20 U.S.C. § 1087e (EDUCATION)
§ 1087e. Terms and conditions of loans
(a) In general
(1) Parallel terms, conditions, benefits, and amounts
Unless otherwise specified in this part, loans made to borrowers under this part shall have the same terms, conditions, and benefits, and be available in the same amounts, as loans made to borrowers, and first disbursed on June 30, 2010, under sections 1078, 1078–2, 1078–3, and 1078–8 of this title.
(2) Designation of loans
Loans made to borrowers under this part that, except as otherwise specified in this part, have the same terms, conditions, and benefits as loans made to borrowers under—
(A) section 1078 of this title shall be known as “Federal Direct Stafford Loans”;
(B) section 1078–2 of this title shall be known as “Federal Direct PLUS Loans”;
(C) section 1078–3 of this title shall be known as “Federal Direct Consolidation Loans”; and
(D) section 1078–8 of this title shall be known as “Federal Direct Unsubsidized Stafford Loans”.
(3) Termination of authority to make interest subsidized loans and federal direct plus loans to graduate and professional students
(A) Termination of authority to make interest subsidized loans to graduate and professional students
Subject to subparagraph (B), and notwithstanding any provision of this part or part B—
(i) for any period of instruction beginning on or after July 1, 2012, a graduate or professional student shall not be eligible to receive a Federal Direct Stafford loan under this part; and
(ii) for any period of instruction beginning on July 1, 2012, and ending on June 30, 2026, the maximum annual amount of Federal Direct Unsubsidized Stafford loans such a student may borrow in any academic year (as defined in section 1088(a)(2) of this title) or its equivalent shall be the maximum annual amount for such student determined under section 1078–8 of this title, plus an amount equal to the amount of Federal Direct Stafford loans the student would have received in the absence of this subparagraph.
(B) Exception
Subparagraph (A) shall not apply to an individual enrolled in course work specified in paragraph (3)(B) or (4)(B) of section 1091(b) of this title.
(C) Termination of authority to make Federal Direct PLUS loans to graduate and professional students
Subject to paragraph (8) and notwithstanding any provision of this part or part B, for any period of instruction beginning on or after July 1, 2026, a graduate or professional student shall not be eligible to receive a Federal Direct PLUS Loan under this part.
(4) Graduate and professional annual and aggregate limits for Federal Direct Unsubsidized Stafford loans beginning July 1, 2026
(A) Annual limits beginning July 1, 2026
Subject to paragraphs (7)(A) and (8), beginning on July 1, 2026, the maximum annual amount of Federal Direct Unsubsidized Stafford loans—
(i) a graduate student, who is not a professional student, may borrow in any academic year or its equivalent shall be $20,500; and
(ii) a professional student may borrow in any academic year or its equivalent shall be $50,000.
(B) Aggregate limits
Subject to paragraphs (6), (7)(A), and (8), beginning on July 1, 2026, the maximum aggregate amount of Federal Direct Unsubsidized Stafford loans, in addition to the amount borrowed for undergraduate education, that—
(i) a graduate student—
(I) who is not (and has not been) a professional student, may borrow for programs of study described in subparagraph (C)(i) shall be $100,000; or
(II) who is (or has been) a professional student, may borrow for programs of study described in subparagraph (C)(i) shall be an amount equal to—
(aa) $200,000; minus
(bb) the amount such student borrowed for programs of study described in subparagraph (C)(ii); and
(ii) a professional student—
(I) who is not (and has not been) a graduate student, may borrow for programs of study described in subparagraph (C)(ii) shall be $200,000; or
(II) who is (or has been) a graduate student, may borrow for programs of study described in subparagraph (C)(ii) shall be an amount equal to—
(aa) $200,000; minus
(bb) the amount such student borrowed for programs of study described in subparagraph (C)(i).
(C) Definitions
(i) Graduate student
The term “graduate student” means a student enrolled in a program of study that awards a graduate credential (other than a professional degree) upon completion of the program.
(ii) Professional student
In this paragraph, the term “professional student” means a student enrolled in a program of study that awards a professional degree, as defined under section 668.2 of title 34, Code of Federal Regulations (as in effect on July 4, 2025), upon completion of the program.
(5) Parent borrower annual and aggregate limits for Federal Direct PLUS loans beginning July 1, 2026
(A) Annual limits
Subject to paragraph (8) and notwithstanding any provision of this part or part B, beginning on July 1, 2026, for each dependent student, the total maximum annual amount of Federal Direct PLUS loans that may be borrowed on behalf of that dependent student by all parents of that dependent student shall be $20,000.
(B) Aggregate limits
Subject to paragraph (8) and notwithstanding any provision of this part or part B, beginning on July 1, 2026, for each dependent student, the total maximum aggregate amount of Federal Direct PLUS loans that may be borrowed on behalf of that dependent student by all parents of that dependent student shall be $65,000, without regard to any amounts repaid, forgiven, canceled, or otherwise discharged on any such loan.
(6) Lifetime maximum aggregate amount for all students
Subject to paragraph (8) and notwithstanding any provision of this part or part B, beginning on July 1, 2026, the maximum aggregate amount of loans made, insured, or guaranteed under this subchapter that a student may borrow (other than a Federal Direct PLUS loan, or loan under section 1078–2 of this title, made to the student as a parent borrower on behalf of a dependent student) shall be $257,500, without regard to any amounts repaid, forgiven, canceled, or otherwise discharged on any such loan.
(7) Additional rules regarding annual loan limits
(A) Less than full-time enrollment
Notwithstanding any provision of this part or part B, in any case in which a student is enrolled in a program of study of an institution of higher education on less than a full-time basis during any academic year, the amount of a loan that student may borrow for an academic year or its equivalent shall be reduced in direct proportion to the degree to which that student is not so enrolled on a full-time basis, rounded to the nearest whole percentage point, as provided in a schedule of reductions published by the Secretary computed for purposes of this subparagraph.
(B) Institutionally determined limits
Notwithstanding the annual loan limits established under this section and, for undergraduate students, under this part and part B, beginning on July 1, 2026, an institution of higher education (at the discretion of a financial aid administrator at the institution) may limit the total amount of loans made under this part for a program of study for an academic year that a student may borrow, and that a parent may borrow on behalf of such student, as long as any such limit is applied consistently to all students enrolled in such program of study.
(8) Interim exception for certain students
(A) Application of prior limits
Paragraphs (3)(C), (4), (5), and (6) shall not apply, and paragraph (3)(A)(ii) shall apply as such paragraph was in effect for periods of instruction ending before June 30, 2026, during the expected time to credential described in subparagraph (B), with respect to an individual who, as of June 30, 2026—
(i) is enrolled in a program of study at an institution of higher education; and
(ii) has received a loan (or on whose behalf a loan was made) under this part for such program of study.
(B) Expected time to credential
For purposes of this paragraph, the expected time to credential of an individual shall be equal to the lesser of—
(i) three academic years; or
(ii) the period determined by calculating the difference between—
(I) the program length for the program of study in which the individual is enrolled; and
(II) the period of such program of study that such individual has completed as of the date of the determination under this subparagraph.
(C) Definition of program length
In this paragraph, the term “program length” means the minimum amount of time in weeks, months, or years that is specified in the catalog, marketing materials, or other official publications of an institution of higher education for a full-time student to complete the requirements for a specific program of study.
(b) Interest rate
(1) Rates for FDSL and FDUSL
For Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans for which the first disbursement is made on or after July 1, 1994, the applicable rate of interest shall, during any 12-month period beginning on July 1 and ending on June 30, be determined on the preceding June 1 and be equal to—
(A) the bond equivalent rate of 91-day Treasury bills auctioned at the final auction held prior to such June 1; plus
(B) 3.1 percent,
except that such rate shall not exceed 8.25 percent.
(2) In school and grace period rules
(A) Notwithstanding the provisions of paragraph (1), but subject to paragraph (3), with respect to any Federal Direct Stafford Loan or Federal Direct Unsubsidized Stafford Loan for which the first disbursement is made on or after July 1, 1995, the applicable rate of interest for interest which accrues—
(i) prior to the beginning of the repayment period of the loan; or
(ii) during the period in which principal need not be paid (whether or not such principal is in fact paid) by reason of a provision described in section 1078(b)(1)(M) or 1077(a)(2)(C) of this title,
shall not exceed the rate determined under subparagraph (B).
(B) For the purpose of subparagraph (A), the rate determined under this subparagraph shall, during any 12-month period beginning on July 1 and ending on June 30, be determined on the preceding June 1 and be equal to—
(i) the bond equivalent rate of 91-day Treasury bills auctioned at the final auction prior to such June 1; plus
(ii) 2.5 percent,
except that such rate shall not exceed 8.25 percent.
(3) Out-year rule
Notwithstanding paragraphs (1) and (2), for Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans made on or after July 1, 1998, the applicable rate of interest shall, during any 12-month period beginning on July 1 and ending on June 30, be determined on the preceding June 1 and be equal to—
(A) the bond equivalent rate of the security with a comparable maturity as established by the Secretary; plus
(B) 1.0 percent,
except that such rate shall not exceed 8.25 percent.
(4) Rates for FDPLUS
(A)
(i) For Federal Direct PLUS Loans for which the first disbursement is made on or after July 1, 1994, the applicable rate of interest shall, during any 12-month period beginning on July 1 and ending on or before June 30, 2001, be determined on the preceding June 1 and be equal to—
(I) the bond equivalent rate of 52-week Treasury bills auctioned at final auction held prior to such June 1; plus
(II) 3.1 percent,
except that such rate shall not exceed 9 percent.
(ii) For any 12-month period beginning on July 1 of 2001 or any succeeding year, the applicable rate of interest determined under this subparagraph shall be determined on the preceding June 26 and be equal to—
(I) the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the last calendar week ending on or before such June 26; plus
(II) 3.1 percent,
except that such rate shall not exceed 9 percent.
(B) For Federal Direct PLUS loans made on or after July 1, 1998, the applicable rate of interest shall, during any 12-month period beginning on July 1 and ending on June 30, be determined on the preceding June 1 and be equal to—
(i) the bond equivalent rate of the security with a comparable maturity as established by the Secretary; plus
(ii) 2.1 percent,
except that such rate shall not exceed 9 percent.
(5) Temporary interest rate provision
(A) Rates for FDSL and FDUSL
Notwithstanding the preceding paragraphs of this subsection, for Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans for which the first disbursement is made on or after July 1, 1998, and before October 1, 1998, the applicable rate of interest shall, during any 12-month period beginning on July 1 and ending on June 30, be determined on the preceding June 1 and be equal to—
(i) the bond equivalent rate of 91-day Treasury bills auctioned at the final auction held prior to such June 1; plus
(ii) 2.3 percent,
except that such rate shall not exceed 8.25 percent.
