Author: obbba-admin

Paragraph (1) of section 458(a) of the Higher Education Act of 1965 (20 U.S.C. 1087h(a)(1)) is amended to read as follows:

“(1) ADDITIONAL MANDATORY FUNDS FOR SERVICING.—There shall be available to the Secretary (in addition to any other amounts appropriated under any appropriations Act for administrative costs under this part and part B and out of any money in the Treasury not otherwise appropriated) $1,000,000,000 to be obligated for administrative costs under this part and part B, including the costs of servicing the direct student loan programs under this part, which shall remain available until expended.”.

Section 455(m)(1)(A) of the Higher Education Act of 1965 (20 U.S.C. 1087e(m)(1)(A)) is amended—

(1) in clause (iii), by striking “; or” and inserting a semicolon;

(2) in clause (iv), by striking “; and” and inserting “(as in effect on the day before the date of the repeal of subsection (e) of this section); or”; and

(3) by adding at the end the following new clause:

“(v) on-time payments under the Repayment Assistance Plan under subsection (q); and”.

(a) Updating loan rehabilitation limits.—

(1) FFEL AND DIRECT LOANS.—Section 428F(a)(5) of the Higher Education Act of 1965 (20 U.S.C. 1078–6(a)(5)) is amended by striking “one time” and inserting “two times”.

(2) PERKINS LOANS.—Section 464(h)(1)(D) of the Higher Education Act of 1965 (20 U.S.C. 1087dd(h)(1)(D)) is amended by striking “once” and inserting “twice”.

(3) EFFECTIVE DATE.—The amendments made by this subsection shall take effect beginning on July 1, 2027, and shall apply with respect to any loan made, insured, or guaranteed under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.).

(b) Minimum monthly payment amount.—Section 428F(a)(1)(B) of the Higher Education Act of 1965 (20 U.S.C. 1078–6(a)(1)(B)) is amended by adding at the end the following: “With respect to a borrower who has 1 or more loans made under part D on or after July 1, 2027 that are described in subparagraph (A), the total monthly payment of the borrower for all such loans shall not be less than $10.”.

(a) Sunset of economic hardship and unemployment deferments.—Section 455(f) of the Higher Education Act of 1965 (20 U.S.C. 1087e(f)) is amended—

(1) by striking the subsection heading and inserting the following: “Deferment; forbearance”;

(2) in paragraph (2)—

(A) in subparagraph (B), by striking “not in” and inserting “subject to paragraph (7), not in” ; and

(B) in subparagraph (D), by striking “not in” and inserting “subject to paragraph (7), not in”; and

(3) by adding at the end the following:

“(7) SUNSET OF UNEMPLOYMENT AND ECONOMIC HARDSHIP DEFERMENTS.—A borrower who receives a loan made under this part on or after July 1, 2027, shall not be eligible to defer such loan under subparagraph (B) or (D) of paragraph (2).”.

(b) Forbearance on loans made under this part on or after July 1, 2027.—Section 455(f) of the Higher Education Act of 1965 (20 U.S.C. 1087e(f)) is amended by adding at the end the following:

“(8) FORBEARANCE ON LOANS MADE UNDER THIS PART ON OR AFTER JULY 1, 2027.—A borrower who receives a loan made under this part on or after July 1, 2027, may only be eligible for a forbearance on such loan pursuant to section 428(c)(3)(B) that does not exceed 9 months during any 24-month period.”.

(a) Transition to income-based repayment plans.—

(1) SELECTION.—The Secretary of Education shall take such steps as may be necessary to ensure that before July 1, 2028, each borrower who has one or more loans that are in a repayment status in accordance with, or an administrative forbearance associated with, an income contingent repayment plan authorized under section 455(e) of the Higher Education Act of 1965 (referred to in this subsection as “covered income contingent loans”) selects one of the following income-based repayment plans that is otherwise applicable, and for which that borrower is otherwise eligible, for the repayment of the covered income contingent loans of the borrower:

(A) The Repayment Assistance Plan under section 455(q) of the Higher Education Act of 1965.

(B) The income-based repayment plan under section 493C of the Higher Education Act of 1965.

(C) Any other repayment plan as authorized under section 455(d)(1) of the Higher Education Act of 1965.

(2) COMMENCEMENT OF NEW REPAYMENT PLAN.—Beginning on July 1, 2028, a borrower described in paragraph (1) shall begin repaying the covered income contingent loans of the borrower in accordance with the repayment plan selected under paragraph (1), unless the borrower chooses to begin repaying in accordance with the repayment plan selected under paragraph (1) before such date.

(3) FAILURE TO SELECT.—In the case of a borrower described in paragraph (1) who fails to select a repayment plan in accordance with such paragraph, the Secretary of Education shall—

(A) enroll the covered income contingent loans of such borrower in—

(i) the Repayment Assistance Plan under section 455(q) of the Higher Education Act of 1965 with respect to loans that are eligible for the Repayment Assistance Plan under such subsection; or

(ii) the income-based repayment plan under section 493C of such Act, with respect to loans that are not eligible for the Repayment Assistance Plan; and

(B) require the borrower to begin repaying covered income contingent loans according to the plans under subparagraph (A) on July 1, 2028.

