§ 1087e. Terms and conditions of loans

1998—Subsec. (b)(5). Pub. L. 105–178, § 8301(c)(2), which directed amendment of section 455(b) (20 U.S.C. 1087e(b)) by adding par. (5), was executed to this section, which is section 455(b) of Pub. L. 89–329, to reflect the probable intent of Congress. Former par. (5) redesignated (6).

Subsec. (b)(6). Pub. L. 105–244, § 452(a)(1), added par. (6) relating to interest rate provision for new loans.

Pub. L. 105–178, § 8301(c)(1), which directed amendment of section 455(b) (20 U.S.C. 1087e(b)) by redesignating par. (5) as (6), was executed to this section, which is section 455(b) of Pub. L. 89–329, to reflect the probable intent of Congress.

Subsec. (b)(7). Pub. L. 105–244, § 452(b), added par. (7).

Subsec. (g). Pub. L. 105–244, § 452(c), struck out “only under such terms and conditions as the Secretary shall establish pursuant to section 1087g(a)(1) of this title or regulations promulgated under this part” after “section 1078–3(a)(4) of this title”.

Subsecs. (j)(2), (k)(3). Pub. L. 105–244, § 401(g)(6), substituted “Federal Pell Grants” for “basic grants”.

1994—Subsec. (f)(3), (4). Pub. L. 103–382 added pars. (3) and (4).

1993—Pub. L. 103–66 amended section generally, substituting provisions relating to terms and conditions of loans for former provisions relating to withdrawal and termination procedures.

1992—Pub. L. 102–325 amended section generally, substituting provisions relating to withdrawal and termination procedures for former provisions relating to feasibility study.

Statutory Notes and Related Subsidiaries

Effective Date of 2025 Amendment

Amendment by section 82001(c)(1) of Pub. L. 119–21 effective July 1, 2028, see section 82001(c)(3) of Pub. L. 119–21, set out in a note under section 1078 of this title.

Effective Date of 2023 Amendment

Pub. L. 118–31, div. A, title X, § 1054(b), Dec. 22, 2023, 137 Stat. 398, provided that: “The amendments made by subsection (a) [amending this section] shall take effect 90 days after the date of the enactment of this Act [Dec. 22, 2023].”

Effective Date of 2020 Amendment

Amendment by Pub. L. 116–260 effective July 1, 2024, except as otherwise expressly provided, and applicable with respect to award year 2024–2025 and each subsequent award year, as determined under this chapter, see section 701(b) of Pub. L. 116–260, set out as a note under section 1001 of this title.

Pub. L. 116–260, div. FF, title VII, § 705(b), Dec. 27, 2020, 134 Stat. 3200, provided that: “Notwithstanding section 701(b) of this Act [div. FF of Pub. L. 116–260, set out as an Effective Date of 2020 Amendment note under section 1001 of this title] and section 455(q) of the Higher Education Act of 1965 (20 U.S.C. 1087e(q)) as in effect on the date of enactment of this Act [Dec. 27, 2020], the Secretary of Education may implement the repeal authorized under subsection (a) [repealing subsec. (q) of this section] before (but not later than) July 1, 2023. The Secretary shall specify in a designation on what date and for which award years the implementation of such repeal will be effective prior to July 1, 2023. The Secretary shall publish any designation under this paragraph in the Federal Register at least 60 days before implementation.”

[Effective date of title VII of div. FF of Pub. L. 116–260 was changed from July 1, 2023, to July 1, 2024, by section 102(a) of Pub. L. 117–103, see section 701(b) of div. FF of Pub. L. 116–260, set out as a note under section 1001 of this title. However, the July 1, 2023, implementation dates in section 705(b) of Pub. L. 116–260, set out above, were not correspondingly amended.]

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–245 applicable with respect to loans made on or after Sept. 28, 2018, or in repayment on Sept. 28, 2018, see section 309(f) of Pub. L. 115–245, set out as a note under section 1077 of this title.

Effective Date of 2013 Amendment

Pub. L. 113–28, § 2(b), Aug. 9, 2013, 127 Stat. 507, provided that: “The amendments made by subsection (a) [amending this section] shall take effect as if enacted on July 1, 2013.”

