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New Student Loan Repayment Plan: Lower Payments and Faster Forgiveness

This Act introduces the Savings Opportunity and Affordable Repayment (SOAR) plan, a new income-driven student loan repayment option. The plan significantly lowers monthly payments for low-income borrowers, setting the payment at $0 for incomes below 250% of the poverty line. Crucially, it offers faster loan forgiveness: after 10 years of payments for short-term undergraduate loans and 15 years for most other loans, providing substantial financial relief to citizens.
Key points
New SOAR Repayment Plan: Monthly payments are based on income, not loan balance. Payments are $0 for income at or below 250% of the poverty line.
Lower Rates for Undergraduate Loans: Payments are 5% of discretionary income (above 250% of the poverty line) for undergraduate loans, and 10% for all other eligible loans.
Loan Forgiveness in 10 or 15 Years: Loans for short-term undergraduate study (up to 2 years) are forgiven after 10 years (120 payments), and all other eligible loans are forgiven after 15 years (180 payments).
Interest Subsidy: Any accrued interest not covered by the borrower's monthly payment will not be charged, preventing the loan balance from growing.
Phase-Out of Old Plans: The existing Pay As You Earn (PAYE) and Income Contingent Repayment (ICR) plans will be phased out for new borrowers two years after the Act's enactment.
article Official text account_balance Process page
Introduced
Citizen Poll
No votes cast
Additional Information
Print number: 119_S_1220
Sponsor: Sen. Merkley, Jeff [D-OR]
Process start date: 2025-04-01
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Summarized by: gemini-flash-latest
Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

Savings Opportunity and Affordable Repayment Act

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 119_S_1220.

Which chamber initiated this legislation?

This legislation was initiated in the Senate.

When did the legislative process begin?

The process officially started on 2025-04-01.

What are the main provisions?

Key points include:

  • New SOAR Repayment Plan: Monthly payments are based on income, not loan balance. Payments are $0 for income at or below 250% of the poverty line.
  • Lower Rates for Undergraduate Loans: Payments are 5% of discretionary income (above 250% of the poverty line) for undergraduate loans, and 10% for all other eligible loans.
  • Loan Forgiveness in 10 or 15 Years: Loans for short-term undergraduate study (up to 2 years) are forgiven after 10 years (120 payments), and all other eligible loans are forgiven after 15 years (180 payments).
  • Interest Subsidy: Any accrued interest not covered by the borrower's monthly payment will not be charged, preventing the loan balance from growing.
  • Phase-Out of Old Plans: The existing Pay As You Earn (PAYE) and Income Contingent Repayment (ICR) plans will be phased out for new borrowers two years after the Act's enactment.
What is the specific legal status?

The current status is Introduced.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Sen. Merkley, Jeff [D-OR].

What is the latest detailed status?

The latest detailed status is: Introduced in Senate

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-31.

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