(b) Repayment plans.—Section 455(d) of the Higher Education Act of 1965 (20 U.S.C. 1087e(d)) is amended—

(1) in paragraph (1)—

(A) in the matter preceding subparagraph (A), by inserting “before July 1, 2026, who has not received a loan made under this part on or after July 1, 2026,” after “made under this part”;

(B) in subparagraph (D)—

(i) by inserting “before June 30, 2028,” before “an income contingent repayment plan”; and

(ii) by striking “and” after the semicolon;

(C) in subparagraph (E)—

(i) by striking “that enables borrowers who have a partial financial hardship to make a lower monthly payment”;

(ii) by striking “a Federal Direct Consolidation Loan, if the proceeds of such loan were used to discharge the liability on such Federal Direct PLUS Loan or a loan under section 428B made on behalf of a dependent student” and inserting “an excepted Consolidation Loan (as defined in section 493C(a)(2))”; and

(iii) by striking the period at the end and inserting “; and”; and

(D) by adding at the end the following:

“(F) beginning on July 1, 2026, the income-based Repayment Assistance Plan under subsection (q), provided that—

“(i) such Plan shall not be available for the repayment of excepted loans (as defined in paragraph (7)(E)); and

“(ii) the borrower is required to pay each outstanding loan of the borrower made under this part under such Repayment Assistance Plan, except that a borrower of an excepted loan (as defined in paragraph (7)(E)) may repay the excepted loan separately from other loans under this part obtained by the borrower.”;

(2) in paragraph (5), by amending subparagraph (B) to read as follows:

“(B) repay the loan pursuant to an income-based repayment plan under subsection (q) or section 493C, as applicable.”; and

(3) by adding at the end the following:

“(6) TERMINATION AND LIMITATION OF REPAYMENT AUTHORITY.—

“(A) SUNSET OF REPAYMENT PLANS AVAILABLE BEFORE JULY 1, 2026.—Paragraphs (1) through (4) of this subsection shall only apply to loans made under this part before July 1, 2026.

“(B) PROHIBITIONS.—The Secretary may not, for any loan made under this part on or after July 1, 2026—

“(i) authorize a borrower of such a loan to repay such loan pursuant to a repayment plan that is not described in paragraph (7)(A); or

“(ii) carry out or modify a repayment plan that is not described in such paragraph.

“(7) REPAYMENT PLANS FOR LOANS MADE ON OR AFTER JULY 1, 2026.—

“(A) DESIGN AND SELECTION.—Beginning on July 1, 2026, the Secretary shall offer a borrower of a loan made under this part on or after such date (including such a borrower who also has a loan made under this part before such date) two plans for repayment of the borrower’s loans under this part, including principal and interest on such loans. The borrower shall be entitled to accelerate, without penalty, repayment on such loans. The borrower may choose—

“(i) a standard repayment plan—

“(I) with a fixed monthly repayment amount paid over a fixed period of time equal to the applicable period determined under subclause (II); and

“(II) with the applicable period of time for repayment determined based on the total outstanding principal of all loans of the borrower made under this part before, on, or after July 1, 2026, at the time the borrower is entering repayment under such plan, as follows—

“(aa) for a borrower with total outstanding principal of less than $25,000, a period of 10 years;

“(bb) for a borrower with total outstanding principal of not less than $25,000 and less than $50,000, a period of 15 years;

“(cc) for a borrower with total outstanding principal of not less than $50,000 and less than $100,000, a period of 20 years; and

“(dd) for a borrower with total outstanding principal of $100,000 or more, a period of 25 years; or

“(ii) the income-based Repayment Assistance Plan under subsection (q).

“(B) SELECTION BY SECRETARY.—If a borrower of a loan made under this part on or after July 1, 2026, does not select a repayment plan described in subparagraph (A), the Secretary shall provide the borrower with the standard repayment plan described in subparagraph (A)(i).

“(C) SELECTION APPLIES TO ALL OUTSTANDING LOANS.—A borrower is required to pay each outstanding loan of the borrower made under this part under the same selected repayment plan, except that a borrower who selects the Repayment Assistance Plan and also has an excepted loan that is not eligible for repayment under such Repayment Assistance Plan shall repay the excepted loan separately from other loans under this part obtained by the borrower.

“(D) CHANGES OF REPAYMENT PLAN.—A borrower may change the borrower’s selection of—

“(i) the standard repayment plan under subparagraph (A)(i), or the Secretary’s selection of such plan for the borrower under subparagraph (B), as the case may be, to the Repayment Assistance Plan under subparagraph (A)(ii) at any time; and

“(ii) the Repayment Assistance Plan under subparagraph (A)(ii) to the standard repayment plan under subparagraph (A)(i) at any time.

“(E) REPAYMENT FOR BORROWERS WITH EXCEPTED LOANS MADE ON OR AFTER JULY 1, 2026.—

“(i) STANDARD REPAYMENT PLAN REQUIRED.—Notwithstanding subparagraphs (A) through (D), beginning on July 1, 2026, the Secretary shall require a borrower who has received an excepted loan made on or after such date (including such a borrower who also has an excepted loan made before such date) to repay each excepted loan, including principal and interest on those excepted loans, under the standard repayment plan under subparagraph (A)(i). The borrower shall be entitled to accelerate, without penalty, repayment on such loans.

“(ii) EXCEPTED LOAN DEFINED.—For the purposes of this paragraph, the term ‘excepted loan’ means a loan with an outstanding balance that is—

“(I) a Federal Direct PLUS Loan that is made on behalf of a dependent student; or

“(II) a Federal Direct Consolidation Loan, if the proceeds of such loan were used to discharge the liability on—

“(aa) an excepted PLUS loan, as defined in section 493C(a)(1); or

“(bb) an excepted consolidation loan (as such term is defined in section 493C(a)(2)(A), notwithstanding subparagraph (B) of such section).”.

(c) Elimination of authority to provide income contingent repayment plans.—

(1) REPEAL.—Subsection (e) of section 455 of the Higher Education Act of 1965 (20 U.S.C. 1087e(e)) is repealed.

(2) FURTHER AMENDMENTS TO ELIMINATE INCOME CONTINGENT REPAYMENT.—

(A) Section 428 of the Higher Education Act of 1965 (20 U.S.C. 1078) is amended—

(i) in subsection (b)(1)(D), by striking “be subject to income contingent repayment in accordance with subsection (m)” and inserting “be subject to income-based repayment in accordance with subsection (m)”; and

(ii) in subsection (m)—

(I) in the subsection heading, by striking “Income Contingent and”;

(II) by amending paragraph (1) to read as follows:

“(1) AUTHORITY OF SECRETARY TO REQUIRE.—The Secretary may require borrowers who have defaulted on loans made under this part that are assigned to the Secretary under subsection (c)(8) to repay those loans pursuant to an income-based repayment plan under section 493C.”; and

(III) in the heading of paragraph (2), by striking “income contingent or”.