(B) In school and grace period rules
Notwithstanding the preceding paragraphs of this subsection, with respect to any Federal Direct Stafford Loan or Federal Direct Unsubsidized Stafford Loan for which the first disbursement is made on or after July 1, 1998, and before October 1, 1998, the applicable rate of interest for interest which accrues—
(i) prior to the beginning of the repayment period of the loan; or
(ii) during the period in which principal need not be paid (whether or not such principal is in fact paid) by reason of a provision described in section 1078(b)(1)(M) or 1077(a)(2)(C) of this title,
shall be determined under subparagraph (A) by substituting “1.7 percent” for “2.3 percent”.
(C) PLUS loans
Notwithstanding the preceding paragraphs of this subsection, with respect to Federal Direct PLUS Loan for which the first disbursement is made on or after July 1, 1998, and before October 1, 1998, the applicable rate of interest shall be determined under subparagraph (A)—
(i) by substituting “3.1 percent” for “2.3 percent”; and
(ii) by substituting “9.0 percent” for “8.25 percent”.
(6) Interest rate provision for new loans on or after October 1, 1998, and before July 1, 2006
(A) Rates for FDSL and FDUSL
Notwithstanding the preceding paragraphs of this subsection, for Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans for which the first disbursement is made on or after October 1, 1998, and before July 1, 2006, the applicable rate of interest shall, during any 12-month period beginning on July 1 and ending on June 30, be determined on the preceding June 1 and be equal to—
(i) the bond equivalent rate of 91-day Treasury bills auctioned at the final auction held prior to such June 1; plus
(ii) 2.3 percent,
except that such rate shall not exceed 8.25 percent.
(B) In school and grace period rules
Notwithstanding the preceding paragraphs of this subsection, with respect to any Federal Direct Stafford Loan or Federal Direct Unsubsidized Stafford Loan for which the first disbursement is made on or after October 1, 1998, and before July 1, 2006, the applicable rate of interest for interest which accrues—
(i) prior to the beginning of the repayment period of the loan; or
(ii) during the period in which principal need not be paid (whether or not such principal is in fact paid) by reason of a provision described in section 1078(b)(1)(M) or 1077(a)(2)(C) of this title,
shall be determined under subparagraph (A) by substituting “1.7 percent” for “2.3 percent”.
(C) PLUS loans
Notwithstanding the preceding paragraphs of this subsection, with respect to Federal Direct PLUS Loan for which the first disbursement is made on or after October 1, 1998, and before July 1, 2006, the applicable rate of interest shall be determined under subparagraph (A)—
(i) by substituting “3.1 percent” for “2.3 percent”; and
(ii) by substituting “9.0 percent” for “8.25 percent”.
(D) Consolidation loans
Notwithstanding the preceding paragraphs of this subsection, any Federal Direct Consolidation loan for which the application is received on or after February 1, 1999, and before July 1, 2006, shall 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 consolidated, rounded to the nearest higher one-eighth of one percent; or
(ii) 8.25 percent.
(E) Temporary rules for consolidation loans
Notwithstanding the preceding paragraphs of this subsection, any Federal Direct Consolidation loan for which the application is received on or after October 1, 1998, and before February 1, 1999, shall bear interest at an annual rate on the unpaid principal balance of the loan that is equal to—
(i) the bond equivalent rate of 91-day Treasury bills auctioned at the final auction held prior to such June 1; plus
(ii) 2.3 percent,
except that such rate shall not exceed 8.25 percent.
(7) Interest rate provision for new loans on or after July 1, 2006 and before July 1, 2013
(A) Rates for FDSL and FDUSL
Notwithstanding the preceding paragraphs of this subsection, for Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans for which the first disbursement is made on or after July 1, 2006, and before July 1, 2013, the applicable rate of interest shall be 6.8 percent on the unpaid principal balance of the loan.
(B) PLUS loans
Notwithstanding the preceding paragraphs of this subsection, with respect to any Federal Direct PLUS loan for which the first disbursement is made on or after July 1, 2006, and before July 1, 2013, the applicable rate of interest shall be 7.9 percent on the unpaid principal balance of the loan.
(C) Consolidation loans
Notwithstanding the preceding paragraphs of this subsection, any Federal Direct Consolidation loan for which the application is received on or after July 1, 2006, and before July 1, 2013, shall 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 consolidated, rounded to the nearest higher one-eighth of one percent; or
(ii) 8.25 percent.
(D) Reduced rates for undergraduate FDSL
Notwithstanding the preceding paragraphs of this subsection and subparagraph (A) of this paragraph, for Federal Direct Stafford Loans made to undergraduate students for which the first disbursement is made on or after July 1, 2006, and before July 1, 2013, the applicable rate of interest shall be as follows:
(i) For a loan for which the first disbursement is made on or after July 1, 2006, and before July 1, 2008, 6.8 percent on the unpaid principal balance of the loan.
(ii) For a loan for which the first disbursement is made on or after July 1, 2008, and before July 1, 2009, 6.0 percent on the unpaid principal balance of the loan.
(iii) For a loan for which the first disbursement is made on or after July 1, 2009, and before July 1, 2010, 5.6 percent on the unpaid principal balance of the loan.
(iv) For a loan for which the first disbursement is made on or after July 1, 2010, and before July 1, 2011, 4.5 percent on the unpaid principal balance of the loan.
(v) For a loan for which the first disbursement is made on or after July 1, 2011, and before July 1, 2013, 3.4 percent on the unpaid principal balance of the loan.
(8) Interest rate provisions for new loans on or after July 1, 2013
(A) Rates for undergraduate FDSL and FDUSL
Notwithstanding the preceding paragraphs of this subsection, for Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans issued to undergraduate students, for which the first disbursement is made on or after July 1, 2013, the applicable rate of interest shall, for loans disbursed during any 12-month period beginning on July 1 and ending 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 plus 2.05 percent; or
(ii) 8.25 percent.
(B) Rates for graduate and professional FDUSL
Notwithstanding the preceding paragraphs of this subsection, for Federal Direct Unsubsidized Stafford Loans issued to graduate or professional students, for which the first disbursement is made on or after July 1, 2013, the applicable rate of interest shall, for loans disbursed during any 12-month period beginning on July 1 and ending 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 plus 3.6 percent; or
(ii) 9.5 percent.
(C) PLUS loans
Notwithstanding the preceding paragraphs of this subsection, for Federal Direct PLUS Loans, for which the first disbursement is made on or after July 1, 2013, the applicable rate of interest shall, for loans disbursed during any 12-month period beginning on July 1 and ending 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 plus 4.6 percent; or
(ii) 10.5 percent.
(D) Consolidation loans
Notwithstanding the preceding paragraphs of this subsection, any Federal Direct Consolidation Loan for which the application is received on or after July 1, 2013, shall bear interest at an annual rate on the unpaid principal balance of the loan that is equal to the weighted average of the interest rates on the loans consolidated, rounded to the nearest higher one-eighth of one percent.
(E) Consultation
The Secretary shall determine the applicable rate of interest under this paragraph after consultation with the Secretary of the Treasury and shall publish such rate in the Federal Register as soon as practicable after the date of determination.
(F) Rate
The applicable rate of interest determined under this paragraph for a Federal Direct Stafford Loan, a Federal Direct Unsubsidized Stafford Loan, or a Federal Direct PLUS Loan shall be fixed for the period of the loan.
(9) Repayment incentives
(A) Incentives for loans disbursed before July 1, 2012
Notwithstanding any other provision of this part 1 with respect to loans for which the first disbursement of principal is made before July 1, 2012,,2 the Secretary is authorized to prescribe by regulation such reductions in the interest rate or origination fee paid by a borrower of a loan made under this part as the Secretary determines appropriate to encourage on-time repayment of the loan. Such reductions may be offered only if the Secretary determines the reductions are cost neutral and in the best financial interest of the Federal Government. Any increase in subsidy costs resulting from such reductions shall be completely offset by corresponding savings in funds available for the William D. Ford Federal Direct Loan Program in that fiscal year from section 1087h of this title and other administrative accounts.
(B) Accountability
Prior to publishing regulations proposing repayment incentives with respect to loans for which the first disbursement of principal is made before July 1, 2012, the Secretary shall ensure the cost neutrality of such reductions. The Secretary shall not prescribe such regulations in final form unless an official report from the Director of the Office of Management and Budget to the Secretary and a comparable report from the Director of the Congressional Budget Office to the Congress each certify that any such reductions will be completely cost neutral. Such reports shall be transmitted to the authorizing committees not less than 60 days prior to the publication of regulations proposing such reductions.
(C) No repayment incentives for new loans disbursed on or after July 1, 2012
Notwithstanding any other provision of this part, the Secretary is prohibited from authorizing or providing any repayment incentive not otherwise authorized under this part to encourage on-time repayment of a loan under this part for which the first disbursement of principal is made on or after July 1, 2012, including any reduction in the interest or origination fee rate paid by a borrower of such a loan, except that the Secretary may provide for an interest rate reduction for a borrower who agrees to have payments on such a loan automatically electronically debited from a bank account.
(10) Publication
The Secretary shall determine the applicable rates of interest under this subsection after consultation with the Secretary of the Treasury and shall publish such rate in the Federal Register as soon as practicable after the date of determination.
(c) Loan fee
(1) In general
The Secretary shall charge the borrower of a loan made under this part an origination fee of 4.0 percent of the principal amount of loan.
(2) Subsequent reduction
Paragraph (1) shall be applied to loans made under this part, other than Federal Direct Consolidation loans and Federal Direct PLUS loans—
(A) by substituting “3.0 percent” for “4.0 percent” with respect to loans for which the first disbursement of principal is made on or after February 8, 2006, and before July 1, 2007;
(B) by substituting “2.5 percent” for “4.0 percent” with respect to loans for which the first disbursement of principal is made on or after July 1, 2007, and before July 1, 2008;
(C) by substituting “2.0 percent” for “4.0 percent” with respect to loans for which the first disbursement of principal is made on or after July 1, 2008, and before July 1, 2009;
(D) by substituting “1.5 percent” for “4.0 percent” with respect to loans for which the first disbursement of principal is made on or after July 1, 2009, and before July 1, 2010; and
(E) by substituting “1.0 percent” for “4.0 percent” with respect to loans for which the first disbursement of principal is made on or after July 1, 2010.
