— 
The term ‘eligible private education loan’ means a 
private education loan, as defined in section 140(a) 
of the Truth in Lending Act (15 U.S.C. 1650(a)), 
that— 
‘‘(A) was disbursed to the borrower before 
July 1, 2023; and 
‘‘(B) was for the borrower’s own postsec-
ondary educational expenses for an eligible pro-
gram at an institution of higher education par-
ticipating in the loan program under this part, 
as of the date that the loan was disbursed. 
‘‘(2) FEDERAL DIRECT REFINANCED PRIVATE 
LOAN.—The term ‘Federal Direct Refinanced Pri-
vate Loan’ means a loan issued under subsection 
(b)(1). 
‘‘(3) PRIVATE
EDUCATIONAL
LENDER.—The 
term ‘private educational lender’ has the meaning 
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given the term in section 140(a) of the Truth in 
Lending Act (15 U.S.C. 1650(a)). 
‘‘(4) QUALIFIED BORROWER.—The term ‘quali-
fied borrower’ means an individual who— 
‘‘(A) has an eligible private education loan; 
‘‘(B) has been current on payments on the 
eligible private education loan for the 6 months 
prior to the date of the qualified borrower’s ap-
plication for refinancing under this section, and 
is in good standing on the loan at the time of 
such application; 
‘‘(C) is not in default on the eligible pri-
vate education loan or on any loan made, in-
sured, or guaranteed under this part or part B 
or E; and 
‘‘(D) meets the eligibility requirements de-
scribed in subsection (b)(2). 
‘‘(b) PROGRAM AUTHORIZED.— 
‘‘(1) IN GENERAL.—The Secretary, in consulta-
tion with the Secretary of the Treasury, shall carry 
out a program under which the Secretary, upon ap-
plication by a qualified borrower who has an eligible 
private education loan, shall issue such borrower a 
loan under this part in accordance with the fol-
lowing: 
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‘‘(A) The loan issued under this program 
shall be in an amount equal to the sum of the 
unpaid principal, accrued unpaid interest, and 
late charges of the private education loan. 
‘‘(B) The Secretary shall pay the proceeds 
of the loan issued under this program to the 
private educational lender of the private edu-
cation loan, in order to discharge the qualified 
borrower from any remaining obligation to the 
lender with respect to the original loan. 
‘‘(C) The Secretary shall require that the 
qualified borrower undergo loan counseling that 
provides all of the relevant information and 
counseling required under section 485(l)(2) be-
fore the loan is refinanced in accordance with 
this section, and before the proceeds of such 
loan are paid to the private educational lender. 
‘‘(D) The Secretary shall issue the loan as 
a Federal Direct Refinanced Private Loan, 
which shall have the same terms, conditions, 
and benefits as a Federal Direct Unsubsidized 
Stafford Loan, except as otherwise provided in 
this section. 
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‘‘(E) The interest rate for each loan made 
by the Secretary under this section shall be the 
rate provided under subsection (c). 
‘‘(2) BORROWER ELIGIBILITY.—The Secretary, 
in consultation with the Secretary of the Treasury 
and the Director of the Consumer Financial Protec-
tion Bureau, shall establish eligibility require-
ments— 
‘‘(A) to ensure eligibility only for borrowers 
in good standing; 
‘‘(B) to minimize inequities between Fed-
eral Direct Refinanced Private Loans and other 
Federal student loans; 
‘‘(C) to preclude windfall profits for pri-
vate educational lenders; and 
‘‘(D) to ensure full access to the program 
authorized in this subsection for borrowers with 
private loans who otherwise meet the criteria 
established in accordance with subparagraph 
(A). 
‘‘(c) INTEREST RATE.— 
‘‘(1) IN
GENERAL.—The interest rate for a 
Federal Direct Refinanced Private Loan is a rate 
equal to the interest rate determined under section 
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455(b)(9)(A) for the date on which the refinanced 
private loan is made. 
‘‘(2) FIXED
RATE.—The interest rate deter-
mined under this subsection for a Federal Direct 
Refinanced Private Loan shall be fixed for the pe-
riod of the loan. 
‘‘(3) CAPITALIZED
INTEREST
AND
FEES
EX-
CLUDED.—With respect to a Federal Direct Refi-
nanced Private Loan under this section, interest 
shall only accrue on the percentage of such Refi-
nanced Private Loan that is equal to— 
‘‘(A) the amount of the unpaid principal of 
the original loan comprising the Refinanced 
Private Loan on the date such original loan was 
refinanced; divided by 
‘‘(B) the total amount of such Refinanced 
Private Loan. 
‘‘(d) NO INCLUSION IN AGGREGATE LIMITS.—The 
amount of a Federal Direct Refinanced Private Loan, or 
a Federal Direct Consolidated Loan to the extent such 
loan was used to repay a Federal Direct Refinanced Pri-
vate Loan, shall not be included in calculating a bor-
rower’s annual or aggregate loan limits under section 428 
or 428H. 
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‘‘(e) NO ELIGIBILITY FOR SERVICE-RELATED RE-
PAYMENT.—A Federal Direct Refinanced Private Loan, or 
any Federal Direct Consolidation Loan to the extent such 
loan was used to repay a Federal Direct Refinanced Pri-
vate Loan, shall not be eligible for any loan repayment 
or loan forgiveness program under section 428K, 428L, 
or 460 or for the loan cancellation repayment plan for 
public service employees under section 455(m). 
‘‘(f) PRIVATE EDUCATIONAL LENDER REPORTING 
REQUIREMENT.— 
‘‘(1) REPORTING
REQUIRED.—The Secretary, 
in consultation with the Secretary of the Treasury 
and the Director of the Bureau of Consumer Finan-
cial Protection, shall establish a requirement that, in 
order to allow for an assessment of the private edu-
cation loan market, private educational lenders re-
port the data described in paragraph (2) to— 
‘‘(A) the Secretary; 
‘‘(B) the Secretary of the Treasury; 
‘‘(C) the Director of the Consumer Finan-
cial Protection Bureau; 
‘‘(D) the Committee on Education and 
Labor of the House of Representatives; 
‘‘(E) the Committee on Financial Services 
of the House of Representatives; 
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‘‘(F) the Senate Committee on Health, 
Education, Labor, and Pensions; and 
‘‘(G) the Senate Committee on Banking, 
Housing, and Urban Affairs. 
‘‘(2) CONTENTS
OF
REPORTING.—The data 
that private educational lenders shall report in ac-
cordance with paragraph (1) shall include each of 
the following about private education loans (as de-
fined in section 140(a) of the Truth in Lending Act 
(15 U.S.C. 1650(a))): 
‘‘(A) The total amount of private education 
loan debt the lender holds. 
‘‘(B) The total number of private edu-
cation loan borrowers the lender serves. 
‘‘(C) The average interest rate on the out-
standing private education loan debt held by the 
lender. 
‘‘(D) The proportion of private education 
loan borrowers who are in default on a loan 
held by the lender. 
‘‘(E) The proportion of the outstanding 
private education loan volume held by the lend-
er that is in default. 
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‘‘(F) The proportions of outstanding pri-
vate education loan borrowers who are 30, 60, 
and 90 days delinquent. 
‘‘(G) The proportions of outstanding pri-
vate education loan volume that is 30, 60, and 
90 days delinquent. 
‘‘(g) NOTIFICATION
TO
BORROWERS.—The Sec-
retary, in coordination with the Secretary of the Treasury 
and the Director of the Consumer Financial Protection 
Bureau, shall undertake a campaign to alert borrowers 
about the availability of private student loan refinancing 
under this section.’’. 
Æ 
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