This bill would add a new income-contingent repayment option called the Savings Opportunity and Affordable Repayment plan. It changes the Higher Education Act to let borrowers set monthly payments based on their adjusted gross income and family size, using 250% of the poverty line as a key threshold. For income at or below 250% of the poverty line the monthly payment would be $0. For income above that threshold, the plan sets payments at 5% of the income portion tied to undergraduate loan balances and 10% for other loan balances, with those shares prorated by original loan balance. Payments under the plan are split so 50% goes directly to outstanding principal and 50% goes first to fees and collection costs, then to interest, then to principal. The bill prohibits charging borrowers accrued interest that their monthly payment does not cover, and any unpaid principal is deferred. The plan offers loan cancellation after either 120 qualifying monthly payments (10 years) for borrowers who only repaid certain short undergraduate programs or 180 qualifying payments (15 years) if the borrower repays at least one other type of eligible loan. The Secretary would set annual recertification procedures, use tax data where authorized, allow borrowers to request recalculation for changed circumstances, and track forgiveness automatically.
If you enroll, your monthly payment would be based on your adjusted gross income and family size, with payments possibly $0 if income is at or below 250% of the poverty line. Your payment would be calculated partly by how much of your original loan balance came from undergraduate loans versus other loans. Half of each monthly payment would reduce principal immediately; the other half would pay fees, then interest, then principal. If you do not provide required income documentation when asked, you could be removed from this plan and put on a 10-year standard repayment schedule. You may stop using this plan at any time and move to another eligible repayment plan, and you may make extra or lump-sum payments. The plan specifies many types of deferment and forbearance months that still count toward the required payment totals for loan cancellation.
No publicly available information on federal budgetary costs or projected savings is included in the bill text or metadata provided. The bill directs the Secretary to carry out and administer the plan but does not include an official cost estimate within the text provided.
No publicly available information.
No publicly available information.