(d) Repayment plans
(1) Design and selection
Consistent with criteria established by the Secretary, the Secretary shall offer a borrower of a loan made under this part before July 1, 2026, who has not received a loan made under this part on or after July 1, 2026, a variety of plans for repayment of such loan, including principal and interest on the loan. The borrower shall be entitled to accelerate, without penalty, repayment on the borrower’s loans under this part. The borrower may choose—
(A) a standard repayment plan, consistent with subsection (a)(1) of this section and with section 1078(b)(9)(A)(i) of this title;
(B) a graduated repayment plan, consistent with section 1078(b)(9)(A)(ii) of this title;
(C) an extended repayment plan, consistent with section 1078(b)(9)(A)(iv) of this title, except that the borrower shall annually repay a minimum amount determined by the Secretary in accordance with section 1078(b)(1)(L) of this title;
(D) before June 30, 2028, an income contingent repayment plan, with varying annual repayment amounts based on the income of the borrower, paid over an extended period of time prescribed by the Secretary, not to exceed 25 years, except that the plan described in this subparagraph shall not be available to the borrower of a Federal Direct PLUS loan made on behalf of a dependent student;
(E) beginning on July 1, 2009, an income-based repayment plan in accordance with section 1098e of this title, except that the plan described in this subparagraph shall not be available to the borrower of a Federal Direct PLUS Loan made on behalf of a dependent student or an excepted Consolidation Loan (as defined in section 1098e(a)(2) of this title); and
(F) beginning on July 1, 2026, the income-based Repayment Assistance Plan under subsection (q), provided that—
(i) such Plan shall not be available for the repayment of excepted loans (as defined in paragraph (7)(E)); and
(ii) the borrower is required to pay each outstanding loan of the borrower made under this part under such Repayment Assistance Plan, except that a borrower of an excepted loan (as defined in paragraph (7)(E)) may repay the excepted loan separately from other loans under this part obtained by the borrower.
(2) Selection by Secretary
If a borrower of a loan made under this part does not select a repayment plan described in paragraph (1), the Secretary may provide the borrower with a repayment plan described in subparagraph (A), (B), or (C) of paragraph (1).
(3) Changes in selections
The borrower of a loan made under this part may change the borrower’s selection of a repayment plan under paragraph (1), or the Secretary’s selection of a plan for the borrower under paragraph (2), as the case may be, under such terms and conditions as may be established by the Secretary.
(4) Alternative repayment plans
The Secretary may provide, on a case by case basis, an alternative repayment plan to a borrower of a loan made under this part who demonstrates to the satisfaction of the Secretary that the terms and conditions of the repayment plans available under paragraph (1) are not adequate to accommodate the borrower’s exceptional circumstances. In designing such alternative repayment plans, the Secretary shall ensure that such plans do not exceed the cost to the Federal Government, as determined on the basis of the present value of future payments by such borrowers, of loans made using the plans available under paragraph (1).
(5) Repayment after default
The Secretary may require any borrower who has defaulted on a loan made under this part to—
(A) pay all reasonable collection costs associated with such loan; and
(B) repay the loan pursuant to an income-based repayment plan under subsection (q) or section 1098e of this title, as applicable.
(6) Termination and limitation of repayment authority
(A) Sunset of repayment plans available before July 1, 2026
Paragraphs (1) through (4) of this subsection shall only apply to loans made under this part before July 1, 2026.
(B) Prohibitions
The Secretary may not, for any loan made under this part on or after July 1, 2026—
(i) authorize a borrower of such a loan to repay such loan pursuant to a repayment plan that is not described in paragraph (7)(A); or
(ii) carry out or modify a repayment plan that is not described in such paragraph.
(7) Repayment plans for loans made on or after July 1, 2026
(A) Design and selection
Beginning on July 1, 2026, the Secretary shall offer a borrower of a loan made under this part on or after such date (including such a borrower who also has a loan made under this part before such date) two plans for repayment of the borrower’s loans under this part, including principal and interest on such loans. The borrower shall be entitled to accelerate, without penalty, repayment on such loans. The borrower may choose—
(i) a standard repayment plan—
(I) with a fixed monthly repayment amount paid over a fixed period of time equal to the applicable period determined under subclause (II); and
(II) with the applicable period of time for repayment determined based on the total outstanding principal of all loans of the borrower made under this part before, on, or after July 1, 2026, at the time the borrower is entering repayment under such plan, as follows—
(aa) for a borrower with total outstanding principal of less than $25,000, a period of 10 years;
(bb) for a borrower with total outstanding principal of not less than $25,000 and less than $50,000, a period of 15 years;
(cc) for a borrower with total outstanding principal of not less than $50,000 and less than $100,000, a period of 20 years; and
(dd) for a borrower with total outstanding principal of $100,000 or more, a period of 25 years; or
(ii) the income-based Repayment Assistance Plan under subsection (q).
(B) Selection by Secretary
If a borrower of a loan made under this part on or after July 1, 2026, does not select a repayment plan described in subparagraph (A), the Secretary shall provide the borrower with the standard repayment plan described in subparagraph (A)(i).
(C) Selection applies to all outstanding loans
A borrower is required to pay each outstanding loan of the borrower made under this part under the same selected repayment plan, except that a borrower who selects the Repayment Assistance Plan and also has an excepted loan that is not eligible for repayment under such Repayment Assistance Plan shall repay the excepted loan separately from other loans under this part obtained by the borrower.
(D) Changes of repayment plan
A borrower may change the borrower’s selection of—
(i) the standard repayment plan under subparagraph (A)(i), or the Secretary’s selection of such plan for the borrower under subparagraph (B), as the case may be, to the Repayment Assistance Plan under subparagraph (A)(ii) at any time; and
(ii) the Repayment Assistance Plan under subparagraph (A)(ii) to the standard repayment plan under subparagraph (A)(i) at any time.
(E) Repayment for borrowers with excepted loans made on or after July 1, 2026
(i) Standard repayment plan required
Notwithstanding subparagraphs (A) through (D), beginning on July 1, 2026, the Secretary shall require a borrower who has received an excepted loan made on or after such date (including such a borrower who also has an excepted loan made before such date) to repay each excepted loan, including principal and interest on those excepted loans, under the standard repayment plan under subparagraph (A)(i). The borrower shall be entitled to accelerate, without penalty, repayment on such loans.
(ii) Excepted loan defined
For the purposes of this paragraph, the term “excepted loan” means a loan with an outstanding balance that is—
(I) a Federal Direct PLUS Loan that is made on behalf of a dependent student; or
(II) a Federal Direct Consolidation Loan, if the proceeds of such loan were used to discharge the liability on—
(aa) an excepted PLUS loan, as defined in section 1098e(a)(1) of this title; or
(bb) an excepted consolidation loan (as such term is defined in section 1098e(a)(2)(A) of this title, notwithstanding subparagraph (B) of such section).
(e) Income contingent repayment
(1) Information and procedures
The Secretary may obtain such information as is reasonably necessary regarding the income of a borrower (and the borrower’s spouse, if applicable) of a loan made under this part that is, or may be, repaid pursuant to income contingent repayment, for the purpose of determining the annual repayment obligation of the borrower. Returns and return information (as defined in section 6103 of title 26) may be obtained under the preceding sentence only to the extent authorized by section 6103(l)(13) of title 26. The Secretary shall establish procedures for determining the borrower’s repayment obligation on that loan for such year, and such other procedures as are necessary to implement effectively income contingent repayment.
(2) Repayment based on adjusted gross income
A repayment schedule for a loan made under this part and repaid pursuant to income contingent repayment shall be based on the adjusted gross income (as defined in section 62 of title 26) of the borrower or, if the borrower is married and files a Federal income tax return jointly with the borrower’s spouse, on the adjusted gross income of the borrower and the borrower’s spouse.
(3) Additional documents
A borrower who chooses, or is required, to repay a loan made under this part pursuant to income contingent repayment, and for whom adjusted gross income is unavailable or does not reasonably reflect the borrower’s current income, shall provide to the Secretary other documentation of income satisfactory to the Secretary, which documentation the Secretary may use to determine an appropriate repayment schedule.
(4) Repayment schedules
Income contingent repayment schedules shall be established by regulations promulgated by the Secretary and shall require payments that vary in relation to the appropriate portion of the annual income of the borrower (and the borrower’s spouse, if applicable) as determined by the Secretary.
(5) Calculation of balance due
The balance due on a loan made under this part that is repaid pursuant to income contingent repayment shall equal the unpaid principal amount of the loan, any accrued interest, and any fees, such as late charges, assessed on such loan. The Secretary may promulgate regulations limiting the amount of interest that may be capitalized on such loan, and the timing of any such capitalization.
(6) Notification to borrowers
The Secretary shall establish procedures under which a borrower of a loan made under this part who chooses or is required to repay such loan pursuant to income contingent repayment is notified of the terms and conditions of such plan, including notification of such borrower, that if a borrower considers that special circumstances, such as a loss of employment by the borrower or the borrower’s spouse, warrant an adjustment in the borrower’s loan repayment, the borrower may contact the Secretary, who shall determine whether such adjustment is appropriate, in accordance with criteria established by the Secretary.
(7) Maximum repayment period
In calculating the extended period of time for which an income contingent repayment plan under this subsection may be in effect for a borrower, the Secretary shall include all time periods during which a borrower of loans under part B, part D, or part E—
(A) is not in default on any loan that is included in the income contingent repayment plan; and
(B)
(i) is in deferment due to an economic hardship described in section 1085(o) of this title;
(ii) makes monthly payments under paragraph (1) or (6) of section 1098e(b) of this title;
(iii) makes monthly payments of not less than the monthly amount calculated under section 1078(b)(9)(A)(i) of this title or subsection (d)(1)(A), based on a 10-year repayment period, when the borrower first made the election described in section 1098e(b)(1) of this title;
(iv) makes payments of not less than the payments required under a standard repayment plan under section 1078(b)(9)(A)(i) of this title or subsection (d)(1)(A) with a repayment period of 10 years; or
(v) makes payments under an income contingent repayment plan under subsection (d)(1)(D).
(8) Automatic recertification
(A) In general
The Secretary shall establish and implement, with respect to any borrower described in subparagraph (B), procedures to—
(i) use return information disclosed under section 6103(l)(13) of title 26, pursuant to approval provided under section 1098h of this title, to determine the repayment obligation of the borrower without further action 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 information as the Secretary may require to determine the repayment obligation of the borrower (or withdraw from the repayment plan under this subsection); and
(iii) provide the borrower with an opportunity to update the return information so disclosed before the determination of the repayment obligation of the borrower.
(B) Applicability
Subparagraph (A) shall apply to each borrower of a loan made under this part who, on or after the date on which the Secretary establishes procedures under such subparagraph—
(i) selects, or is required to repay such loan pursuant to, an income-contingent repayment plan; or
(ii) recertifies income or family size under such plan.
(f) Deferment; Forbearance
(1) Effect on principal and interest
A borrower of a loan made under this part who meets the requirements described in paragraph (2) shall be eligible for a deferment, during which periodic installments of principal need not be paid, and interest—
(A) shall not accrue, in the case of a—
(i) Federal Direct Stafford Loan; or
(ii) a Federal Direct Consolidation Loan that consolidated only Federal Direct Stafford Loans, or a combination of such loans and Federal Stafford Loans for which the student borrower received an interest subsidy under section 1078 of this title; or
(B) shall accrue and be capitalized or paid by the borrower, in the case of a Federal Direct PLUS Loan, a Federal Direct Unsubsidized Stafford Loan, or a Federal Direct Consolidation Loan not described in subparagraph (A)(ii).
