Lowering Obstacles to Achievement Now Act or the LOAN Act
This bill makes various changes to federal student aid programs, including by providing funding to increase the maximum Pell Grant award for each eligible student and reducing the number of monthly loan payments required for loan forgiveness under the Public Service Loan Forgiveness (PSLF) program.
To amend the Higher Education Act of 1965 to double the Pell Grant 
award amount, improve the Public Service Loan Forgiveness program, and 
             reduce interest rates, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Lowering Obstacles 
to Achievement Now Act'' or the ``LOAN Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                      TITLE I--FEDERAL PELL GRANTS

Sec. 101. Doubling Federal Pell Grants and providing all Federal Pell 
                            Grants through mandatory funding.
Sec. 102. Providing increased Federal Pell Grants and other assistance 
                            for recipients of means-tested benefits.
Sec. 103. Federal aid eligibility for dreamer students.
Sec. 104. Restoring the total semesters of Federal Pell Grant 
                            eligibility.
Sec. 105. Reducing financial aid penalties from satisfactory academic 
                            progress determinations.
Sec. 106. Federal Pell Grants for graduate students.
  TITLE II--AMENDMENTS TO TERMS AND CONDITIONS OF LOANS AND REPAYMENT 
                                 PLANS

                          Part A--Direct Loans

Sec. 201. Subsidized loans for graduate and professional students.
Sec. 202. Interest rate on subsidized loans for graduate and 
                            professional students.
Sec. 203. Repeal of origination fees.
Sec. 204. Prepayment amounts.
  Part B--Automatic Enrollment in Income-Driven Repayment for Certain 
                               Borrowers

Sec. 211. Notification and automatic enrollment procedures for 
                            borrowers who are delinquent on loans.
Sec. 212. Notification and automatic enrollment procedures for 
                            borrowers who are rehabilitating defaulted 
                            loans.
Sec. 213. Covered loan, income-driven repayment plan, and non-covered 
                            loan defined.
Sec. 214. Automatic recertification of income for income-driven 
                            repayment plans.
Sec. 215. Procedure and requirement for requesting tax return 
                            information from the IRS.
        Part C--Amendments to Certain Loan Forgiveness Programs

Sec. 221. Amendments to terms and conditions of Public Service Loan 
                            Forgiveness.
Sec. 222. Loan forgiveness for teachers.
                   TITLE III--INTEREST CAPITALIZATION

Sec. 301. Elimination of interest capitalization.
Sec. 302. Elimination of disclosure requirements relating to 
                            capitalization.
                        TITLE IV--INTEREST RATES

Sec. 401. Interest rate provisions for new Federal student loans on or 
                            after July 1, 2023.
Sec. 402. Refinancing FFEL and Federal Direct Loans.
Sec. 403. Refinancing private student loans.

                      TITLE I--FEDERAL PELL GRANTS

SEC. 101. DOUBLING FEDERAL PELL GRANTS AND PROVIDING ALL FEDERAL PELL 
              GRANTS THROUGH MANDATORY FUNDING.

    (a) Amount of Minimum Federal Pell Grants.--Section 401 of the 
Higher Education Act of 1965 (20 U.S.C. 1070a), as amended by title VII 
of division FF of the FAFSA Simplification Act (Public Law 116-260), is 
amended--
            (1) in subsection (a)(2)(F), by striking ``10 percent'' and 
        inserting ``5 percent'';
            (2) in subsection (b)--
                    (A) in paragraph (1)(B)(i), by striking ``paragraph 
                (5)(A)'' and inserting ``paragraph (5)'';
                    (B) by striking paragraph (5) and inserting the 
                following:
            ``(5) Maximum federal pell grant.--
                    ``(A) Award year 2024-2025.--For award year 2024-
                2025, the total maximum Federal Pell Grant award shall 
                be $9,000.
                    ``(B) Award year 2025-2026.--For award year 2025-
                2026, the total maximum Federal Pell Grant award shall 
                be $10,000.
                    ``(C) Award year 2026-2027.--For award year 2026-
                2027, the total maximum Federal Pell Grant award shall 
                be $11,000.
                    ``(D) Award year 2027-2028.--For award year 2027-
                2028, the total maximum Federal Pell Grant award shall 
                be $12,000.
                    ``(E) Award year 2028-2029.--For award year 2028-
                2029, the total maximum Federal Pell Grant award shall 
                be $13,000.
                    ``(F) Award year 2029-2030 and subsequent years.--
                For award year 2029-2030, and each subsequent award 
                year, the total maximum Federal Pell Grant award shall 
                be $13,000--
                            ``(i) increased by the adjustment 
                        percentage for the award year for which the 
                        amount under this subparagraph is being 
                        determined; and
                            ``(ii) rounded to the nearest $50.
                    ``(G) Definition of adjustment percentage.--In this 
                paragraph, the term `adjustment percentage,' as applied 
                to an award year, is equal to the percentage increase 
                in the Consumer Price Index, as defined in section 
                478(f), for the most recent calendar year ending prior 
                to the beginning of the award year.'';
                    (C) by striking paragraphs (6) and (7) and 
                inserting the following:
            ``(6) Appropriation of funds.--There are authorized to be 
        appropriated, and there are appropriated, out of any money in 
        the Treasury not otherwise appropriated, such sums as may be 
        necessary for fiscal year 2024 and each subsequent fiscal year 
        to provide the total maximum Federal Pell Grant for which a 
        student shall be eligible under this section during an award 
        year.''; and
                    (D) by redesignating paragraphs (8) and (9) as 
                paragraphs (7) and (8), respectively;
            (3) in subsection (d)(5)(B)(ii)--
                    (A) in subclause (I)(bb), by striking ``or'' after 
                the semicolon;
                    (B) in subclause (II)(bb)(CC), by striking the 
                period and inserting ``; or''; and
                    (C) by adding at the end the following:
                                    ``(III) during a period for which 
                                the student did not receive a loan 
                                under this title but for which, if the 
                                student had received such a loan, such 
                                loan would have been discharged under 
                                the circumstances described in 
                                subclause (II)(bb)(CC).'';
            (4) by striking subsections (g) and (h); and
            (5) by redesignating subsections (i) and (j) as subsections 
        (g) and (h), respectively.
    (b) Repeal of Scoring Requirement.--
            (1) In general.--Section 406 of H. Con. Res. 95 (109th 
        Congress) is amended--
                    (A) by striking subsection (b); and
                    (B) by striking ``(a) In General.--Upon'' and 
                inserting the following: ``Upon''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall take effect beginning on July 1, 2024.
    (c) Student Support Services.--Section 402D(d)(1) of the Higher 
Education Act of 1965 (20 U.S.C. 1070a-14(d)(1)) is amended by striking 
``the minimum'' and inserting ``10 percent of the maximum''.
    (d) Scholarship Component.--Section 404E(d) of the Higher Education 
Act of 1965 (20 U.S.C. 1070a-25(d)) is amended by striking ``less than 
the minimum'' and inserting ``less than 10 percent of the maximum''.

SEC. 102. PROVIDING INCREASED FEDERAL PELL GRANTS AND OTHER ASSISTANCE 
              FOR RECIPIENTS OF MEANS-TESTED BENEFITS.

    (a) Increased Amount of Maximum Federal Pell Grants for Students 
With Negative Student Aid Indexes.--Section 401(b)(1) of the Higher 
Education Act of 1965 (20 U.S.C. 1070a(b)(1)), as amended by section 2 
and section 703 of the FAFSA Simplification Act (Public Law 116-260), 
is amended--
            (1) in subparagraph (A)--
                    (A) in the matter preceding clause (i), by striking 
                ``A student'' and inserting ``Except in the case of a 
                student with a student aid index of less than zero, a 
                student'';
                    (B) by striking clause (i); and
                    (C) by redesignating clauses (ii) and (iii) as 
                clauses (i) and (ii), respectively;
            (2) by redesignating subparagraphs (B) through (E) as 
        subparagraphs (C) through (F), respectively;
            (3) by inserting after subparagraph (A) the following:
                    ``(B) A student with a student aid index of less 
                than zero shall be eligible for a Federal Pell Grant 
                award that exceeds the total maximum Federal Pell Grant 
                by an amount equal to the amount by which the student's 
                student aid index is less than zero.'';
            (4) in subparagraph (C), as redesignated by paragraph (2)--
                    (A) in the matter preceding clause (i), by striking 
                ``subparagraph (A) for an academic year,'' and 
                inserting ``subparagraph (A), or an increased Federal 
                Pell Grant under subparagraph (B), for an academic 
                year,''; and
                    (B) in clause (ii), by striking ``, except that a 
                student aid index of less than zero shall be considered 
                to be zero for the purposes of this clause'';
            (5) in subparagraph (D), as redesignated by paragraph (2), 
        by striking ``(A) or (B)'' and inserting ``(A), (B), or (C)'';
            (6) in subparagraph (E), as redesignated by paragraph (2), 
        by inserting ``or an increased Federal Pell Grant under 
        subparagraph (B)'' after ``subparagraph (A)''; or
            (7) in subparagraph (F), as redesignated by paragraph (2), 
        by striking ``or a minimum Federal Pell Grant under 
        subparagraph (C)'' and inserting ``an increased Federal Pell 
        Grant under subparagraph (B), or a minimum Federal Pell Grant 
        under subparagraph (D)''.
    (b) Special Student Aid Index Rule for Recipients of Means-Tested 
Benefits.--Section 473 of the Higher Education Act of 1965 (20 U.S.C. 
1087mm), as amended by section 702(b) of the FAFSA Simplification Act 
(Public Law 116-260), is amended by adding at the end the following:
    ``(d) Special Rule for Means-Tested Benefit Recipients.--
Notwithstanding subsection (b), for an applicant (or, as applicable, an 
applicant and spouse, or an applicant's parents) who, at any time 
during the previous 24-month period, received a benefit under a means-
tested Federal benefit program (or whose parent or spouse received such 
a benefit, as applicable), the Secretary shall for the purposes of this 
title consider the student aid index as equal to -$1,500 for the 
applicant.''.

SEC. 103. FEDERAL AID ELIGIBILITY FOR DREAMER STUDENTS.

