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) 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-
sued by that student at the institution at which the 
student is in attendance except that— 
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‘‘(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 
‘‘(iii) the period during which the stu-
dent receives Federal Pell Grants does not 
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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—GENERAL TERMS AND CONDITIONS 
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.— 
‘‘(i) IN GENERAL.—Beginning on or 
after July 1, 2026, a graduate or profes-
sional student shall be eligible to receive a 
Federal Direct Stafford loan under this 
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part for a graduate or professional pro-
gram at a covered institution of higher 
education. 
‘‘(ii) COVERED INSTITUTION OF HIGH-
ER
EDUCATION.—In this subparagraph, 
the term ‘covered institution of higher edu-
cation’— 
‘‘(I) means an institution of high-
er education defined in section 101 or 
section 102(a)(1)(C); and 
‘‘(II) does not include a graduate 
medical school, nursing school, or a 
veterinary school, located outside the 
United States that does not meet the 
requirements of section 101(a)(4).’’. 
SEC. 202. 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: 
‘‘(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, 2026.’’. 
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SEC. 203. PREPAYMENT AMOUNTS. 
Part G of title IV of the Higher Education Act of 
1965 (20 U.S.C. 1088) is amended by adding at the end 
the following: 
‘‘SEC. 494A. PREPAYMENT AMOUNTS. 
‘‘(a) PREPAYMENTS AUTHORIZED.—A borrower may 
pay, without penalty, an amount in excess of the amount 
due on an outstanding loan made under part B or D, and 
such excess amount shall be referred to as a ‘prepayment 
amount’ for purposes of this subsection. Except as pro-
vided in subsection (b) a prepayment amount shall be ap-
plied first toward the fees (including any collection costs 
and authorized late charges) owed by the borrower on such 
loan, next on outstanding principal, and then on out-
standing interest. If the prepayment amount exceeds the 
monthly payment amount owed on such loan, the due date 
of the next payment shall be advanced, unless the bor-
rower requests otherwise, and the Secretary shall notify 
the borrower of such revised due date for the next pay-
ment. 
‘‘(b) APPLICATION OF PREPAYMENT AMOUNTS.— 
‘‘(1) BORROWERS WITHOUT FEE BALANCES.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), with respect to a borrower who does 
not owe an outstanding balance of fees (includ-
ing collection costs and authorized late charges) 
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on any loan made under part B or D, and who 
makes a prepayment on 2 or more loans made 
under this part— 
‘‘(i) if such loans have different appli-
cable rates of interest, the holder of such 
loans shall apply the borrower’s prepay-
ment amount, first toward the outstanding 
balance of principal due on the loan with 
the highest applicable rate of interest 
among such loans, next on any fees owed 
on such loan, and then on outstanding in-
terest owed on such loan; or 
‘‘(ii) if such loans have the same ap-
plicable rates of interest, the holder of 
such loans shall apply the borrower’s pre-
payment amount, first toward the out-
standing balance of principal due on the 
loan with the highest principal balance 
among such loans, next on any fees on 
such loan, and then on outstanding inter-
est owed on such loan. 
‘‘(B) WRITTEN EXCEPTION.—A borrower 
described in subparagraph (A) who does not 
want prepayment amounts applied in the man-
ner described in clause (i) or (ii) of such sub-
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paragraph shall provide to the Secretary, a 
written request for a different application of 
prepayment amounts. 
‘‘(2) BORROWERS WITH FEE BALANCES.—With 
respect to a borrower who owes fees (which may in-
clude collection costs and authorized late charges) on 
a loan made under part B or part D, a prepayment 
amount made by the borrower shall be applied first 
toward the fees (including any collection costs and 
authorized late charges) owed by the borrower on 
such loan, next on outstanding principal, and then 
on outstanding interest.’’. 
SEC. 204. DEFAULT REQUIREMENTS. 
Part G of title IV of the Higher Education Act of 
1965 (20 U.S.C. 1088), as amended by the preceding sec-
tion, is further amended by adding at the end the fol-
lowing: 
‘‘SEC. 494B. DEFAULT REQUIREMENTS. 
‘‘(a) IN GENERAL.—If a borrower defaults on a loan 
made under part B or D— 
‘‘(1) the entire unpaid balance and accrued in-
terest shall be immediately due and payable; and 
‘‘(2) the Secretary shall assess collection 
charges. 