(B) Section 428C of the Higher Education Act of 1965 (20 U.S.C. 1078–3) is amended—

(i) in subsection (a)(3)(B)(i)(V)(aa), by striking “for the purposes of obtaining income contingent repayment or income-based repayment” and inserting “for the purposes of qualifying for an income-based repayment plan under section 455(q) or section 493C, as applicable”;

(ii) in subsection (b)(5), by striking “be repaid either pursuant to income contingent repayment under part D of this title, pursuant to income-based repayment under section 493C, or pursuant to any other repayment provision under this section” and inserting “be repaid pursuant to an income-based repayment plan under section 493C or any other repayment provision under this section”; and

(iii) in subsection (c)—

(I) in paragraph (2)(A), by striking “or by the terms of repayment pursuant to income contingent repayment offered by the Secretary under subsection (b)(5)” and inserting “or by the terms of repayment pursuant to an income-based repayment plan under section 493C”; and

(II) in paragraph (3)(B), by striking “except as required by the terms of repayment pursuant to income contingent repayment offered by the Secretary under subsection (b)(5)” and inserting “except as required by the terms of repayment pursuant to an income-based repayment plan under section 493C”.

(C) Section 485(d)(1) of the Higher Education Act of 1965 (20 U.S.C. 1092(d)(1)) is amended by striking “income-contingent and”.

(D) Section 494(a)(2) of the Higher Education Act of 1965 (20 U.S.C. 1098h(a)(2)) is amended—

(i) in the paragraph heading, by striking “Income-contingent and income-based” and inserting “Income-based”; and

(ii) in subparagraph (A)—

(I) in the matter preceding clause (i), by striking “income-contingent or”; and

(II) in clause (ii)(I), by striking “section 455(e)(8) or the equivalent procedures established under section 493C(c)(2)(B), as applicable” and inserting “section 493C(c)(2)”.

(3) EFFECTIVE DATE.—The amendments made by this subsection shall take effect on July 1, 2028.

(d) Repayment assistance plan.—Section 455 of the Higher Education Act of 1965 (20 U.S.C. 1087e) is amended by adding at the end the following new subsection:

“(q) Repayment assistance plan.—

“(1) IN GENERAL.—Notwithstanding any other provision of this Act, beginning on July 1, 2026, the Secretary shall carry out an income-based repayment plan (to be known as the ‘Repayment Assistance Plan’), that shall have the following terms and conditions:

“(A) The total monthly repayment amount owed by a borrower for all of the loans of the borrower that are repaid pursuant to the Repayment Assistance Plan shall be equal to the applicable monthly payment of a borrower calculated under paragraph (4)(B), except that the borrower may not be precluded from repaying an amount that exceeds such amount for any month.

“(B) The Secretary shall apply the borrower’s applicable monthly payment under this paragraph first toward interest due on each such loan, next toward any fees due on each loan, and then toward the principal of each loan.

“(C) Any principal due and not paid under subparagraph (B) or paragraph (2)(B) shall be deferred.

“(D) A borrower who is not in a period of deferment or forbearance shall make an applicable monthly payment for each month until the earlier of—

“(i) the date on which the outstanding balance of principal and interest due on all of the loans of the borrower that are repaid pursuant to the Repayment Assistance Plan is $0; or

“(ii) the date on which the borrower has made 360 qualifying monthly payments.

“(E) The Secretary shall cancel any outstanding balance of principal and interest due on a loan made under this part to a borrower—

“(i) who, for any period of time, participated in the Repayment Assistance Plan under this subsection;

“(ii) whose most recent payment for such loan prior to the loan cancellation under this subparagraph was made under such Repayment Assistance Plan; and

“(iii) who has made 360 qualifying monthly payments on such loan.

“(F) For the purposes of this subsection, the term ‘qualifying monthly payment’ means any of the following:

“(i) An on-time applicable monthly payment under this subsection.

“(ii) An on-time monthly payment under the standard repayment plan under subsection (d)(7)(A)(i) of not less than the monthly payment required under such plan.

“(iii) A monthly payment under any repayment plan (excluding the Repayment Assistance Plan under this subsection) of not less than the monthly payment that would be required under a standard repayment plan under section 455(d)(1)(A) with a repayment period of 10 years.

“(iv) A monthly payment under section 493C of not less than the monthly payment required under such section, including a monthly payment equal to the minimum payment amount permitted under such section.

“(v) A monthly payment made before July 1, 2028, under an income contingent repayment plan carried out under section 455(d)(1)(D) (or under an alternative repayment plan in lieu of repayment under such an income contingent repayment plan, if placed in such an alternative repayment plan by the Secretary) of not less than the monthly payment required under such a plan, including a monthly payment equal to the minimum payment amount permitted under such a plan.

“(vi) A month when the borrower did not make a payment because the borrower was in deferment under subsection (f)(2)(B) or due to an economic hardship described in subsection (f)(2)(D).

“(vii) A month that ended before the date of enactment of this subsection when the borrower did not make a payment because the borrower was in a period of deferment or forbearance described in section 685.209(k)(4)(iv) of title 34, Code of Federal Regulations (as in effect on the date of enactment of this subsection).

“(G) The procedures established by the Secretary under section 493C(c) shall apply for annually determining the borrower’s eligibility for the Repayment Assistance Plan, including verification of a borrower’s annual income and the annual amount due on the total amount of loans eligible to be repaid under this subsection, and such other procedures as are necessary to effectively implement income-based repayment under this subsection. With respect to carrying out section 494(a)(2) for the Repayment Assistance Plan, an individual may elect to opt out of the disclosures required under section 494(a)(2)(A)(ii) in accordance with the procedures established under section 493C(c)(2).

“(2) BALANCE ASSISTANCE FOR DISTRESSED BORROWERS.—

“(A) INTEREST SUBSIDY.—With respect to a borrower of a loan made under this part, for each month for which such a borrower makes an on-time applicable monthly payment required under paragraph (1)(A) and such monthly payment is insufficient to pay the total amount of interest that accrues for the month on all loans of the borrower repaid pursuant to the Repayment Assistance Plan under this subsection, the amount of interest accrued and not paid for the month shall not be charged to the borrower.