    Section 484 of the Higher Education Act of 1965 (20 U.S.C. 1091), 
as amended by section 702(n) of the FAFSA Simplification Act (Public 
Law 116-260), is amended--
            (1) in subsection (a)(5), by inserting ``, or be a Dreamer 
        student, as defined in subsection (u)'' after ``becoming a 
        citizen or permanent resident''; and
            (2) by adding at the end the following:
    ``(u) Dreamer Students.--
            ``(1) In general.--In this section, the term `Dreamer 
        student' means an individual who--
                    ``(A)(i) is not a citizen or national of the United 
                States; and
                    ``(ii) is inadmissible or deportable under the 
                Immigration and Nationality Act (8 U.S.C. 1101 et 
                seq.)); and
                    ``(B)(i) in the case of such an individual who was 
                younger than 18 years of age on the date on which the 
                individual initially entered the United States--
                            ``(I) has earned a high school diploma, the 
                        recognized equivalent of such diploma from a 
                        secondary school, or a high school equivalency 
                        diploma recognized by State law, or is 
                        scheduled to complete the requirements for such 
                        a diploma or equivalent before the next 
                        academic year begins;
                            ``(II) is enrolled at an institution of 
                        higher education pursuant to subsection (d);
                            ``(III) has served in the uniformed 
                        services (as such term is defined in section 
                        101 of title 10, United States Code) for not 
                        less than 2 years and, if discharged, received 
                        an honorable discharge;
                            ``(IV) has acquired a degree, certificate, 
                        or recognized postsecondary credential from an 
                        institution of higher education or area career 
                        and technical education school (as such term is 
                        defined in section 3 of the Carl D. Perkins 
                        Career and Technical Education Act of 2006 (20 
                        U.S.C. 2302)); or
                            ``(V) has completed not less than 2 years 
                        in a postsecondary program at an institution of 
                        higher education, or area career and technical 
                        education school, in the United States and has 
                        made satisfactory academic progress, as defined 
                        in subsection (c), during such time period; or
                    ``(ii)(I) is, or at any time was, eligible for a 
                grant of deferred action pursuant to--
                            ``(aa) the memorandum of the Department of 
                        Homeland Security entitled `Exercising 
                        Prosecutorial Discretion with Respect to 
                        Individuals Who Came to the United States as 
                        Children' issued on June 15, 2012; or
                            ``(bb) the memorandum of the Department of 
                        Homeland Security entitled `Exercising 
                        Prosecutorial Discretion with Respect to 
                        Individuals Who Came to the United States as 
                        Children and with Respect to Certain 
                        Individuals Who Are the Parents of U.S. 
                        Citizens or Permanent Residents' issued on 
                        November 20, 2014; or
                    ``(II) would have been eligible for such a grant of 
                deferred action if the applicable memorandum described 
                in subclause (I) had been fully in effect since the 
                date on which it was issued.
            ``(2) Hardship exception.--The Secretary shall issue 
        regulations that direct when the Department shall waive the age 
        requirement of paragraph (1)(B)(i) for an individual to qualify 
        as a Dreamer student under such paragraph, if the individual 
        demonstrates compelling circumstances, such as economic 
        hardship (as defined in section 435(o)).''.

SEC. 104. RESTORING THE TOTAL SEMESTERS OF FEDERAL PELL GRANT 
              ELIGIBILITY.

    Section 401(d)(5)(A) of the Higher Education Act of 1965, as added 
by section 703 of the FAFSA Simplification Act (Public Law 116-260), is 
amended by striking ``12'' each place the term appears and inserting 
``18''.

SEC. 105. REDUCING FINANCIAL AID PENALTIES FROM SATISFACTORY ACADEMIC 
              PROGRESS DETERMINATIONS.

    Section 484(c) of the Higher Education Act of 1965 (20 U.S.C. 
1091(c)) is amended to read as follows:
    ``(c) Satisfactory Progress.--
            ``(1) Definitions.--In this subsection:
                    ``(A) Appeal.--The term `appeal' means a process by 
                which a student who is not meeting the institution's 
                satisfactory academic progress standards petitions the 
                institution for reconsideration of the student's 
                eligibility for assistance under this title.
                    ``(B) Financial aid probation.--The term `financial 
                aid probation' means a status assigned by an 
                institution to a student who fails to make satisfactory 
                academic progress and who has appealed and has had 
                eligibility for aid reinstated.
                    ``(C) Financial aid warning.--The term `financial 
                aid warning' means a status assigned to a student who 
                fails to make satisfactory academic progress at the end 
                of the semester or equivalent period in which the 
                student first fails to make such progress.
                    ``(D) Payment period.--The term `payment period' 
                means the applicable payment period described in 
                section 668.4 of title 34, Code of Federal Regulations, 
                or any successor regulation.
            ``(2) Satisfactory academic progress policy.--An 
        institution shall establish a reasonable satisfactory academic 
        progress policy for determining whether an otherwise eligible 
        student is making satisfactory academic progress in the 
        student's educational program and may receive assistance under 
        this title. The Secretary shall consider the institution's 
        policy to be reasonable if--
                    ``(A) the policy is at least as strict as the 
                policy the institution applies to a student who is not 
                receiving assistance under this title;
                    ``(B) the policy provides for consistent 
                application of standards to all students, including 
                full-time, part-time, undergraduate, and graduate 
                students, and all educational programs established by 
                the institution;
                    ``(C)(i) the policy specifies the grade point 
                average that a student must achieve at each evaluation, 
                or if a grade point average is not an appropriate 
                qualitative measure, a comparable assessment measured 
                against a norm; and
                    ``(ii) if a student is enrolled in an educational 
                program of more than 2 academic years, the policy 
                specifies that at the end of the second academic year, 
                the student must have a grade point average of at least 
                a `C' or its equivalent, or have academic standing 
                consistent with the institution's requirements for 
                graduation;
                    ``(D) the policy provides for measurement of the 
                student's progress at each evaluation;
                    ``(E) the policy describes--
                            ``(i) how a student's grade point average 
                        and the pace at which the student progresses 
                        toward completion are affected by course 
                        incompletes, withdrawals, or repetitions, or 
                        transfers of credit from other institutions, 
                        including that credit hours from another 
                        institution that are accepted toward the 
                        student's educational program are counted as 
                        both attempted and completed hours; and
                            ``(ii) how after a student reenrolls after 
                        the student's satisfactory academic progress 
                        was reset pursuant to paragraph (3)(B), the 
                        student may have any credits that were earned 
                        before the student was determined not to be 
                        making satisfactory academic progress counted 
                        for purposes of determining progress when the 
                        student reenrolls, but any attempted hours that 
                        were not earned by the student (including 
                        incompletes, withdrawn courses, and failed 
                        courses) before the student was determined not 
                        to be making satisfactory academic progress 
                        will not negatively impact the determination of 
                        whether the student made satisfactory academic 
                        progress after such reset;
                    ``(F) the policy provides that, except as provided 
                in subparagraph (G) with respect to a student placed on 
                financial aid warning or financial aid probation and 
                paragraph (3), a student is no longer eligible to 
                receive assistance under this title if the student has 
                not achieved the required grade point average or who is 
                not making progress toward completion in the student's 
                educational program--
                            ``(i) at the time of each evaluation with 
                        respect to a student who is in an educational 
                        program of 2 academic years or less in length; 
                        or
                            ``(ii) at the end of the second academic 
                        year with respect to a student who is in an 
                        educational program of more than 2 academic 
                        years in length;
                    ``(G) the policy describes when students will be 
                placed on financial aid warning or financial aid 
                probation, in accordance with paragraph (4), and 
                provides that--
                            ``(i) a student on financial aid warning--
                                    ``(I) shall receive assistance 
                                under this title for one payment period 
                                despite a determination that the 
                                student is not making satisfactory 
                                academic progress; and
                                    ``(II) may be assigned such status 
                                without an appeal or other action by 
                                the student; and
                            ``(ii)(I) a student on financial aid 
                        probation may receive assistance under this 
                        title for one payment period and the 
                        institution may require the student to fulfill 
                        specific terms and conditions, such as taking a 
                        reduced course load or enrolling in specific 
                        courses; and
                            ``(II) at the end of such one payment 
                        period, the student is required to meet the 
                        institution's satisfactory academic progress 
                        standards, or meet the requirements of the 
                        academic plan developed by the institution and 
                        the student, in order to qualify for continued 
                        assistance under this title;
                    ``(H) if the institution permits a student to 
                appeal a determination by the institution that the 
                student is not making satisfactory academic progress, 
                the policy describes--
                            ``(i) how the student may reestablish the 
                        student's eligibility to receive assistance 
                        under this title;
                            ``(ii) the basis on which the student may 
                        file an appeal, including because of the death 
                        of a relative, an injury or illness of the 
                        student, or another special circumstance; and
                            ``(iii) information the student is required 
                        to submit regarding why the student failed to 
                        make satisfactory academic progress, and what 
                        has changed in the student's situation that 
                        will allow the student to demonstrate 
                        satisfactory academic progress at the next 
                        evaluation;
                    ``(I) if the institution does not permit a student 
                to appeal a determination by the institution that the 
                student is not making satisfactory academic progress, 
                the policy describes how the student may reestablish 
                the student's eligibility to receive assistance under 
                this title;
                    ``(J) the policy provides for notification to 
                students of the results of an evaluation that impacts 
                the student's eligibility for assistance under this 
                title; and
                    ``(K) the policy does not impose satisfactory 
                progress limitations on need-based institutional aid 
                that are more stringent than the standard applied under 
                this subsection without demonstrating to the Secretary 
                the effectiveness of such limitations on improving 
                student persistence in, and completion of, 
                postsecondary study.
            ``(3) Regaining eligibility.--
                    ``(A) Students who remain in school.--Whenever a 
                student fails to meet the eligibility requirements of 
                subsection (a)(2) as a result of the application of 
                this subsection and, subsequent to that failure, the 
                student has academic standing for any grading period 
                consistent with the requirements for staying on track 
                to graduate within 150 percent of the published length 
                of the educational program, as determined by the 
                institution, the student shall again be eligible under 
                subsection (a)(2) for a grant, loan, or work assistance 
                under this title, as long as the student maintains 
                satisfactory academic progress under paragraph (2) 
                beginning on and after the date that the student 
                regains eligibility.
                    ``(B) Students who leave school.--
                            ``(i) In general.--If a student has not 
                        been enrolled in any institution of higher 
                        education for the immediately preceding 2 
                        years, any previous failure to meet the 
                        eligibility requirements of subsection (a)(2) 
                        shall not be used in any determination of 
                        eligibility of such student under such 
                        subsection. Such student shall, on the date of 
                        enrollment subsequent to such 2-year period, 
                        have the student's eligibility for a grant, 
                        loan, or work assistance under this title reset 
                        and be deemed as meeting the requirements 
                        described in paragraph (2). Beginning on and 
                        after such date, the student's satisfactory 
                        academic progress shall be determined in 
                        accordance with paragraph (2)(E)(ii).
                            ``(ii) Maximum number of resets.--A student 
                        shall be eligible for a reset of eligibility 
                        pursuant to this subparagraph not more than 2 
                        times.
                    ``(C) Duties of the secretary.--The Secretary 
                shall--
                            ``(i) send, to each student who failed to 
                        meet the eligibility requirements of subsection 
                        (a)(2) and who has not regained eligibility for 
                        a grant, loan, or work assistance under 
                        subparagraph (A), a notice, two years after 
                        such failure, that includes--
                                    ``(I) a notification that, if the 
                                student has not been enrolled in any 
                                institution of higher education for the 
                                preceding two years and has not 
                                received two resets of eligibility 
                                under subparagraph (B), the student may 
                                use grant, loan, or work assistance 
                                under this title for enrollment at any 
                                eligible institution, including an 
                                institution other than the institution 
                                in which the student was previously 
                                enrolled;
                                    ``(II) a notification that, if the 
                                student has remained enrolled, or 
                                resumed enrollment, at an institution 
                                of higher education, the student may be 
                                eligible for a grant, loan, or work 
                                assistance under this title subject to 
                                the requirements of subparagraph (A);
                                    ``(III) information on how many 
                                semesters of eligibility for a grant, 
                                loan, or work assistance under this 
                                title to which the student still has 
                                access; and
                                    ``(IV) a notification that the 
                                student should ask any prospective 
                                eligible institution how many of the 
                                student's previously completed credits 
                                the student would be able to transfer; 
                                and
                            ``(ii) submit an annual report to Congress 
                        on the outcomes of students who have received a 
                        reset of eligibility pursuant to this 
                        paragraph, including--
                                    ``(I) the number of students who 
                                reenroll in an eligible institution 
                                after such reset, disaggregated by race 
                                or ethnicity, sex, age, socioeconomic 
                                status, and disability status;
                                    ``(II) the 250 eligible 
                                institutions with the highest numbers 
                                of enrolled students receiving grant, 
                                loan, or work assistance under this 
                                title after such a reset;
                                    ``(III) the 250 eligible 
                                institutions with the highest share of 
                                enrolled students receiving grant, 
                                loan, or work assistance under this 
                                title after such a reset; and
                                    ``(IV) the average completion rate 
                                and time to completion for students who 
                                reenroll in an eligible institution 
                                after such reset, disaggregated by 
                                institution.
            ``(4) Evaluation of academic progress.--
                    ``(A) In general.--An institution that determines 
                that a student is not making satisfactory academic 
                progress under its policy may disburse funds provided 
                through student financial assistance programs under 
                this title (including work-study programs under 
                subtitle C) to the student in accordance with 
                subparagraphs (B), (C), and (D).
                    ``(B) Payment period following not making 
                satisfactory academic progress.--For the payment period 
                following the payment period in which a student did not 
                make satisfactory academic progress, the institution 
                shall place the student on financial aid warning and 
                disburse funds under this title to the student.
                    ``(C) Payment period following financial aid 
                warning.--For the payment period following a payment 
                period during which a student was on financial aid 
                warning, the institution may place the student on 
                financial aid probation, and disburse funds under this 
                title to the student if--
                            ``(i) the institution evaluates the 
                        student's progress and determines that student 
                        did not make satisfactory academic progress 
                        during the payment period the student was on 
                        financial aid warning;
                            ``(ii) the student appeals the 
                        determination; and
                            ``(iii)(I) the institution determines that 
                        the student should be able to meet the 
                        institution's satisfactory academic progress 
                        standards by the end of the subsequent payment 
                        period; or
                            ``(II) the institution develops an academic 
                        plan for the student that, if followed, will 
                        ensure that the student is able to meet the 
                        institution's satisfactory academic progress 
                        standards by a specific point in time.
                    ``(D) Payment period following financial aid 
                probation.--A student on financial aid probation for a 
                payment period may not receive funds under this title 
                for the subsequent payment period unless the student 
                makes satisfactory academic progress or the institution 
                determines that the student met the requirements 
                specified by the institution in the academic plan for 
                the student developed under subparagraph (C)(iii)(II).
                    ``(E) Frequency of academic progress evaluation and 
                communication.--
                            ``(i) In general.--Subject to clause (ii), 
                        for the purpose of determining whether 
                        presently enrolled students are maintaining 
                        satisfactory progress, each institution of 
                        higher education that enrolls students who 
                        receive any grant, loan, or work assistance 
                        under this title shall review the progress of 
                        such students at the end of each payment 
                        period.
                            ``(ii) Shorter payment periods.--For each 
                        institution described in clause (i) that has 
                        payment periods that are shorter than on the 
                        semester system basis (such as on a quarterly 
                        or trimester system basis or by clock hour 
                        program or non-term program), such institution 
                        shall review the progress of presently enrolled 
                        students at the end of each semester or 
                        equivalent period of 12 to 18 weeks.
                            ``(iii) Financial aid warning.--At the end 
                        of each payment period (or, in the case of an 
                        institution described in clause (ii), at the 
                        end of each semester or equivalent period), 
                        each institution shall send a financial aid 
                        warning to presently enrolled students that do 
                        not meet the grade point average requirement 
                        described in paragraph (2), or its equivalent 
                        or academic standing consistent with the 
                        requirements for graduation, as determined by 
                        the institution, that informs the students of 
                        their risk of being determined to not be 
                        maintaining satisfactory progress and therefore 
                        losing eligibility for grant, loan, or work 
                        assistance under this title and provides 
                        information on--
                                    ``(I) the specific criteria of the 
                                institution's academic requirements 
                                that the student is not meeting and the 
                                specific improvements needed to meet 
                                the requirements; and
                                    ``(II) how to meet with the 
                                student's academic advisor to get the 
                                academic support the student needs.
            ``(5) Detailing requirements to students.--Each institution 
        of higher education that enrolls students who receive any 
        grant, loan, or work assistance under this title shall detail 
        the institution's requirements regarding students maintaining 
        satisfactory academic progress--
                    ``(A) to such students before the students begin 
                classes at the institution through a detailed 
                communication that may be separate from a financial aid 
                offer; and
                    ``(B) on the financial aid webpage of the website 
                of the institution.
            ``(6) Consumer testing.--The Secretary--
                    ``(A) shall conduct consumer testing to develop 
                exemplary practices and templates--
                            ``(i) to support institutions of higher 
                        education in carrying out paragraph (5); and
                            ``(ii) which shall be available as 
                        resources for institutions of higher education; 
                        and
                    ``(B) shall not require the use of such practices 
                and templates by institutions of higher education.''.