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‘‘(b) COLLECTION OF A DEFAULTED LOAN.—The 
Secretary may, with respect to a borrower who defaults 
on a loan made under part B or D— 
‘‘(1) take any action authorized by law to col-
lect such loan, including filing a lawsuit against the 
borrower, reporting the default to nationwide con-
sumer reporting agencies, requesting the Internal 
Revenue Service to offset the borrower’s Federal in-
come tax refund, and garnishing the borrower’s 
wages; and 
‘‘(2) may designate the Income-Driven Repay-
ment Plan under section 455A(c) for the borrower.’’. 
PART B—ONE INCOME-CONTINGENT REPAYMENT 
PLAN AND ONE FIXED REPAYMENT PLAN 
SEC. 211. NOTIFICATION TO BORROWERS. 
(a) IN GENERAL.—Beginning on the date of enact-
ment of this Act, the Secretary of Education, in coordina-
tion with the Director of the Consumer Financial Protec-
tion Bureau, shall undertake a campaign to alert all bor-
rowers of loans made under part D of title IV of the High-
er Education Act of 1965 that they are eligible to change 
repayment plans and to enroll in one of the following re-
payment plans: 
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(1) The fixed repayment plan under section 
455A(b) of the Higher Education Act of 1965, as 
added by section 212. 
(2) The Income-Driven Repayment plan under 
section 455A(c) of the Higher Education Act of 
1965, as added by section 212. 
(b) CAMPAIGN ACTIVITIES.—The campaign shall in-
clude the following activities: 
(1) Developing consumer information materials 
about the opportunity to change repayment plans 
and to enroll in one of the repayment plans de-
scribed in paragraphs (1) and (2) of subsection (a). 
(2) Requiring servicers of loans made under 
part D of title IV of the Higher Education Act of 
1965 to provide such consumer information to bor-
rowers in a manner determined appropriate by the 
Secretary. 
SEC. 212. NEW REPAYMENT PLANS. 
(a) SUNSET OF REPAYMENT PLANS AVAILABLE BE-
FORE JULY 1, 2026.—Section 455(d)(1) of the Higher 
Education Act of 1965 (20 U.S.C. 1087e(d)(1)) is amend-
ed, in the matter preceding subparagraph (A), by inserting 
‘‘, before July 1, 2026’’ after ‘‘may choose’’. 
(b) REPAYMENT PLANS AVAILABLE ON AND AFTER 
JULY 1, 2026.—Part D of title IV of the Higher Edu-
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cation Act of 1965 (20 U.S.C. 1087a et seq.) is amended 
by inserting after section 455 the following: 
‘‘SEC. 455A. REPAYMENT PLANS AVAILABLE ON AND AFTER 
JULY 1, 2026. 
‘‘(a) REPAYMENT PLANS FOR LOANS MADE ON OR 
AFTER JULY 1, 2026.— 
‘‘(1) SUNSET
OF
REPAYMENT
PLANS
AVAIL-
ABLE
BEFORE
JULY
1, 
2026.—Paragraphs (1) 
through (5) of section 455(d) shall only apply to 
loans made under this part before July 1, 2026. 
‘‘(2) PROHIBITIONS.—The Secretary may not, 
for any loan made under this part on or after July 
1, 2026— 
‘‘(A) authorize a borrower of such a loan 
to repay such loan pursuant to a repayment 
plan that is not described in paragraph (3); or 
‘‘(B) carry out or modify a repayment plan 
that is not described in such paragraph. 
‘‘(3) 
DESIGN
AND
SELECTION.—Notwith-
standing section 455(d), beginning on July 1, 2026, 
the Secretary shall offer a borrower of a loan made 
under this part on or after such date (including a 
Federal Direct Stafford Loan, a Federal Direct 
PLUS Loan (including such a loan made on behalf 
of a dependent student), a Federal Direct Consolida-
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tion Loan (including such a loan that discharged the 
liability on a Federal Direct PLUS Loan made on 
behalf of a dependent student), and a Federal Direct 
Unsubsidized Stafford Loan) two plans for repay-
ment of such loan in accordance with subsection (d), 
including principal and interest on the loan. The 
borrower shall be entitled to accelerate, without pen-
alty, repayment on the borrower’s loan under this 
part. The borrower may choose— 
‘‘(A) a fixed repayment plan under sub-
section (b); or 
‘‘(B) the Income-Driven Repayment Plan 
under subsection (c). 
‘‘(4) SELECTION
BY
SECRETARY.—If a bor-
rower of a loan made under this part on or after 
July 1, 2026, does not select a repayment plan de-
scribed in paragraph (3), the Secretary shall provide 
the borrower with the fixed repayment plan de-
scribed in subsection (b). 
