This bill, titled the Student Loan Reform Act, establishes an Institutional Cosigner Program under the Higher Education Act of 1965, effective July 1, 2026. Under this program, institutions of higher education may elect to cosign all eligible direct federal student loans for their enrolled students. Participating institutions must enter into an agreement with the Secretary of Education, committing to cosign these loans and adhere to specific liability terms. A key provision outlines cosigner liability : if a student defaults on a cosigned loan and it is not rehabilitated within 90 days, the institution becomes responsible for repaying the outstanding principal and interest under a 10-year standard repayment plan. Importantly, the borrower's default status for credit reporting and debt collection purposes remains unaffected, even if the institution makes payments. In return for assuming this risk, cosigned loans will receive a reduced interest rate , determined by the Secretary to be proportionate to the decreased risk. The Secretary is also directed to revise the master promissory note to include these cosigner terms and the reduced interest rate. Annually, the Department of Education must publish a list of all participating institutions. Furthermore, the bill modifies the cohort default rate threshold : institutions participating in the cosigner program will have a higher threshold of 40 percent, compared to 30 percent for non-participating institutions, for certain federal aid eligibility determinations.