SEC. 106. FEDERAL PELL GRANTS FOR GRADUATE STUDENTS.

    Section 401 of the Higher Education Act of 1965 (20 U.S.C. 1070a), 
as amended by title VII of division FF of the FAFSA Simplification Act 
(Public Law 116-260), is amended--
            (1) in subsection (b)(8)(A), by inserting ``or as a 
        postbaccalaureate student in accordance with subsection 
        (d)(1)'' after ``as an undergraduate''; and
            (2) in subsection (d)--
                    (A) by amending paragraph (1) to read as follows:
            ``(1) In general.--The period during which a student may 
        receive Federal Pell Grants shall be the period required for 
        the completion of the first undergraduate baccalaureate course 
        of study being pursued by that student at the institution at 
        which the student is in attendance except that--
                    ``(A) any 1-year period during which the student is 
                enrolled in a noncredit or remedial course of study as 
                defined in paragraph (2) shall not be counted for the 
                purpose of this paragraph; and
                    ``(B) the period during which a student may receive 
                Federal Pell Grants shall also include the period 
                required for the completion of the first 
                postbaccalaureate course of study in a case in which--
                            ``(i) the student received a Federal Pell 
                        Grant during the period required for the 
                        completion of the student's first undergraduate 
                        baccalaureate course of study for at least 1 
                        but fewer than 18 semesters, or the equivalent 
                        of at least 1 but fewer than 18 semesters, as 
                        determined under paragraph (5);
                            ``(ii) the student would otherwise be 
                        eligible for a Federal Pell Grant, but for the 
                        completion of such baccalaureate course of 
                        study; and
                            ``(iii) the period during which the student 
                        receives Federal Pell Grants does not exceed 
                        the student's duration limits under paragraph 
                        (5).''; and
                    (B) in paragraph (2), by striking ``or 
                certificate'' and inserting ``, certificate, or first 
                postbaccalaureate degree''.

  TITLE II--AMENDMENTS TO TERMS AND CONDITIONS OF LOANS AND REPAYMENT 
                                 PLANS

                          PART A--DIRECT LOANS

SEC. 201. SUBSIDIZED LOANS FOR GRADUATE AND PROFESSIONAL STUDENTS.

    Section 455(a)(3) of the Higher Education Act of 1965 (20 U.S.C. 
1087e(a)(3)) is amended--
            (1) in subparagraph (A), in the matter preceding clause 
        (i), by striking ``subparagraph (B)'' and inserting 
        ``subparagraphs (B) and (C)''; and
            (2) by adding at the end the following:
                    ``(C) Authority to make interest subsidized loans 
                to graduate and professional students.--For any period 
                of instruction at an institution of higher education 
                (as defined in section 101 or section 102(a)(1)(C), 
                except that a graduate medical school, nursing school, 
                or a veterinary school, located outside the United 
                States that does not meet the requirements of section 
                101(a)(4) shall be excluded) beginning on or after July 
                1, 2023, a graduate or professional student shall be 
                eligible to receive a Federal Direct Stafford loan 
                under this part.''.

SEC. 202. INTEREST RATE ON SUBSIDIZED LOANS FOR GRADUATE AND 
              PROFESSIONAL STUDENTS.

    Section 455(b)(8)(B) of the Higher Education Act of 1965 (20 U.S.C. 
1087e(b)(8)(B)) is amended--
            (1) in the heading for subparagraph (B), by striking 
        ``fdusl'' and inserting ``fdsl and fdusl''; and
            (2) by inserting ``and Federal Direct Stafford Loans'' 
        after ``Federal Direct Unsubsidized Stafford Loans''.

SEC. 203. REPEAL OF ORIGINATION FEES.

    Section 455(c)(2) of the Higher Education Act of 1965 (20 U.S.C. 
1087e(c)(2)) is amended--
            (1) by striking ``and'' at the end of subparagraph (D); and
            (2) by adding at the end the following:
                    ``(E) by substituting `0.0 percent' for `4.0 
                percent' with respect to loans for which the first 
                disbursement of principal is made on or after July 1, 
                2023.''.