‘‘(5) SELECTION
AVAILABLE
FOR
EACH
NEW 
LOAN.—Each time a borrower receives a new loan 
made under this part on or after July 1, 2026, the 
borrower may select either the fixed repayment plan 
under subsection (b) or the Income-Driven Repay-
ment Plan under subsection (c), which shall apply to 
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all such loans of the borrower in accordance with 
paragraph (6). 
‘‘(6) SAME REPAYMENT PLAN REQUIRED.— 
‘‘(A) LOANS MADE ON OR AFTER JULY 1, 
2026.—All loans made to a borrower under this 
part on or after July 1, 2026, must be repaid 
together under the same repayment plan. 
‘‘(B) LOANS MADE BEFORE AND ON OR 
AFTER JULY 1, 2026.—A borrower with a loan 
made under this part before July 1, 2026, and 
with a loan made on or after July 1, 2026, (in-
cluding a Federal Direct PLUS loan made on 
behalf of a dependent student made before, on, 
or after such date) may repay such loans on 
different repayment plans, provided that— 
‘‘(i) all such loans made on or after 
July 1, 2026, are repaid under the same 
repayment plan in accordance with sub-
paragraph (A); and 
‘‘(ii) all such loans made before July 
1, 2026, are repaid under the repayment 
plan that the borrower was enrolled in with 
respect to each such loan on June 30, 
2026. 
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‘‘(7) PERMISSIBLE
CHANGES
OF
REPAYMENT 
PLAN.— 
‘‘(A) CHANGE
FROM
FIXED
REPAYMENT 
PLAN.—A borrower may change the borrower’s 
selection of a fixed repayment plan under sub-
section (b), or the Secretary’s selection of such 
plan for the borrower under paragraph (4), as 
applicable, to the Income-Driven Repayment 
Plan under subsection (c) at any time. 
‘‘(B) CHANGE FROM THE INCOME-DRIVEN 
REPAYMENT
PLAN.—A borrower may change 
the borrower’s selection of the Income-Driven 
Repayment Plan under subsection (c) to a fixed 
repayment plan under subsection (b), provided 
that the required fixed monthly payment 
amount of the borrower under such plan is de-
termined based on— 
‘‘(i) the total amount of the out-
standing principal and interest and fees on 
the loans of the borrower to be repaid 
under such fixed plan, as of the date on 
which the borrower’s change in selection 
takes effect; 
‘‘(ii) the interest rates on such loans; 
and 
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‘‘(iii) the applicable repayment period 
determined under subsection (b)(2). 
‘‘(8) TREATMENT OF BORROWERS WITH LOANS 
MADE BEFORE JULY 1, 2026.—With respect to an 
outstanding loan made under this part (including a 
Federal Direct PLUS loan made on behalf of a de-
pendent student) before July 1, 2026, a borrower 
with such a loan— 
‘‘(A) shall not be eligible to change the 
borrower’s selection of a repayment plan under 
paragraph (1) of section 455(d), or the Sec-
retary’s selection of a plan for the borrower 
under paragraph (2) of such section, as applica-
ble, to another repayment plan under such 
paragraph (1) on or after July 1, 2026; 
‘‘(B) may, at any time, change the bor-
rower’s selection of a repayment plan to a re-
payment plan described in paragraph (3); and 
‘‘(C) upon changing the borrower’s selec-
tion of a repayment plan in accordance with 
subparagraph (B), shall make any such subse-
quent change in selection in accordance with 
paragraphs (6) and (7). 
‘‘(b) FIXED REPAYMENT PLAN.— 
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‘‘(1) IN GENERAL.—The fixed repayment plan 
made available to borrowers in accordance with this 
section shall be a repayment plan consistent with 
subsection (a)(1) of section 455 and section 
428(b)(9)(A)(i), except as expressly provided in this 
subsection, with a fixed annual repayment amount 
paid over a fixed period of time. Except as provided 
in paragraph (3), the required fixed monthly pay-
ment amount of a borrower shall be determined 
based on the total amount of the outstanding prin-
cipal and interest of the Federal Direct Loans of the 
borrower to be repaid pursuant to such plan, the in-
terest rates on such loans, and the applicable repay-
ment period determined under this subsection. 
