; . (h) Notes and insurance certificates in combined payment plans Section 485A(f) of the Higher Education Act of 1965 ( 20 U.S.C. 1092a(f) ) is amended by adding at the end the following new paragraph: (3) Treatment of interest Not withstanding paragraphs (1) and (2), beginning on the date of enactment of the Student Loan Refinancing and Recalculation Act , interest on a loan reissued under subsection (e) shall not be capitalized, and interest shall only accrue on the percentage of such reissued loan that is equal to— (A) the amount of the outstanding principal on the original loan on the date it was reissued; divided by (B) the total amount of such reissued loan on the date such loan was reissued. . (i) Default reduction program Section 428F(a)(1)(E) of the Higher Education Act of 1965 ( 20 U.S.C. 1078–6(a)(1)(E) ) is amended— (1) in clause (i), by striking and at the end; (2) in clause (ii), by striking the period at the end and inserting a semicolon; and (3) by adding to the end the following: (iii) for a loan assigned on or after the date of enactment of the Student Loan Refinancing and Recalculation Act , the interest outstanding at the time of the assignment of such loan, and any interest accruing after such time, shall not be capitalized; and (iv) beginning on the date of enactment of the Student Loan Refinancing and Recalculation Act , interest shall only accrue on the percentage of such a loan that is equal to— (I) the amount of the outstanding principal on the original loan on the date it was assigned; divided by (II) the total amount of such assigned loan, including interest outstanding at the time of the assignment of such loan and the amount added by the guaranty agency in accordance with clause (i), on the date such loan was assigned. .