Higher Education Reform and Opportunity Act

The Higher Education Reform and Opportunity Act (S 2629) creates a new simplified federal student loan program while phasing out most traditional student loans by September 30, 2028. It establishes specific borrowing limits and interest rates for "Federal Direct simplification loans" (capping undergraduate annual loans at $15,000 for independent students), eliminates most student loan forgiveness programs for loans made after July 1, 2024, and requires colleges to publicly report detailed data on student outcomes, debt levels, and financial aid. The bill also allows states to create alternative accreditation systems for colleges and introduces a "default rate fine" for institutions with high student loan default rates. These changes would directly affect students seeking federal loans, colleges and universities, and the federal student loan program.