‘‘(2) APPLICABLE REPAYMENT PERIOD.— 
‘‘(A) DIRECT
LOANS
OTHER
THAN
CON-
SOLIDATION LOANS.—The applicable repayment 
period of a Federal Direct loan under this part, 
other than a Federal Direct Consolidation 
Loan, shall be 10 years. 
‘‘(B) DIRECT
CONSOLIDATION
LOANS.— 
The applicable repayment period for a Federal 
Direct Consolidation loan made on or after July 
1, 2026, repaid pursuant to a fixed repayment 
plan with a total outstanding amount of prin-
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‘‘(3) MINIMUM MONTHLY PAYMENT.—The min-
imum monthly payment amount of a borrower under 
a fixed repayment plan shall be $50 per month, ex-
cept that the final payment of the borrower pursu-
ant to such plan may be less than $50. 
‘‘(4) PERIODS OF DEFERMENT AND FORBEAR-
ANCE.—The fixed repayment plan period applicable 
to a borrower shall not include periods when the bor-
rower is in authorized deferment or forbearance. 
‘‘(5) ADJUSTMENTS FOR VARIABLE INTEREST 
RATES.—The number of payments or the fixed 
monthly repayment amount may be adjusted to re-
flect changes in the variable interest rate identified 
in section 685.202(a) of title 34, Code of Federal 
Regulations (as in effect on July 1, 2026). 
‘‘(c) INCOME-DRIVEN REPAYMENT PLAN.— 
‘‘(1) 
TERMS
AND
CONDITIONS.—Notwith-
standing any other provision of this Act, beginning 
on July 1, 2026, the Secretary shall carry out an in-
come-contingent repayment plan, to be known as the 
‘Income-Driven Repayment Plan’, that shall have 
the following terms and conditions: 
‘‘(A) A borrower of any loan made under 
this part may elect to have the borrower’s total 
monthly payment amount owed for all of the 
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loans of the borrower made under this part that 
are repaid under the Income-Driven Repayment 
Plan not exceed the applicable monthly pay-
ment of the borrower. 
‘‘(B) The Secretary shall apply the bor-
rower’s applicable monthly payment first to-
wards principal due, next toward any fees due 
on the loan, and then toward the interest due 
on the loan. 
‘‘(C) In the case of an applicable monthly 
payment that does not fully cover the amount 
of interest that has accrued on the borrower’s 
loans for the month to which such applicable 
monthly payment applies, the Secretary shall 
not charge such remaining interest to the bor-
rower and such remaining interest shall not be 
capitalized. 
‘‘(D) The Secretary shall have the discre-
tion to determine— 
‘‘(i) how a borrower’s applicable 
monthly payment is applied to each out-
standing loan of the borrower repayed 
under the Income-Driven Repayment Plan; 
and 
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‘‘(ii) the amount of principal, fees, 
and interest due on each outstanding loan 
of the borrower repayed under the Income- 
Driven Repayment Plan. 
‘‘(E) The Secretary shall cancel any out-
standing balance of principal and interest due 
on all loans of the borrower repaid under the 
Income-Driven Repayment Plan by a borrower, 
without the need for an application or other 
documentation from the borrower, on the earlier 
of— 
‘‘(i) in the case of a borrower who 
does not have at least one outstanding loan 
under this part attributable to a graduate 
or professional course of study, the date 
that the borrower has made 240 qualifying 
payments over a period of at least 20 
years; 
‘‘(ii) in the case of a borrower who 
has at least one outstanding loan under 
this part attributable to a graduate or pro-
fessional course of study, the date that the 
borrower has made 300 qualifying pay-
ments over a period of at least 25 years; 
or 
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‘‘(iii) the date that the borrower has 
made— 
‘‘(I) in the case of a borrower 
with a total original balance of prin-
cipal due on all such loans that is 
equal to or less than $12,000, 120 
qualifying payments over a period of 
at least 10 years; or 
‘‘(II) in the case of a borrower 
with a total original balance of prin-
cipal due on all such loans that is 
greater than $12,000— 
‘‘(aa) 120 qualifying pay-
ments over a period of at least 
10 years; plus 
‘‘(bb) for each increment of 
$1 to $1,000 above $12,499 of 
such total original principal bal-
ance, 12 additional qualifying 
payments over a period of at 
least 1 year. 
