II
119THCONGRESS
1
STSESSION S. 1220
To amend the Higher Education Act of 1965 to provide for a Savings
Opportunity and Affordable Repayment plan as an income contingent
repayment plan.
IN THE SENATE OF THE UNITED STATES
APRIL1 (legislative day, MARCH31), 2025
Mr. M
ERKLEY(for himself, Mr. KAINE, Mr. SCHUMER, Ms. HIRONO, Mr.
B
LUMENTHAL, Ms. WARREN, Mr. WELCH, Mrs. GILLIBRAND, Mr.
P
ADILLA, Mr. BOOKER, Ms. SMITH, Mr. SANDERS, Mr. WYDEN, Mr.
K
IM, and Mr. MARKEY) introduced the following bill; which was read
twice and referred to the Committee on Health, Education, Labor, and
Pensions
A BILL
To amend the Higher Education Act of 1965 to provide
for a Savings Opportunity and Affordable Repayment
plan as an income contingent repayment plan.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘Savings Opportunity 4
and Affordable Repayment Act’’. 5
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SEC. 2. SAVINGS OPPORTUNITY AND AFFORDABLE REPAY-1
MENT PLAN. 2
(a) A
MENDMENTS TO THE HIGHEREDUCATIONACT 3
OF1965.—The Higher Education Act of 1965 (20 U.S.C. 4
1001 et seq.) is amended— 5
(1) in section 428(b)(9)(A)— 6
(A) in clause (iv), by striking ‘‘and’’ after 7
the semicolon; 8
(B) in clause (v), by striking the period at 9
the end and inserting ‘‘; and’’; and 10
(C) by adding at the end the following: 11
‘‘(vi) beginning on the date that is 12
180 days after the date of enactment of 13
the Savings Opportunity and Affordable 14
Repayment Act, an income contingent re-15
payment plan known as the ‘Savings Op-16
portunity and Affordable Repayment plan’, 17
consistent with section 493E.’’; 18
(2) in section 428C(c)(2)(A)— 19
(A) in the first sentence, by striking ‘‘or 20
income-based’’ and inserting ‘‘income-based, or 21
income contingent Savings Opportunity and Af-22
fordable Repayment (consistent with section 23
493E)’’; and 24
(B) in the second sentence, by striking ‘‘or 25
income-based’’ and inserting ‘‘income-based, or 26
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income contingent Savings Opportunity and Af-1
fordable Repayment’’; 2
(3) in section 455(d)— 3
(A) in paragraph (1), by striking subpara-4
graph (D) and inserting the following: 5
‘‘(D) except as provided in paragraph (6), 6
an income contingent repayment plan— 7
‘‘(i) with varying annual repayment 8
amounts based on the income of the bor-9
rower, paid over an extended period of 10
time prescribed by the Secretary, not to 11
exceed 25 years, except that the plan de-12
scribed in this clause shall not be available 13
to the borrower of a Federal Direct PLUS 14
loan made on behalf of a dependent stu-15
dent; and 16
‘‘(ii) which, beginning on the date 17
that is 180 days after the date of enact-18
ment of the Savings Opportunity and Af-19
fordable Repayment Act, shall include the 20
‘Savings Opportunity and Affordable Re-21
payment plan’, consistent with section 22
493E; and’’; and 23
(B) by adding at the end the following: 24
‘‘(6) P
HASE OUTS.— 25
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‘‘(A) PAYE REPAYMENT PLAN.— 1
‘‘(i) I
N GENERAL.—A borrower may 2
choose the Pay As You Earn Repayment 3
Plan, as described in section 685.209 of 4
title 34, Code of Federal Regulations (as 5
in effect on January 19, 2025), as an in-6
come contingent repayment plan pursuant 7
to paragraph (1)(D)— 8
‘‘(I) before the date that is 2 9
years after the date of enactment of 10
the Savings Opportunity and Afford-11
able Repayment Act, only if the bor-12
rower— 13
‘‘(aa) has loans eligible for 14
repayment under such plan, as 15
described in such section as in ef-16
fect on such date; and 17
‘‘(bb) has a partial financial 18
hardship when the borrower ini-19
tially enters such plan, as de-20
scribed in such section as in ef-21
fect on such date; and 22
‘‘(II) on or after the date that is 23
2 years after the date of enactment of 24
the Savings Opportunity and Afford-25
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able Repayment Act, only if the bor-1
rower meets the conditions described 2
in subclause (I) and was repaying a 3
loan under such plan before such date 4