Effective Date of 2010 Amendment

Pub. L. 111–152, title II, § 2211(b), Mar. 30, 2010, 124 Stat. 1078, provided that: “The amendment made by subsection (a)(1) [amending this section] shall apply with respect to loans first disbursed under part D of title IV of the Higher Education Act of 1965 (20 U.S.C. 1087a et seq.) on or after July 1, 2010.”

Effective Date of 2009 Amendment

Amendment by Pub. L. 111–39 effective as if enacted on the date of enactment of Pub. L. 110–315 (Aug. 14, 2008), see section 3 of Pub. L. 111–39, set out as a note under section 1001 of this title.

Effective Date of 2007 Amendment

Amendment by sections 201(b), 202(b), 205, and 401 of Pub. L. 110–84 effective Oct. 1, 2007, see section 1(c) of Pub. L. 110–84, set out as a note under section 1070a of this title.

Amendment by section 203(b)(3) of Pub. L. 110–84 effective July 1, 2009, see section 203(c)(1) of Pub. L. 110–84, set out as a note under section 1078–3 of this title.

Effective Date of 2006 Amendment

Amendment by Pub. L. 109–171 effective July 1, 2006, except as otherwise provided, see section 8001(c) of Pub. L. 109–171, set out as a note under section 1002 of this title.

Amendment by section 8007(b) of Pub. L. 109–171 applicable with respect to all loans under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.), see section 8007(f) of Pub. L. 109–171, set out as a note under section 1078 of this title.

Effective Date of 2002 Amendment

Amendment by Pub. L. 107–314 applicable with respect to interest, and any special allowance under section 1087–1 of this title, that accrue for months beginning on or after Oct. 1, 2003, on student loans described in section 2174(c) of Title 10, Armed Forces, that were made before, on, or after such date to members of the Armed Forces who are on active duty (as defined in section 101(d) of Title 10) on or after that date, see section 651(e) of Pub. L. 107–314, set out as an Effective Date note under section 2174 of Title 10.

Effective Date of 1998 Amendment

Amendment by sections 401(g)(6) and 452(b), (c) of Pub. L. 105–244 effective Oct. 1, 1998, except as otherwise provided in Pub. L. 105–244, see section 3 of Pub. L. 105–244, set out as a note under section 1001 of this title.

Pub. L. 105–244, title IV, § 452(d), Oct. 7, 1998, 112 Stat. 1717, provided that: “The amendments made by subsection (a) [amending this section] shall apply with respect to any loan made under part D of title IV of the Higher Education Act of 1965 [this part] for which the first disbursement is made on or after October 1, 1998, and before July 1, 2003, except that such amendments shall apply with respect to a Federal Direct Consolidation Loan for which the application is received on or after October 1, 1998, and before July 1, 2003.”

Effective Date of 1992 Amendment

Amendment by Pub. L. 102–325 effective Oct. 1, 1992, see section 2 of Pub. L. 102–325, set out as a note under section 1001 of this title.

Construction of 2006 Amendment

Nothing in amendment by section 8007(b) of Pub. L. 109–171 to be construed to authorize any refunding of any repayment of a loan, see section 8007(e) of Pub. L. 109–171, set out as a note under section 1078 of this title.

