This bill modifies the Higher Education Act of 1965 by establishing that State-based education loan programs are excluded from certain requirements related to preferred lender arrangements. It defines these programs as those provided by a State agency, authority, or nonprofit organization, which are authorized by State law and offer loans not funded, insured, or guaranteed by the Federal Government. A key provision mandates that these State-based programs must offer interest rates and fees that are at least as favorable as Direct PLUS loans at the time of origination. Furthermore, institutions of higher education must advise borrowers about their opportunity to exhaust eligibility for Federal education loans and inform them of the benefits of such loans, including income-driven repayment and loan forgiveness options, before they accept a State-based loan.