(2) Eligibility
A borrower of a loan made under this part shall be eligible for a deferment during any period—
(A) during which the borrower—
(i) is carrying at least one-half the normal full-time work load for the course of study that the borrower is pursuing, as determined by the eligible institution (as such term is defined in section 1085(a) of this title) the borrower is attending; or
(ii) is pursuing a course of study pursuant to a graduate fellowship program approved by the Secretary, or pursuant to a rehabilitation training program for individuals with disabilities approved by the Secretary,
except that no borrower shall be eligible for a deferment under this subparagraph, or a loan made under this part (other than a Federal Direct PLUS Loan or a Federal Direct Consolidation Loan), while serving in a medical internship or residency program;
(B) subject to paragraph (7), not in excess of 3 years during which the borrower is seeking and unable to find full-time employment;
(C) during which the borrower—
(i) is serving on active duty during a war or other military operation or national emergency; or
(ii) is performing qualifying National Guard duty during a war or other military operation or national emergency,
and for the 180-day period following the demobilization date for the service described in clause (i) or (ii); or
(D) subject to paragraph (7), not in excess of 3 years during which the Secretary determines, in accordance with regulations prescribed under section 1085(o) of this title, that the borrower has experienced or will experience an economic hardship.
(3) Deferment for borrowers receiving cancer treatment
(A) Effect on principal and interest
A borrower of a loan made under this part who meets the requirements of subparagraph (B) shall be eligible for a deferment, during which periodic installments of principal need not be paid, and interest shall not accrue.
(B) Eligibility
A borrower of a loan made under this part shall be eligible for a deferment during—
(i) any period in which such borrower is receiving treatment for cancer; and
(ii) the 6 months after such period.
(C) Applicability
This paragraph shall apply with respect to loans—
(i) made on or after September 28, 2018; or
(ii) in repayment on September 28, 2018.
(4) Deferment for dislocated military spouses
(A) Duration and effect on principal and interest
A borrower of a loan made under this part who meets the requirements of subparagraph (B) shall be eligible for a deferment for an aggregate period of 180 days, during which periodic installments of principal need not be paid, and interest—
(i) shall not accrue, in the case of a—
(I) Federal Direct Stafford Loan; or
(II) a Federal Direct Consolidation Loan that consolidated only Federal Direct Stafford Loans, or a combination of such loans and Federal Stafford Loans for which the student borrower received an interest subsidy under section 1078 of this title; or
(ii) shall accrue and be capitalized or paid by the borrower, in the case of a Federal Direct PLUS Loan, a Federal Direct Unsubsidized Stafford Loan, or a Federal Direct Consolidation Loan not described in clause (i)(II).
(B) Eligibility
A borrower of a loan made under this part shall be eligible for a deferment under subparagraph (A) if the borrower—
(i) is the spouse of a member of the Armed Forces serving on active duty; and
(ii) has experienced a loss of employment as a result of relocation to accommodate a permanent change in duty station of such member.
(C) Documentation and approval
(i) In general
A borrower may establish eligibility for a deferment under subparagraph (A) by providing to the Secretary—
(I) the documentation described in clause (ii); or
(II) such other documentation as the Secretary determines appropriate.
(ii) Documentation
The documentation described in this clause is—
(I) evidence that the borrower is the spouse of a member of the Armed Forces serving on active duty;
(II) evidence that a military permanent change of station order was issued to such member; and
(III)
(aa) evidence that the borrower is eligible for unemployment benefits due to a loss of employment resulting from relocation to accommodate such permanent change in duty station; or
(bb) a written certification, or an equivalent as approved by the Secretary, that the borrower is registered with a public or private employment agency due to a loss of employment resulting from relocation to accommodate such permanent change in duty station.
(5) “Borrower” defined
For the purpose of this subsection, the term “borrower” means an individual who is a new borrower on the date such individual applies for a loan under this part for which the first disbursement is made on or after July 1, 1993.
(6) Deferments for previous part B loan borrowers
A borrower of a loan made under this part, who at the time such individual applies for such loan, has an outstanding balance of principal or interest owing on any loan made, insured, or guaranteed under part B of this subchapter prior to July 1, 1993, shall be eligible for a deferment under section 1077(a)(2)(C) of this title or section 1078(b)(1)(M) of this title as such sections were in effect on July 22, 1992.
(7) Sunset of unemployment and economic hardship deferments
A borrower who receives a loan made under this part on or after July 1, 2027, shall not be eligible to defer such loan under subparagraph (B) or (D) of paragraph (2).
(8) Forbearance on loans made under this part on or after July 1, 2027
A borrower who receives a loan made under this part on or after July 1, 2027, may only be eligible for a forbearance on such loan pursuant to section 1078(c)(3)(B) of this title that does not exceed 9 months during any 24-month period.
(g) Federal Direct Consolidation Loans
(1) In general
A borrower of a loan made under this part may consolidate such loan with the loans described in section 1078–3(a)(4) of this title, including any loan made under part B and first disbursed before July 1, 2010. To be eligible for a consolidation loan under this part, a borrower shall meet the eligibility criteria set forth in section 1078–3(a)(3) of this title.
(2) Separating joint consolidation loans
(A) In general
(i) Authorization
A married couple, or 2 individuals who were previously a married couple, and who received a joint consolidation loan as such married couple under subparagraph (C) of section 1078–3(a)(3) of this title (as such subparagraph was in effect on June 30, 2006), may apply to the Secretary, in accordance with subparagraph (C) of this paragraph, for each individual borrower in the married couple (or previously married couple) to receive a separate Federal Direct Consolidation Loan under this part.
(ii) Eligibility for borrowers in default
Notwithstanding any other provision of this chapter, a married couple, or 2 individuals who were previously a married couple, who are in default on a joint consolidation loan may be eligible to receive a separate Federal Direct Consolidation Loan under this part in accordance with this paragraph.
(B) Secretarial requirements
Notwithstanding section 1078–3(a)(3)(A) of this title or any other provision of law, for each individual borrower who applies under subparagraph (A), the Secretary shall—
(i) make a separate Federal Direct Consolidation Loan under this part that—
(I) shall be for an amount equal to the product of—
(aa) the unpaid principal and accrued unpaid interest of the joint consolidation loan (as of the date that is the day before such separate consolidation loan is made) and any outstanding charges and fees with respect to such loan; and
(bb) the percentage of the joint consolidation loan attributable to the loans of the individual borrower for whom such separate consolidation loan is being made, as determined—
(AA) on the basis of the loan obligations of such borrower with respect to such joint consolidation loan (as of the date such joint consolidation loan was made); or
(BB) in the case in which both borrowers request, on the basis of proportions outlined in a divorce decree, court order, or settlement agreement; and
(II) has the same rate of interest as the joint consolidation loan (as of the date that is the day before such separate consolidation loan is made); and
(ii) in a timely manner, notify each individual borrower that the joint consolidation loan had been repaid and of the terms and conditions of their new loans.
(C) Application for separate direct consolidation loan
(i) Joint application
Except as provided in clause (ii), to receive separate consolidation loans under this part, both individual borrowers in a married couple (or previously married couple) shall jointly apply under subparagraph (A).
(ii) Separate application
An individual borrower in a married couple (or previously married couple) may apply for a separate consolidation loan under subparagraph (A) separately and without regard to whether or when the other individual borrower in the married couple (or previously married couple) applies under subparagraph (A), in a case in which—
(I) the individual borrower certifies to the Secretary that such borrower—
(aa) has experienced an act of domestic violence (as defined in section 12291 of title 34 from the other individual borrower;
(bb) has experienced economic abuse (as defined in section 12291 of title 34 from the other individual borrower; or
(cc) is unable to reasonably reach or access the loan information of the other individual borrower; or
(II) the Secretary determines that authorizing each individual borrower to apply separately under subparagraph (A) would be in the best fiscal interests of the Federal Government.
(iii) Remaining obligation from separate application
In the case of an individual borrower who receives a separate consolidation loan due to the circumstances described in clause (ii), the other non-applying individual borrower shall become solely liable for the remaining balance of the joint consolidation loan.
(3) Consolidation loans made on or after July 1, 2026
A Federal Direct Consolidation Loan offered to a borrower under this part on or after July 1, 2026, may only be repaid pursuant to a repayment plan described in clause (i) or (ii) of subsection (d)(7)(A) of this section, as applicable, and the repayment schedule of such a Consolidation Loan shall be determined in accordance with such repayment plan.
(h) Borrower defenses
Notwithstanding any other provision of State or Federal law, the Secretary shall specify in regulations which acts or omissions of an institution of higher education a borrower may assert as a defense to repayment of a loan made under this part, except that in no event may a borrower recover from the Secretary, in any action arising from or relating to a loan made under this part, an amount in excess of the amount such borrower has repaid on such loan.
(i) Loan application and promissory note
The common financial reporting form required in section 1090(a)(1) of this title shall constitute the application for loans made under this part (other than a Federal Direct PLUS loan). The Secretary shall develop, print, and distribute to participating institutions a standard promissory note and loan disclosure form.
(j) Loan disbursement
(1) In general
Proceeds of loans to students under this part shall be applied to the student’s account for tuition and fees, and, in the case of institutionally owned housing, to room and board. Loan proceeds that remain after the application of the previous sentence shall be delivered to the borrower by check or other means that is payable to and requires the endorsement or other certification by such borrower.
(2) Payment periods
The Secretary shall establish periods for the payments described in paragraph (1) in a manner consistent with payment of Federal Pell Grants under subpart 1 of part A of this subchapter.
(k) Fiscal control and fund accountability
(1) In general
(A) An institution shall maintain financial records in a manner consistent with records maintained for other programs under this subchapter.
(B) Except as otherwise required by regulations of the Secretary 1 an institution may maintain loan funds under this part in the same account as other Federal student financial assistance.
(2) Payments and refunds
Payments and refunds shall be reconciled in a manner consistent with the manner set forth for the submission of a payment summary report required of institutions participating in the program under subpart 1 of part A, except that nothing in this paragraph shall prevent such reconciliations on a monthly basis.
(3) Transaction histories
All transaction histories under this part shall be maintained using the same system designated by the Secretary for the provision of Federal Pell Grants under subpart 1 of part A of this subchapter.
(l) Armed Forces and NOAA Commissioned Officer Corps student loan interest payment programs
(1) Authority
Using funds received by transfer to the Secretary under section 2174 of title 10 or section 3078 of title 33 for the payment of interest on a loan made under this part to a member of the Armed Forces or an officer in the commissioned officer corps of the National Oceanic and Atmospheric Administration, respectively, the Secretary shall pay the interest on the loan as due for a period not in excess of 36 consecutive months. The Secretary may not pay interest on such a loan out of any funds other than funds that have been so transferred.
(2) Forbearance
During the period in which the Secretary is making payments on a loan under paragraph (1), the Secretary shall grant the borrower forbearance, in the form of a temporary cessation of all payments on the loan other than the payments of interest on the loan that are made under that paragraph.