‘‘(2) ANNUAL INCOME VERIFICATION.— 
‘‘(A) IN GENERAL.—The procedures estab-
lished by the Secretary under section 455(e)(8) 
shall apply for annually determining the bor-
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rower’s eligibility for the Income-Driven Repay-
ment Plan, including verification of a bor-
rower’s annual income and the annual amount 
due on the total amount of loans eligible to be 
repaid under this subsection, and such other 
procedures as are necessary to effectively imple-
ment the Income-Driven Repayment Plan. With 
respect to carrying out section 494(a)(2) for the 
Income-Driven Repayment Plan, an individual 
may elect to opt out of the disclosures required 
under section 494(a)(2)(A)(ii) in accordance 
with 
the 
procedures 
established 
under 
455(e)(8). 
‘‘(B) ADDITIONAL PROCEDURES.—In addi-
tion to carrying out the procedures described in 
subparagraph (A), the Secretary shall establish 
and implement— 
‘‘(i) in the case that the Secretary re-
ceives the return information disclosed 
under section 6103(l)(13) of the Internal 
Revenue Code of 1986, pursuant to ap-
proval provided under section 494, to de-
termine the repayment obligation of the 
borrower but is unable to determine the re-
payment obligation of the borrower, proce-
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dures to require the borrower to provide 
such information as the Secretary may re-
quire to determine such repayment obliga-
tion under the Income-Driven Repayment 
Plan; and 
‘‘(ii) such other procedures as are nec-
essary to implement effectively the Income- 
Driven Repayment Plan. 
‘‘(C) RECONSIDERATION.— 
‘‘(i) IN GENERAL.—In the case that a 
borrower believes that the annual repay-
ment obligation of the borrower determined 
pursuant to this paragraph is not reflective 
of the borrower’s income or family size, the 
borrower may request that the Secretary 
recalculate such annual repayment obliga-
tion. Such request shall include docu-
mentation of income or family size not 
based on tax information to account for a 
decrease in income since the borrower last 
filed a tax return, the borrower’s separa-
tion from a spouse with whom the bor-
rower had previously filed a joint tax re-
turn, the birth or impending birth of a 
child, or other comparable circumstances. 
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‘‘(ii) ADJUSTMENT
TO
REPAYMENT 
OBLIGATION.—If the Secretary determines 
that the annual repayment obligation of 
the borrower determined pursuant to this 
paragraph is not reflective of the bor-
rower’s income or family size based on a 
request described in clause (i), the Sec-
retary shall adjust the annual repayment 
obligation of the borrower as determined 
appropriate by the Secretary and in a 
manner consistent with this subsection. 
‘‘(D) FORBEARANCE.—In the case that a 
borrower provides information or documentation 
pursuant to subparagraph (B)(i) or subpara-
graph (C)(i), the Secretary shall grant the bor-
rower administrative forbearance for a period of 
up to 60 days in order for the Secretary to col-
lect and process such information or docu-
mentation. 
‘‘(3) REPAYMENT DISCLOSURE.—After the Sec-
retary obtains sufficient information to calculate a 
borrower’s annual repayment obligation under the 
Income-Driven Repayment Plan pursuant to para-
graph (2) and not later than 3 months before any 
payments in accordance with such annual repayment 
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obligation are due, the Secretary shall provide to the 
borrower a repayment disclosure that— 
‘‘(A) specifies the borrower’s applicable 
monthly payment amount; 
‘‘(B) explains how such applicable monthly 
payment amount was calculated; 
‘‘(C) informs the borrower of the terms 
and conditions of the Income-Driven Repay-
ment Plan; and 
‘‘(D) informs the borrower of how to con-
tact the Secretary if the calculated applicable 
monthly payment amount is not reflective of the 
borrower’s current income or family size. 
‘‘(4) FAILURE TO PROVIDE INFORMATION.—In 
the case that the Secretary requires information 
from the borrower to determine the annual repay-
ment obligation of the borrower and the borrower 
does not provide the necessary information to the 
Secretary in accordance with the procedures de-
scribed in paragraph (2), the Secretary shall remove 
the borrower from the Income-Driven Repayment 
Plan and provide the borrower with the fixed repay-
ment plan described in subsection (b). 
‘‘(5) TREATMENT OF CONSOLIDATION LOANS.— 
With respect to cancelling any outstanding balance 
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of principal and interest due on all loans of the bor-
rower repaid under the Income-Driven Repayment 
Plan pursuant to paragraph (1)(E), the Secretary 
shall— 
‘‘(A) for a borrower with an outstanding 
Federal Direct Consolidation Loan that dis-
charges the liability on loans with more than 
one period of qualifying payments, determine 
the number of qualifying payments made to-
wards such Direct Consolidation Loan based on 
the weighted average of the number of quali-
fying payments made on each such discharged 
loan. 