that is 2 years after the date of enact-5
ment of the Savings Opportunity and 6
Affordable Repayment Act. 7
‘‘(ii) P
ROHIBITION AGAINST RE -EN-8
ROLLMENT.—Beginning on the date that is 9
2 years after the date of enactment of the 10
Savings Opportunity and Affordable Re-11
payment Act, a borrower who was repaying 12
a loan under the Pay As You Earn Repay-13
ment Plan, as described in clause (i), and 14
changes to a different repayment plan may 15
not re-enroll in the Pay As You Earn Re-16
payment Plan. 17
‘‘(B) I
NCOME CONTINGENT REPAYMENT 18
PLAN.— 19
‘‘(i) I
N GENERAL.—A borrower may 20
choose the ICR plan, as described in sec-21
tion 685.209 of title 34, Code of Federal 22
Regulations (as in effect on January 19, 23
2025), as an income contingent repayment 24
plan pursuant to paragraph (1)(D)— 25
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‘‘(I) before the date that is 2 1
years after the date of enactment of 2
the Savings Opportunity and Afford-3
able Repayment Act, only if the bor-4
rower has loans eligible for repayment 5
under such plan, as described in such 6
section as in effect on such date, ex-7
cept as provided in clause (iii); and 8
‘‘(II) on or after the date that is 9
2 years after the date of enactment of 10
the Savings Opportunity and Afford-11
able Repayment Act, only if the bor-12
rower has loans eligible for repayment 13
under such plan, as described in such 14
section as in effect on such date, ex-15
cept as provided in clause (iii), and 16
was repaying a loan under such plan 17
before such date that is 2 years after 18
the date of enactment of the Savings 19
Opportunity and Affordable Repay-20
ment Act. 21
‘‘(ii) P
ROHIBITION AGAINST RE -EN-22
ROLLMENT.—Beginning on the date that is 23
2 years after the date of enactment of the 24
Savings Opportunity and Affordable Re-25
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payment Act, a borrower who was repaying 1
a loan under the ICR plan, as described in 2
clause (i), and changes to a different re-3
payment plan may not re-enroll in the ICR 4
plan. 5
‘‘(iii) E
LIGIBLE LOANS FOR PURPOSES 6
OF ICR REPAYMENT .—In addition to the 7
loans eligible for repayment under the ICR 8
plan as described in section 685.209 of 9
title 34, Code of Federal Regulations (as 10
in effect on January 19, 2025), an eligible 11
loan for purposes of repayment under the 12
ICR plan may include— 13
‘‘(I) a Federal Direct PLUS 14
Loan made on behalf of a dependent 15
student; 16
‘‘(II) a Federal Direct Consolida-17
tion Loan for which the proceeds were 18
used to discharge the liability on a 19
Federal Direct PLUS Loan or a loan 20
under section 428B made on behalf of 21
a dependent student; 22
‘‘(III) a loan under section 428B 23
made on behalf of a dependent stu-24
dent; or 25
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‘‘(IV) a loan under section 428C 1
for which the proceeds were used to 2
discharge the liability on a Federal 3
Direct PLUS Loan or a loan under 4
section 428B made on behalf of a de-5
pendent student.’’; and 6
(4) by inserting after section 493D the fol-7
lowing: 8
‘‘SEC. 493E. SAVINGS OPPORTUNITY AND AFFORDABLE RE-9
PAYMENT PLAN. 10
‘‘(a) D
EFINITIONS.—In this section: 11
‘‘(1) E
LIGIBLE LOAN.— The term ‘eligible loan’ 12
means a loan made, insured, or guaranteed under 13
part B or D. 14
‘‘(2) M
ONTHLY PAYMENT OBLIGATION .— 15
‘‘(A) I
N GENERAL.—The term ‘monthly 16
payment obligation’, when used with respect to 17
a borrower, means that for such borrower the 18
monthly payment amount due on the total 19
amount of eligible loans made to such borrower 20
that is equal to, except as provided in subpara-21
graph (B)— 22
‘‘(i) $0 for the portion of the bor-23
rower’s, and the borrower’s spouse’s (if ap-24
plicable), adjusted gross income (as defined 25
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in section 62 of the Internal Revenue Code 1
of 1986) that is less than or equal to 250 2
percent of the poverty line applicable to the 3
borrower’s family size as determined under 4
section 673(2) of the Community Services 5