(m) Repayment plan for public service employees
(1) In general
The Secretary shall cancel the balance of interest and principal due, in accordance with paragraph (2), on any eligible Federal Direct Loan not in default for a borrower who—
(A) has made 120 monthly payments on the eligible Federal Direct Loan after October 1, 2007, pursuant to any one or a combination of the following—
(i) payments under an income-based repayment plan under section 1098e of this title;
(ii) payments under a standard repayment plan under subsection (d)(1)(A), based on a 10-year repayment period;
(iii) monthly payments under a repayment plan under subsection (d)(1) or (g) of not less than the monthly amount calculated under subsection (d)(1)(A), based on a 10-year repayment period;
(iv) payments under an income contingent repayment plan under subsection (d)(1)(D) (as in effect on the day before the date of the repeal of subsection (e) of this section); or
(v) on-time payments under the Repayment Assistance Plan under subsection (q); and
(B)
(i) is employed in a public service job at the time of such forgiveness; and
(ii) has been employed in a public service job during the period in which the borrower makes each of the 120 payments described in subparagraph (A).
(2) Loan cancellation amount
After the conclusion of the employment period described in paragraph (1), the Secretary shall cancel the obligation to repay the balance of principal and interest due as of the time of such cancellation, on the eligible Federal Direct Loans made to the borrower under this part.
(3) Definitions
In this subsection:
(A) Eligible Federal Direct Loan
The term “eligible Federal Direct Loan” means a Federal Direct Stafford Loan, Federal Direct PLUS Loan, or Federal Direct Unsubsidized Stafford Loan, or a Federal Direct Consolidation Loan.
(B) Public service job
The term “public service job” means—
(i) a full-time job in emergency management, government (excluding time served as a member of Congress), military service, public safety, law enforcement, public health (including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health care support occupations, as such terms are defined by the Bureau of Labor Statistics), public education, social work in a public child or family service agency, public interest law services (including prosecution or public defense or legal advocacy on behalf of low-income communities at a nonprofit organization), early childhood education (including licensed or regulated childcare, Head Start, and State funded prekindergarten), public service for individuals with disabilities, public service for the elderly, public library sciences, school-based library sciences and other school-based services, or at an organization that is described in section 501(c)(3) of title 26 and exempt from taxation under section 501(a) of such title; or
(ii) teaching as a full-time faculty member at a Tribal College or University as defined in section 1059c(b) of this title and other faculty teaching in high-needs subject areas or areas of shortage (including nurse faculty, foreign language faculty, and part-time faculty at community colleges), as determined by the Secretary.
(4) Ineligibility for double benefits
No borrower may, for the same service, receive a reduction of loan obligations under both this subsection and section 1078–10, 1078–11, 1078–12, or 1087j of this title.
(n) Identity fraud protection
The Secretary shall take such steps as may be necessary to ensure that monthly Federal Direct Loan statements and other publications of the Department do not contain more than four digits of the Social Security number of any individual.
(o) No accrual of interest for active duty service members
(1) In general
Notwithstanding any other provision of this part and in accordance with paragraphs (2) and (4), interest shall not accrue for an eligible military borrower on a loan made under this part for which the first disbursement is made on or after October 1, 2008.
(2) Consolidation loans
In the case of any consolidation loan made under this part that is disbursed on or after October 1, 2008, interest shall not accrue pursuant to this subsection only on such portion of such loan as was used to repay a loan made under this part for which the first disbursement is made on or after October 1, 2008.
(3) Eligible military borrower
In this subsection, the term “eligible military borrower” means an individual who—
(A)
(i) is serving on active duty during a war or other military operation or national emergency; or
(ii) is performing qualifying National Guard duty during a war or other military operation or national emergency; and
(B) is serving in an area of hostilities in which service qualifies for special pay under section 310, or paragraph (1) or (3) of section 351(a), of title 37.
(4) Limitation
An individual who qualifies as an eligible military borrower under this subsection may receive the benefit of this subsection for not more than 60 months.
(p) Disclosures
Each institution of higher education with which the Secretary has an agreement under section 1087c of this title, and each contractor with which the Secretary has a contract under section 1087f of this title, shall, with respect to loans under this part and in accordance with such regulations as the Secretary shall prescribe, comply with each of the requirements under section 1083 of this title that apply to a lender with respect to a loan under part B.
(q) Repayment Assistance Plan
(1) In general
Notwithstanding any other provision of this chapter, beginning on July 1, 2026, the Secretary shall carry out an income-based repayment plan (to be known as the “Repayment Assistance Plan”), that shall have the following terms and conditions:
(A) The total monthly repayment amount owed by a borrower for all of the loans of the borrower that are repaid pursuant to the Repayment Assistance Plan shall be equal to the applicable monthly payment of a borrower calculated under paragraph (4)(B), except that the borrower may not be precluded from repaying an amount that exceeds such amount for any month.
(B) The Secretary shall apply the borrower’s applicable monthly payment under this paragraph first toward interest due on each such loan, next toward any fees due on each loan, and then toward the principal of each loan.
(C) Any principal due and not paid under subparagraph (B) or paragraph (2)(B) shall be deferred.
(D) A borrower who is not in a period of deferment or forbearance shall make an applicable monthly payment for each month until the earlier of—
(i) the date on which the outstanding balance of principal and interest due on all of the loans of the borrower that are repaid pursuant to the Repayment Assistance Plan is $0; or
(ii) the date on which the borrower has made 360 qualifying monthly payments.
(E) The Secretary shall cancel any outstanding balance of principal and interest due on a loan made under this part to a borrower—
(i) who, for any period of time, participated in the Repayment Assistance Plan under this subsection;
(ii) whose most recent payment for such loan prior to the loan cancellation under this subparagraph was made under such Repayment Assistance Plan; and
(iii) who has made 360 qualifying monthly payments on such loan.
(F) For the purposes of this subsection, the term “qualifying monthly payment” means any of the following:
(i) An on-time applicable monthly payment under this subsection.
(ii) An on-time monthly payment under the standard repayment plan under subsection (d)(7)(A)(i) of not less than the monthly payment required under such plan.
(iii) A monthly payment under any repayment plan (excluding the Repayment Assistance Plan under this subsection) of not less than the monthly payment that would be required under a standard repayment plan under subsection (d)(1)(A) with a repayment period of 10 years.
(iv) A monthly payment under section 1098e of this title of not less than the monthly payment required under such section, including a monthly payment equal to the minimum payment amount permitted under such section.
(v) A monthly payment made before July 1, 2028, under an income contingent repayment plan carried out under subsection (d)(1)(D) (or under an alternative repayment plan in lieu of repayment under such an income contingent repayment plan, if placed in such an alternative repayment plan by the Secretary) of not less than the monthly payment required under such a plan, including a monthly payment equal to the minimum payment amount permitted under such a plan.
(vi) A month when the borrower did not make a payment because the borrower was in deferment under subsection (f)(2)(B) or due to an economic hardship described in subsection (f)(2)(D).
(vii) A month that ended before July 4, 2025, when the borrower did not make a payment because the borrower was in a period of deferment or forbearance described in section 685.209(k)(4)(iv) of title 34, Code of Federal Regulations (as in effect on July 4, 2025).
(G) The procedures established by the Secretary under section 1098e(c) of this title shall apply for annually determining the borrower’s eligibility for the Repayment Assistance Plan, including verification of a borrower’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 implement income-based repayment under this subsection. With respect to carrying out section 1098h(a)(2) of this title for the Repayment Assistance Plan, an individual may elect to opt out of the disclosures required under section 1098h(a)(2)(A)(ii) of this title in accordance with the procedures established under section 1098e(c)(2) of this title.
(2) Balance assistance for distressed borrowers
(A) Interest subsidy
With respect to a borrower of a loan made under this part, for each month for which such a borrower makes an on-time applicable monthly payment required under paragraph (1)(A) and such monthly payment is insufficient to pay the total amount of interest that accrues for the month on all loans of the borrower repaid pursuant to the Repayment Assistance Plan under this subsection, the amount of interest accrued and not paid for the month shall not be charged to the borrower.
(B) Matching principal payment
With respect to a borrower of a loan made under this part and not in a period of deferment or forbearance, for each month for which a borrower makes an on-time applicable monthly payment required under paragraph (1)(A) and such monthly payment reduces the total outstanding principal balance of all loans of the borrower repaid pursuant to the Repayment Assistance Plan under this subsection by less than $50, the Secretary shall reduce such total outstanding principal balance of the borrower by an amount that is equal to—
(i) the amount that is the lesser of—
(I) $50; or
(II) the total amount paid by the borrower for such month pursuant to paragraph (1)(A); minus
(ii) the total amount paid by the borrower for such month pursuant to paragraph (1)(A) that is applied to such total outstanding principal balance.
(3) Additional documents
A borrower who chooses, or is required, to repay a loan under this subsection, and for whom adjusted gross income is unavailable or does not reasonably reflect the borrower’s current income, shall provide to the Secretary other documentation of income satisfactory to the Secretary, which documentation the Secretary may use to determine repayment under this subsection.
(4) Definitions
In this subsection:
(A) Adjusted gross income
The term “adjusted gross income”, when used with respect to a borrower, means the adjusted gross income (as such term is defined in section 62 of title 26) of the borrower (and the borrower’s spouse, as applicable) for the most recent taxable year, except that, in the case of a married borrower who files a separate Federal income tax return, the term does not include the adjusted gross income of the borrower’s spouse.
(B) Applicable monthly payment
(i) In general
Except as provided in clause (ii), (iii), or (vi), the term “applicable monthly payment” means, when used with respect to a borrower, the amount equal to—
(I) the applicable base payment of the borrower, divided by 12; minus
(II) $50 for each dependent of the borrower (which, in the case of a married borrower filing a separate Federal income tax return, shall include only each dependent that the borrower claims on that return).
(ii) Minimum amount
In the case of a borrower with an applicable monthly payment amount calculated under clause (i) that is less than $10, the applicable monthly payment of the borrower shall be $10.
(iii) Final payment
In the case of a borrower whose total outstanding balance of principal and interest on all of the loans of the borrower that are repaid pursuant to the Repayment Assistance Plan is less than the applicable monthly payment calculated pursuant to clause (i) or (ii), as applicable, then the applicable monthly payment of the borrower shall be the total outstanding balance of principal and interest on all such loans.
(iv) Base payment
The amount of the applicable base payment for a borrower with an adjusted gross income of—
(I) not more than $10,000, is $120;
(II) more than $10,000 and not more than $20,000, is 1 percent of such adjusted gross income;
(III) more than $20,000 and not more than $30,000, is 2 percent of such adjusted gross income;
(IV) more than $30,000 and not more than $40,000, is 3 percent of such adjusted gross income;
(V) more than $40,000 and not more than $50,000, is 4 percent of such adjusted gross income;
(VI) more than $50,000 and not more than $60,000, is 5 percent of such adjusted gross income;
(VII) more than $60,000 and not more than $70,000, is 6 percent of such adjusted gross income;
(VIII) more than $70,000 and not more than $80,000, is 7 percent of such adjusted gross income;
(IX) more than $80,000 and not more than $90,000, is 8 percent of such adjusted gross income;
(X) more than $90,000 and not more than $100,000, is 9 percent of such adjusted gross income; and
(XI) more than $100,000, is 10 percent of such adjusted gross income.