SEC. 204. PREPAYMENT AMOUNTS.

    Section 455(d) of the Higher Education Act of 1965 (20 U.S.C. 
1087e(d)) is amended by adding at the end the following:
            ``(6) Application of prepayment amounts.--
                    ``(A) Requirement for eligible borrowers.--
                            ``(i) In general.--Notwithstanding any 
                        other provision of this subsection or any other 
                        provision of law--
                                    ``(I) with respect to loans made to 
                                an eligible borrower under this part or 
                                part B, which are held by the same 
                                holder and which have different 
                                applicable rates of interest, the 
                                holder of such loans shall, unless 
                                otherwise requested by the borrower in 
                                writing, apply the borrower's 
                                prepayment amount (within the meaning 
                                of section 682.209(b) of title 34, Code 
                                of Federal Regulations, or a successor 
                                regulation) for one or more of such 
                                loans, first toward the outstanding 
                                balance of principal due on the loan 
                                with the highest applicable rate of 
                                interest among such loans; and
                                    ``(II) except as provided in 
                                subclause (I), with respect to loans 
                                made to an eligible borrower under this 
                                part or part B, which are held by the 
                                same holder and which have the same 
                                applicable rates of interest, the 
                                holder of such loans shall, unless 
                                otherwise requested by the borrower in 
                                writing, apply the borrower's 
                                prepayment amount (within the meaning 
                                of section 682.209(b) of title 34, Code 
                                of Federal Regulations, or a successor 
                                regulation) for one or more of such 
                                loans, first toward the outstanding 
                                balance of principal due on the loan 
                                with the highest principal balance 
                                among such loans.
                            ``(ii) Eligible borrower defined.--For 
                        purposes of this paragraph, the term `eligible 
                        borrower' means a borrower with no outstanding 
                        balance of fees, including collection costs and 
                        authorized late charges, due on any loan made 
                        under this part or part B.
                    ``(B) Requirement for other borrowers.--A 
                prepayment amount (as described in subparagraph (A)(i)) 
                made by a borrower who is not an eligible borrower to a 
                holder shall be applied first toward the borrower's 
                outstanding balance of fees, including collection costs 
                and authorized late charges, due on any loan made under 
                this part or part B held by such holder.''.

  PART B--AUTOMATIC ENROLLMENT IN INCOME-DRIVEN REPAYMENT FOR CERTAIN 
                               BORROWERS

SEC. 211. NOTIFICATION AND AUTOMATIC ENROLLMENT PROCEDURES FOR 
              BORROWERS WHO ARE DELINQUENT ON LOANS.

    Section 455(d) of the Higher Education Act of 1965 (20 U.S.C. 
1087e(d)), as amended by this Act, is further amended by adding at the 
end the following:
            ``(9) Notification and automatic enrollment procedures for 
        borrowers who are delinquent on loans.--
                    ``(A) Authority to obtain income information.--The 
                Secretary shall establish and implement, with respect 
                to any borrower described in subparagraph (B), 
                procedures to--
                            ``(i) use return information of the 
                        borrower (and the borrower's spouse, if 
                        applicable) disclosed under section 6103(l)(13) 
                        of the Internal Revenue Code of 1986, pursuant 
                        to approval provided under section 494, to 
                        determine the income and family size of the 
                        borrower (and the borrower's spouse, if 
                        applicable) without further 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 income 
                        and family size of the borrower (and the 
                        borrower's spouse, if applicable); and
                            ``(iii) provide the borrower with an 
                        opportunity to update the return information so 
                        disclosed before the determination of the 
                        income and family size of the borrower for 
                        purposes of this paragraph.
                    ``(B) Borrower notification.--With respect to each 
                borrower of a covered loan who is at least 31 days 
                delinquent on such loan and who has not been subject to 
                the procedures under this paragraph for such loan in 
                the preceding 62 days, the Secretary shall, as soon as 
                practicable after such 31-day delinquency, provide to 
                the borrower the following:
                            ``(i) Notification that the borrower is at 
                        least 31 days delinquent on at least 1 covered 
                        loan, and a description of all delinquent 
                        covered loans, nondelinquent covered loans, and 
                        noncovered loans of the borrower.
                            ``(ii) A brief description of the repayment 
                        plans for which the borrower is eligible and 
                        the covered loans and noncovered loans of the 
                        borrower that may be eligible for such plans, 
                        based on information available to the 
                        Secretary.
                            ``(iii) The amount of monthly payments for 
                        the covered and noncovered loans under each 
                        repayment plan identified under clause (ii), 
                        based on information available to the 
                        Secretary, including, if the income information 
                        of the borrower is available to the Secretary 
                        under subparagraph (A), the income, family 
                        size, tax filing status, and tax year 
                        information on which each such monthly payment 
                        is based.
                            ``(iv) Clear and simple instructions on how 
                        to select the repayment plans.
                            ``(v) An explanation that, in the case of a 
                        borrower for whom adjusted gross income is 
                        unavailable--
                                    ``(I) if the borrower selects to 
                                repay the covered loans of such 
                                borrower pursuant to an income-driven 
                                repayment plan that defines 
                                discretionary income in such a manner 
                                that an individual not required under 
                                section 6012(a)(1) of the Internal 
                                Revenue Code of 1986 to file a return 
                                with respect to income taxes imposed by 
                                subtitle A of such Code may have a 
                                calculated monthly payment greater than 
                                $0, the borrower will be required to 
                                provide the Secretary with other 
                                documentation of income satisfactory to 
                                the Secretary, which documentation the 
                                Secretary may use to determine an 
                                appropriate repayment schedule; and
                                    ``(II) if the borrower selects to 
                                repay such loans pursuant to an income-
                                driven repayment plan that is not 
                                described in subclause (I), the 
                                borrower will not be required to 
                                provide the Secretary with such other 
                                documentation of income, and the 
                                borrower will have a calculated monthly 
                                payment of $0.
                            ``(vi) An explanation that the Secretary 
                        shall take the actions under subparagraph (C) 
                        with respect to such borrower, if--
                                    ``(I) the borrower is 80 days 
                                delinquent on 1 or more covered loans 
                                and has not selected a new repayment 
                                plan for the covered loans of the 
                                borrower; and
                                    ``(II) in the case of such a 
                                borrower whose existing repayment plan 
                                for the covered loans of the borrower 
                                is not an income-driven repayment plan, 
                                the monthly payments under such 
                                existing repayment plan are higher than 
                                such monthly payments would be under an 
                                income-driven repayment plan.
                            ``(vii) Instructions on updating the 
                        information of the borrower obtained under 
                        subparagraph (A).
                    ``(C) Secretary's selection of a plan.--With 
                respect to each borrower described in subparagraph (B) 
                whose existing repayment plan for the covered loans of 
                the borrower is described in clause (vi)(II) of 
                subparagraph (B), and who has not selected a new 
                repayment plan for such loans in accordance with the 
                notice received under such subparagraph and who is at 
                least 80 days delinquent on such a loan, the Secretary 
                shall, as soon as practicable--
                            ``(i) in a case in which any of the 
                        borrower's covered loans are eligible for an 
                        income-driven repayment plan--
                                    ``(I)(aa) provide the borrower with 
                                the income-driven repayment plan that 
                                requires the lowest monthly payment 
                                amount for each covered loan of the 
                                borrower, compared to any other such 
                                plan for which the borrower is 
                                eligible; or
                                    ``(bb) if more than one income-
                                driven repayment plan would offer the 
                                borrower the same lowest monthly 
                                payment amount, provide the borrower 
                                with the income-driven repayment plan 
                                that has the most favorable terms for 
                                the borrower;
                                    ``(II) if the plan selected under 
                                subclause (I) is not the income-driven 
                                repayment plan that would have the 
                                lowest monthly payment amount if the 
                                borrower were eligible for such plan 
                                for the borrower's covered loans and 
                                noncovered loans, notify the borrower 
                                of the actions, if any, the borrower 
                                may take to become eligible for such 
                                income-driven repayment plan; and
                                    ``(III) authorize the borrower to 
                                change the Secretary's selection of a 
                                plan under this clause to any plan 
                                described in paragraph (1) for which 
                                the borrower is eligible; and
                            ``(ii) in a case in which none of the 
                        borrower's covered loans are eligible for an 
                        income-driven repayment plan, notify the 
                        borrower of the actions, if any, the borrower 
                        may take for such loans to become eligible for 
                        such a plan.''.

SEC. 212. NOTIFICATION AND AUTOMATIC ENROLLMENT PROCEDURES FOR 
              BORROWERS WHO ARE REHABILITATING DEFAULTED LOANS.

    Section 455(d) of the Higher Education Act of 1965 (20 U.S.C. 
1087e(d)), as amended by this Act, is further amended by adding at the 
end the following:
            ``(10) Notification and automatic enrollment procedures for 
        borrowers who are rehabilitating defaulted loans.--
                    ``(A) Authority to obtain income information.--The 
                Secretary shall establish and implement, with respect 
                to any borrower who is rehabilitating a covered loan 
                pursuant to section 428F(a), procedures to--
                            ``(i) use return information of the 
                        borrower (and the borrower's spouse, if 
                        applicable) disclosed section 6103(l)(13) of 
                        the Internal Revenue Code of 1986, pursuant to 
                        approval provided under section 494, to obtain 
                        such information as is reasonably necessary 
                        regarding the income and family size of the 
                        borrower (and the borrower's spouse, if 
                        applicable);
                            ``(ii) allow the borrower (or the spouse of 
                        the borrower), at any time, to opt out of 
                        disclosure under such section 6103(l)(13) and 
                        instead provide such information as the 
                        Secretary may require to obtain such 
                        information; and
                            ``(iii) provide the borrower with an 
                        opportunity to update the return information so 
                        disclosed before the determination of income 
                        and family size of the borrower (and the 
                        borrower's spouse, if applicable) for purposes 
                        of this paragraph.
                    ``(B) Borrower notification.--Not later than 30 
                days after a borrower makes the 6th payment required on 
                such covered loan for the loan rehabilitation described 
                in subparagraph (A), the Secretary shall notify the 
                borrower of the process under subparagraph (C) with 
                respect to such loan.
                    ``(C) Secretary's selection of plan.--With respect 
                to each borrower who has made the 9th payment required 
                on such covered loan for the loan rehabilitation 
                described in subparagraph (A), the Secretary shall, as 
                soon as practicable after such payment, carry out the 
                procedures described in clauses (i) and (ii) of 
                paragraph (9)(C) with respect to such loan.''.

