SIMPLE Act automatically connects student loan borrowers with income-driven repayment plans

WASHINGTON, DC – Congresswoman Suzanne Bonamici (D-OR) and Congressman Brian Fitzpatrick (R-PA) introduced updated legislation to help student loan borrowers avoid default.

The bipartisan Streamlining Income-driven, Manageable Payments on Loans for Education (SIMPLE) Act will help prevent student loan defaults by automatically enrolling struggling borrowers in income-driven repayment plans so they can repay based on financial ability. The legislation uses information already on file at the Department of Education and U.S. Treasury to connect borrowers automatically with existing repayment plans. The bill also removes the redundant annual paperwork for updating income information while enrolled in these plans, further lowering risk of default.

“For too many, student loan debt is a crippling burden that impacts borrowers’ involvement in our economy and achieving personal goals like owning a home, starting a family, and supporting the community. Investing in one’s own future through higher education should not lead to long-term financial distress,” said Congressman Brian Fitzpatrick. “Student loan defaults have damaging consequences for borrowers that can last for significant periods of time, an issue only worsened in the midst of the COVID-19 pandemic. I am proud to support the SIMPLE Act, which will provide our students and borrowers what they deserve: more efficient access to the repayment resources already at their disposal.” 

“Although the Biden-Harris administration has taken encouraging steps to improve student loan forgiveness and income-driven repayment plans, there is more we can do to help borrowers,” said Congresswoman Suzanne Bonamici, Chair of the Education & Labor Subcommittee on Civil Rights and Human Services. “The bipartisan SIMPLE Act will streamline the enrollment process for income-driven repayment plans, making it easier for borrowers to access affordable payments and avoid catastrophic defaults. It is unacceptable that people who invested time and resources in their education have to navigate a needlessly complicated student repayment system. The decision to go to college shouldn’t lead to financial ruin, and I’m glad to work across the aisle to find an urgent, common-sense solution to the convergent crises of growing student debt and diminishing college affordability.”

Defaulting on student loans can cause long-term financial damage, disproportionately affecting low-income borrowers and borrowers who have up to $10,000 in debt with no degree. The SIMPLE Act prioritizes and protects vulnerable student loan borrowers—those who are in immediate danger of default, and those who are totally and permanently disabled—from these severe consequences.

“Income-driven repayment (IDR) plans offer a lifeline for millions of student loan borrowers, making repayment more affordable and helping struggling borrowers avoid default. Unfortunately, the complexities of enrolling and remaining in IDR keep many vulnerable borrowers from accessing this important safety net. The SIMPLE Act would expand access to affordable income-driven repayment options by automatically enrolling struggling borrowers in IDR plans before they experience the punitive consequences of default. The bill also eliminates burdensome annual paperwork requirements, making it easier for borrowers to remain enrolled in IDR. The financial aid community stands in support of this bill,” said Justin Draeger, President & CEO, National Association of Student Financial Aid Administrators (NASFAA)

“We applaud Rep. Bonamici and Rep. Fitzpatrick for leading the bipartisan SIMPLE Act, which makes common-sense improvements to help student loan borrowers access more affordable repayment options and avoid the devastating consequences of loan default,” said Michele Streeter, Senior Director of College Affordability, The Institute for College Access & Success (TICAS).

In addition to NASFAA and TICAS, the SIMPLE Act is endorsed by Third Way and New America. 

You can read a summary of the SIMPLE Act here, and the full text of the bill here.