Sec. 222. Notification and automatic enrollment procedures for borrowers who 
are rehabilitating defaulted loans. 
Sec. 223. Covered loan and non-covered loan defined. 
Sec. 224. Automatic recertification of income for income-driven repayment 
plans. 
Sec. 225. Procedure and requirement for requesting tax return information 
from the IRS. 
PART D—STREAMLINING PUBLIC SERVICE LOAN FORGIVENESS 
Sec. 231. Amendments to terms and conditions of public service loan forgive-
ness. 
Sec. 232. Terms and conditions of employment. 
Sec. 233. Online portal and database of public service jobs. 
Sec. 234. Treatment of consolidated and refinanced loans. 
Sec. 235. Loan forgiveness for teachers. 
Sec. 236. GAO study on data matching agreements for public service loan for-
giveness. 
PART E—SUPPORT FOR BORROWERS IN DEFAULT 
Sec. 241. Removal of record of default. 
Sec. 242. Removal of record of default from credit history upon loan consolida-
tion. 
Sec. 243. Default reduction program. 
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, 2026. 
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) is amended— 
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(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) 
TOTAL
MAXIMUM
FEDERAL
PELL 
GRANT.— 
‘‘(A) AWARD YEAR 2026–2027.—For award 
year 2026–2027, the total maximum Federal 
Pell Grant award shall be $10,000. 
‘‘(B) AWARD YEAR 2027–2028.—For award 
year 2027–2028, the total maximum Federal 
Pell Grant award shall be $11,000. 
‘‘(C) AWARD YEAR 2028–2029.—For award 
year 2028–2029, the total maximum Federal 
Pell Grant award shall be $12,000. 
‘‘(D) AWARD YEAR 2029–2030.—For award 
year 2029–2030, the total maximum Federal 
Pell Grant award shall be $13,000. 
‘‘(E) AWARD YEAR 2030–2031.—For award 
year 2030–2031, the total maximum Federal 
Pell Grant award shall be $14,000. 
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‘‘(F) AWARD YEAR 2031–2032 AND SUBSE-
QUENT
YEARS.—For award year 2031–2032, 
and each subsequent award year, the total max-
imum Federal Pell Grant award shall be 
$14,000— 
‘‘(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. 
‘‘(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 2026 and each subsequent fiscal year 
to provide the total maximum Federal Pell Grant for 
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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: 
‘‘(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 
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(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, 2026. 
(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– 
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 101 of this Act, is amended— 
(1) in subparagraph (A)— 
(A) in the matter preceding clause (i), by 
striking ‘‘A student’’ and inserting ‘‘Except in 
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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: 
‘‘(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 
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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) 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 
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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; 
‘‘(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 
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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— 
‘‘(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. 
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‘‘(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-
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 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. 
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‘‘(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 
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— 
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‘‘(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; 
‘‘(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— 
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the student is not making satisfactory academic 
progress, the policy describes— 
‘‘(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-
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pacts the student’s eligibility for assistance 
under this title; and 
‘‘(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-
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ning on and after the date that the student re-
gains eligibility. 
‘‘(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. 
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‘‘(C) DUTIES OF THE SECRETARY.—The 
Secretary shall— 
‘‘(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 
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eligible for a grant, loan, or work as-
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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