SEC. 213. COVERED LOAN, INCOME-DRIVEN REPAYMENT PLAN, AND NON-COVERED 
              LOAN DEFINED.

    Section 455(d) of the Higher Education Act of 1965 (20 U.S.C. 
1087e(d)), as amended by this Act, is further amended by adding at the 
end the following:
            ``(11) Definitions.--In this subsection:
                    ``(A) Covered loan.--The term `covered loan' 
                means--
                            ``(i) a loan made under this part;
                            ``(ii) a loan purchased under section 459A; 
                        or
                            ``(iii) a loan that has been assigned to 
                        the Secretary under subsection (c)(8) or 
                        (j)(3)(B) of section 428, or subsection 
                        (a)(1)(A)(ii) or (a)(1)(G) of section 428F.
                    ``(B) Income-driven repayment plan.--The term 
                `income-driven repayment plan' means a repayment plan 
                described in subparagraph (D) or (E) of paragraph (1).
                    ``(C) Noncovered loan.--The term `noncovered loan' 
                means a loan made, insured, or guaranteed under this 
                title that is not a covered loan.''.

SEC. 214. AUTOMATIC RECERTIFICATION OF INCOME FOR INCOME-DRIVEN 
              REPAYMENT PLANS.

    (a) Income-Contingent Repayment Plans.--Section 455(e)(8)(A) of the 
Higher Education Act of 1965 (20 U.S.C. 1087e(e)(8)(A)) is amended--
            (1) by striking ``and'' at the end of clause (ii);
            (2) by redesignating clause (iii) as clause (iv);
            (3) in clause (iv) (as so redesignated), by striking the 
        period at the end and inserting ``; and''; and
            (4) by inserting after clause (ii), the following:
                            ``(iii) in the case of a borrower who has 
                        selected to repay a loan made under this part 
                        pursuant to an income contingent repayment plan 
                        that defines discretionary income in such a 
                        manner that the borrower would have a 
                        calculated monthly payment equal to $0, not 
                        require the borrower to provide the Secretary 
                        the information described in clause (i) or 
                        (ii), and ensure that the borrower will have a 
                        calculated monthly payment of $0; and''.
    (b) Income-Based Repayment Plans.--Section 493C(c)(2)(B) of the 
Higher Education Act of 1965 (20 U.S.C. 1098e(c)(2)(B)) is amended by 
striking ``any loan made under part D (other than an excepted PLUS loan 
or excepted consolidation loan)'' and inserting ``any covered loan (as 
defined in section 455(d)(11))''.

SEC. 215. PROCEDURE AND REQUIREMENT FOR REQUESTING TAX RETURN 
              INFORMATION FROM THE IRS.

    Section 494(a) of the Higher Education Act of 1965 (20 U.S.C. 
1098h(a)) is amended--
            (1) in paragraph (2)--
                    (A) in subparagraph (A), in the matter preceding 
                clause (i), by striking ``a loan under part D'' and 
                inserting ``a covered loan (as defined in section 
                455(d)(11))''; and
                    (B) in subparagraph (B), by striking ``a loan under 
                part D'' and inserting ``a covered loan (as defined in 
                section 455(d)(11))''; and
            (2) by adding at the end the following:
            ``(4) Loan delinquency and rehabilitation.--
                    ``(A) Borrowers delinquent on loans.--In the case 
                of an individual who is a borrower of a covered loan 
                and who is at least 31 days delinquent on such loan, 
                the Secretary, with respect to such individual and any 
                spouse of such individual, shall--
                            ``(i) provide to such individuals the 
                        notification described in paragraph (1)(A)(i); 
                        and
                            ``(ii) require, as a condition of 
                        eligibility for the notification and automatic 
                        enrollment procedures under section 455(d)(9), 
                        that such individuals--
                                    ``(I) affirmatively approve the 
                                disclosure described in paragraph 
                                (1)(A)(i) and agree that such approval 
                                shall serve as an ongoing approval of 
                                such disclosure until the date on which 
                                the individual elects to opt out of 
                                such disclosure under section 
                                455(d)(9)(A)(ii); or
                                    ``(II) provide such information as 
                                the Secretary may require to carry out 
                                the procedures under section 455(d)(9) 
                                with respect to such individual.
                    ``(B) Loan rehabilitation.--In the case of any 
                written or electronic application by an individual for 
                the rehabilitation of a covered loan pursuant to 
                section 428F(a), the Secretary, with respect to such 
                individual and any spouse of such individual, shall--
                            ``(i) provide to such individuals the 
                        notification described in paragraph (1)(A)(i); 
                        and
                            ``(ii) require, as a condition of 
                        eligibility for loan rehabilitation pursuant to 
                        section 428F(a), that such individuals--
                                    ``(I) affirmatively approve the 
                                disclosure described in paragraph 
                                (1)(A)(i) and agree that such approval 
                                shall serve as an ongoing approval of 
                                such disclosure until the date on which 
                                the individual elects to opt out of 
                                such disclosure under section 
                                455(d)(10)(A)(ii); or
                                    ``(II) provide such information as 
                                the Secretary may require to carry out 
                                the procedures under section 455(d)(10) 
                                with respect to such individual.
                    ``(C) Covered loan defined.--In this paragraph, the 
                term `covered loan' has the meaning given the term in 
                section 455(d)(11).''.

        PART C--AMENDMENTS TO CERTAIN LOAN FORGIVENESS PROGRAMS

SEC. 221. AMENDMENTS TO TERMS AND CONDITIONS OF PUBLIC SERVICE LOAN 
              FORGIVENESS.

    (a) Number of Monthly Payments; Repayment Plans.--Paragraph (1) of 
section 455(m) of the Higher Education Act of 1965 (20 U.S.C. 1087e(m)) 
is amended--
            (1) in subparagraph (A)--
                    (A) in the matter preceding clause (i), by striking 
                ``120'' and inserting ``96'';
                    (B) by striking ``or'' at the end of clause (iii);
                    (C) in clause (iv), by striking ``and'' and 
                inserting ``or''; and
                    (D) by adding at the end the following:
                            ``(v) in lieu of such a payment, has been 
                        in--
                                    ``(I) cancer treatment deferment 
                                under section 427(a)(2)(C)(iv), 
                                428(b)(1)(M)(v), or 455(f)(3);
                                    ``(II) rehabilitation training 
                                program deferment under section 
                                427(a)(2)(C)(i)(II), 
                                428(b)(1)(M)(i)(II), or 
                                455(f)(2)(A)(ii);
                                    ``(III) military service deferment 
                                under section 428(b)(1)(M)(iii) or 
                                455(f)(2)(C);
                                    ``(IV) unemployment deferment under 
                                section 427(a)(2)(C)(ii), 
                                428(b)(1)(M)(ii), 428B(d)(1)(A)(i), or 
                                455(f)(2)(B);
                                    ``(V) deferment due to an economic 
                                hardship described in section 
                                427(a)(2)(C)(iii), section 
                                428(b)(1)(M)(iv), section 
                                428B(d)(1)(A)(i), section 435(o), or 
                                section 455(f)(2)(D);
                                    ``(VI) Peace Corps service 
                                deferment under section 
                                682.210(b)(2)(ii) or 682.210(k) of 
                                title 34, Code of Federal Regulations 
                                (or successor regulations), as made 
                                applicable to Direct Loan borrowers 
                                under section 685.204(j) of such title 
                                34;
                                    ``(VII) has been in post-active-
                                duty student deferment under section 
                                493D;
                                    ``(VIII) AmeriCorps forbearance 
                                under section 428(c)(3)(A)(i)(III);
                                    ``(IX) National Guard Duty 
                                forbearance under section 
                                682.211(h)(2)(iii) or 685.205(a)(7) of 
                                title 34, Code of Federal Regulations 
                                (or successor regulations);
                                    ``(X) Department of Defense student 
                                loan repayment program forbearance 
                                under section 428(c)(3)(A)(i)(IV);
                                    ``(XI) Administrative forbearance 
                                or mandatory administrative forbearance 
                                under section 428(c)(3)(D) or 
                                428H(e)(7); or
                                    ``(XII) Student loan debt burden 
                                forbearance under section 
                                428(c)(3)(A)(i)(II); and''; and
            (2) in subparagraph (B), by striking ``(i) is employed'' 
        and all that follows through ``has been'' and inserting ``has 
        been''.
    (b) Automatic Cancellation.--Paragraph (2) of section 455(m) of the 
Higher Education Act of 1965 (20 U.S.C. 1087e(m)(2)) is amended by 
adding at the end the following: ``In the case of a borrower who meets 
the requirements under paragraph (1) for such cancellation, such 
cancellation shall occur without further action by the borrower.''.
    (c) Treatment of Refinanced Loans; On-Line Portal; Database of 
Public Service Jobs.--Section 455(m) of such Act (20 U.S.C. 1087e(m)) 
is further amended--
            (1) by redesignating paragraphs (3) and (4) as paragraphs 
        (6) and (7), respectively; and
            (2) by inserting after paragraph (2) the following:
            ``(3) Treatment of loans refinanced under sections 460a.--
        In the case of an eligible refinanced Federal Direct Loan under 
        section 460A, any monthly payment pursuant to any repayment 
        plan listed in paragraph (1)(A) (including a period of 
        deferment or forbearance described in paragraph (1)(A)(v)) made 
        on a loan, for which the liability has been discharged by such 
        refinanced loan and without regard to whether such loan is an 
        eligible Federal Direct Loan, shall be treated as a monthly 
        payment under paragraph (1)(A) on the portion of such 
        refinanced loan that is attributable to such discharged loan.
            ``(4) On-line portal.--
                    ``(A) Borrowers.--The Secretary shall ensure that 
                borrowers have access to an on-line portal that 
                provides each borrower who signs on to such portal with 
                the following:
                            ``(i) Instructions on how to access the 
                        database under paragraph (5) so that the 
                        borrower can determine whether the borrower is 
                        employed in a public service job.
                            ``(ii) An identification of the loans of 
                        the borrower that are eligible Federal Direct 
                        Loans.
                            ``(iii) With respect to each such eligible 
                        Federal Direct Loan, the number of monthly 
                        payments on such loan that qualify as a monthly 
                        payment under paragraph (1)(A), and the 
                        estimated number of monthly payments under 
                        paragraph (1)(A) remaining on such loan before 
                        the borrower may be eligible for loan 
                        cancellation under this subsection.
                            ``(iv) With respect to each loan of the 
                        borrower that is not eligible for loan 
                        cancellation under this subsection, an 
                        explanation of why the loan is not so eligible 
                        and instructions on how what, if anything, the 
                        borrower may do to make the loan so eligible.
                            ``(v) Instructions for the submission of 
                        any forms associated with such loan 
                        cancellation, and an ability for the borrower 
                        to use the portal to electronically sign and 
                        submit such forms.
                            ``(vi) In the case of a borrower who 
                        disputes a determination of the Secretary 
                        relating to the entitlement of the borrower to 
                        loan cancellation under paragraph (2)--
                                    ``(I) an ability for the borrower 
                                to file a claim with the Secretary to 
                                dispute such determination through the 
                                portal; and
                                    ``(II) in the case of such a claim 
                                that has been filed, the status of such 
                                claim, for which updates shall be 
                                provided not fewer than once every 90 
                                days.
                    ``(B) Employers.--The Secretary shall ensure that 
                an employer of a borrower has the option to 
                electronically sign and submit any forms associated 
                with loan cancellation under this subsection.
                    ``(C) Information.--The Secretary shall ensure that 
                any information provided through the on-line portal 
                described in this paragraph is up-to-date information.
            ``(5) Database of public service jobs.--
                    ``(A) In general.--The Secretary, in consultation 
                with the Secretary of Labor, shall establish and 
                regularly update a database that lists public service 
                jobs.
                    ``(B) Public availability.--The database 
                established under subparagraph (A) shall be made 
                available on a publicly accessible website of the 
                Department in an easily searchable format.''.
    (d) Definitions.--Section 455(m) of such Act is further amended in 
paragraph (6)(A) (as so redesignated by subsection (c))--
            (1) by inserting before the period at the end the 
        following: ``(including any Federal Direct Stafford Loan, 
        Federal Direct PLUS Loan, Federal Direct Unsubsidized Stafford 
        Loan, or Federal Direct Consolidation Loan refinanced under 
        section 460A)'';
            (2) by striking ``The term'' and inserting the following:
                            ``(i) In general.--The term''; and
            (3) by adding at the end the following:
                            ``(ii) Treatment of certain consolidation 
                        loan payments.--In the case of an eligible 
                        Federal Direct Loan that is a Federal Direct 
                        Consolidation Loan made on or after the date of 
                        enactment of the LOAN Act, any monthly payment 
                        pursuant to any repayment plan listed in 
                        paragraph (1)(A) (including a period of 
                        deferment or forbearance described in paragraph 
                        (1)(A)(v)) made on a loan, for which the 
                        liability has been discharged by the proceeds 
                        of such Federal Direct Consolidation Loan and 
                        without regard to whether the loan is an 
                        eligible Federal Direct Loan, shall be treated 
                        as a monthly payment under paragraph (1)(A) on 
                        the portion of such Federal Direct 
                        Consolidation Loan that is attributable to such 
                        discharged loan, except that in a case of a 
                        borrower who previously received a Federal 
                        Direct Consolidation Loan, any monthly payment 
                        made on a loan for which the liability has been 
                        discharged by such previous consolidation loan 
                        shall not be treated as a monthly payment on a 
                        portion of the subsequent Federal Direct 
                        Consolidation Loan made on or after such date 
                        of enactment.''.
    (e) Treatment of Double Benefits.--Section 455(m) of such Act is 
further amended in paragraph (7) (as so redesignated by subsection (c)) 
by striking ``both this subsection and section 428J, 428K, 428L, or 
460'' and inserting ``both this subsection and section 428K or 428L''.

