Blog: Reps. Bonamici, Fitzpatrick sponsor bill to help student borrowers repay debt – Financial Regulation News – Financial Regulation News

U.S. Reps. Suzanne Bonamici (D-OR) and Brian Fitzpatrick (R-PA) are sponsoring a bill to help student loan borrowers avoid default.

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The Streamlining Income-driven, Manageable Payments on Loans for Education (SIMPLE) Act would automatically enroll struggling borrowers in income-driven repayment plans so they can repay based on financial ability.

“Although the Biden-Harris administration has taken encouraging steps to improve student loan forgiveness and income-driven repayment plans, there is more we can do to help borrowers,” Bonamici, chair of the Education & Labor Subcommittee on Civil Rights and Human Services, said. “The bipartisan SIMPLE Act will streamline the enrollment process for income-driven repayment plans, making it easier for borrowers to access affordable payments and avoid catastrophic defaults. It is unacceptable that people who invested time and resources in their education have to navigate a needlessly complicated student repayment system. The decision to go to college shouldn’t lead to financial ruin, and I’m glad to work across the aisle to find an urgent, common-sense solution to the convergent crises of growing student debt and diminishing college affordability.”

The legislation would use information already on file at the Department of Education and U.S. Treasury to connect borrowers automatically with existing repayment plans. It would also remove the redundant annual paperwork for updating income information while enrolled in these plans.

“For too many, student loan debt is a crippling burden that impacts borrowers’ involvement in our economy and achieving personal goals like owning a home, starting a family, and supporting the community. Investing in one’s own future through higher education should not lead to long-term financial distress,” Fitzpatrick said. “Student loan defaults have damaging consequences for borrowers that can last for significant periods of time, an issue only worsened in the midst of the COVID-19 pandemic. I am proud to support the SIMPLE Act, which will provide our students and borrowers what they deserve: more efficient access to the repayment resources already at their disposal.”

The bill has been endorsed by the National Association of Student Financial Aid Administrators (NASFAA), the Institute for College Access & Success (TICAS), Third Way, and New America.

“Income-driven repayment (IDR) plans offer a lifeline for millions of student loan borrowers, making repayment more affordable and helping struggling borrowers avoid default,” NASFAA President and CEO Justin Draeger said. “Unfortunately, the complexities of enrolling and remaining in IDR keep many vulnerable borrowers from accessing this important safety net. The SIMPLE Act would expand access to affordable income-driven repayment options by automatically enrolling struggling borrowers in IDR plans before they experience the punitive consequences of default. The bill also eliminates burdensome annual paperwork requirements, making it easier for borrowers to remain enrolled in IDR. The financial aid community stands in support of this bill.”

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