S. 4269 — Restoring College Access and Affordability Act

This section repeals Section 81001 of P.L. 119-21, which modified loan limits, and directs that any affected laws or regulations be applied as if that section and its amendments had not been enacted. (Thus, statutory loan limits applicable prior to P.L. 119-21 are restored.)

This section repeals three provisions of P.L. 119-21 (the FY2025 reconciliation act)—(1) section 82001 on federal student loan repayment, (2) section 82002 on deferment and forbearance, and (3) section 82004 on Public Service Loan Forgiveness (PSLF, i.e., program forgiving Direct Loans after 120 qualifying payments while employed full-time by a qualifying public service employer)—and directs that affected laws and regulations apply as if those sections and their amendments had not been enacted.

This section repeals two provisions of P.L. 119-21 (139 Stat. 72) concerning Federal Pell Grants: (1) changes to eligibility requirements under sec. 83001; and (2) changes to the exclusion of other grant aid from Pell Grant calculations under sec. 83004. (Thus, prior law and regulations are restored for the Pell Grant program, which provides need-based grants to low-income undergraduate students to help cover college costs.)

This section revises the Direct Student Loan Program's ineligibility rules for institutions based on low student earning outcomes (i.e., programs failing debt-to-earnings thresholds) by (1) defining "covered educational program" to mean an eligible program under title IV of the Higher Education Act of 1965 that is a gainful employment training program (such as one awarding a certificate or credential) or awards an associate's degree, awards an associate's or baccalaureate degree, or awards a graduate or professional degree or graduate certificate; and (2) replacing references to "an educational program" with "a covered educational program" throughout the subsection, with conforming changes to program descriptions and metrics. (Thus, explicitly subjects gainful employment programs to the same accountability measures previously applied primarily to degree programs.)

This section repeals statutory delays enacted in P.L. 119-21 to Department of Education regulations on (1) borrower defense to repayment—under which federal student loan borrowers misled by their schools may obtain loan discharges—and (2) closed school discharges—under which borrowers unable to complete attendance at closed institutions receive automatic loan forgiveness. (Thus, the regulations apply without those delays.)

This section modifies the excise tax on net investment income of applicable educational institutions—private colleges and universities with at least 500 tuition-paying students and assets of at least $500,000 per student—by establishing a flat rate of 1.4% (from the applicable percentage). It also strikes the definition of applicable percentage, redesignates subsections, updates cross-references, and applies the changes to taxable years beginning after December 31, 2025.