SEC. 222. LOAN FORGIVENESS FOR TEACHERS.

    The Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) is 
further amended--
            (1) in section 428J(g)(2) (20 U.S.C. 1078-10(g)(2))--
                    (A) in subparagraph (A), by inserting ``or'' after 
                the semicolon at the end;
                    (B) by striking subparagraph (B); and
                    (C) by redesignating subparagraph (C) as 
                subparagraph (B); and
            (2) in section 460(g)(2) (20 U.S.C. 1087j(g)(2))--
                    (A) in subparagraph (A), by inserting ``or'' after 
                the semicolon at the end;
                    (B) by striking subparagraph (B); and
                    (C) by redesignating subparagraph (C) as 
                subparagraph (B).

                   TITLE III--INTEREST CAPITALIZATION

SEC. 301. ELIMINATION OF INTEREST CAPITALIZATION.

    (a) Federal PLUS Loans.--Section 428B(d)(2) of the Higher Education 
Act of 1965 (20 U.S.C. 1078-2(d)(2)) is amended to read as follows:
            ``(2) No capitalization of interest.--Interest on loans 
        made under this section for which payments of principal are 
        deferred pursuant to paragraph (1) shall be paid by the 
        borrower and shall not be capitalized.''.
    (b) Federal Consolidation Loans Deferrals.--Section 
428C(b)(4)(C)(ii)(III) of the Higher Education Act of 1965 (20 U.S.C. 
1078-3(b)(4)(C)(III)) is amended by striking ``or capitalized,''.
    (c) Default Reduction Program.--Section 428F(a)(1)(E) of such Act 
of 1965 (20 U.S.C. 1078-6(a)(1)(E)) is amended to read as follows:
                    ``(E) Duties upon assignment.--With respect to a 
                loan assigned under subparagraph (A)(ii)--
                            ``(i) the guaranty agency shall add to the 
                        principal and interest outstanding at the time 
                        of the assignment of such loan an amount equal 
                        to the amount described in subparagraph 
                        (D)(i)(II)(aa);
                            ``(ii) the Secretary shall pay the guaranty 
                        agency, for deposit in the agency's Operating 
                        Fund established pursuant to section 422B, an 
                        amount equal to the amount added to the 
                        principal and interest outstanding at the time 
                        of the assignment in accordance with clause 
                        (i);
                            ``(iii) for a loan assigned on or after the 
                        date of enactment of the LOAN Act, the interest 
                        outstanding at the time of the assignment of 
                        such loan, and any interest accruing after such 
                        time, shall not be capitalized; and
                            ``(iv) beginning on the date of enactment 
                        of LOAN Act, interest shall only accrue on the 
                        percentage of such a loan that is equal to--
                                    ``(I) the amount of the outstanding 
                                principal on the original loan on the 
                                date it was assigned; divided by
                                    ``(II) the total amount of such 
                                assigned loan, including interest 
                                outstanding at the time of the 
                                assignment of such loan and the amount 
                                added by the guaranty agency in 
                                accordance with clause (i), on the date 
                                such loan was assigned.''.
    (d) Loan Limits for Unsubsidized Stafford Loans.--Section 
428H(d)(5) of the Higher Education Act of 1965 (20 U.S.C. 1078-8(d)(5)) 
is amended by inserting ``before the date of enactment of the LOAN 
Act'' after ``Interest capitalized''.
    (e) Unsubsidized Stafford Loans for Middle Income Borrowers.--
Section 428H(e)(2) of the Higher Education Act of 1965 (20 U.S.C. 1078-
8(e)(2)) is amended--
            (1) in the header, by striking ``Capitalization'' and 
        inserting ``No capitalization'';
            (2) in subparagraph (A), in the matter before clause (i), 
        by striking ``, if agreed upon by the borrower and the lender'' 
        and all that follows through clause (ii)(IV) and inserting ``be 
        paid by the borrower and shall not be capitalized.'';
            (3) by striking subparagraph (B); and
            (4) by redesignating subparagraph (C) as subparagraph (B).
    (f) Income Contingent Repayment.--Section 455(e)(5) of the Higher 
Education Act of 1965 (20 U.S.C. 1087e(e)(5)) is amended by striking 
the last sentence and inserting ``No interest may be capitalized on 
such loan on or after the date of the enactment of the LOAN Act, and 
the Secretary shall promulgate regulations with respect to the 
treatment of accrued interest that is not capitalized''.
    (g) Deferment and Forbearance.--
            (1) In general.--Section 455(f) of the Higher Education Act 
        of 1965 (20 U.S.C. 1087e(f)) is amended--
                    (A) in the subsection heading, by inserting at the 
                end the following: ``and Forbearance'';
                    (B) in subparagraph (B), by striking ``capitalized 
                or''; and
                    (C) by adding at the end the following:
            ``(6) Forbearance.--At the expiration of a period of 
        forbearance, interest shall not be capitalized on any loans 
        made under this part.''.
            (2) Application of amendment.--The amendments made by 
        paragraph (1) shall apply to any deferment or forbearance 
        period in effect on the date of enactment of this Act, or any 
        deferment or forbearance period beginning on or after such date 
        of enactment.
    (h) Income-Based Repayment Program.--Section 493C(b)(3) of the 
Higher Education Act of 1965 (20 U.S.C. 1098e(b)(3)) is amended to read 
as follows:
            ``(3) on subsidized loans, any interest due and not paid 
        under paragraph (2) shall be paid by the Secretary for a period 
        of not more than 3 years after the date of the borrower's 
        election under paragraph (1), except that such period shall not 
        include any period during which the borrower is in deferment 
        due to an economic hardship described in section 435(o);''.
    (i) Notes and Insurance Certificates in Combined Payment Plans.--
Section 485A(f) of the Higher Education Act of 1965 (20 U.S.C. 
1092a(f)) is amended by adding at the end the following new paragraph:
            ``(3) Treatment of interest.--Not withstanding paragraphs 
        (1) and (2), beginning on the date of enactment of the LOAN 
        Act, interest on a loan reissued under subsection (e) shall not 
        be capitalized, and interest shall only accrue on the 
        percentage of such reissued loan that is equal to--
                    ``(A) the amount of the outstanding principal on 
                the original loan on the date it was reissued; divided 
                by
                    ``(B) the total amount of such reissued loan on the 
                date such loan was reissued.''.

SEC. 302. ELIMINATION OF DISCLOSURE REQUIREMENTS RELATING TO 
              CAPITALIZATION.