“(B) MATCHING PRINCIPAL PAYMENT.—With respect to a borrower of a loan made under this part and not in a period of deferment or forbearance, for each month for which a borrower makes an on-time applicable monthly payment required under paragraph (1)(A) and such monthly payment reduces the total outstanding principal balance of all loans of the borrower repaid pursuant to the Repayment Assistance Plan under this subsection by less than $50, the Secretary shall reduce such total outstanding principal balance of the borrower by an amount that is equal to—

“(i) the amount that is the lesser of—

“(I) $50; or

“(II) the total amount paid by the borrower for such month pursuant to paragraph (1)(A); minus

“(ii) the total amount paid by the borrower for such month pursuant to paragraph (1)(A) that is applied to such total outstanding principal balance.

“(3) ADDITIONAL DOCUMENTS.—A borrower who chooses, or is required, to repay a loan under this subsection, and for whom adjusted gross income is unavailable or does not reasonably reflect the borrower’s current income, shall provide to the Secretary other documentation of income satisfactory to the Secretary, which documentation the Secretary may use to determine repayment under this subsection.

“(4) DEFINITIONS.—In this subsection:

“(A) ADJUSTED GROSS INCOME.—The term ‘adjusted gross income’, when used with respect to a borrower, means the adjusted gross income (as such term is defined in section 62 of the Internal Revenue Code of 1986) of the borrower (and the borrower’s spouse, as applicable) for the most recent taxable year, except that, in the case of a married borrower who files a separate Federal income tax return, the term does not include the adjusted gross income of the borrower’s spouse.

“(B) APPLICABLE MONTHLY PAYMENT.—

“(i) IN GENERAL.—Except as provided in clause (ii), (iii), or (vi), the term ‘applicable monthly payment’ means, when used with respect to a borrower, the amount equal to—

“(I) the applicable base payment of the borrower, divided by 12; minus

“(II) $50 for each dependent of the borrower (which, in the case of a married borrower filing a separate Federal income tax return, shall include only each dependent that the borrower claims on that return).

“(ii) MINIMUM AMOUNT.—In the case of a borrower with an applicable monthly payment amount calculated under clause (i) that is less than $10, the applicable monthly payment of the borrower shall be $10.

“(iii) FINAL PAYMENT.—In the case of a borrower whose total outstanding balance of principal and interest on all of the loans of the borrower that are repaid pursuant to the Repayment Assistance Plan is less than the applicable monthly payment calculated pursuant to clause (i) or (ii), as applicable, then the applicable monthly payment of the borrower shall be the total outstanding balance of principal and interest on all such loans.

“(iv) BASE PAYMENT.—The amount of the applicable base payment for a borrower with an adjusted gross income of—

“(I) not more than $10,000, is $120;

“(II) more than $10,000 and not more than $20,000, is 1 percent of such adjusted gross income;

“(III) more than $20,000 and not more than $30,000, is 2 percent of such adjusted gross income;

“(IV) more than $30,000 and not more than $40,000, is 3 percent of such adjusted gross income;

“(V) more than $40,000 and not more than $50,000, is 4 percent of such adjusted gross income;

“(VI) more than $50,000 and not more than $60,000, is 5 percent of such adjusted gross income;

“(VII) more than $60,000 and not more than $70,000, is 6 percent of such adjusted gross income;

“(VIII) more than $70,000 and not more than $80,000, is 7 percent of such adjusted gross income;

“(IX) more than $80,000 and not more than $90,000, is 8 percent of such adjusted gross income;

“(X) more than $90,000 and not more than $100,000, is 9 percent of such adjusted gross income; and

“(XI) more than $100,000, is 10 percent of such adjusted gross income.

“(v) DEPENDENT.—For the purposes of this paragraph, the term ‘dependent’ means an individual who is a dependent under section 152 of the Internal Revenue Code of 1986.

“(vi) SPECIAL RULE.—In the case of a borrower who is required by the Secretary to provide information to the Secretary to determine the applicable monthly payment of the borrower under this subparagraph, and who does not comply with such requirement, the applicable monthly payment of the borrower shall be—

“(I) the sum of the monthly payment amounts the borrower would have paid for each of the borrower’s loans made under this part under a standard repayment plan with a fixed monthly repayment amount, paid over a period of 10 years, based on the outstanding principal due on such loan when such loan entered repayment; and

“(II) determined pursuant to this clause until the date on which the borrower provides such information to the Secretary.”.

(e) Federal consolidation loans.—Section 455(g) of the Higher Education Act of 1965 (20 U.S.C. 1087e(g)) is amended by adding at the end the following new paragraph:

“(3) CONSOLIDATION LOANS MADE ON OR AFTER JULY 1, 2026.—A Federal Direct Consolidation Loan offered to a borrower under this part on or after July 1, 2026, may only be repaid pursuant to a repayment plan described in clause (i) or (ii) of subsection (d)(7)(A) of this section, as applicable, and the repayment schedule of such a Consolidation Loan shall be determined in accordance with such repayment plan.”.

(f) Income-Based repayment.—

(1) AMENDMENTS.—

(A) EXCEPTED CONSOLIDATION LOAN DEFINED.—Section 493C(a)(2) of the Higher Education Act of 1965 (20 U.S.C. 1098e(a)(2)) is amended to read as follows:

“(2) EXCEPTED CONSOLIDATION LOAN.—

“(A) IN GENERAL.—The term ‘excepted consolidation loan’ means—

“(i) a consolidation loan under section 428C, or a Federal Direct Consolidation Loan, if the proceeds of such loan were used to discharge the liability on an excepted PLUS loan; or

“(ii) a consolidation loan under section 428C, or a Federal Direct Consolidation Loan, if the proceeds of such loan were used to discharge the liability on a consolidation loan under section 428C, or a Federal Direct Consolidation Loan described in clause (i).

