Wyden, Bonamici Announce Bipartisan Effort to Prevent Student Loan Defaults
SIMPLE Act Provides Relief to At-Risk Student Loan Borrowers
Washington, D.C. – Senate Finance Committee Ranking Member Sen. Ron Wyden, D-Ore., Congresswoman Suzanne Bonamici, D-Ore., and a bipartisan group of colleagues announced the SIMPLE Act, legislation to reduce administrative burdens on struggling student loan borrowers. The legislation allows vulnerable borrowers to automatically enroll in affordable income-driven loan repayment plans and it removes burdensome paperwork requirements for totally and permanently disabled borrowers whose loans are discharged. The SIMPLE Act will also help borrowers keep payments affordable by automating the annual process of updating borrowers’ income information while enrolled in income-driven repayment plans.
Last year, more than one million borrowers defaulted on their student loans. Overall, more than eight million borrowers are in default, and many more are behind on payments. These borrowers are often vulnerable, and many would qualify for lower payments in an existing income-driven repayment plan. Unfortunately, navigating the enrollment process for an income-driven repayment plans and continuing to submit annual documentation to qualify for affordable payments can be difficult. The SIMPLE (Streamlining Income-driven, Manageable Payments on Loans for Education) Act helps more borrowers participate in income-driven repayment plans.
“People who’ve taken out student loans often struggle to navigate the many loan repayment options, make their payments on time and keep up with their bills,” said Sen. Wyden, D-Ore. Ranking Member of the Senate Finance Committee. “The bipartisan SIMPLE Act will provide a back-stop for struggling borrowers and prevent the lasting damage of loan default by automatically connecting struggling borrowers to manageable repayment plans when they are at risk of defaulting on their loans.”
“Many people struggle to manage student loan payments when they have competing expenses like housing and child care,” said Rep. Suzanne Bonamici, D-Ore. Vice Ranking Member of the House Education Committee. “Fortunately there are repayment plans based on income that can help make payments affordable and protect people from financial turmoil. Our bipartisan, commonsense SIMPLE Act will protect many people from default by making these plans easier to access and by eliminating unnecessary paperwork. Importantly, this legislation will bring relief to some of the most vulnerable student loan borrowers, those whose loans have been discharged because of total and permanent disability. The SIMPLE Act is one important step toward reducing the burden of student debt that is holding back so many people in our country.”
The SIMPLE Act allows at-risk borrowers to make more informed decisions about which repayment plans are right for them, and it automatically connects these borrowers with income-driven repayment plans before they default. Additionally, the SIMPLE Act provides for automatic recertification of borrowers’ incomes while they are enrolled in income-driven repayment plans to prevent unexpected increases in loan payments. Finally, the SIMPLE Act automates the income-monitoring process for borrowers whose loans are discharged because of disability.
You can read a summary of the SIMPLE Act here and the full text of the bill here. In the House, the SIMPLE Act is cosponsored by Reps. Ryan Costello, R-Penn., Seth Moulton, D-Mass., and Patrick Meehan, D-Penn.
The SIMPLE Act is supported by The Institute for College Access and Success (TICAS); Student Veterans of America (SVA); National Consumer Law Center (NCLC), on behalf of its low-income clients; Third Way; Student Debt Crisis; American Federation of Teachers (AFT); Center for Law and Social Policy (CLASP); National Education Association (NEA); United Negro College Fund (UNCF); Pennsylvania Higher Education Assistance Agency (PHEAA); AccessLex Institute; Consumers Union; Young Invincibles; Center for Responsible Lending (CRL); Center for American Progress (CAP); American Association of University Women (AAUW); Association of Community College Trustees (ACCT); Pennsylvania Association of Student Financial Aid Administrators (PASFAA); National Association for College Admission Counseling (NACAC); The Education Trust; Higher Education Loan Coalition (HELC); Veterans Education Success (VES); Consumer Action; American Association of Community Colleges (AACC); American Legion; Service Employees International Union (SEIU); and National Association of Student Financial Aid Administrators (NASFAA).
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