    (a) Insurance Program Agreements To Qualify Loans for Interest 
Subsidies.--Section 428(b)(1)(Y) of the Higher Education Act of 1965 
(20 U.S.C. 1078(b)(1)(Y)) is amended--
            (1) in clause (i)(IV), by inserting ``and'' after the 
        semicolon;
            (2) in clause (ii), by striking ``; and'' and inserting a 
        period; and
            (3) by striking clause (iii).
    (b) Forbearance.--Section 428(c)(3)(C) of such Act of 1965 (20 
U.S.C. 1078(c)(3)(C)) is amended--
            (1) in clause (ii), by inserting ``and'' after the 
        semicolon; and
            (2) by striking clauses (iii) and (iv) and inserting the 
        following:
                            ``(iii) the lender shall contact the 
                        borrower not less often than once every 180 
                        days during the period of forbearance to inform 
                        the borrower of--
                                    ``(I) the amount of unpaid 
                                principal and the amount of interest 
                                that has accrued since the last 
                                statement of such amounts provided to 
                                the borrower by the lender;
                                    ``(II) the fact that interest will 
                                accrue on the loan for the period of 
                                forbearance;
                                    ``(III) the responsibility of the 
                                borrower to pay the interest that has 
                                accrued; and
                                    ``(IV) the borrower's option to 
                                discontinue the forbearance at any 
                                time; and''.
    (c) Required Disclosure Before Disbursement.--Section 433(a) of the 
Higher Education Act of 1965 (20 U.S.C. 1083(a)) is amended--
            (1) by amending paragraph (6) to read as follows:
            ``(6) for loans made under section 428H or to a student 
        borrower under section 428B, an explanation that the borrower 
        has the option to pay the interest that accrues on the loan 
        while the borrower is a student at an institution of higher 
        education;''; and
            (2) in paragraph (7)--
                    (A) in subparagraph (A), by inserting ``and'' after 
                the semicolon;
                    (B) by striking subparagraph (B); and
                    (C) by redesignating subparagraph (C) as 
                subparagraph (B).
    (d) Required Disclosure Before Repayment.--Section 433(b)(3) of the 
Higher Education Act of 1965 (20 U.S.C. 1083(b)(3)) is amended by 
striking ``(including, if applicable, the estimated amount of interest 
to be capitalized)''.
    (e) Special Disclosure Rules on PLUS Loans and Unsubsidized 
Loans.--Section 433(d) of the Higher Education Act of 1965 (20 U.S.C. 
1083(d)) is amended--
            (1) in the matter preceding paragraph (1)--
                    (A) by striking ``resulting from capitalization of 
                interest''; and
                    (B) by striking ``borrower of--'' and inserting 
                ``borrower of paying the interest as the interest 
                accrues.''; and
            (2) by striking paragraphs (1) and (2).
    (f) Disclosure Required Prior to Perkins Repayment.--Section 
463A(b)(3) of the Higher Education Act of 1965 (20 U.S.C. 1087cc-
1(b)(3)) is amended by striking ``(including, if applicable, the 
estimated amount of interest to be capitalized)''.
    (g) Departmental Publication of Descriptions of Assistance 
Programs.--Section 485(d)(1) of the Higher Education Act of 1965 (20 
U.S.C. 1092(d)(1)) is amended by striking ``, including the increase in 
debt that results from capitalization of interest''.
    (h) Information To Be Provided During Entrance Counseling for 
Borrowers.--Section 485(l)(2)(C) of the Higher Education Act of 1965 
(20 U.S.C. 1092(l)(2)) is amended by striking ``and is capitalized''.

                        TITLE IV--INTEREST RATES

SEC. 401. INTEREST RATE PROVISIONS FOR NEW FEDERAL STUDENT LOANS ON OR 
              AFTER JULY 1, 2023.

    Section 455(b) of the Higher Education Act of 1965 (20 U.S.C. 
1087e(b)) is amended--
            (1) in paragraph (8)--
                    (A) in the paragraph heading, by inserting ``and 
                before july 1, 2023''; and
                    (B) by inserting ``and before July 1, 2023,'' after 
                ``July 1, 2013,'' each place it appears;
            (2) by redesignating paragraphs (9) and (10) as paragraphs 
        (10) and (11), respectively; and
            (3) by inserting after paragraph (8) the following new 
        paragraph:
            ``(9) Interest rate provisions for new loans on or after 
        july 1, 2023.--
                    ``(A) Rate for fdsl, fdusl, and plus loans.--
                Notwithstanding the preceding paragraphs of this 
                subsection, for Federal Direct Stafford Loans, Federal 
                Direct Unsubsidized Stafford Loans, and Federal Direct 
                PLUS Loans, for which the first disbursement is made on 
                or after July 1, 2023, the applicable rate of interest 
                shall, for loans disbursed during any 12-month period 
                beginning on July 1 and 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; or
                            ``(ii) 5.0 percent.
                    ``(B) 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, 2023, shall--
                            ``(i) bear interest at an annual rate on 
                        the unpaid principal balance of the loan that 
                        is equal to the lesser of--
                                    ``(I) the weighted average of the 
                                interest rates on the loans 
                                consolidated, rounded to the nearest 
                                higher one-eighth of one percent; or
                                    ``(II) 5.0 percent; and
                            ``(ii) only accrue interest on the 
                        percentage of such Federal Direct Consolidation 
                        Loan that is equal to--
                                    ``(I) the amount of the sum of the 
                                unpaid principal on the loans 
                                consolidated; divided by
                                    ``(II) the total amount of such 
                                Federal Direct Consolidation Loan.
                    ``(C) Consultation.--The Secretary shall determine 
                the applicable rate of interest under this paragraph 
                after consultation with the Secretary of the Treasury 
                and shall publish such rate in the Federal Register as 
                soon as practicable after the date of determination.
                    ``(D) Fixed rate.--The applicable rate of interest 
                determined under this paragraph for a Federal Direct 
                Stafford Loan, a Federal Direct Unsubsidized Stafford 
                Loan, a Federal Direct PLUS Loan, or a Federal Direct 
                Consolidation Loan shall be fixed for the period of the 
                loan.''.

SEC. 402. REFINANCING FFEL AND FEDERAL DIRECT LOANS.

    Part D of title IV of the Higher Education Act of 1965 (20 U.S.C. 
1087a et seq.) is amended by adding at the end the following:

``SEC. 460A. REFINANCING FFEL AND FEDERAL DIRECT LOANS.

    ``(a) In General.--The Secretary shall establish a program under 
which the Secretary, upon the receipt of an application from a 
qualified borrower, makes a loan under this part, in accordance with 
the provisions of this section, in order to permit the borrower to 
obtain the interest rate provided under subsection (c).
    ``(b) Refinancing Direct Loans.--
            ``(1) Federal direct loans.--Upon application of a 
        qualified borrower, the Secretary shall repay a Federal Direct 
        Stafford Loan, a Federal Direct Unsubsidized Stafford Loan, a 
        Federal Direct PLUS Loan, or a Federal Direct Consolidation 
        Loan of the qualified borrower, for which the first 
        disbursement was made, or the application for the consolidation 
        loan was received, before July 1, 2023, with the proceeds of a 
        refinanced Federal Direct Stafford Loan, a Federal Direct 
        Unsubsidized Stafford Loan, a Federal Direct PLUS Loan, or a 
        Federal Direct Consolidation Loan, respectively, issued to the 
        borrower in an amount equal to the sum of the unpaid principal, 
        accrued unpaid interest, and late charges of the original loan.
            ``(2) Refinancing ffel program loans as refinanced federal 
        direct loans.--Upon application of a qualified borrower for any 
        loan that was made, insured, or guaranteed under part B and for 
        which the first disbursement was made, or the application for 
        the consolidation loan was received, before July 1, 2010, the 
        Secretary shall make a loan under this part, in an amount equal 
        to the sum of the unpaid principal, accrued unpaid interest, 
        and late charges of the original loan to the borrower in 
        accordance with the following:
                    ``(A) The Secretary shall pay the proceeds of such 
                loan to the eligible lender of the loan made, insured, 
                or guaranteed under part B, in order to discharge the 
                borrower from any remaining obligation to the lender 
                with respect to the original loan.
                    ``(B) A loan made under this section that was 
                originally--
                            ``(i) a loan originally made, insured, or 
                        guaranteed under section 428 shall be a Federal 
                        Direct Stafford Loan;
                            ``(ii) a loan originally made, insured, or 
                        guaranteed under section 428B shall be a 
                        Federal Direct PLUS Loan;
                            ``(iii) a loan originally made, insured, or 
                        guaranteed under section 428H shall be a 
                        Federal Direct Unsubsidized Stafford Loan; and
                            ``(iv) a loan originally made, insured, or 
                        guaranteed under section 428C shall be a 
                        Federal Direct Consolidation Loan.
                    ``(C) The interest rate for each loan made by the 
                Secretary under this paragraph shall be the rate 
                provided under subsection (c).
    ``(c) Interest Rates.--
            ``(1) In general.--The interest rate for the refinanced 
        Federal Direct Stafford Loans, Federal Direct Unsubsidized 
        Stafford Loans, Federal Direct PLUS Loans, and Federal Direct 
        Consolidation Loans, shall be a rate equal to--
                    ``(A) in any case where the original loan was a 
                loan under section 428, 428B, 428H, a Federal Direct 
                Stafford loan, a Federal Direct Unsubsidized Stafford 
                Loan, or a Federal Direct PLUS Loan, a rate equal to 
                the interest rate determined under section 455(b)(9)(A) 
                for the date on which the refinanced loan is made; and
                    ``(B) in any case where the original loan was a 
                loan under section 428C or a Federal Direct 
                Consolidation Loan, a rate calculated in accordance 
                with paragraph (2).
            ``(2) Interest rates for consolidation loans.--
                    ``(A) Method of calculation.--In order to determine 
                the interest rate for any refinanced Federal Direct 
                Consolidation Loan under paragraph (1)(B), the 
                Secretary shall--
                            ``(i) determine each of the component loans 
                        that were originally consolidated in the loan 
                        under section 428C or the Federal Direct 
                        Consolidation Loan, and calculate the 
                        proportion of the unpaid principal balance of 
                        the loan under section 428C or the Federal 
                        Direct Consolidation Loan that each component 
                        loan represents;
                            ``(ii) use the proportions determined in 
                        accordance with clause (i) and the interest 
                        rate applicable for each component loan, as 
                        determined under subparagraph (B), to calculate 
                        the weighted average of the interest rates on 
                        the loans consolidated into the loan under 
                        section 428C or the Federal Direct 
                        Consolidation Loan; and
                            ``(iii) make the applicable interest rate 
                        for the refinanced Federal Direct Consolidation 
                        Loan the lesser of--
                                    ``(I) the weighted average 
                                calculated under clause (ii); or
                                    ``(II) 5.0 percent.
                    ``(B) Interest rates for component loans.--The 
                interest rates for the component loans of a loan made 
                under section 428C or a Federal Direct Consolidation 
                Loan shall be the following:
                            ``(i) The interest rate for any loan under 
                        section 428, 428B, 428H, Federal Direct 
                        Stafford Loan, Federal Direct Unsubsidized 
                        Stafford Loan, or Federal Direct PLUS Loan 
                        shall be a rate equal to the lesser of--
                                    ``(I) the interest rate determined 
                                under section 455(b)(9)(A) for the date 
                                on which the component loan is made; or
                                    ``(II) the original interest rate 
                                of the component loan.
                            ``(ii) The interest rate for any component 
                        loan that is a loan under section 428C or a 
                        Federal Direct Consolidation Loan shall be the 
                        lesser of--
                                    ``(I) the weighted average of the 
                                interest rates that would apply under 
                                this subparagraph for each loan 
                                comprising the component consolidation 
                                loan; or
                                    ``(II) 5 percent.
                            ``(iii) The interest rate for any eligible 
                        loan that is a component of a loan made under 
                        section 428C or a Federal Direct Consolidation 
                        Loan and is not described in clauses (i) or 
                        (ii) shall be the lesser of--
                                    ``(I) the interest rate on the 
                                original component loan; or
                                    ``(II) 5 percent.
            ``(3) Fixed rate.--The applicable rate of interest 
        determined under paragraph (1) for a refinanced loan under this 
        section shall be fixed for the period of the loan.
            ``(4) Capitalized interest and fees excluded.--With respect 
        to a refinanced loan under this section, interest shall only 
        accrue on the percentage of such refinanced loan that is equal 
        to--
                    ``(A) the amount of the unpaid principal of the 
                original loan, or in the case of a refinanced Federal 
                Direct Consolidation Loan, the sum of the unpaid 
                principal of all the component loans, comprising the 
                refinanced loan; divided by
                    ``(B) the total amount of such refinanced loan.
    ``(d) Terms and Conditions of Loans.--
            ``(1) In general.--A loan that is refinanced under this 
        section shall have the same terms and conditions as the 
        original loan, except as otherwise provided in this section.
            ``(2) No automatic extension of repayment period.--
        Refinancing a loan under this section shall not result in the 
        extension of the duration of the repayment period of the loan, 
        and the borrower shall retain the same repayment term that was 
        in effect on the original loan. Nothing in this paragraph shall 
        be construed to prevent a borrower from electing a different 
        repayment plan at any time in accordance with section 
        455(d)(4).
    ``(e) Definition of Qualified Borrower.--For purposes of this 
section, the term `qualified borrower' means a borrower--
            ``(1) of a loan under this part or part B for which the 
        first disbursement was made, or the application for a 
        consolidation loan was received, before July 1, 2023; and
            ``(2) who has one or more loans described in paragraph (1) 
        or (2) of subsection (b) with an interest rate that exceeds 5 
        percent.
    ``(f) Notification to Borrowers.--The Secretary, in coordination 
with the Director of the Bureau of Consumer Financial Protection, shall 
undertake a campaign to alert borrowers of loans that are eligible for 
refinancing under this section that the borrowers are eligible to apply 
for such refinancing. The campaign shall include the following 
activities:
            ``(1) Developing consumer information materials about the 
        availability of Federal student loan refinancing.
            ``(2) Requiring servicers of loans under this part or part 
        B to provide such consumer information to borrowers in a manner 
        determined appropriate by the Secretary, in consultation with 
        the Director of the Bureau of Consumer Financial Protection.''.