Block Grant Act (42 U.S.C. 9902(2)); plus 6
‘‘(ii) 5 percent of the portion of the 7
borrower’s, and the borrower’s spouse’s (if 8
applicable), adjusted gross income (as de-9
fined in section 62 of the Internal Revenue 10
Code of 1986) that is greater than 250 11
percent of the poverty line applicable to the 12
borrower’s family size as determined under 13
section 673(2) of the Community Services 14
Block Grant Act (42 U.S.C. 9902(2)), pro-15
rated by the percentage that is the result 16
of dividing the borrower’s original total 17
loan balance attributable to eligible loans 18
received for the borrower’s undergraduate 19
study by the original total loan balance at-20
tributable to all eligible loans, divided by 21
12; plus 22
‘‘(iii) for loans not subject to clause 23
(ii), 10 percent of the portion of the bor-24
rower’s, and the borrower’s spouse’s (if ap-25
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plicable), adjusted gross income (as defined 1
in section 62 of the Internal Revenue Code 2
of 1986) that is greater than 250 percent 3
of the poverty line applicable to the bor-4
rower’s family size as determined under 5
section 673(2) of the Community Services 6
Block Grant Act (42 U.S.C. 9902(2)), pro-7
rated by the percentage that is the result 8
of dividing the borrower’s original total 9
loan balance minus the original total loan 10
balance of loans subject to clause (ii) by 11
the borrower’s original total loan balance 12
attributable to all eligible loans, divided by 13
12. 14
‘‘(B) M
INIMAL PAYMENT OBLIGATION .—If 15
the calculation of the monthly payment amount 16
due under subparagraph (A) for a borrower 17
is— 18
‘‘(i) less than $5, then the monthly 19
payment obligation for such borrower is 20
equal to $0; and 21
‘‘(ii) equal to or greater than $5 but 22
less than $10, then the monthly payment 23
obligation for such borrower is equal to 24
$10. 25
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‘‘(b) SAVINGSOPPORTUNITY AND AFFORDABLERE-1
PAYMENTAUTHORIZED.—Notwithstanding any other pro-2
vision of this Act, the Secretary shall carry out a Savings 3
Opportunity and Affordable Repayment plan program 4
that complies with the following: 5
‘‘(1) A borrower of any eligible loan may elect 6
to have the borrower’s aggregate monthly payment 7
for all such loans not exceed the monthly payment 8
obligation of such borrower. 9
‘‘(2) The holder of such eligible loan shall 10
apply— 11
‘‘(A) 50 percent of the borrower’s monthly 12
payment under this subsection toward out-13
standing principal; and 14
‘‘(B) 50 percent of the borrower’s monthly 15
payment under this subsection— 16
‘‘(i) first toward accrued charges and 17
collection costs on the loan; 18
‘‘(ii) then toward outstanding interest; 19
and 20
‘‘(iii) then toward outstanding prin-21
cipal. 22
‘‘(3) During all periods of repayment on all 23
loans being repaid under the Savings Opportunity 24
and Affordable Repayment plan, the Secretary shall 25
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not charge the borrower’s account any accrued inter-1
est that is not covered by the borrower’s monthly 2
payment obligation. 3
‘‘(4) Any principal due and not paid under 4
paragraph (2) shall be deferred. 5
‘‘(5) In the case of a borrower repaying under 6
the Savings Opportunity and Affordable Repayment 7
plan, the Secretary shall cancel the remaining bal-8
ance due on all eligible loans for a borrower in the 9
case the borrower— 10
‘‘(A) is repaying only eligible loans received 11
for undergraduate study, or a consolidation 12
loan that repaid only loans received for such 13
study, for which the borrower’s attendance in 14
such undergraduate study was not more than 2 15
years, after the borrower has satisfied 120 16
monthly payments or the equivalent (as de-17
scribed in paragraph (6)), over a period of at 18
least 10 years; and 19
‘‘(B) is repaying at least one eligible loan 20
not described in subparagraph (A), after the 21
borrower has satisfied 180 monthly payments 22
or the equivalent (as described in paragraph 23
