Sec. 301 Simplification of Federal student loans
“(c) Termination of authority To make new loans—Notwithstanding subsection (a) or any other provision of law—
“(1) no new loans may be made under this part after September 30, 2026, except Federal Direct simplification loans under section 460A; and
“(2) no funds are authorized to be appropriated, or may be expended, under this Act, or any other Act to make loans under this part for which the first disbursement is after September 30, 2026, except Federal Direct simplification loans under section 460A, or as expressly authorized by an Act of Congress enacted after the date of enactment of Higher Education Reform and Opportunity Act of 2019.
“(d) Student eligibility beginning with award year 2022
“(1) New borrowers—No loan may be made under this part to a new borrower for which the first disbursement is after June 30, 2022, except Federal Direct simplification loans under section 460A.
“(2) Borrowers with outstanding balances—Subject to paragraph (3), with respect to a borrower who, as of July 1, 2022, has an outstanding balance of principal or interest owing on a loan made under this part that is not a Federal Direct simplification loan under section 460A, such borrower may—
“(A) in the case of such a loan made to the borrower for enrollment in a program of undergraduate education, borrow loans made under this part that are not Federal Direct simplification loans under section 460A for any program of undergraduate education through the close of September 30, 2026;
“(B) in the case of such a loan made to the borrower for enrollment in a program of graduate or professional education, borrow loans made under this part that are not Federal Direct simplification loans under section 460A for any program of graduate or professional education through the close of September 30, 2026; and
“(C) in the case of such a loan made to the borrower on behalf of a dependent student for the student’s enrollment in a program of undergraduate education, borrow loans made under this part that are not Federal Direct simplification loans under section 460A on behalf of such student through the close of September 30, 2026.
“(3) Loss of eligibility—A borrower described in paragraph (2) who borrows a Federal Direct simplification loan made under section 460A for which the first disbursement is made before September 30, 2026, shall lose the borrower’s eligibility to borrow a loan under this part that is not a Federal Direct simplification loan under section 460A in accordance with paragraph (2).”
“460A. Federal Direct simplification loans
“(a) In general—Beginning on July 1, 2022, except as provided in section 451(d), the Secretary shall make loans to borrowers under this section. Loans made under this section shall be known as Federal Direct simplification loans.
“(b) Federal Direct simplification loans—The provisions of this part shall apply with respect to Federal Direct simplification loans, except that Federal Direct simplification loans shall be made in accordance with the following:
“(1) The applicable rate of interest on a loan made under this section 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—
“(A) a rate equal to the high yield of the 10-year Treasury note auctioned at the final auction held prior to such June 1; plus
“(B) 3.6 percent.
“(2) Interest on a loan made under this section shall begin to accrue on the date the loan is disbursed.
“(3) The maximum—
“(A) annual amount of loans under this section an undergraduate student may borrow in any academic year (as defined in section 481(a)(2)) or its equivalent shall be equal to $7,500; and
“(B) aggregate amount of loans under this section an undergraduate student may borrow shall be equal to $30,000.
“(4) The maximum—
“(A) annual amount of loans under this section a graduate or professional student may borrow in any academic year (as defined in section 481(a)(2)) or its equivalent shall be equal to $12,500; and
“(B) aggregate amount of loans under this section a graduate or professional student may borrow shall be equal to $50,000.
“(5) The only length of repayment—
“(A) for a loan borrowed by an undergraduate student shall be 15 years; and
“(B) for a loan borrowed by a graduate or professional student shall be 25 years.
“(6) Repayment on a loan made under this section shall begin—
“(A) after 125 percent of the normal time for completion of the program of study for which the borrower receives the loan under this section; or
“(B) if the borrower withdraws from the program of study before the borrower completes the program, 6 months after the date the borrower withdraws.
“(7) The Secretary shall not repay or cancel any outstanding balance of principal or interest due on a Federal Direct simplification loan as part of a student loan forgiveness program, including such a program under section 455(m) and section 493C.
“(c) Authorization To limit loan amounts—An institution of higher education that is required under State law to enroll all eligible applicants for an academic year may limit the amount of loans under this section that a student may borrow for such academic year to not more than the tuition and fees at such institution for such academic year.
“(d) Loan fee—The Secretary shall not charge the borrower of a loan made under this part an origination fee.
“(e) Repayment—A borrower of a loan made under this section may accelerate without penalty repayment of the whole or any part of the loan.”