SEC. 403. REFINANCING PRIVATE STUDENT LOANS.

    Part D of title IV of the Higher Education Act of 1965 (20 U.S.C. 
1087a et seq.) is amended by adding at the end the following:

``SEC. 460B. FEDERAL DIRECT REFINANCED PRIVATE LOAN PROGRAM.

    ``(a) Definitions.--In this section:
            ``(1) Eligible private education loan.--The term `eligible 
        private education loan' means a private education loan, as 
        defined in section 140(a) of the Truth in Lending Act (15 
        U.S.C. 1650(a)), that--
                    ``(A) was disbursed to the borrower before July 1, 
                2023; and
                    ``(B) was for the borrower's own postsecondary 
                educational expenses for an eligible program at an 
                institution of higher education participating in the 
                loan program under this part, as of the date that the 
                loan was disbursed.
            ``(2) Federal direct refinanced private loan.--The term 
        `Federal Direct Refinanced Private Loan' means a loan issued 
        under subsection (b)(1).
            ``(3) Private educational lender.--The term `private 
        educational lender' has the meaning given the term in section 
        140(a) of the Truth in Lending Act (15 U.S.C. 1650(a)).
            ``(4) Qualified borrower.--The term `qualified borrower' 
        means an individual who--
                    ``(A) has an eligible private education loan;
                    ``(B) has been current on payments on the eligible 
                private education loan for the 6 months prior to the 
                date of the qualified borrower's application for 
                refinancing under this section, and is in good standing 
                on the loan at the time of such application;
                    ``(C) is not in default on the eligible private 
                education loan or on any loan made, insured, or 
                guaranteed under this part or part B or E; and
                    ``(D) meets the eligibility requirements described 
                in subsection (b)(2).
    ``(b) Program Authorized.--
            ``(1) In general.--The Secretary, in consultation with the 
        Secretary of the Treasury, shall carry out a program under 
        which the Secretary, upon application by a qualified borrower 
        who has an eligible private education loan, shall issue such 
        borrower a loan under this part in accordance with the 
        following:
                    ``(A) The loan issued under this program shall be 
                in an amount equal to the sum of the unpaid principal, 
                accrued unpaid interest, and late charges of the 
                private education loan.
                    ``(B) The Secretary shall pay the proceeds of the 
                loan issued under this program to the private 
                educational lender of the private education loan, in 
                order to discharge the qualified borrower from any 
                remaining obligation to the lender with respect to the 
                original loan.
                    ``(C) The Secretary shall require that the 
                qualified borrower undergo loan counseling that 
                provides all of the relevant information and counseling 
                required under section 485(l)(2) before the loan is 
                refinanced in accordance with this section, and before 
                the proceeds of such loan are paid to the private 
                educational lender.
                    ``(D) The Secretary shall issue the loan as a 
                Federal Direct Refinanced Private Loan, which shall 
                have the same terms, conditions, and benefits as a 
                Federal Direct Unsubsidized Stafford Loan, except as 
                otherwise provided in this section.
                    ``(E) The interest rate for each loan made by the 
                Secretary under this section shall be the rate provided 
                under subsection (c).
            ``(2) Borrower eligibility.--The Secretary, in consultation 
        with the Secretary of the Treasury and the Director of the 
        Consumer Financial Protection Bureau, shall establish 
        eligibility requirements--
                    ``(A) to ensure eligibility only for borrowers in 
                good standing;
                    ``(B) to minimize inequities between Federal Direct 
                Refinanced Private Loans and other Federal student 
                loans;
                    ``(C) to preclude windfall profits for private 
                educational lenders; and
                    ``(D) to ensure full access to the program 
                authorized in this subsection for borrowers with 
                private loans who otherwise meet the criteria 
                established in accordance with subparagraph (A).
    ``(c) Interest Rate.--
            ``(1) In general.--The interest rate for a Federal Direct 
        Refinanced Private Loan is a rate equal to the interest rate 
        determined under section 455(b)(9)(A) for the date on which the 
        refinanced private loan is made.
            ``(2) Fixed rate.--The interest rate determined under this 
        subsection for a Federal Direct Refinanced Private Loan shall 
        be fixed for the period of the loan.
            ``(3) Capitalized interest and fees excluded.--With respect 
        to a Federal Direct Refinanced Private Loan under this section, 
        interest shall only accrue on the percentage of such Refinanced 
        Private Loan that is equal to--
                    ``(A) the amount of the unpaid principal of the 
                original loan comprising the Refinanced Private Loan on 
                the date such original loan was refinanced; divided by
                    ``(B) the total amount of such Refinanced Private 
                Loan.
    ``(d) No Inclusion in Aggregate Limits.--The amount of a Federal 
Direct Refinanced Private Loan, or a Federal Direct Consolidated Loan 
to the extent such loan was used to repay a Federal Direct Refinanced 
Private Loan, shall not be included in calculating a borrower's annual 
or aggregate loan limits under section 428 or 428H.
    ``(e) No Eligibility for Service-Related Repayment.--A Federal 
Direct Refinanced Private Loan, or any Federal Direct Consolidation 
Loan to the extent such loan was used to repay a Federal Direct 
Refinanced Private Loan, shall not be eligible for any loan repayment 
or loan forgiveness program under section 428K, 428L, or 460 or for the 
loan cancellation repayment plan for public service employees under 
section 455(m).
    ``(f) Private Educational Lender Reporting Requirement.--
            ``(1) Reporting required.--The Secretary, in consultation 
        with the Secretary of the Treasury and the Director of the 
        Bureau of Consumer Financial Protection, shall establish a 
        requirement that, in order to allow for an assessment of the 
        private education loan market, private educational lenders 
        report the data described in paragraph (2) to--
                    ``(A) the Secretary;
                    ``(B) the Secretary of the Treasury;
                    ``(C) the Director of the Consumer Financial 
                Protection Bureau;
                    ``(D) the Committee on Education and Labor of the 
                House of Representatives;
                    ``(E) the Committee on Financial Services of the 
                House of Representatives;
                    ``(F) the Senate Committee on Health, Education, 
                Labor, and Pensions; and
                    ``(G) the Senate Committee on Banking, Housing, and 
                Urban Affairs.
            ``(2) Contents of reporting.--The data that private 
        educational lenders shall report in accordance with paragraph 
        (1) shall include each of the following about private education 
        loans (as defined in section 140(a) of the Truth in Lending Act 
        (15 U.S.C. 1650(a))):
                    ``(A) The total amount of private education loan 
                debt the lender holds.
                    ``(B) The total number of private education loan 
                borrowers the lender serves.
                    ``(C) The average interest rate on the outstanding 
                private education loan debt held by the lender.
                    ``(D) The proportion of private education loan 
                borrowers who are in default on a loan held by the 
                lender.
                    ``(E) The proportion of the outstanding private 
                education loan volume held by the lender that is in 
                default.
                    ``(F) The proportions of outstanding private 
                education loan borrowers who are 30, 60, and 90 days 
                delinquent.
                    ``(G) The proportions of outstanding private 
                education loan volume that is 30, 60, and 90 days 
                delinquent.
    ``(g) Notification to Borrowers.--The Secretary, in coordination 
with the Secretary of the Treasury and the Director of the Consumer 
Financial Protection Bureau, shall undertake a campaign to alert 
borrowers about the availability of private student loan refinancing 
under this section.''.
                                 <all>
LOAN Act
To amend the Higher Education Act of 1965 to double the Pell Grant award amount, improve the Public Service Loan Forgiveness program, and reduce interest rates, and for other purposes.
LOAN Act
Lowering Obstacles to Achievement Now Act
Rep. Wilson, Frederica S.