; and (C) in the case of such a loan made to the borrower on behalf of a dependent student for the student’s enrollment in a program of undergraduate education, borrow loans made under this part that are not Federal Direct simplification loans under section 460A on behalf of such student through the close of September 30, 2028. (3) Loss of eligibility A borrower described in paragraph (2) who borrows a Federal Direct simplification loan made under section 460A for which the first disbursement is made before September 30, 2028, shall lose the borrower’s eligibility to borrow a loan under this part that is not a Federal Direct simplification loan under section 460A in accordance with paragraph (2). . (b) Federal Direct simplification loans Part D of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1087a et seq. ) is amended by adding at the end the following: 460A. Federal Direct simplification loans (a) In general Beginning on July 1, 2024, except as provided in section 451(e), the Secretary shall make loans to borrowers under this section. Loans made under this section shall be known as Federal Direct simplification loans. (b) Federal Direct simplification loans The provisions of this part shall apply with respect to Federal Direct simplification loans, except that Federal Direct simplification loans shall be made in accordance with the following: (1) The applicable rate of interest on a loan made under this section shall— (A) in the case of such loans issued to undergraduate students, for loans disbursed during any 12-month period beginning on July 1 and ending on June 30, be determined on the preceding June 1 and be equal to the lesser of— (i) a rate equal to the high yield of the 10-year Treasury note auctioned at the final auction held prior to such June 1 plus 2.05 percent; or (ii) 8.25 percent