SIMPLE Act

Summary#

The SIMPLE Act would change the Higher Education Act to give the Department of Education new ways to notify and automatically enroll certain federal student loan borrowers into lower-cost repayment plans. The Department could use taxpayers' return information from the IRS to figure out a borrower's income and family size, unless the borrower opts out and provides other paperwork.

The bill requires the Department to send a notice to borrowers who are at least 31 days delinquent. The notice must list the borrower’s loans, describe repayment plans the borrower may be eligible for, show estimated monthly payments (using IRS income data when available), and explain how to pick a plan. If a borrower is at least 75 days delinquent and their current plan has higher monthly payments than the lowest available income-driven repayment plan for their covered loans, the Department would automatically select the income-driven plan that gives the lowest monthly payment (or the plan with the most favorable terms if there are ties). Borrowers could change the Department’s selection.

For borrowers rehabilitating defaulted loans, the Department would notify the borrower after the 6th required rehabilitation payment and would select a low-payment income-driven plan after the 9th required payment if eligible. The bill adds definitions for covered loan and income-driven repayment plan, updates rules for automatic recertification when adjusted gross income is unavailable so some borrowers can keep a $0 monthly payment, and adjusts tax-return disclosure authority so the IRS can share return data with the Department of Education for these purposes.

The automatic-notice and automatic-enrollment parts of the bill would apply to covered loans starting July 1, 2028 (award year 2028–2029 and later). Changes about switching repayment plans would take effect on enactment. IRS disclosure changes apply after enactment.

What it means for you#

• If you are 31 days late on a covered federal student loan, you would get a notice listing your loans and repayment options and showing estimated monthly payments.
• If you do not pick a new plan and become 75 days late, the Department could automatically put you on the income-driven plan that gives the lowest monthly payment for your covered loans. You can change that selection.
• If you are rehabilitating a defaulted loan, you would get a notice after the 6th required payment and may be placed on a low-payment income-driven plan after the 9th required payment.
• The Department could use IRS return data to calculate payments unless you opt out and provide other paperwork. You can opt out at any time.
• Some borrowers whose income data are not available could be automatically recertified for $0 payments under certain income-contingent plans without providing new documents.

Expenses#

No publicly available information on costs or budgetary effects is included in the bill text provided.

Proponents' View#

No publicly available information.

Opponents' View#

No publicly available information.