The TEACH Improvement Act of 2026 significantly amends the Higher Education Act of 1965, focusing on the Teacher Education Assistance for College and Higher Education (TEACH) Grant program. Its primary purpose is to enhance the effectiveness and fairness of the program, particularly by addressing issues related to the conversion of grants into loans. The bill adjusts grant amounts, providing up to $4,000 for the first two years and $5,000 for the subsequent two years for undergraduate and post-baccalaureate students, with a total cap of $18,000. Graduate students can receive $5,000 annually, up to a total of $10,000. It also refines the definition of an eligible institution , requiring high-quality teacher preparation, financial responsibility, and robust pedagogical support. A key provision establishes a detailed process for recipients to request reconsideration of loan conversions , including those that occurred before the Act's enactment. If a conversion was due to administrative error, processing delays, or changes in high-need fields, the Secretary must discharge the loan, reinstate the grant, and reimburse any payments made, while also removing negative credit reporting. New institutional accountability measures are introduced, penalizing institutions with high rates of TEACH Grant conversions to loans. Institutions where 50% or more of graduates have had their grants converted face temporary ineligibility to offer new grants, while those with 40% conversion rates face heightened requirements, such as not offering grants to first-year students and establishing task forces to improve conversion rates. The bill also mandates increased transparency and support for recipients and institutions. The Secretary must provide technical assistance, disseminate best practices for minimizing loan conversions, and maintain publicly available lists of qualifying schools and high-need fields. Furthermore, it requires annual reports on program outcomes, loan conversion data, and recipient demographics. Finally, the Act includes provisions for servicer accountability , requiring the Secretary to prescribe regulations ensuring third-party servicers properly perform their contractual obligations and are held responsible for any loss of benefits to TEACH Grant recipients due to their failures. These amendments are set to take effect on July 1, 2026.