(6)), over a period of at least 15 years. 24
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‘‘(6) A monthly payment or the equivalent shall 1
be satisfied by any of the following: 2
‘‘(A) A month in which the borrower— 3
‘‘(i) makes a monthly payment that is 4
equal to not less than the monthly pay-5
ment obligation of the borrower; or 6
‘‘(ii) has a monthly payment obliga-7
tion of $0. 8
‘‘(B) A month in which the borrower re-9
ceives a deferment or forbearance of repayment 10
under any of the following: 11
‘‘(i) A cancer treatment deferment 12
under section 455(f)(3). 13
‘‘(ii) A rehabilitation training program 14
deferment. 15
‘‘(iii) An unemployment deferment. 16
‘‘(iv) An economic hardship 17
deferment, which includes volunteer service 18
in the Peace Corps as an economic hard-19
ship condition. 20
‘‘(v) A military service deferment. 21
‘‘(vi) A post active-duty student 22
deferment. 23
‘‘(vii) A national service forbearance. 24
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‘‘(viii) A national guard duty forbear-1
ance. 2
‘‘(ix) A Department of Defense Stu-3
dent Loan Repayment forbearance. 4
‘‘(x) An administrative forbearance 5
under a period— 6
‘‘(I) during which the Secretary 7
has authorized forbearance due to a 8
national military mobilization or other 9
local or national emergency; 10
‘‘(II) necessary for the Secretary 11
to collect and process documentation 12
supporting the borrower’s request for 13
a deferment, forbearance, change in 14
repayment plan, or consolidation loan; 15
or 16
‘‘(III) determined necessary by 17
the Secretary. 18
‘‘(xi) A bankruptcy forbearance if the 19
borrower made the required payments on a 20
confirmed bankruptcy plan. 21
‘‘(C) A month in which the borrower re-22
ceives a deferment or forbearance of repayment 23
not described in subparagraph (B), but for 24
which the borrower makes an additional pay-25
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ment equal to or greater than their monthly 1
payment obligation (including a monthly pay-2
ment obligation of $0), for a deferment or for-3
bearance that ended within 3 years of the date 4
of such additional payment and occurred on or 5
after the date that is 180 days after the date 6
of enactment of the Savings Opportunity and 7
Affordable Repayment Act. 8
‘‘(D) A month in which the borrower— 9
‘‘(i) makes a payment pursuant to a 10
repayment plan under section 493C or sec-11
tion 455(d)(1)(E), or another income con-12
tinent repayment plan under section 13
455(d)(1)(D), or had a monthly payment 14
obligation under such a plan of $0; 15
‘‘(ii) makes a payment under the 16
standard repayment plan, as described in 17
section 428(b)(9)(A)(i); or 18
‘‘(iii) makes a payment under a repay-19
ment plan with payments that are as least 20
as much as they would have been under 21
the standard repayment plan, as described 22
in section 428(b)(9)(A)(i). 23
‘‘(7) A borrower who is repaying an eligible 24
loan pursuant to this section may elect, at any time, 25
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to terminate repayment pursuant to this section and 1
repay such loan under any other repayment plan for 2
which the borrower is eligible. 3
‘‘(8) A borrower who is repaying an eligible 4
loan pursuant to this section may— 5
‘‘(A) pay in multiple installments that 6
equal the full scheduled monthly payment obli-7
gation of such borrower; or 8
‘‘(B) pay a lump sum or monthly payment 9
amount that is equal to or greater than the full 10
scheduled monthly payment obligation of such 11
borrower in advance of the borrower’s scheduled 12
payment due date for a period of months not to 13
exceed the period from the Secretary’s receipt 14
of the payment until the borrower’s next annual 15
repayment plan recertification date. 16
‘‘(c) E
LIGIBILITYDETERMINATIONS.— 17
‘‘(1) I
N GENERAL.—The Secretary shall estab-18
lish procedures for annually determining the bor-19
rower’s eligibility for repayment under this section, 20
including verification of a borrower’s annual income 21
and the annual amount due on the total amount of 22
