Sponsors (13)
The bill makes undergraduate loan repayment much more affordable for low-income borrowers and accelerates eventual cancellation, but it narrows repayment options, risks implementation challenges, and likely increases costs to taxpayers.
Low- and moderate-income borrowers with eligible undergraduate loans: monthly payments are capped by excluding income up to 250% of the federal poverty line, lowering or eliminating required payments for many.
Borrowers who meet service/time criteria: outstanding loan balances are automatically canceled after 10 years (120 payments) for qualifying short programs and 15 years (180 payments) for others, reducing long-term debt burdens.
Borrowers in the new plan: half of each required monthly payment is applied directly to principal, accelerating principal reduction and lowering long-term interest costs.
All taxpayers and federal borrowers: capping payments and allowing many $0 payments plus accelerated cancellation will reduce near-term federal loan receipts and increase the likelihood of taxpayer-funded costs from loan cancellations.
Borrowers: the bill phases out access to PAYE and ICR for new enrollees after two years and prohibits re-enrollment after leaving, reducing repayment-plan options and potentially locking some borrowers into less-favorable terms.
Borrowers and federal employees: implementing the new statutory regime and administrative procedures within the required timeframe may strain the Department of Education and loan servicers, risking enrollment errors, incorrect income verification, and delays in crediting payments toward cancellation.
Based on analysis of 2 sections of legislative text.
Adds a new income‑contingent repayment plan (SOAR) offered within 180 days and phases out new enrollment in PAYE and ICR two years after enactment.
Creates a new income‑contingent repayment option for federal student loans called the Savings Opportunity and Affordable Repayment plan and requires the Secretary of Education to offer it within 180 days of enactment. It also amends multiple Higher Education Act provisions to add the plan to statutory lists of repayment options and to define income‑contingent repayment terms (maximum repayment period up to 25 years). The bill also phases out future access to two existing income‑driven plans (Pay As You Earn and Income‑Contingent Repayment) for new enrollees two years after enactment, allowing those already using PAYE or ICR to continue but generally preventing new borrowers from choosing those plans after the cutoff date.
Official title: To amend the Higher Education Act of 1965 to provide for a Savings Opportunity and Affordable Repayment plan as an income contingent repayment plan.
Introduced April 23, 2026 by Rosa L. Delauro · Last progress April 23, 2026