New Student Loan Bill Would Help Borrowers Access More Affordable Payments
Summary
A new bill called the SIMPLE Act was introduced in Congress to help federal student loan borrowers avoid missing payments and defaulting. It would automatically enroll borrowers who are late on payments into affordable income-driven repayment plans using their tax information.Key Facts
- The SIMPLE Act aims to place struggling borrowers into affordable payment plans before they default.
- It was introduced by Oregon Democratic Representative Suzanne Bonamici and other Democrats.
- The bill uses taxpayers' existing income data to determine eligibility for repayment plans.
- Borrowers 31 days late would get notices about their repayment options.
- If borrowers are 75 days late and have not chosen a plan, they would be automatically enrolled in the best income-driven plan.
- The bill would remove the need for annual paperwork for those already in income-driven repayment plans.
- About 13% of student loan borrowers have defaulted, affecting roughly 9 million people who owe $220 billion.
- The goal is to reduce confusion and prevent serious consequences like wage garnishment and credit damage without forgiving the debt.
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