“(B) EXCLUSION.—The term ‘excepted consolidation loan’ does not include a Federal Direct Consolidation Loan described in subparagraph (A) that, on any date during the period beginning on the date of enactment of this subparagraph and ending on June 30, 2028, was being repaid—

“(i) pursuant to the Income Contingent Repayment (ICR) plan in accordance with section 685.209(b) of title 34, Code of Federal Regulations (as in effect on June 30, 2023); or

“(ii) pursuant to another income driven repayment plan.”.

(B) TERMINATION OF PARTIAL FINANCIAL HARDSHIP ELIGIBILITY.—Section 493C(a)(3) of the Higher Education Act of 1965 (20 U.S.C. 1098e(a)(3)) is amended to read as follows:

“(3) APPLICABLE AMOUNT.—The term ‘applicable amount’ means 15 percent of the result obtained by calculating, on at least an annual basis, the amount by which—

“(A) the borrower’s, and the borrower’s spouse’s (if applicable), adjusted gross income; exceeds

“(B) 150 percent of the poverty line applicable to the borrower’s family size as determined under section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)).”.

(C) TERMS OF INCOME-BASED REPAYMENT.—Section 493C(b) of the Higher Education Act of 1965 (20 U.S.C. 1098e(b)) is amended—

(i) by amending paragraph (1) to read as follows:

“(1) a borrower of any loan made, insured, or guaranteed under part B or D (other than an excepted PLUS loan or excepted consolidation loan), may elect to have the borrower’s aggregate monthly payment for all such loans not exceed the applicable amount divided by 12;”;

(ii) by striking paragraph (6) and inserting the following:

“(6) if the monthly payment amount calculated under this section for all loans made to the borrower under part B or D (other than an excepted PLUS loan or excepted consolidation loan) exceeds the monthly amount calculated under section 428(b)(9)(A)(i) or 455(d)(1)(A), based on a 10-year repayment period, when the borrower first made the election described in this subsection (referred to in this paragraph as the ‘standard monthly repayment amount’), or if the borrower no longer wishes to continue the election under this subsection, then—

“(A) the maximum monthly payment required to be paid for all loans made to the borrower under part B or D (other than an excepted PLUS loan or excepted consolidation loan) shall be the standard monthly repayment amount; and

“(B) the amount of time the borrower is permitted to repay such loans may exceed 10 years;”;

(iii) in paragraph (7)(B)(iv), by inserting “(as such section was in effect on the day before the date of the repeal of section 455(e)” after “section 455(d)(1)(D)”; and

(iv) in paragraph (8), by inserting “or the Repayment Assistance Program under section 455(q)” after “standard repayment plan”.

(D) ELIGIBILITY DETERMINATIONS.—Section 493C(c) of the Higher Education Act of 1965 (20 U.S.C. 1098e(c)) is amended to read as follows:

“(c) Eligibility determinations; automatic recertification.—

“(1) IN GENERAL.—The Secretary shall establish procedures for annually determining, in accordance with paragraph (2), the borrower’s eligibility for income-based repayment, including the verification of a borrower’s annual income and the annual amount due on the total amount of loans made, insured, or guaranteed under part B or D (other than an excepted PLUS loan or excepted consolidation loan), and such other procedures as are necessary to effectively implement income-based repayment under this section. The Secretary shall consider, but is not limited to, the procedures established in accordance with section 455(e)(1) (as in effect on the day before the date of repeal of subsection (e) of section 455) or in connection with income sensitive repayment schedules under section 428(b)(9)(A)(iii) or 428C(b)(1)(E).

“(2) AUTOMATIC RECERTIFICATION.—

“(A) IN GENERAL.—The Secretary shall establish and implement, with respect to any borrower enrolled in an income-based repayment program under this section or under section 455(q), procedures to—

“(i) use return information disclosed under section 6103(l)(13) of the Internal Revenue Code of 1986, pursuant to approval provided under section 494, to determine the repayment obligation of the borrower without further action by the borrower;

“(ii) allow the borrower (or the spouse of the borrower), at any time, to opt out of disclosure under such section 6103(l)(13) and instead provide such information as the Secretary may require to determine the repayment obligation of the borrower (or withdraw from the repayment plan under this section or under section 455(q), as the case may be); and

“(iii) provide the borrower with an opportunity to update the return information so disclosed before the determination of the repayment obligation of the borrower.

“(B) APPLICABILITY.—Subparagraph (A) shall apply to each borrower of a loan eligible to be repaid under this section or under section 455(q), who, on or after the date on which the Secretary establishes procedures under such subparagraph (A)—

“(i) selects, or is required to repay such loan pursuant to, an income-based repayment plan under this section or under section 455(q); or

“(ii) recertifies income or family size under such plan.”.

(E) SPECIAL TERMS FOR NEW BORROWERS ON AND AFTER JULY 1, 2014.—Section 493C(e) of the Higher Education Act of 1965 (20 U.S.C. 1098e(e)) is amended—

(i) in the subsection heading, by inserting “and before July 1, 2026” after “After July 1, 2014” ; and

(ii) by inserting “and before July 1, 2026” after “after July 1, 2014”.

(2) EFFECTIVE DATE AND APPLICATION.—The amendments made by this subsection shall take effect on the date of enactment of this title, and shall apply with respect to any borrower who is in repayment before, on, or after the date of enactment of this title.

(g) FFEL adjustment.—Section 428(b)(9)(A)(v) of the Higher Education Act of 1965 (20 U.S.C. 1078(b)(9)(A)(v)) is amended by striking “who has a partial financial hardship”.

SEC. 81001. Establishment of loan limits for graduate and professional students and parent borrowers; termination of graduate and professional PLUS loans.