(v) Dependent
For the purposes of this paragraph, the term “dependent” means an individual who is a dependent under section 152 of title 26.
(vi) Special rule
In the case of a borrower who is required by the Secretary to provide information to the Secretary to determine the applicable monthly payment of the borrower under this subparagraph, and who does not comply with such requirement, the applicable monthly payment of the borrower shall be—
(I) the sum of the monthly payment amounts the borrower would have paid for each of the borrower’s loans made under this part under a standard repayment plan with a fixed monthly repayment amount, paid over a period of 10 years, based on the outstanding principal due on such loan when such loan entered repayment; and
(II) determined pursuant to this clause until the date on which the borrower provides such information to the Secretary.
(Pub. L. 89–329, title IV, § 455, as added Pub. L. 99–498, title IV, § 404, Oct. 17, 1986, 100 Stat. 1439; amended Pub. L. 102–325, title IV, § 451, July 23, 1992, 106 Stat. 572; Pub. L. 103–66, title IV, § 4021, Aug. 10, 1993, 107 Stat. 346; Pub. L. 103–382, title III, § 359, Oct. 20, 1994, 108 Stat. 3968; Pub. L. 105–178, title VIII, § 8301(c), June 9, 1998, 112 Stat. 498; Pub. L. 105–244, title IV, §§ 401(g)(6), 452(a)(1), (b), (c), Oct. 7, 1998, 112 Stat. 1652, 1715–1717; Pub. L. 106–554, § 1(a)(1) [title III, § 318(b)], Dec. 21, 2000, 114 Stat. 2763, 2763A–49; Pub. L. 107–139, § 1(b), (c), Feb. 8, 2002, 116 Stat. 9; Pub. L. 107–314, div. A, title VI, § 651(c), Dec. 2, 2002, 116 Stat. 2580; Pub. L. 109–171, title VIII, §§ 8007(b), 8008(b), (c)(2), (3), 8009(d), Feb. 8, 2006, 120 Stat. 160, 162–164; Pub. L. 110–84, title II, §§ 201(b), 202(b), 203(b)(3), 205, title IV, § 401, Sept. 27, 2007, 121 Stat. 791, 795, 800; Pub. L. 110–315, title I, § 103(b)(8), title IV, §§ 425(b)(3), 451, Aug. 14, 2008, 122 Stat. 3089, 3234, 3261; Pub. L. 111–39, title IV, § 404(b)(2), July 1, 2009, 123 Stat. 1946; Pub. L. 111–152, title II, § 2211(a), Mar. 30, 2010, 124 Stat. 1078; Pub. L. 112–25, title V, §§ 502, 503, Aug. 2, 2011, 125 Stat. 266; Pub. L. 112–141, div. F, title III, §§ 100301, 100302(a), July 6, 2012, 126 Stat. 979; Pub. L. 113–28, § 2(a), Aug. 9, 2013, 127 Stat. 506; Pub. L. 114–328, div. A, title VI, § 618(e), Dec. 23, 2016, 130 Stat. 2160; Pub. L. 115–245, div. B, title III, § 309(a), Sept. 28, 2018, 132 Stat. 3105; Pub. L. 116–91, § 4(a), Dec. 19, 2019, 133 Stat. 1192; Pub. L. 116–259, title II, § 202(b)(2), Dec. 23, 2020, 134 Stat. 1163; Pub. L. 116–260, div. FF, title VII, § 705(a), Dec. 27, 2020, 134 Stat. 3200; Pub. L. 117–200, § 2(a), Oct. 11, 2022, 136 Stat. 2219; Pub. L. 118–31, div. A, title X, § 1054(a), Dec. 22, 2023, 137 Stat. 397; Pub. L. 119–21, title VIII, §§ 81001, 82001(b), (c)(1), (d), (e), 82002, 82004, July 4, 2025, 139 Stat. 334, 337, 340, 341, 345, 348.)
heading: Repeal of Subsection (e)
text: Pub. L. 119–21, title VIII, § 82001(c)(1), (3), July 4, 2025, 139 Stat. 340, 341, provided that, effective on July 1, 2028, subsection (e) of this section is repealed. See 2025 Amendment note below.
heading: Editorial Notes
heading: References in Text
text: Sections 1077(a)(2)(C) and 1078(b)(1)(M) of this title as such sections were in effect on July 22, 1992, referred to in subsec. (f)(6), means sections 1077(a)(2)(C) and 1078(b)(1)(M) of this title prior to being amended generally by sections 414(b) and 416(e)(1), respectively, of Pub. L. 102–325, title IV, July 23, 1992, 106 Stat. 513, 519.
Subparagraph (C) of section 1078–3(a)(3) of this title (as such subparagraph was in effect on June 30, 2006), referred to in subsec. (g)(2)(A)(i), means section 1078–3(a)(3)(C) of this title prior to being struck out by Pub. L. 109–171, title VIII, § 8009(c), Feb. 8, 2006, 120 Stat. 164, effective July 1, 2006. Text of subsec. (a)(3)(C) prior to its repeal is set out in a 2006 Amendment note under section 1078–3 of this title.
For the date of the repeal of subsection (e) of this section, referred to in subsec. (m)(1)(A)(iv), see section 82001(c)(3) of Pub. L. 119–21, set out as an Effective Date of 2025 Amendment note under section 1078 of this title.
heading: Amendments
text: 2025—Subsec. (a)(3). Pub. L. 119–21, § 81001(1)(A), inserted “and federal direct plus loans” after “subsidized loans” in heading.
Subsec. (a)(3)(A). Pub. L. 119–21, § 81001(1)(B), added subpar. (A) and struck out former subpar. (A) which related to a graduate or professional student’s ineligibility to receive a Federal Direct Stafford loan under this part and the maximum annual amount of Federal Direct Unsubsidized Stafford loans such a student may borrow.
Subsec. (a)(3)(C). Pub. L. 119–21, § 81001(1)(C), added subpar. (C).
Subsec. (a)(4) to (8). Pub. L. 119–21, § 81001(2), added pars. (4) to (8).
Subsec. (d)(1). Pub. L. 119–21, § 82001(b)(1)(A), inserted “before July 1, 2026, who has not received a loan made under this part on or after July 1, 2026,” before “a variety of plans” in introductory provisions.
Subsec. (d)(1)(D). Pub. L. 119–21, § 82001(b)(1)(B), inserted “before June 30, 2028,” before “an income contingent repayment plan” and struck out “and” after semicolon.
Subsec. (d)(1)(E). Pub. L. 119–21, § 82001(b)(1)(C), struck out “that enables borrowers who have a partial financial hardship to make a lower monthly payment” after “an income-based repayment plan”, and substituted “an excepted Consolidation Loan (as defined in section 1098e(a)(2) of this title)” for “a Federal Direct Consolidation Loan, if the proceeds of such loan were used to discharge the liability on such Federal Direct PLUS Loan or a loan under section 1078–2 of this title made on behalf of a dependent student” and “; and” for period at end.
Subsec. (d)(1)(F). Pub. L. 119–21, § 82001(b)(1)(D), added subpar. (F).
Subsec. (d)(5)(B). Pub. L. 119–21, § 82001(b)(2), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “repay the loan pursuant to an income contingent repayment plan.”
Subsec. (d)(6), (7). Pub. L. 119–21, § 82001(b)(3), added pars. (6) and (7).
Subsec. (e). Pub. L. 119–21, § 82001(c)(1), struck out subsec. (e) which related to income contingent repayment.
Subsec. (f). Pub. L. 119–21, § 82002(a)(1), substituted “Deferment; Forbearance” for “Deferment” in heading.
Subsec. (f)(2)(B). Pub. L. 119–21, § 82002(a)(2)(A), substituted “subject to paragraph (7), not in” for “not in”.
Subsec. (f)(2)(D). Pub. L. 119–21, § 82002(a)(2)(B), substituted “subject to paragraph (7), not in” for “not in”.
Subsec. (f)(7). Pub. L. 119–21, § 82002(a)(3), added par. (7).
Subsec. (f)(8). Pub. L. 119–21, § 82002(b), added par. (8).
Subsec. (g)(3). Pub. L. 119–21, § 82001(e), added par. (3).
Subsec. (m)(1)(A)(iv), (v). Pub. L. 119–21, § 82004, substituted “(as in effect on the day before the date of the repeal of subsection (e) of this section); or” for “; and” in cl. (iv) and added cl. (v).
Subsec. (q). Pub. L. 119–21, § 82001(d), added subsec. (q).
2023—Subsec. (f)(4) to (6). Pub. L. 118–31 added par. (4) and redesignated former pars. (4) and (5) as (5) and (6), respectively.
2022—Subsec. (g). Pub. L. 117–200 designated existing provisions as par. (1), inserted heading, and added par. (2).
2020—Subsec. (l). Pub. L. 116–259, § 202(b)(2)(A), substituted “Armed Forces and NOAA Commissioned Officer Corps student loan interest payment programs” for “Armed Forces student loan interest payment program” in heading.
Subsec. (l)(1). Pub. L. 116–259, § 202(b)(2)(B), inserted “or section 3078 of title 33” after “section 2174 of title 10” and “or an officer in the commissioned officer corps of the National Oceanic and Atmospheric Administration, respectively” after “Armed Forces”.
Subsec. (q). Pub. L. 116–260 struck out subsec. (q) which related to eligibility for, and interest charges on, Federal Direct Stafford Loans for new borrowers on or after July 1, 2013.
2019—Subsec. (e)(6). Pub. L. 116–91, § 4(a)(2), substituted “including notification of such borrower, that if a borrower” for “including notification of such borrower—
“(A) that the Internal Revenue Service will disclose to the Secretary tax return information as authorized under section 6103(l)(13) of title 26; and
“(B) that if a borrower”
and struck out “as determined using the information described in subparagraph (A), or the alternative documentation described in paragraph (3)” after “borrower’s loan repayment”.
Subsec. (e)(8). Pub. L. 116–91, § 4(a)(1), added par. (8).
2018—Subsec. (f)(3) to (5). Pub. L. 115–245 added par. (3) and redesignated former pars. (3) and (4) as (4) and (5), respectively.
2016—Subsec. (o)(3)(B). Pub. L. 114–328 inserted “, or paragraph (1) or (3) of section 351(a),” after “section 310”.
2013—Subsec. (b)(7). Pub. L. 113–28, § 2(a)(1)(A), inserted “and before July 1, 2013” after “on or after July 1, 2006” in heading.
