Sec. 30021. Loan repayment

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Beginning on the date of enactment of this title, the Secretary of Education shall take such steps as may be necessary to apply the repayment plan under section 493C of the Higher Education Act of 1965 (as amended by this title) to the loans of each borrower who, on the day before such date of enactment, is 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 (as in effect on the day before the date of enactment of this title). The Secretary shall complete the application of the repayment plan under section 493C to the loans described in paragraph

(1)as soon as practicable, but not later than 9 months after the date of enactment of this title. The Secretary may not establish, promulgate, issue, or modify any regulations or guidance with respect to any income-based repayment plan under the Higher Education Act of 1965, except that the Secretary may— during the 270-day period after the date of enactment of this title, issue an interim final rule as necessary for the application of the repayment plan under section 493C of such Act of 1965 in accordance with paragraph

(1); during the 270-day period after the date of enactment of this title, issue an interim final rule as necessary to implement the amendments to such section 493C made by subsection

(f)of this title; and during the 18-month period after the date of enactment of this title, issue an interim final rule as necessary to implement the income-based Repayment Assistance Program under section 455(q) of such Act of 1965 (as added by this title). Any guidance or regulations issued or modified in accordance with subparagraph

(A)or

(B)of paragraph

(2)shall not be subject to negotiated rulemaking requirements under section 492 of the Higher Education Act of 1965 ( 20 U.S.C. 1098a ). Section 455(d) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(d) ) is amended— in paragraph (1)— 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 ; by amending subparagraph

(D)to read as follows: beginning on July 1, 2026, the income-based Repayment Assistance Plan under subsection (q), provided that— the borrower is required to pay each outstanding loan of the borrower made under this part under such Repayment Assistance Plan; such Plan shall not be available to borrowers with an excepted loan (as defined in paragraph (7)); and the borrower may not change the borrower’s selection of the Repayment Assistance Plan except in accordance with paragraph (7)(C). ; and in subparagraph (E)— by striking that enables borrowers who have a partial financial hardship to make a lower monthly payment ; and 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)) ; in paragraph (5), by amending subparagraph

(B)to read as follows: repay the loan pursuant to an income-based repayment plan under subsection

(q)or section 493C, as applicable. ; and by adding at the end the following: Paragraphs

(1)through

(4)of this subsection shall only apply to loans made under this part before July 1, 2026. The Secretary may not, for any loan made under this part on or after July 1, 2026— 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 carry out or modify a repayment plan that is not described in such paragraph. 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— a standard repayment plan— with a fixed monthly repayment amount paid over a fixed period of time equal to the applicable period determined under subclause

(II); and 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— for a borrower with total outstanding principal of less than $25,000, a period of 10 years; for a borrower with total outstanding principal of not less than $25,000 and less than $50,000, a period of 15 years; for a borrower with total outstanding principal of not less than $50,000 and less than $100,000, a period of 20 years; and for a borrower with total outstanding principal of $100,000 or more, a period of 25 years; or the income-based Repayment Assistance Plan under subsection (q). 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) . Each time a borrower receives a loan made under this part on or after July 1, 2026, the borrower may select either the standard repayment plan under subparagraph (A)(i) or the Repayment Assistance Plan under subparagraph (A)(ii) , provided that the borrower is required to pay each outstanding loan of the borrower made under this part under such selected repayment plan. A borrower may change the borrower’s selection of the standard repayment plan under subparagraph (A)(i) , or the Secretary’s selection of such plan for the borrower under subparagraph

(C), as the case may be, to the Repayment Assistance Plan under subparagraph (A)(ii) at any time. A borrower may not change the borrower’s selection of the Repayment Assistance Plan under subparagraph (A)(ii) , except in accordance with subparagraph

(C). Notwithstanding subparagraphs

(A)through (D), beginning on July 1, 2026, the Secretary shall require a borrower who has an excepted loan and who has received a loan made under this part on or after such date to repay each outstanding loan of the borrower made under this part, including principal and interest on such loans, under the standard repayment plan under subparagraph (A)(i) . The borrower shall be entitled to accelerate, without penalty, repayment on such loans. For the purposes of this paragraph, the term excepted loan means a loan with an outstanding balance that is— a Federal Direct PLUS Loan that is made on behalf of a dependent student; or a Federal Direct Consolidation Loan, if the proceeds of such loan were used to the discharge the liability on— an excepted PLUS loan, as defined in section 493C(a)(1); or an excepted consolidation loan (as such term is defined in section 493C(a)(2)(A), notwithstanding subparagraph

(B)of such section). A borrower who has an outstanding loan (including an excepted loan) made under this part before July 1, 2026, and who has not received a loan made under this part on or after July 1, 2026, shall not be eligible to change the borrower’s selection of a repayment plan to the standard repayment plan under subparagraph (A)(i) . . Subsection

(e)of section 455 the Higher Education Act of 1965 ( 20 U.S.C. 1087e(e) ) is repealed. Section 428 of the Higher Education Act of 1965 ( 20 U.S.C. 1078 ) is amended— 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 in subsection (m)— in the subsection heading, by striking ; Income Contingent and by amending paragraph

(1)to read as follows: 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 455(q) or section 493C, as applicable. ; and in the heading of paragraph (2), by striking . income contingent or Section 428C of the Higher Education Act of 1965 ( 20 U.S.C. 1078–3 ) is amended— 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 ; 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 in subsection (c)— 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 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 . 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 . Section 494(a)(2) of the Higher Education Act of 1965 ( 20 U.S.C. 1098h(a)(2) ) is amended— in the paragraph heading, by striking and inserting Income-contingent and income-based ; Income-based in subparagraph (A)— in the matter preceding clause (i), by striking income-contingent or ; and in clause (ii)(I), by inserting (as in effect on the day before the date of repeal of subsection