Section 455(a) of the Higher Education Act of 1965 (20 U.S.C. 1087e(a)) is amended—

(1) in paragraph (3)—

(A) in the paragraph heading, by inserting “and Federal Direct PLUS loans” after “loans”;

(B) by striking subparagraph (A) and inserting the following:

“(A) TERMINATION OF AUTHORITY TO MAKE INTEREST SUBSIDIZED LOANS TO GRADUATE AND PROFESSIONAL STUDENTS.—Subject to subparagraph (B), and notwithstanding any provision of this part or part B—

“(i) for any period of instruction beginning on or after July 1, 2012, a graduate or professional student shall not be eligible to receive a Federal Direct Stafford loan under this part; and

“(ii) for any period of instruction beginning on July 1, 2012, and ending on June 30, 2026, the maximum annual amount of Federal Direct Unsubsidized Stafford loans such a student may borrow in any academic year (as defined in section 481(a)(2)) or its equivalent shall be the maximum annual amount for such student determined under section 428H, plus an amount equal to the amount of Federal Direct Stafford loans the student would have received in the absence of this subparagraph.”; and

(C) by adding at the end the following:

“(C) TERMINATION OF AUTHORITY TO MAKE FEDERAL DIRECT PLUS LOANS TO GRADUATE AND PROFESSIONAL STUDENTS.—Subject to paragraph (8) and notwithstanding any provision of this part or part B, for any period of instruction beginning on or after July 1, 2026, a graduate or professional student shall not be eligible to receive a Federal Direct PLUS Loan under this part.”; and

(2) by adding at the end the following:

“(4) GRADUATE AND PROFESSIONAL ANNUAL AND AGGREGATE LIMITS FOR FEDERAL DIRECT UNSUBSIDIZED STAFFORD LOANS BEGINNING JULY 1, 2026.—

“(A) ANNUAL LIMITS BEGINNING JULY 1, 2026.—Subject to paragraphs (7)(A) and (8), beginning on July 1, 2026, the maximum annual amount of Federal Direct Unsubsidized Stafford loans—

“(i) a graduate student, who is not a professional student, may borrow in any academic year or its equivalent shall be $20,500; and

“(ii) a professional student may borrow in any academic year or its equivalent shall be $50,000.

“(B) AGGREGATE LIMITS.—Subject to paragraphs (6), (7)(A), and (8), beginning on July 1, 2026, the maximum aggregate amount of Federal Direct Unsubsidized Stafford loans, in addition to the amount borrowed for undergraduate education, that—

“(i) a graduate student—

“(I) who is not (and has not been) a professional student, may borrow for programs of study described in subparagraph (C)(i) shall be $100,000; or

“(II) who is (or has been) a professional student, may borrow for programs of study described in subparagraph (C)(i) shall be an amount equal to—

“(aa) $200,000; minus

“(bb) the amount such student borrowed for programs of study described in subparagraph (C)(ii); and

“(ii) a professional student—

“(I) who is not (and has not been) a graduate student, may borrow for programs of study described in subparagraph (C)(ii) shall be $200,000; or

“(II) who is (or has been) a graduate student, may borrow for programs of study described in subparagraph (C)(ii) shall be an amount equal to—

“(aa) $200,000; minus

“(bb) the amount such student borrowed for programs of study described in subparagraph (C)(i).

“(C) DEFINITIONS.—

“(i) GRADUATE STUDENT.—The term ‘graduate student’ means a student enrolled in a program of study that awards a graduate credential (other than a professional degree) upon completion of the program.

“(ii) PROFESSIONAL STUDENT.—In this paragraph, the term ‘professional student’ means a student enrolled in a program of study that awards a professional degree, as defined under section 668.2 of title 34, Code of Federal Regulations (as in effect on the date of enactment of this paragraph), upon completion of the program.

“(5) PARENT BORROWER ANNUAL AND AGGREGATE LIMITS FOR FEDERAL DIRECT PLUS LOANS BEGINNING JULY 1, 2026.—

“(A) ANNUAL LIMITS.—Subject to paragraph (8) and notwithstanding any provision of this part or part B, beginning on July 1, 2026, for each dependent student, the total maximum annual amount of Federal Direct PLUS loans that may be borrowed on behalf of that dependent student by all parents of that dependent student shall be $20,000.

“(B) AGGREGATE LIMITS.—Subject to paragraph (8) and notwithstanding any provision of this part or part B, beginning on July 1, 2026, for each dependent student, the total maximum aggregate amount of Federal Direct PLUS loans that may be borrowed on behalf of that dependent student by all parents of that dependent student shall be $65,000, without regard to any amounts repaid, forgiven, canceled, or otherwise discharged on any such loan.

“(6) LIFETIME MAXIMUM AGGREGATE AMOUNT FOR ALL STUDENTS.—Subject to paragraph (8) and notwithstanding any provision of this part or part B, beginning on July 1, 2026, the maximum aggregate amount of loans made, insured, or guaranteed under this title that a student may borrow (other than a Federal Direct PLUS loan, or loan under section 428B, made to the student as a parent borrower on behalf of a dependent student) shall be $257,500, without regard to any amounts repaid, forgiven, canceled, or otherwise discharged on any such loan.

“(7) ADDITIONAL RULES REGARDING ANNUAL LOAN LIMITS.—

“(A) LESS THAN FULL-TIME ENROLLMENT.—Notwithstanding any provision of this part or part B, in any case in which a student is enrolled in a program of study of an institution of higher education on less than a full-time basis during any academic year, the amount of a loan that student may borrow for an academic year or its equivalent shall be reduced in direct proportion to the degree to which that student is not so enrolled on a full-time basis, rounded to the nearest whole percentage point, as provided in a schedule of reductions published by the Secretary computed for purposes of this subparagraph.

“(B) INSTITUTIONALLY DETERMINED LIMITS.—Notwithstanding the annual loan limits established under this section and, for undergraduate students, under this part and part B, beginning on July 1, 2026, an institution of higher education (at the discretion of a financial aid administrator at the institution) may limit the total amount of loans made under this part for a program of study for an academic year that a student may borrow, and that a parent may borrow on behalf of such student, as long as any such limit is applied consistently to all students enrolled in such program of study.