‘‘(B) for a borrower with an outstanding 
joint consolidation loan that is separated into 
individual Federal Direct Consolidation Loans, 
determine the number of qualifying payments 
made towards each such separated loan based 
on the number of qualifying payments that the 
borrower made prior to the separation. 
‘‘(6) DEFINITIONS.—In this subsection: 
‘‘(A) APPLICABLE MONTHLY PAYMENT.— 
‘‘(i) IN GENERAL.—The term ‘applica-
ble monthly payment’ means, when used 
with respect to a borrower and except as 
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provided in clause (ii), the amount equal 
to— 
‘‘(I) $0 for the portion of the 
borrower’s income (and the borrower’s 
spouse’s income, if applicable) that is 
less than or equal to 225 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))); plus 
‘‘(II) in the case of a borrower 
with an outstanding loan made under 
this part for an undergraduate pro-
gram of study, 5 percent of the por-
tion of the borrower’s income (and the 
borrower’s spouse’s income, if applica-
ble) that is greater than 225 percent 
of the poverty line applicable to the 
borrower’s family size (as determined 
under section 673(2) of the Commu-
nity Services Block Grant Act (42 
U.S.C. 9902(2))), prorated by the 
percentage that is the result of divid-
ing— 
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‘‘(aa) the borrower’s total 
outstanding balance of loans that 
is attributable to loans made 
under this part for an under-
graduate program of study, de-
termined at the time the bor-
rower enters into repayment for 
such loans; by 
‘‘(bb) the result of divid-
ing— 
‘‘(AA) the borrower’s 
total outstanding balance of 
loans made under this part, 
determined at the time the 
borrower enters into repay-
ment for such loans; by 
‘‘(BB) 12; plus 
‘‘(III) in the case of a borrower 
with an outstanding loan made under 
this part not described in subclause 
(II), 10 percent of the portion of the 
borrower’s income (and the borrower’s 
spouse’s income, if applicable) that is 
greater than 225 percent of the pov-
erty line applicable to the borrower’s 
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family size (as determined under sec-
tion 673(2) of the Community Serv-
ices Block Grant Act (42 U.S.C. 
9902(2))), prorated by the percentage 
that is the result of dividing— 
‘‘(aa) 
the 
difference 
be-
tween— 
‘‘(AA) the borrower’s 
total outstanding balance of 
loans made under this part, 
determined at the time the 
borrower enters into repay-
ment for such loans; and 
‘‘(BB) the balance of 
loans subject to subclause 
(II); by 
‘‘(bb) the result of divid-
ing— 
‘‘(AA) the borrower’s 
total outstanding balance of 
loans made under this part, 
determined at the time the 
borrower enters into repay-
ment for such loans; by 
‘‘(BB) 12. 
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‘‘(ii) ADJUSTMENTS
TO
APPLICABLE 
MONTHLY
PAYMENT.—Notwithstanding 
clause (i), the applicable monthly payment 
of a borrower shall be— 
‘‘(I) in the case that the amount 
calculated for such borrower pursuant 
to clause (i) is less than $5, $0; 
‘‘(II) in the case that the amount 
calculated for such borrower pursuant 
to clause (i) is greater than $5 but 
less than $10, $10; or 
‘‘(III) in the case of a married 
borrower who is not an exempted bor-
rower, the amount resulting by multi-
plying— 
‘‘(aa) the amount calculated 
for such borrower pursuant to 
clause (i); by 
‘‘(bb) the result of divid-
ing— 
‘‘(AA) the outstanding 
balance of principal and in-
terest due on all loans of the 
borrower made under this 
part; by 
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‘‘(II) the borrower is unable to 
reasonably assess the income of the 
borrower’s spouse. 
‘‘(E) QUALIFYING
PAYMENT.—The term 
‘qualifying payment’, when used with respect to 
a borrower, means any of the following: 
‘‘(i) An applicable monthly payment. 
‘‘(ii) A monthly payment made under 
the fixed repayment plan described in sub-
section (b). 
‘‘(iii) A monthly payment made under 
a repayment plan described in paragraph 
(1) of section 455(d). 
‘‘(iv) A payment under a repayment 
plan with payments that are as least as 
much as they would have been under a 
standard repayment plan for a term of 10 
years consistent with subsection (a)(1) of 
section 455 and section 428(b)(9)(A)(i), 
except that, in the case of a borrower who 
was moved by the Secretary to such a re-
payment plan due to the borrower’s failure 
to submit information for annual income 
verification or their failure to provide other 
necessary information, no more than 12 
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payments made under such a repayment 
plan may be counted as qualifying pay-
ments. 