Subsec. (b)(7)(A) to (C). Pub. L. 113–28, § 2(a)(1)(B)–(D), inserted “and before July 1, 2013,” after “on or after July 1, 2006,”.
Subsec. (b)(8) to (10). Pub. L. 113–28, § 2(a)(2), (3), added par. (8) and redesignated former pars. (8) and (9) as (9) and (10), respectively.
2012—Subsec. (b)(7)(D). Pub. L. 112–141, § 100301(1), substituted “and before July 1, 2013,” for “and before July 1, 2012,” in introductory provisions.
Subsec. (b)(7)(D)(v). Pub. L. 112–141, § 100301(2), substituted “and before July 1, 2013,” for “and before July 1, 2012,”.
Subsec. (q). Pub. L. 112–141, § 100302(a), added subsec. (q).
2011—Subsec. (a)(3). Pub. L. 112–25, § 502, added par. (3).
Subsec. (b)(8)(A). Pub. L. 112–25, § 503(1), substituted “Incentives for loans disbursed before July 1, 2012” for “In general” in heading and inserted “with respect to loans for which the first disbursement of principal is made before July 1, 2012,” after “of this part” in text.
Subsec. (b)(8)(B). Pub. L. 112–25, § 503(2), inserted “with respect to loans for which the first disbursement of principal is made before July 1, 2012” after “repayment incentives”.
Subsec. (b)(8)(C). Pub. L. 112–25, § 503(3), added subpar. (C).
2010—Subsec. (a)(1). Pub. L. 111–152, § 2211(a)(1), inserted “, and first disbursed on June 30, 2010,” before “under sections 1078”.
Subsec. (g). Pub. L. 111–152, § 2211(a)(2), inserted “, including any loan made under part B and first disbursed before July 1, 2010” after “section 1078–3(a)(4) of this title” and struck out at end “The Secretary, upon application for such a loan, shall comply with the requirements applicable to a lender under section 1078–3(b)(1)(G) of this title.”
2009—Subsec. (d)(1)(C). Pub. L. 111–39, § 404(b)(2)(A), substituted “1078(b)(9)(A)(iv)” for “1078(b)(9)(A)(v)”.
Subsec. (h). Pub. L. 111–39, § 404(b)(2)(B), struck out “(except as authorized under section 1087g(a)(1) of this title)” after “regulations”.
Subsec. (k)(1)(B). Pub. L. 111–39, § 404(b)(2)(C), struck out “, or in a notice under section 1087g(a)(1) of this title,” after “regulations of the Secretary”.
2008—Subsec. (b)(8)(B). Pub. L. 110–315, § 103(b)(8), substituted “authorizing committees” for “Committee on Labor and Human Resources of the Senate and the Committee on Education and the Workforce of the House of Representatives”.
Subsec. (d)(1)(E). Pub. L. 110–315, § 451(a), added subpar. (E).
Subsec. (g). Pub. L. 110–315, § 425(b)(3), substituted “section 1078–3(b)(1)(G)” for “section 1078–3(b)(1)(F)”.
Subsec. (m)(3)(B). Pub. L. 110–315, § 451(b)(1), amended subpar. (B) generally. Prior to amendment, text read as follows: “The term ‘public service job’ means—
“(i) a full-time job in emergency management, government, military service, public safety, law enforcement, public health, public education (including early childhood education), social work in a public child or family service agency, public interest law services (including prosecution or public defense or legal advocacy in low-income communities at a nonprofit organization), public child care, public service for individuals with disabilities, public service for the elderly, public library sciences, school-based library sciences and other school-based services, or at an organization that is described in section 501(c)(3) of title 26 and exempt from taxation under section 501(a) of such title; or
“(ii) teaching as a full-time faculty member at a Tribal College or University as defined in section 1059c(b) of this title and other faculty teaching in high-needs areas, as determined by the Secretary.”
Subsec. (m)(4). Pub. L. 110–315, § 451(b)(2), added par. (4).
Subsec. (n). Pub. L. 110–315, § 451(c), added subsec. (n).
Subsec. (o). Pub. L. 110–315, § 451(d), added subsec. (o).
Subsec. (p). Pub. L. 110–315, § 451(e), added subsec. (p).
2007—Subsec. (b)(7)(D). Pub. L. 110–84, § 201(b), added subpar. (D).
Subsec. (d)(1)(D). Pub. L. 110–84, § 203(b)(3), inserted “made on behalf of a dependent student” after “PLUS loan”.
Subsec. (e)(7). Pub. L. 110–84, § 205, added par. (7).
Subsec. (f)(2)(C). Pub. L. 110–84, § 202(b), struck out “not in excess of 3 years” before “during” in introductory provisions, substituted comma for “; or” at end of cl. (ii), and inserted concluding provisions.
Subsec. (m). Pub. L. 110–84, § 401, added subsec. (m).
2006—Subsec. (a)(1). Pub. L. 109–171, § 8009(d)(1), inserted “1078–3,” after “1078–2,”.
Subsec. (a)(2)(C), (D). Pub. L. 109–171, § 8009(d)(2), added subpar. (C) and redesignated former subpar. (C) as (D).
Subsec. (b)(8)(A). Pub. L. 109–171, § 8008(c)(3), inserted “or origination fee” after “reductions in the interest rate”.
Subsec. (c). Pub. L. 109–171, § 8008(c)(2), designated existing provisions as par. (1), inserted par. (1) heading, and added par. (2).
Subsec. (d)(1)(A) to (C). Pub. L. 109–171, § 8008(b), added subpars. (A) to (C) and struck out former subpars. (A) to (C), which read as follows:
“(A) a standard repayment plan, with a fixed annual repayment amount paid over a fixed period of time, consistent with subsection (a)(1) of this section;
“(B) an extended repayment plan, with a fixed annual repayment amount paid over an extended period of time, except that the borrower shall annually repay a minimum amount determined by the Secretary in accordance with section 1078(b)(1)(L) of this title;
“(C) a graduated repayment plan, with annual repayment amounts established at 2 or more graduated levels and paid over a fixed or extended period of time, except that the borrower’s scheduled payments shall not be less than 50 percent, nor more than 150 percent, of what the amortized payment on the amount owed would be if the loan were repaid under the standard repayment plan; and”.
Subsec. (f)(2)(C), (D). Pub. L. 109–171, § 8007(b), added subpar. (C) and redesignated former subpar. (C) as (D).
Subsec. (g). Pub. L. 109–171, § 8009(d)(3), substituted “To be eligible for a consolidation loan under this part, a borrower shall meet the eligibility criteria set forth in section 1078–3(a)(3) of this title. The Secretary, upon application for such a loan, shall comply with the requirements applicable to a lender under section 1078–3(b)(1)(F) of this title.” for “Loans made under this subsection shall be known as ‘Federal Direct Consolidation Loans’.”
2002—Subsec. (b)(6) to (9). Pub. L. 107–139, in par. (6) relating to interest rate provision for new loans substituted “2006” for “2003” in heading and “July 1, 2006,” for “July 1, 2003,” wherever appearing in text, added par. (7), redesignated former par. (7) as (8), and redesignated par. (6) relating to publication of rate in Federal Register as (9).
Subsec. (l). Pub. L. 107–314 added subsec. (l).
2000—Subsec. (b)(4)(A). Pub. L. 106–554 amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “For Federal Direct PLUS Loans for which the first disbursement is made on or after July 1, 1994, the applicable rate of interest shall, during any 12-month period beginning on July 1 and ending on June 30, be determined on the preceding June 1 and be equal to—
“(i) the bond equivalent rate of 52-week Treasury bills auctioned at final auction held prior to such June 1; plus
“(ii) 3.1 percent,
except that such rate shall not exceed 9 percent.”
1998—Subsec. (b)(5). Pub. L. 105–178, § 8301(c)(2), which directed amendment of section 455(b) (20 U.S.C. 1087e(b)) by adding par. (5), was executed to this section, which is section 455(b) of Pub. L. 89–329, to reflect the probable intent of Congress. Former par. (5) redesignated (6).
Subsec. (b)(6). Pub. L. 105–244, § 452(a)(1), added par. (6) relating to interest rate provision for new loans.
Pub. L. 105–178, § 8301(c)(1), which directed amendment of section 455(b) (20 U.S.C. 1087e(b)) by redesignating par. (5) as (6), was executed to this section, which is section 455(b) of Pub. L. 89–329, to reflect the probable intent of Congress.
Subsec. (b)(7). Pub. L. 105–244, § 452(b), added par. (7).
Subsec. (g). Pub. L. 105–244, § 452(c), struck out “only under such terms and conditions as the Secretary shall establish pursuant to section 1087g(a)(1) of this title or regulations promulgated under this part” after “section 1078–3(a)(4) of this title”.
Subsecs. (j)(2), (k)(3). Pub. L. 105–244, § 401(g)(6), substituted “Federal Pell Grants” for “basic grants”.
1994—Subsec. (f)(3), (4). Pub. L. 103–382 added pars. (3) and (4).
1993—Pub. L. 103–66 amended section generally, substituting provisions relating to terms and conditions of loans for former provisions relating to withdrawal and termination procedures.
1992—Pub. L. 102–325 amended section generally, substituting provisions relating to withdrawal and termination procedures for former provisions relating to feasibility study.
heading: Statutory Notes and Related Subsidiaries
heading: Effective Date of 2025 Amendment
text: Amendment by section 82001(c)(1) of Pub. L. 119–21 effective July 1, 2028, see section 82001(c)(3) of Pub. L. 119–21, set out as a note under section 1078 of this title.
heading: Effective Date of 2023 Amendment
text: Pub. L. 118–31, div. A, title X, § 1054(b), Dec. 22, 2023, 137 Stat. 398, provided that: “The amendments made by subsection (a) [amending this section] shall take effect 90 days after the date of the enactment of this Act [Dec. 22, 2023].”
heading: Effective Date of 2020 Amendment
text: Amendment by Pub. L. 116–260 effective July 1, 2024, except as otherwise expressly provided, and applicable with respect to award year 2024–2025 and each subsequent award year, as determined under this chapter, see section 701(b) of Pub. L. 116–260, set out as a note under section 1001 of this title.
Pub. L. 116–260, div. FF, title VII, § 705(b), Dec. 27, 2020, 134 Stat. 3200, provided that: “Notwithstanding section 701(b) of this Act [div. FF of Pub. L. 116–260, set out as an Effective Date of 2020 Amendment note under section 1001 of this title] and section 455(q) of the Higher Education Act of 1965 (20 U.S.C. 1087e(q)) as in effect on the date of enactment of this Act [Dec. 27, 2020], the Secretary of Education may implement the repeal authorized under subsection (a) [repealing subsec. (q) of this section] before (but not later than) July 1, 2023. The Secretary shall specify in a designation on what date and for which award years the implementation of such repeal will be effective prior to July 1, 2023. The Secretary shall publish any designation under this paragraph in the Federal Register at least 60 days before implementation.”