(e)of section 455) after section 455(e)(8) . 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: 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: 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 (3)(B) , except that the borrower may not be precluded from repaying an amount that exceeds such amount for any month. 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. Any principal due and not paid under subparagraph

(B)or paragraph (2)(B) shall be deferred. 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— 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 the date on which the borrower has made 360 qualifying monthly payments. The Secretary shall repay or cancel any outstanding balance of principal and interest due on a loan made under this part to a borrower— who, for any period of time, participated in the Repayment Assistance Plan under this subsection; whose most recent payment for such loan prior to the loan cancellation under this subparagraph was made under such Repayment Assistance Plan; and who has made 360 qualifying monthly payments on such loan. For the purposes of this subsection, the term qualifying monthly payment means any of the following: An on-time applicable monthly payment under this subsection. 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. A monthly payment under any repayment plan 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. 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. A monthly payment made before the date of enactment of this subsection 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. A month when the borrower did not make a payment because the borrower was in deferment due to an economic hardship described in section 435(o). 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 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). 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)(B). 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. 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— the amount that is the lesser of— $50; or the total amount paid by the borrower for such month pursuant to paragraph (1)(A) , minus the total amount paid by the borrower for such month pursuant to paragraph (1)(A) that is applied to such total outstanding principal balance. In this paragraph: 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. 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— the applicable base payment of the borrower, divided by 12; minus $50 for each dependent child of the borrower. 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. 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. The amount of the applicable base payment for a borrower with an adjusted gross income of— not more than $10,000, is $120; more than $10,000 and not more than $20,000, is 1 percent of such adjusted gross income; more than $20,000 and not more than $30,000, is 2 percent of such adjusted gross income; more than $30,000 and not more than $40,000, is 3 percent of such adjusted gross income; more than $40,000 and not more than $50,000, is 4 percent of such adjusted gross income; more than $50,000 and not more than $60,000, is 5 percent of such adjusted gross income; more than $60,000 and not more than $70,000, is 6 percent of such adjusted gross income; more than $70,000 and not more than $80,000, is 7 percent of such adjusted gross income; more than $80,000 and not more than $90,000, is 8 percent of such adjusted gross income; more than $90,000 and not more than $100,000, is 9 percent of such adjusted gross income; and more than $100,000, is 10 percent of such adjusted gross income. For the purposes of this paragraph, the term dependent child of the borrower means an individual who— is under 17 years of age; and is the borrower’s dependent child or another person who lives with and receives more than one-half of their support from the borrower. 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— 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 determined pursuant to this clause until the date on which the borrower provides such information to the Secretary. . 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: Notwithstanding subsections (b)(5), (c)(2), and (c)(3)(A) and

(B)of section 428C, 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 subsection (d)(7)(A)(i) or

(ii)of this section, as applicable, and the repayment schedule of such a Consolidation Loan shall be determined in accordance with such repayment plan. . Section 493C(a)(2) of the Higher Education Act of 1965 ( 20 U.S.C. 1098e(a)(2) ) is amended to read as follows: The term excepted consolidation loan means— a consolidation loan under section 428C, or a Federal Direct Consolidation Loan, if the proceeds of such loan were used to the discharge the liability on an excepted PLUS loan; or 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). The term excepted consolidation loan does not include a Federal Direct Consolidation Loan described in subparagraph

(A)that (on the day before the date of enactment of this subparagraph) was being repaid pursuant to the Income-Contingent Repayment

(ICR)plan in accordance with section 685.209(a) of title 34, Code of Federal Regulations (as in effect on June 30, 2023). . Section 493C(b) of the Higher Education Act of 1965 ( 20 U.S.C. 1098e(b) ) is amended— by amending paragraph

(1)to read as follows: 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 result described in subsection (a)(3)(B) divided by 12; ; in paragraph (3)— in subparagraph (B)— in clause (i)— by striking subclause (II); and by striking the borrower and all the follows through ends and inserting the borrower ends ; and in clause (ii)— by striking subclause (II); by striking the borrower and all the follows through ends and inserting the borrower ends ; and by striking or at the end; by repealing paragraph (6); in paragraph (7)(B)— in the matter preceding clause (i), by striking for a period of time prescribed by the Secretary, not to exceed 25 years and inserting the following: for 25 years (in the case of a borrower who is repaying at least one loan for a program of study for which a graduate credential (as defined in section 472A)) is awarded, or, for 20 years (in the case of a borrower who is not repaying at least one such loan) ; in clause (i), by inserting (as such paragraph was in effect on the day before the date of the repeal of paragraph (6)) after paragraph

(6); and in clause (iv), by inserting (as such section was in effect on the day before the date of the repeal of paragraph (6)) after section 455(d)(1)(D) ; and in paragraph (8), by striking standard repayment plan and inserting standard repayment plan under section 428(b)(9)(A)(i) or 455(d)(1)(A), or the Repayment Assistance Program under section 455(q) . Section 493C(c)(2) of the Higher Education Act of 1965 ( 20 U.S.C. 1098e(c)(2) ) is further amended— in subparagraph (A), by inserting (as in effect on the day before the date of repeal of subsection

(e)of section 455) after section 455(e)(1) ; and in subparagraph (B), by inserting (as in effect on the day before the date of repeal of subsection

(e)of section 455) after section 455(e)(8) . Section 493C of the Higher Education Act of 1965 ( 20 U.S.C. 1098e(e) ) is further amended by striking subsection (e). 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.

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