‘‘(v) A forbearance or deferment of an 
applicable monthly payment otherwise due 
under the Income-Driven Repayment Plan 
pursuant to any of the following: 
‘‘(I) Cancer treatment deferment 
under 
section 
455(f)(3), 
section 
428(b)(1)(M)(v), 
or 
section 
427(a)(2)(C)(iv). 
‘‘(II) Rehabilitation training pro-
gram 
deferment 
under 
section 
455(f)(2)(A)(ii), 
section 
428(b)(1)(M)(i)(II), 
or 
section 
427(a)(2)(C)(i)(II). 
‘‘(III) Deferment relating to a 
period of unemployment under section 
455(f)(2)(B) 
or 
section 
428(b)(1)(M)(ii). 
‘‘(IV) Deferment due to an eco-
nomic hardship described in section 
435(o), section 428(b)(1)(M)(iv), or 
section 427(a)(2)(C)(iii). 
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‘‘(V) Deferment provided in con-
nection with services in the Peace 
Corps. 
‘‘(VI) Military service deferment 
under section 455(f)(2)(C) or section 
428(b)(1)(M)(iii). 
‘‘(VII) Post-active-duty student 
deferment under section 493D. 
‘‘(VIII) 
Forbearance 
provided 
under section 428(c)(3)(A)(i)(III) on 
or after July 1, 2024, because the 
borrower is serving in a national serv-
ice position for which the borrower re-
ceives a national service educational 
award under the National and Com-
munity Service Trust Act of 1993 (42 
U.S.C. 12501 et seq.). 
‘‘(IX) National Guard Duty for-
bearance 
under 
section 
682.211(h)(2)(iii) 
or 
section 
685.205(a)(7) of title 34, Code of 
Federal Regulations (or successor reg-
ulations), on or after July 1, 2024. 
‘‘(X) Department of Defense stu-
dent loan repayment program forbear-
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ance 
under 
section 
428(c)(3)(A)(i)(IV) on or after July 
1, 2024. 
‘‘(XI) Administrative forbearance 
or mandatory administrative forbear-
ance under section 428(c)(3)(D) or 
section 428H(e)(7) on or after July 1, 
2024. 
‘‘(XII) Forbearance granted by 
the Secretary while the Secretary de-
termines whether the borrower is eli-
gible for the Secretary to discharge 
the borrower’s liability on a loan due 
to the borrower’s bankruptcy. 
‘‘(vi) A payment for any month in 
which the borrower was in a period of 
deferment or forbearance not described in 
clause (iv) (other than an in-school 
deferment) if such payment— 
‘‘(I) is made not later than 3 
years after such period of deferment 
or forbearance ended; and 
‘‘(II) is equal to or greater than 
the applicable monthly payment of the 
borrower.’’. 
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SEC. 213. MAXIMUM REPAYMENT PERIOD FOR INCOME- 
CONTINGENT 
REPAYMENT 
AND 
INCOME- 
BASED REPAYMENT. 
(a) ICR.—Section 455(e)(7)(B) of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1087e(e)(7)(B)) is further 
amended— 
(1) by striking ‘‘or’’ at the end of clause (iv); 
(2) by striking the period at the end of clause 
(v) and inserting a semicolon; and 
(3) by adding at the end the following: 
‘‘(vi) makes payments under the In-
come-Driven Repayment Plan under sec-
tion 455A(c); or 
‘‘(vii) makes payments under the fixed 
repayment plan under section 455A(b);’’. 
(b) IBR.—Section 493C(b)(7)(B) of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1098e(b)(7)(B)) is amend-
ed— 
(1) in clause (iv), by striking ‘‘or’’; 
(2) in clause (v), by adding ‘‘or’’ at the end; 
and 
(3) by adding at the end the following: 
‘‘(vi) makes payments under the In-
come-Driven Repayment Plan under sec-
tion 455A(c); or 
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‘‘(vii) makes payments under the fixed 
repayment plan under 455A(b);’’. 
SEC. 214. BORROWERS INELIGIBLE FOR LOANS. 
