terest-Free Education Loan in an amount equal 
to the sum of the unpaid principal, accrued un-
paid interest, and late charges of the original 
loan. 
‘‘(C) PARENT PLUS LOANS FOR UNDER-
GRADUATE EDUCATION.—Nothing in this sec-
tion shall be construed to prohibit a parent 
from borrowing a Federal Direct PLUS Loan 
on behalf of a dependent, undergraduate stu-
dent on or after July 1, 2023. 
‘‘(D) FEDERAL
DIRECT
CONSOLIDATION 
LOANS.—A borrower of a Federal Direct Inter-
est-Free Education Loan and any other loan 
made under this part (such as a Federal Direct 
PLUS Loan or a Federal Direct Unsubsidized 
Stafford Loan for graduate or professional edu-
cation) may consolidate such loans into a Fed-
eral Direct Consolidation Loan. 
‘‘(E) TERMS, CONDITIONS, AND
BENE-
FITS.—A Federal Direct Interest-Free Edu-
cation Loan shall have the same terms and con-
ditions, and benefits to borrowers as a Federal 
Direct Stafford Loan with respect to under-
graduate borrowers, except that such a loan— 
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‘‘(i) shall have an applicable rate of 
interest of 3.73 percent for the term of the 
loan; 
‘‘(ii) the aggregate maximum amount 
that may be awarded to a borrower shall 
be $90,000, for not more than a 4-year 
academic period; 
‘‘(iii) may only be repaid under the in-
come-contingent repayment plan under 
subsection (r) or a standard repayment 
plan under subsection (d)(1)(A); 
‘‘(iv) interest on such loan shall only 
accrue during periods when a borrower is 
earning taxable income, is in repayment on 
such loan, and not making payments under 
a repayment plan described in clause (iii); 
and 
‘‘(v) may include other terms and con-
ditions, and benefits to borrowers of such 
loan, as determined by the Secretary.’’. 
(b) INCOME-CONTINGENT REPAYMENT PLAN
FOR 
UNDERGRADUATE LOANS.—Section 455 of the Higher 
Education Act of 1965 (20 U.S.C. 1087e) is further 
amended by adding at the end the following: 
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‘‘(r) INCOME-CONTINGENT REPAYMENT PLAN FOR 
UNDERGRADUATE LOANS.—Notwithstanding any other 
provision of this Act, the Secretary shall carry out a pro-
gram under which— 
‘‘(1) a borrower of a Federal Direct Interest- 
Free Education Loan— 
‘‘(A) shall have an aggregate monthly pay-
ment for the outstanding balance of principal 
and interest due on all such loans automatically 
withheld from the wages (as such term is de-
fined in section 3401(a) of the Internal Rev-
enue Code of 1986) of the borrower by the em-
ployer of the borrower in a manner which— 
‘‘(i) prohibits employers from using 
any information about an employee’s out-
standing balance or principal and interest 
due on such loans for any purpose of use 
as an advantage against the employee; 
‘‘(ii) is determined by the Secretary, 
in coordination with the heads of other ap-
propriate Federal agencies (including the 
Secretary of the Treasury and the Com-
missioner of the Social Security Adminis-
tration); and 
‘‘(iii) is an amount equal to— 
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‘‘(I) if the borrower’s gross in-
come is less than 337 percent of the 
poverty line applicable to the bor-
rower’s family size as determined 
under section 673(2) of the Commu-
nity Services Block Grant Act (42 
U.S.C. 9902(2)), $0; 
‘‘(II) if the borrower’s gross in-
come is equal to or greater than 337 
percent, but not more than 841 per-
cent of such poverty line, 4 percent of 
the borrower’s gross income; 
‘‘(III) if the borrower’s gross in-
come is equal to or greater than 842 
percent, but not more than 925 per-
cent of such poverty line, 5 percent of 
the borrower’s gross income; 
‘‘(IV) if the borrower’s gross in-
come is equal to or greater than 926 
percent, but not more than 1,010 per-
cent of such poverty line, 6 percent of 
the borrower’s gross income; 
‘‘(V) if the borrower’s gross in-
come is equal to or greater than 1,011 
percent, but not more than 1,094 per-
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cent of such poverty line, 7 percent of 
the borrower’s gross income; 
‘‘(VI) if the borrower’s gross in-
come is equal to or greater than 1,095 
percent, but not more than 1,178 per-
cent of such poverty line, 8 percent of 
the borrower’s gross income; 
‘‘(VII) if the borrower’s gross in-
come is equal to or greater than 1,179 
percent, and 1,262 percent of such 
poverty line, 9 percent of the bor-
rower’s gross income; and 
‘‘(VIII) if the borrower’s gross 
income is equal to or greater than 
1,263 percent of such poverty line, 10 
percent of the borrower’s gross in-
come; and 
‘‘(B) may elect to have any payments made 
under subparagraph (A) that exceed the 
amount owed by the borrower on such loans for 
a calendar year be refunded to the borrower or 
applied to the amount owed by the borrower on 
such loans for the succeeding calendar year; 
‘‘(2) the Secretary shall cancel any outstanding 
balance of principal or interest due on all Federal 
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