“(8) INTERIM EXCEPTION FOR CERTAIN STUDENTS.—

“(A) APPLICATION OF PRIOR LIMITS.—Paragraphs (3)(C), (4), (5), and (6) shall not apply, and paragraph (3)(A)(ii) shall apply as such paragraph was in effect for periods of instruction ending before June 30, 2026, during the expected time to credential described in subparagraph (B), with respect to an individual who, as of June 30, 2026—

“(i) is enrolled in a program of study at an institution of higher education; and

“(ii) has received a loan (or on whose behalf a loan was made) under this part for such program of study.

“(B) EXPECTED TIME TO CREDENTIAL.—For purposes of this paragraph, the expected time to credential of an individual shall be equal to the lesser of—

“(i) three academic years; or

“(ii) the period determined by calculating the difference between—

“(I) the program length for the program of study in which the individual is enrolled; and

“(II) the period of such program of study that such individual has completed as of the date of the determination under this subparagraph.

“(C) DEFINITION OF PROGRAM LENGTH.—In this paragraph, the term ‘program length’ means the minimum amount of time in weeks, months, or years that is specified in the catalog, marketing materials, or other official publications of an institution of higher education for a full-time student to complete the requirements for a specific program of study.”.

Section 455(a) of the Higher Education Act of 1965 (20 U.S.C. 1087e(a)) is amended—

(1) in paragraph (3)—

(A) in the paragraph heading, by inserting “and Federal Direct PLUS loans” after “loans”;

(B) by striking subparagraph (A) and inserting the following:

“(A) TERMINATION OF AUTHORITY TO MAKE INTEREST SUBSIDIZED LOANS TO GRADUATE AND PROFESSIONAL STUDENTS.—Subject to subparagraph (B), and notwithstanding any provision of this part or part B—

“(i) for any period of instruction beginning on or after July 1, 2012, a graduate or professional student shall not be eligible to receive a Federal Direct Stafford loan under this part; and

“(ii) for any period of instruction beginning on July 1, 2012, and ending on June 30, 2026, the maximum annual amount of Federal Direct Unsubsidized Stafford loans such a student may borrow in any academic year (as defined in section 481(a)(2)) or its equivalent shall be the maximum annual amount for such student determined under section 428H, plus an amount equal to the amount of Federal Direct Stafford loans the student would have received in the absence of this subparagraph.”; and

(C) by adding at the end the following:

“(C) TERMINATION OF AUTHORITY TO MAKE FEDERAL DIRECT PLUS LOANS TO GRADUATE AND PROFESSIONAL STUDENTS.—Subject to paragraph (8) and notwithstanding any provision of this part or part B, for any period of instruction beginning on or after July 1, 2026, a graduate or professional student shall not be eligible to receive a Federal Direct PLUS Loan under this part.”; and

(2) by adding at the end the following:

“(4) GRADUATE AND PROFESSIONAL ANNUAL AND AGGREGATE LIMITS FOR FEDERAL DIRECT UNSUBSIDIZED STAFFORD LOANS BEGINNING JULY 1, 2026.—

“(A) ANNUAL LIMITS BEGINNING JULY 1, 2026.—Subject to paragraphs (7)(A) and (8), beginning on July 1, 2026, the maximum annual amount of Federal Direct Unsubsidized Stafford loans—

“(i) a graduate student, who is not a professional student, may borrow in any academic year or its equivalent shall be $20,500; and

“(ii) a professional student may borrow in any academic year or its equivalent shall be $50,000.

“(B) AGGREGATE LIMITS.—Subject to paragraphs (6), (7)(A), and (8), beginning on July 1, 2026, the maximum aggregate amount of Federal Direct Unsubsidized Stafford loans, in addition to the amount borrowed for undergraduate education, that—

“(i) a graduate student—

“(I) who is not (and has not been) a professional student, may borrow for programs of study described in subparagraph (C)(i) shall be $100,000; or

“(II) who is (or has been) a professional student, may borrow for programs of study described in subparagraph (C)(i) shall be an amount equal to—

“(aa) $200,000; minus

“(bb) the amount such student borrowed for programs of study described in subparagraph (C)(ii); and

“(ii) a professional student—

“(I) who is not (and has not been) a graduate student, may borrow for programs of study described in subparagraph (C)(ii) shall be $200,000; or

“(II) who is (or has been) a graduate student, may borrow for programs of study described in subparagraph (C)(ii) shall be an amount equal to—

“(aa) $200,000; minus

“(bb) the amount such student borrowed for programs of study described in subparagraph (C)(i).

“(C) DEFINITIONS.—

“(i) GRADUATE STUDENT.—The term ‘graduate student’ means a student enrolled in a program of study that awards a graduate credential (other than a professional degree) upon completion of the program.

“(ii) PROFESSIONAL STUDENT.—In this paragraph, the term ‘professional student’ means a student enrolled in a program of study that awards a professional degree, as defined under section 668.2 of title 34, Code of Federal Regulations (as in effect on the date of enactment of this paragraph), upon completion of the program.

“(5) PARENT BORROWER ANNUAL AND AGGREGATE LIMITS FOR FEDERAL DIRECT PLUS LOANS BEGINNING JULY 1, 2026.—

“(A) ANNUAL LIMITS.—Subject to paragraph (8) and notwithstanding any provision of this part or part B, beginning on July 1, 2026, for each dependent student, the total maximum annual amount of Federal Direct PLUS loans that may be borrowed on behalf of that dependent student by all parents of that dependent student shall be $20,000.

“(B) AGGREGATE LIMITS.—Subject to paragraph (8) and notwithstanding any provision of this part or part B, beginning on July 1, 2026, for each dependent student, the total maximum aggregate amount of Federal Direct PLUS loans that may be borrowed on behalf of that dependent student by all parents of that dependent student shall be $65,000, without regard to any amounts repaid, forgiven, canceled, or otherwise discharged on any such loan.

