Sponsors (18)
The bill offers substantial targeted debt relief—especially $0 payments for very low‑income borrowers and time‑based cancellation for many undergraduates—while introducing stricter annual verification, phased‑out plan options for new enrollees, and rules (and compliance risks) that could raise payments or reduce flexibility for some borrowers.
Low-income borrowers (AGI ≤ 250% of the federal poverty level), including many students, will have $0 monthly payments under SOAR, reducing immediate financial strain and improving affordability.
Borrowers with eligible undergraduate loans who repay for 120 months (10 years), and borrowers with non-short-undergraduate or mixed loans who repay for 180 months (15 years), will have remaining balances canceled, reducing or eliminating long-term student debt for many borrowers.
Borrowers placed on SOAR will have monthly payments capped by the SOAR formula (with 5%/10% bands and proration rules) and at least half of each payment applied to principal, which limits payment size and accelerates principal reduction versus interest-first application.
Borrowers who fail to provide required documentation on time can be removed from SOAR and placed on a 10-year standard repayment schedule, which can substantially raise monthly payments.
Annual verification and required disclosure of tax data (or alternate documentation) increases administrative burden and raises privacy and data-sharing concerns for borrowers and taxpayers.
The bill phases out PAYE and ICR for new enrollments after two years, reducing repayment-plan choices and flexibility for future borrowers or those who later seek to switch plans.
Based on analysis of 2 sections of legislative text.
Adds a new income‑contingent repayment plan (SOAR), requires its adoption within 180 days, expands ICR eligibility for dependent-student PLUS loans, and phases out new enrollment/re-enrollment in PAYE and ICR after two years.
Introduced April 1, 2025 by Jeff Merkley · Last progress April 1, 2025
Creates a new income-contingent student loan repayment option called the Savings Opportunity and Affordable Repayment plan (SOAR) and requires the Department of Education to add it to the list of income-contingent plans within 180 days. The bill also phases out new enrollment and re-enrollment in two existing income-driven plans (Pay As You Earn and Income-Contingent Repayment) for most borrowers beginning two years after enactment, and expands eligibility of the Income-Contingent Repayment plan to explicitly cover certain Federal Direct PLUS loans for dependent students and related consolidation loans.