Sponsors (7)
The bill makes it easier for delinquent and low‑income borrowers to get lower or $0 monthly payments and reduces paperwork by using IRS data, but it trades off privacy, risks misclassification of income, and could alter repayment or forgiveness outcomes for borrowers who miss notices or do not affirmatively consent.
Delinquent borrowers (especially students and low-income individuals) will be automatically placed into lower‑payment income‑driven repayment plans, immediately reducing monthly payments and lowering short‑term default risk.
The Department can automatically use IRS income and household data (with borrower approval), cutting paperwork and administrative burden for borrowers and simplifying income verification.
Borrowers whose calculated payments are $0 because AGI is unavailable will remain at a $0 payment without needing to submit additional income documentation, preserving immediate affordability for many low‑income borrowers.
Automatic changes to repayment status could occur without affirmative, informed consent if borrowers miss notices, potentially altering repayment terms or harming long‑term forgiveness or credit outcomes for many borrowers.
Borrowers' tax return information will be shared with the Department of Education (even if disclosure requires approval or request), raising significant privacy and data‑security concerns for students and taxpayers.
Relying on IRS data risks misclassifying household income or family size after recent life changes (e.g., marriage, dependents, job loss), producing inappropriate payment amounts unless borrowers actively update information.
Based on analysis of 2 sections of legislative text.
Authorizes IRS-to-Education sharing of return data (with borrower consent) to auto-notify and in many cases auto-enroll delinquent or rehabilitating borrowers into income-driven or lower-payment plans.
Official title: To amend the Higher Education Act of 1965 to include notification and automatic enrollment procedures for borrowers who are delinquent on loans, and for other purposes.
Introduced September 2, 2026 by Suzanne Bonamici · Last progress September 2, 2026
Uses IRS return data (with borrower consent and an opt-out) to determine income and family size so the Department of Education can notify and, in many cases, automatically enroll delinquent or rehabilitating federal student loan borrowers into income-driven or lower-payment plans. It also smooths recertification so borrowers whose adjusted gross income (AGI) is unavailable and whose calculated payment is $0 remain on $0 plans without extra paperwork. Changes to IRS disclosure rules let the IRS share limited return information with Education for this purpose; most provisions take effect on enactment, while automatic-enrollment rules phase in starting July 1, 2028 (award year 2028–2029).