Loan Repayment

Pub. L. 119–21, title VIII, § 82001(a), July 4, 2025, 139 Stat. 337, provided that: “(a) Transition to Income-based Repayment Plans.—“(1) Selection.—The Secretary of Education shall take such steps as may be necessary to ensure that before July 1, 2028, each borrower who has one or more loans that are in a repayment status in accordance with, or an administrative forbearance associated with, an income contingent repayment plan authorized under section 455(e) of the Higher Education Act of 1965 [20 U.S.C. 1087e(e)] (referred to in this subsection as ‘covered income contingent loans’) selects one of the following income-based repayment plans that is otherwise applicable, and for which that borrower is otherwise eligible, for the repayment of the covered income contingent loans of the borrower:“(A) The Repayment Assistance Plan under section 455(q) of the Higher Education Act of 1965 [20 U.S.C. 1087e(q)]. “(B) The income-based repayment plan under section 493C of the Higher Education Act of 1965 [20 U.S.C. 1098e]. “(C) Any other repayment plan as authorized under section 455(d)(1) of the Higher Education Act of 1965 [20 U.S.C. 1087e(d)(1)]. “(2) Commencement of new repayment plan.—Beginning on July 1, 2028, a borrower described in paragraph (1) shall begin repaying the covered income contingent loans of the borrower in accordance with the repayment plan selected under paragraph (1), unless the borrower chooses to begin repaying in accordance with the repayment plan selected under paragraph (1) before such date. “(3) Failure to select.—In the case of a borrower described in paragraph (1) who fails to select a repayment plan in accordance with such paragraph, the Secretary of Education shall—“(A) enroll the covered income contingent loans of such borrower in—“(i) the Repayment Assistance Plan under section 455(q) of the Higher Education Act of 1965 [20 U.S.C. 1087e(q)] with respect to loans that are eligible for the Repayment Assistance Plan under such subsection; or “(ii) the income-based repayment plan under section 493C of such Act [20 U.S.C. 1098e], with respect to loans that are not eligible for the Repayment Assistance Plan; and “(B) require the borrower to begin repaying covered income contingent loans according to the plans under subparagraph (A) on July 1, 2028.”

Ensuring Access to Certain Higher Education Benefits

Pub. L. 118–159, div. A, title V, § 559B, Dec. 23, 2024, 138 Stat. 1900, provided that: “(a) Data Matching Required.—Not later than one year after the date of the enactment of this Act [Dec. 23, 2024], the Secretary of Defense and the Secretary of Education shall jointly complete a data matching process—“(1) to identify each individual who, while serving as a covered employee of the Department of Defense, made one or more student loan payments eligible to be counted for purposes of the Public Service Loan Forgiveness program under section 455(m) of the Higher Education Act of 1965 (20 U.S.C. 1087e(m)); and “(2) without requiring further information or action from such individual—“(A) to certify the total period of such employment for purposes of such program; and “(B) to count the total number of qualifying payments made by the individual for purposes of such program during such period. “(b) Covered Employee Defined.—In this section, the term ‘covered employee’ means an individual who, at any time beginning on or after October 1, 2007, was—“(1) a member of the Armed Forces serving on active duty for a period of more than 30 consecutive days; or “(2) a civilian employee of the Department of Defense.”

Limitation on Consolidation Loans During Temporary Interest Rate

Pub. L. 105–244, title IV, § 452(a)(2), Oct. 7, 1998, 112 Stat. 1716, provided that: “Notwithstanding section 455(g) of the Higher Education Act of 1965 [subsec. (g) of this section], a borrower who is enrolled or accepted for enrollment in an institution of higher education may not consolidate loans under such section during the period beginning October 1, 1998, and ending February 1, 1999, unless the borrower certifies that the borrower has no outstanding loans made, insured, or guaranteed under title IV of such Act [20 U.S.C. 1070 et seq.] other than loans made under part D of such title [this part].”

Executive Documents

Ex. Ord. No. 14235. Restoring Public Service Loan Forgiveness

Ex. Ord. No. 14235, Mar. 7, 2025, 90 F.R. 11885, provided:

By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered:

Section 1. Purpose. In 2007, the Congress established the Public Service Loan Forgiveness (PSLF) Program to encourage Americans to enter the public service sector by promising to forgive their remaining student loans after they completed 10 years of service in those jobs while making 10 years of minimum payments.

The prior administration abused the PSLF Program through a waiver process, using taxpayer funds to pay off loans for employees still years away from the statutorily required number of payments. Moreover, instead of alleviating worker shortages in necessary occupations, the PSLF Program has misdirected tax dollars into activist organizations that not only fail to serve the public interest, but actually harm our national security and American values, sometimes through criminal means. The PSLF Program also creates perverse incentives that can increase the cost of tuition, can load students in low-need majors with unsustainable debt, and may push students into organizations that hide under the umbrella of a non-profit designation and degrade our national interest, thus requiring additional Federal funding to correct the negative societal effects caused by these organizations’ federally subsidized wrongdoing.