[Effective date of title VII of div. FF of Pub. L. 116–260 was changed from July 1, 2023, to July 1, 2024, by section 102(a) of Pub. L. 117–103, see section 701(b) of div. FF of Pub. L. 116–260, set out as a note under section 1001 of this title. However, the July 1, 2023, implementation dates in section 705(b) of Pub. L. 116–260, set out above, were not correspondingly amended.]
heading: Effective Date of 2018 Amendment
text: Amendment by Pub. L. 115–245 applicable with respect to loans made on or after Sept. 28, 2018, or in repayment on Sept. 28, 2018, see section 309(f) of Pub. L. 115–245, set out as a note under section 1077 of this title.
heading: Effective Date of 2013 Amendment
text: Pub. L. 113–28, § 2(b), Aug. 9, 2013, 127 Stat. 507, provided that: “The amendments made by subsection (a) [amending this section] shall take effect as if enacted on July 1, 2013.”
heading: Effective Date of 2010 Amendment
text: Pub. L. 111–152, title II, § 2211(b), Mar. 30, 2010, 124 Stat. 1078, provided that: “The amendment made by subsection (a)(1) [amending this section] shall apply with respect to loans first disbursed under part D of title IV of the Higher Education Act of 1965 (20 U.S.C. 1087a et seq.) on or after July 1, 2010.”
heading: Effective Date of 2009 Amendment
text: Amendment by Pub. L. 111–39 effective as if enacted on the date of enactment of Pub. L. 110–315 (Aug. 14, 2008), see section 3 of Pub. L. 111–39, set out as a note under section 1001 of this title.
heading: Effective Date of 2007 Amendment
text: Amendment by sections 201(b), 202(b), 205, and 401 of Pub. L. 110–84 effective Oct. 1, 2007, see section 1(c) of Pub. L. 110–84, set out as a note under section 1070a of this title.
Amendment by section 203(b)(3) of Pub. L. 110–84 effective July 1, 2009, see section 203(c)(1) of Pub. L. 110–84, set out as a note under section 1078–3 of this title.
heading: Effective Date of 2006 Amendment
text: Amendment by Pub. L. 109–171 effective July 1, 2006, except as otherwise provided, see section 8001(c) of Pub. L. 109–171, set out as a note under section 1002 of this title.
Amendment by section 8007(b) of Pub. L. 109–171 applicable with respect to all loans under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.), see section 8007(f) of Pub. L. 109–171, set out as a note under section 1078 of this title.
heading: Effective Date of 2002 Amendment
text: Amendment by Pub. L. 107–314 applicable with respect to interest, and any special allowance under section 1087–1 of this title, that accrue for months beginning on or after Oct. 1, 2003, on student loans described in section 2174(c) of Title 10, Armed Forces, that were made before, on, or after such date to members of the Armed Forces who are on active duty (as defined in section 101(d) of Title 10) on or after that date, see section 651(e) of Pub. L. 107–314, set out as an Effective Date note under section 2174 of Title 10.
heading: Effective Date of 1998 Amendment
text: Amendment by sections 401(g)(6) and 452(b), (c) of Pub. L. 105–244 effective Oct. 1, 1998, except as otherwise provided in Pub. L. 105–244, see section 3 of Pub. L. 105–244, set out as a note under section 1001 of this title.
Pub. L. 105–244, title IV, § 452(d), Oct. 7, 1998, 112 Stat. 1717, provided that: “The amendments made by subsection (a) [amending this section] shall apply with respect to any loan made under part D of title IV of the Higher Education Act of 1965 [this part] for which the first disbursement is made on or after October 1, 1998, and before July 1, 2003, except that such amendments shall apply with respect to a Federal Direct Consolidation Loan for which the application is received on or after October 1, 1998, and before July 1, 2003.”
heading: Effective Date of 1992 Amendment
text: Amendment by Pub. L. 102–325 effective Oct. 1, 1992, see section 2 of Pub. L. 102–325, set out as a note under section 1001 of this title.
heading: Construction of 2006 Amendment
text: Nothing in amendment by section 8007(b) of Pub. L. 109–171 to be construed to authorize any refunding of any repayment of a loan, see section 8007(e) of Pub. L. 109–171, set out as a note under section 1078 of this title.
heading: Loan Repayment
text: Pub. L. 119–21, title VIII, § 82001(a), July 4, 2025, 139 Stat. 337, provided that:
“(a) Transition to Income-based Repayment Plans.—
“(1) Selection.—
The Secretary of Education shall take such steps as may be necessary to ensure that before July 1, 2028, each borrower who has one or more loans that are in a repayment status in accordance with, or an administrative forbearance associated with, an income contingent repayment plan authorized under section 455(e) of the Higher Education Act of 1965 [20 U.S.C. 1087e(e)] (referred to in this subsection as ‘covered income contingent loans’) selects one of the following income-based repayment plans that is otherwise applicable, and for which that borrower is otherwise eligible, for the repayment of the covered income contingent loans of the borrower:
“(A) The Repayment Assistance Plan under section 455(q) of the Higher Education Act of 1965 [20 U.S.C. 1087e(q)].
“(B) The income-based repayment plan under section 493C of the Higher Education Act of 1965 [20 U.S.C. 1098e].
“(C) Any other repayment plan as authorized under section 455(d)(1) of the Higher Education Act of 1965 [20 U.S.C. 1087e(d)(1)].
“(2) Commencement of new repayment plan.—
Beginning on July 1, 2028, a borrower described in paragraph (1) shall begin repaying the covered income contingent loans of the borrower in accordance with the repayment plan selected under paragraph (1), unless the borrower chooses to begin repaying in accordance with the repayment plan selected under paragraph (1) before such date.
“(3) Failure to select.—
In the case of a borrower described in paragraph (1) who fails to select a repayment plan in accordance with such paragraph, the Secretary of Education shall—
“(A) enroll the covered income contingent loans of such borrower in—
“(i) the Repayment Assistance Plan under section 455(q) of the Higher Education Act of 1965 [20 U.S.C. 1087e(q)] with respect to loans that are eligible for the Repayment Assistance Plan under such subsection; or
“(ii) the income-based repayment plan under section 493C of such Act [20 U.S.C. 1098e], with respect to loans that are not eligible for the Repayment Assistance Plan; and
“(B) require the borrower to begin repaying covered income contingent loans according to the plans under subparagraph (A) on July 1, 2028.”
heading: Ensuring Access to Certain Higher Education Benefits
text: Pub. L. 118–159, div. A, title V, § 559B, Dec. 23, 2024, 138 Stat. 1900, provided that:
“(a) Data Matching Required.—
Not later than one year after the date of the enactment of this Act [Dec. 23, 2024], the Secretary of Defense and the Secretary of Education shall jointly complete a data matching process—
“(1) to identify each individual who, while serving as a covered employee of the Department of Defense, made one or more student loan payments eligible to be counted for purposes of the Public Service Loan Forgiveness program under section 455(m) of the Higher Education Act of 1965 (20 U.S.C. 1087e(m)); and
“(2) without requiring further information or action from such individual—
“(A) to certify the total period of such employment for purposes of such program; and
“(B) to count the total number of qualifying payments made by the individual for purposes of such program during such period.
“(b) Covered Employee Defined.—
In this section, the term ‘covered employee’ means an individual who, at any time beginning on or after October 1, 2007, was—
“(1) a member of the Armed Forces serving on active duty for a period of more than 30 consecutive days; or
“(2) a civilian employee of the Department of Defense.”
heading: Limitation on Consolidation Loans During Temporary Interest Rate
text: Pub. L. 105–244, title IV, § 452(a)(2), Oct. 7, 1998, 112 Stat. 1716, provided that: “Notwithstanding section 455(g) of the Higher Education Act of 1965 [subsec. (g) of this section], a borrower who is enrolled or accepted for enrollment in an institution of higher education may not consolidate loans under such section during the period beginning October 1, 1998, and ending February 1, 1999, unless the borrower certifies that the borrower has no outstanding loans made, insured, or guaranteed under title IV of such Act [20 U.S.C. 1070 et seq.] other than loans made under part D of such title [this part].”
heading: Executive Documents
heading: Continued Student Loan Payment Relief During the COVID–19 Pandemic
text: Memorandum of President of the United States, Aug. 8, 2020, 85 F.R. 49585, provided:
Memorandum for the Secretary of Education
By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows:
Section 1. Policy. The 2019 novel coronavirus known as SARS–CoV–2, the virus causing outbreaks of the disease COVID–19, has significantly disrupted the lives of Americans. In Proclamation 9994 of March 13, 2020 (Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID–19) Outbreak) [50 U.S.C. 1621 note], I declared, pursuant to the National Emergencies Act (50 U.S.C. 1601 et seq.), that the COVID–19 outbreak in the United States constituted a national emergency (the “national emergency”). The same day, I also determined that the COVID–19 outbreak constituted an emergency of nationwide scope, pursuant to section 501(b) of the Stafford Act (42 U.S.C. 5191(b)).
On March 20, 2020, my Administration took action to provide immediate relief to tens of millions of student loan borrowers during the pandemic caused by COVID–19 by both suspending loan payments and temporarily setting interest rates to 0 percent. This relief has helped many students and parents retain financial stability. And many other Americans have continued to routinely pay down their student loan balances, to more quickly eliminate their loans in the long run. During this time, borrowers have been able to determine the best path forward for themselves.
The original announcement of this policy specified that it would continue for at least 60 days. In the interim, the Coronavirus Aid, Relief, and Economic Security Act [Pub. L. 116–136] provided this same student loan payment relief, but that program is scheduled to expire on September 30, 2020. Currently, many Americans remain unemployed due to the COVID–19 pandemic, and many more have accepted lower wages and reduced hours while States and localities continue to impose social distancing measures. It is therefore appropriate to extend this policy until such time that the economy has stabilized, schools have re-opened, and the crisis brought on by the COVID–19 pandemic has subsided.
Sec. 2. Extension of Student Loan Payment Relief. (a) In light of the national emergency declared on March 13, 2020, the Secretary of Education shall take action pursuant to applicable law to effectuate appropriate waivers of and modifications to the requirements and conditions of economic hardship deferments described in section 455(f)(2)(D) of the Higher Education Act of 1965, as amended, 20 U.S.C. 1087e(f)(2)(D), and provide such deferments to borrowers as necessary to continue the temporary cessation of payments and the waiver of all interest on student loans held by the Department of Education until December 31, 2020.
(b) All persons who wish to continue making student loan payments shall be allowed to do so, notwithstanding the deferments provided pursuant to subsection (a) of this section.
Sec. 3. General Provisions. (a) Nothing in this memorandum shall be construed to impair or otherwise affect:
(i) the authority granted by law to an executive department or agency, or the head thereof; or
(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b) This memorandum shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
(d) You are authorized and directed to publish this memorandum in the Federal Register.
Donald J. Trump.