eligible loans, and such other procedures as are nec-23
essary to effectively implement repayment under this 24
section. 25
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‘‘(2) PROCEDURES FOR ELIGIBILITY .—The Sec-1
retary shall— 2
‘‘(A) consider, but is not limited to, the 3
procedures established in accordance with sec-4
tion 455(e)(1); and 5
‘‘(B) carry out, with respect to borrowers 6
of any eligible loan, procedures for repayment 7
plans that are equivalent to the procedures car-8
ried out under section 455(e)(8) with respect to 9
other income contingent repayment plans. 10
‘‘(3) F
AILURE TO TIMELY CERTIFY INFORMA -11
TION.—If the Secretary requires information from 12
the borrower to recalculate the borrower’s monthly 13
payment obligation under this section, and the bor-14
rower does not provide the necessary documentation 15
to the Secretary by the time the Secretary requires 16
such documentation, the Secretary shall remove the 17
borrower from the Savings Opportunity and Afford-18
able Repayment plan under this section and place 19
the borrower on an alternative repayment plan 20
under which the borrower’s required monthly pay-21
ment is the amount the borrower would have paid on 22
a 10-year standard repayment plan based on the 23
current eligible loan balances and interest rates on 24
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the eligible loans at the time the borrower is re-1
moved from the plan under this section. 2
‘‘(4) P
ROCEDURES.— 3
‘‘(A) A
PPROVAL FOR THE DISCLOSURE OF 4
TAX INFORMATION.—A borrower shall provide 5
approval for the disclosure of applicable tax in-6
formation to the Secretary to initially enter re-7
payment, or recertify the borrower’s intent to 8
repay, under this section either as part of the 9
process of completing a Direct Loan Master 10
Promissory Note or a Direct Consolidation 11
Loan Application and Promissory Note in ac-12
cordance with sections 455(e)(8) and 13
493C(c)(2) or on an application form approved 14
by the Secretary. 15
‘‘(B) F
AILURE TO PROVIDE APPROVAL .—If 16
a borrower does not provide approval for the 17
disclosure of applicable tax information pursu-18
ant to subparagraph (A), the borrower shall 19
provide documentation of the borrower’s income 20
and family size to the Secretary. 21
‘‘(C) I
NABILITY TO OBTAIN INFORMATION 22
FROM THE IRS.—If the Secretary has received 23
approval for disclosure of applicable tax infor-24
mation pursuant to subparagraph (A), but can-25
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not obtain the borrower’s income and family 1
size from the Internal Revenue Service, the bor-2
rower and, if applicable, the borrower’s spouse, 3
shall provide documentation of income and fam-4
ily size to the Secretary. 5
‘‘(D) C
ALCULATION OF PAYMENT 6
AMOUNT.—After the Secretary obtains suffi-7
cient information to calculate the borrower’s 8
monthly payment obligation, the Secretary 9
shall— 10
‘‘(i) calculate the borrower’s monthly 11
payment obligation; and 12
‘‘(ii) establish the 12-month period 13
during which the borrower will be obligated 14
to make payments in the amount of the 15
monthly payment obligation. 16
‘‘(E) R
EPAYMENT DISCLOSURE .—The Sec-17
retary shall send to each borrower a repayment 18
disclosure that— 19
‘‘(i) specifies the borrower’s calculated 20
monthly payment obligation; 21
‘‘(ii) explains how the payment was 22
calculated; 23
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‘‘(iii) informs the borrower of the 1
terms and conditions of repayment under 2
this section; and 3
‘‘(iv) informs the borrower of how to 4
contact the Secretary if the calculated 5
monthly payment obligation amount is not 6
reflective of the borrower’s current income 7
or family size. 8
‘‘(F) R
EQUEST FOR RECALCULATION .— 9
‘‘(i) I
N GENERAL.—If a borrower be-10
lieves that the calculated monthly payment 11
obligation amount is not reflective of the 12
borrower’s current income or family size, 13
the borrower may request that the Sec-14
retary recalculate the monthly payment ob-15
ligation amount. 16
‘‘(ii) A
LTERNATIVE DOCUMENTA -17