As President of the United States, I have a duty to protect, preserve, and defend the Constitution and our national security, which includes ending the subsidization of illegal activities, including illegal immigration, human smuggling, child trafficking, pervasive damage to public property, and disruption of the public order, which threaten the security and stability of the United States. Accordingly, it is the policy of my Administration that individuals employed by organizations whose activities have a substantial illegal purpose shall not be eligible for public service loan forgiveness.

Sec. 2. Restoring Public Service Loan Forgiveness. The Secretary of Education shall propose revisions to 34 CFR 685.219, Public Service Loan Forgiveness Program, in coordination with the Secretary of the Treasury as appropriate, that ensure the definition of “public service” excludes organizations that engage in activities that have a substantial illegal purpose, including:

(a) aiding or abetting violations of 8 U.S.C. 1325 [sic] or other Federal immigration laws;

(b) supporting terrorism, including by facilitating funding to, or the operations of, cartels designated as Foreign Terrorist Organizations consistent with 8 U.S.C. 1189 [sic], or by engaging in violence for the purpose of obstructing or influencing Federal Government policy;

(c) child abuse, including the chemical and surgical castration or mutilation of children or the trafficking of children to so-called transgender sanctuary States for purposes of emancipation from their lawful parents, in violation of applicable law;

(d) engaging in a pattern of aiding and abetting illegal discrimination; or

(e) engaging in a pattern of violating State tort laws, including laws against trespassing, disorderly conduct, public nuisance, vandalism, and obstruction of highways.

Sec. 3. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:

(i) the authority granted by law to an executive department or agency, or the head thereof; or

(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

Continued Student Loan Payment Relief During the COVID–19 Pandemic

Memorandum of President of the United States, Aug. 8, 2020, 85 F.R. 49585, provided:

Memorandum for the Secretary of Education

By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows:

Section 1. Policy. The 2019 novel coronavirus known as SARS–CoV–2, the virus causing outbreaks of the disease COVID–19, has significantly disrupted the lives of Americans. In Proclamation 9994 of March 13, 2020 (Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID–19) Outbreak) [50 U.S.C. 1621 note], I declared, pursuant to the National Emergencies Act (50 U.S.C. 1601 et seq.), that the COVID–19 outbreak in the United States constituted a national emergency (the “national emergency”). The same day, I also determined that the COVID–19 outbreak constituted an emergency of nationwide scope, pursuant to section 501(b) of the Stafford Act (42 U.S.C. 5191(b)).

On March 20, 2020, my Administration took action to provide immediate relief to tens of millions of student loan borrowers during the pandemic caused by COVID–19 by both suspending loan payments and temporarily setting interest rates to 0 percent. This relief has helped many students and parents retain financial stability. And many other Americans have continued to routinely pay down their student loan balances, to more quickly eliminate their loans in the long run. During this time, borrowers have been able to determine the best path forward for themselves.

The original announcement of this policy specified that it would continue for at least 60 days. In the interim, the Coronavirus Aid, Relief, and Economic Security Act [Pub. L. 116–136] provided this same student loan payment relief, but that program is scheduled to expire on September 30, 2020. Currently, many Americans remain unemployed due to the COVID–19 pandemic, and many more have accepted lower wages and reduced hours while States and localities continue to impose social distancing measures. It is therefore appropriate to extend this policy until such time that the economy has stabilized, schools have re-opened, and the crisis brought on by the COVID–19 pandemic has subsided.

Sec. 2. Extension of Student Loan Payment Relief. (a) In light of the national emergency declared on March 13, 2020, the Secretary of Education shall take action pursuant to applicable law to effectuate appropriate waivers of and modifications to the requirements and conditions of economic hardship deferments described in section 455(f)(2)(D) of the Higher Education Act of 1965, as amended, 20 U.S.C. 1087e(f)(2)(D), and provide such deferments to borrowers as necessary to continue the temporary cessation of payments and the waiver of all interest on student loans held by the Department of Education until December 31, 2020.

(b) All persons who wish to continue making student loan payments shall be allowed to do so, notwithstanding the deferments provided pursuant to subsection (a) of this section.

Sec. 3. General Provisions. (a) Nothing in this memorandum shall be construed to impair or otherwise affect:

(i) the authority granted by law to an executive department or agency, or the head thereof; or

(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

(b) This memorandum shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

(d) You are authorized and directed to publish this memorandum in the Federal Register.