“(6) LIFETIME MAXIMUM AGGREGATE AMOUNT FOR ALL STUDENTS.—Subject to paragraph (8) and notwithstanding any provision of this part or part B, beginning on July 1, 2026, the maximum aggregate amount of loans made, insured, or guaranteed under this title that a student may borrow (other than a Federal Direct PLUS loan, or loan under section 428B, made to the student as a parent borrower on behalf of a dependent student) shall be $257,500, without regard to any amounts repaid, forgiven, canceled, or otherwise discharged on any such loan.

“(7) ADDITIONAL RULES REGARDING ANNUAL LOAN LIMITS.—

“(A) LESS THAN FULL-TIME ENROLLMENT.—Notwithstanding any provision of this part or part B, in any case in which a student is enrolled in a program of study of an institution of higher education on less than a full-time basis during any academic year, the amount of a loan that student may borrow for an academic year or its equivalent shall be reduced in direct proportion to the degree to which that student is not so enrolled on a full-time basis, rounded to the nearest whole percentage point, as provided in a schedule of reductions published by the Secretary computed for purposes of this subparagraph.

“(B) INSTITUTIONALLY DETERMINED LIMITS.—Notwithstanding the annual loan limits established under this section and, for undergraduate students, under this part and part B, beginning on July 1, 2026, an institution of higher education (at the discretion of a financial aid administrator at the institution) may limit the total amount of loans made under this part for a program of study for an academic year that a student may borrow, and that a parent may borrow on behalf of such student, as long as any such limit is applied consistently to all students enrolled in such program of study.

“(8) INTERIM EXCEPTION FOR CERTAIN STUDENTS.—

“(A) APPLICATION OF PRIOR LIMITS.—Paragraphs (3)(C), (4), (5), and (6) shall not apply, and paragraph (3)(A)(ii) shall apply as such paragraph was in effect for periods of instruction ending before June 30, 2026, during the expected time to credential described in subparagraph (B), with respect to an individual who, as of June 30, 2026—

“(i) is enrolled in a program of study at an institution of higher education; and

“(ii) has received a loan (or on whose behalf a loan was made) under this part for such program of study.

“(B) EXPECTED TIME TO CREDENTIAL.—For purposes of this paragraph, the expected time to credential of an individual shall be equal to the lesser of—

“(i) three academic years; or

“(ii) the period determined by calculating the difference between—

“(I) the program length for the program of study in which the individual is enrolled; and

“(II) the period of such program of study that such individual has completed as of the date of the determination under this subparagraph.

“(C) DEFINITION OF PROGRAM LENGTH.—In this paragraph, the term ‘program length’ means the minimum amount of time in weeks, months, or years that is specified in the catalog, marketing materials, or other official publications of an institution of higher education for a full-time student to complete the requirements for a specific program of study.”.

SEC. 80001. Exemption of certain assets.

(a) Exemption of certain assets.—Section 480(f)(2) of the Higher Education Act of 1965 (20 U.S.C. 1087vv(f)(2)) is amended—

(1) by striking “net value of the” and inserting the following: “net value of—

“(A) the”;

(2) by striking the period at the end and inserting a semicolon; and

(3) by adding at the end the following:

“(B) a family farm on which the family resides;

“(C) a small business with not more than 100 full-time or full-time equivalent employees (or any part of such a small business) that is owned and controlled by the family; or

“(D) a commercial fishing business and related expenses, including fishing vessels and permits owned and controlled by the family.”.

(b) Effective date and application.—The amendments made by subsection (a) shall take effect on July 1, 2026, and shall apply with respect to award year 2026–2027 and each subsequent award year, as determined under the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).

(a) Exemption of certain assets.—Section 480(f)(2) of the Higher Education Act of 1965 (20 U.S.C. 1087vv(f)(2)) is amended—

(1) by striking “net value of the” and inserting the following: “net value of—

“(A) the”;

(2) by striking the period at the end and inserting a semicolon; and

(3) by adding at the end the following:

“(B) a family farm on which the family resides;

“(C) a small business with not more than 100 full-time or full-time equivalent employees (or any part of such a small business) that is owned and controlled by the family; or

“(D) a commercial fishing business and related expenses, including fishing vessels and permits owned and controlled by the family.”.

(b) Effective date and application.—The amendments made by subsection (a) shall take effect on July 1, 2026, and shall apply with respect to award year 2026–2027 and each subsequent award year, as determined under the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).

SEC. 73001. Ending unemployment payments to jobless millionaires.

(a) Prohibition on use of Federal funds.—

(1) IN GENERAL.—No Federal funds may be used—

(A) to make payments of unemployment compensation benefits under an unemployment compensation program of the United States in a year to an individual whose wages during the individual’s base period are equal to or exceed $1,000,000; or

(B) for any administrative costs associated with making payments described in subparagraph (A).

(2) COMPLIANCE.—

(A) SELF-CERTIFICATION.—Any application for unemployment compensation under an unemployment compensation program of the United States shall include a form or procedure for an individual applicant to certify that such individual’s wages during the individual’s base period do not equal or exceed $1,000,000.

(B) VERIFICATION.—Each State agency that is responsible for administering any unemployment compensation program of the United States shall utilize available systems to verify wage eligibility by assessing claimant income to the degree possible.

(3) RECOVERY OF OVERPAYMENTS.—Each State agency that is responsible for administering any unemployment compensation program of the United States shall require individuals who have received amounts of unemployment compensation under such a program to which they were not entitled to repay such amounts.

(4) EFFECTIVE DATE.—The prohibition under paragraph (1) shall apply to weeks of unemployment beginning on or after the date of the enactment of this Act.

(b) Unemployment compensation program of the United States defined.—In this section, the term “unemployment compensation program of the United States” means—

(1) unemployment compensation for Federal civilian employees under subchapter I of chapter 85 of title 5, United States Code;

(2) unemployment compensation for ex-servicemembers under subchapter II of chapter 85 of title 5, United States Code;

(3) extended benefits under the Federal-State Extended Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note);

(4) any Federal temporary extension of unemployment compensation;

(5) any Federal program that increases the weekly amount of unemployment compensation payable to individuals; and

(6) any other Federal program providing for the payment of unemployment compensation, as determined by the Secretary of Labor.