TION.—To support a request under clause 18
(i), the borrower shall submit alternative 19
documentation of income or family size not 20
based on tax information to account for 21
circumstances such as a decrease in in-22
come since the borrower last filed a tax re-23
turn, the borrower’s separation from a 24
spouse with whom the borrower had pre-25
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viously filed a joint tax return, the birth or 1
impending birth of a child, or other com-2
parable circumstances. 3
‘‘(G) F
ORBEARANCE.—If a borrower pro-4
vides alternative documentation under subpara-5
graph (F) or if the Secretary receives docu-6
mentation from the borrower or the borrower’s 7
spouse under subparagraph (C), the Secretary 8
shall grant forbearance to provide time for the 9
Secretary to recalculate the borrower’s monthly 10
payment obligation based on the documenta-11
tion. 12
‘‘(H) 3
MONTHLY PAYMENTS REMAIN -13
ING.—Once a borrower has 3 monthly pay-14
ments remaining under a 12-month period spec-15
ified under subparagraph (D), the Secretary 16
shall follow the procedures described in sub-17
paragraphs (C) through (G). 18
‘‘(I) R
ESETTING OF 12-MONTH PERIOD.— 19
At any point during a 12-month period speci-20
fied under subparagraph (D), a borrower may 21
request that the Secretary recalculate the bor-22
rower’s monthly payment obligation earlier than 23
would have otherwise been the case to account 24
for a change in the borrower’s circumstances, 25
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abielarski on DSK125SN23PROD with BILLS 22
•S 1220 IS
such as a loss of income or employment or di-1
vorce. In such a case, the 12-month period 2
specified under subparagraph (D) shall be reset 3
based on the borrower’s new information. 4
‘‘(J) T
RACKING FORGIVENESS .—The Sec-5
retary shall track a borrower’s progress toward 6
eligibility for loan cancellation under subsection 7
(b)(5) and cancel loans that meet the criteria 8
under such subsection without the need for an 9
application or documentation from the bor-10
rower. 11
‘‘(d) M
ARRIEDBORROWERS.— 12
‘‘(1) C
ALCULATION BASED SOLELY ON BOR -13
ROWER’S INFORMATION.—In the case of a married 14
borrower, the Secretary shall calculate the amount 15
of the borrower’s monthly payment obligation under 16
this section solely on the basis of the borrower’s eli-17
gible loan debt and adjusted gross income (as de-18
fined in section 62 of the Internal Revenue Code of 19
1986) if— 20
‘‘(A) the borrower files a separate Federal 21
income tax return; or 22
‘‘(B) the borrower files a joint Federal in-23
come tax return and certifies that the borrower 24
is currently separated from the borrower’s 25
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•S 1220 IS
spouse or is currently unable to reasonably ac-1
cess the spouse’s income. 2
‘‘(2) C
ALCULATION INCLUDING SPOUSE ’SIN-3
FORMATION.—In the case of a married borrower not 4
described in subparagraph (A) or (B), the Secretary 5
shall— 6
‘‘(A) include the spouse’s income in the 7
calculation of the borrower’s monthly payment 8
obligation under this section; and 9
‘‘(B) if the spouse has eligible loan debt, 10
adjust the borrower’s monthly payment obliga-11
tion under this section by— 12
‘‘(i) dividing the outstanding principal 13
and interest balance of the borrower’s eli-14
gible loans by the couple’s combined out-15
standing principal and interest balance on 16
eligible loans; and 17
‘‘(ii) multiplying the borrower’s pay-18
ment amount as calculated under sub-19
section (a)(5) by the percentage deter-20
mined under clause (i).’’; and 21
(5) in section 494(a)(2)(A)— 22
(A) in the matter preceding clause (i), by 23
inserting ‘‘or a Savings Opportunity and Af-24
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•S 1220 IS
fordable Repayment plan for a loan under part 1
B’’ after ‘‘part D’’; and 2
(B) in clause (ii)(I), by inserting ‘‘or sec-3
tion 493E(c)(2)(B)’’ after ‘‘section 4
493C(c)(2)(B)’’. 5
Æ
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abielarski on DSK125SN23PROD with BILLS