(a) INELIGIBLE BORROWERS.—Section 484 of the 
Higher Education Act of 1965 (20 U.S.C. 1091) is 
amended— 
(1) in subsection (a)(6), by striking ‘‘if the’’ 
and inserting ‘‘if, in accordance with subsection (u), 
the’’; and 
(2) by adding at the end the following: 
‘‘(u) INELIGIBLE BORROWERS.— 
‘‘(1) IN GENERAL.—The Secretary determines 
that a borrower is ineligible pursuant to subsection 
(a)(6) if, at the time the loan was made and without 
the knowledge of the institution of higher education 
or the Secretary, the borrower (or the student on 
whose behalf a parent borrowed) provided false or 
erroneous information, has been convicted of, or has 
pled nolo contendere or guilty to, a crime involving 
fraud in obtaining funds under this title, or took ac-
tions that caused the borrower or student— 
‘‘(A) to receive a loan for which the bor-
rower is wholly or partially ineligible; 
‘‘(B) to receive interest benefits for which 
the borrower was ineligible; or 
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‘‘(C) to receive loan proceeds for a period 
of enrollment for which the borrower was not 
eligible. 
‘‘(2) DEMAND LETTER.— 
‘‘(A) IN
GENERAL.—If the Secretary 
makes the determination described in para-
graph (1), the Secretary shall send an ineligible 
borrower a demand letter that requires that, 
within 30 days from the date the letter is 
mailed, the borrower repay any principal 
amount for which the borrower is ineligible and 
any accrued interest, including interest sub-
sidized by the Secretary, through the previous 
quarter. 
‘‘(B) DEFAULT.—If a borrower fails to 
comply with the demand letter described in 
paragraph (2), the borrower shall be in default 
on the entire loan. 
‘‘(3) PROHIBITION ON CONSOLIDATION.—A bor-
rower may not consolidate a loan under this part for 
which the borrower is wholly or partially ineligible.’’. 
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PART C—AUTOMATIC ENROLLMENT IN THE IN-
COME-DRIVEN REPAYMENT PLAN FOR CER-
TAIN BORROWERS 
SEC. 221. 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: 
‘‘(6) NOTIFICATION AND AUTOMATIC ENROLL-
MENT PROCEDURES FOR BORROWERS WHO ARE DE-
LINQUENT ON LOANS.— 
‘‘(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; 
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‘‘(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 
income and family size of the borrower for 
purposes of this paragraph. 
‘‘(B) BORROWER NOTIFICATION.—With re-
spect to each borrower of a loan made under 
this part who is not repaying such loan pursu-
ant to the Income-Driven Repayment Plan 
under section 455A(c), 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 preceding 62 days, the Sec-
retary shall, as soon as practicable after such 
31-day delinquency, provide to the borrower the 
following: 
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‘‘(i) Notification that the borrower is 
at least 31 days delinquent on at least 1 
loan made under this part, and a descrip-
tion of all delinquent covered loans, non-
delinquent covered loans, and noncovered 
loans of the borrower. 
‘‘(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 
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. 
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‘‘(v) 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 loans made 
under this part and has not selected 
the Income-Driven Repayment Plan 
under section 455A(c) for borrower’s 
loans made under this part; and 
‘‘(II) in the case of such a bor-
rower whose existing repayment plan 
for the borrower’s loans made under 
this part is not such Income-Driven 
Repayment Plan, the monthly pay-
ments under such existing repayment 
plan are higher than such monthly 
payments would be under such In-
come-Driven Repayment Plan. 
‘‘(vi) 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)(v) who has not se-
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lected the Income-Driven Repayment Plan 
under section 455A(c) for the borrower’s loans 
made under this part that are delinquent and 
who is at least 80 days delinquent on such a 
loan, the Secretary shall, as soon as prac-
ticable— 
‘‘(i) enroll the borrower in such In-
come-Driven Repayment Plan; and 
‘‘(ii) authorize the borrower to change 
the Secretary’s selection of the Income- 
Driven Repayment Plan to the fixed-repay-
ment plan under section 455A(b), as long 
as such selection is made in accordance 
with paragraphs (6) and (7) of section 
455A(a).’’. 
SEC. 222. 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: 
‘‘(7) NOTIFICATION AND AUTOMATIC ENROLL-
MENT PROCEDURES FOR BORROWERS WHO ARE RE-
HABILITATING DEFAULTED LOANS.— 
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‘‘(A) AUTHORITY TO OBTAIN INCOME IN-
FORMATION.—The Secretary shall establish and 
implement, with respect to any borrower who is 
rehabilitating a loan made under this part pur-
suant to section 428F(d), 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 
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