SIMPLE Act
- Sponsor
- Rep. Bonamici, Suzanne [D-OR-1]
- Committees
- Ways and Means Committee (primary)
- Last action
- Sep 2, 2026
Bottom line
The bill seeks to reduce student loan delinquency and default by streamlining access to affordable income-driven repayment plans through automated processes and IRS data sharing.
What it actually does
This bill amends the Higher Education Act of 1965 to establish procedures for automatically enrolling federal student loan borrowers who are delinquent or rehabilitating defaulted loans into income-driven repayment (IDR) plans. It authorizes the Department of Education to use IRS tax return information, with borrower consent, to determine income and family size for these automatic enrollments, aiming to simplify the process and prevent further defaults.
Proponents argue
Proponents argue that this legislation provides a critical safety net for struggling borrowers, preventing them from falling further into financial distress or default due to administrative hurdles or lack of awareness. By simplifying enrollment into IDR plans, the bill would reduce the burden on borrowers, improve the overall health of the federal student loan portfolio, and ensure more manageable payments for those most in need.
Opponents contend
Critics may raise concerns about the expansion of government access to personal financial data, even with opt-out provisions, citing potential privacy implications. Some may also argue that while well-intentioned, automatic enrollment could reduce individual responsibility for actively managing loan obligations or create new administrative burdens for the Department of Education.
The bill is relatively short and focused, allowing for a thorough understanding of its provisions within a reasonable timeframe.
Section 2(a)(1), new HEA Section 455(d)(8)
Automatic Enrollment for Delinquent Borrowers
This provision establishes procedures for the Secretary of Education to use IRS tax data (with borrower approval) to determine income and family size for borrowers who are at least 31 days delinquent on covered federal student loans. If a borrower is 75 days delinquent and has not selected a new repayment plan, and their current plan's payments are higher than an available IDR plan, the Secretary will automatically enroll them in the IDR plan with the lowest monthly payment. Borrowers retain the ability to opt out of data sharing or change their repayment plan.
Supporters argue
Supporters argue this provision provides a critical safety net, preventing defaults by automatically placing struggling borrowers into affordable repayment plans, thereby reducing financial stress and improving the overall health of the federal loan portfolio.
Critics contend
Critics might raise concerns about the government's role in automatically enrolling individuals, even if beneficial, and potential privacy implications of routine IRS data sharing, even with opt-out options.
Tradeoffs
This provision balances borrower protection and default prevention against concerns about government paternalism and data privacy.
Section 2(a)(1), new HEA Section 455(d)(9)
Automatic Enrollment for Rehabilitating Borrowers
This provision requires the Secretary of Education to use IRS tax data (with borrower approval) for borrowers who are rehabilitating defaulted federal student loans. After a borrower makes the 9th payment required for loan rehabilitation, the Secretary will automatically enroll them in the income-driven repayment plan that offers the lowest monthly payment for which they are eligible, ensuring a smooth transition out of default.
Section 2(a)(2), new HEA Section 455(d)(10)
Definitions of "Covered Loan" and "Income-Driven Repayment Plan"
This section defines "covered loan" to include Direct Loans, loans purchased under section 459A, and loans assigned to the Secretary under section 428(c)(8) of the Higher Education Act. It also defines "income-driven repayment plan" to encompass specific plans described in the Act, including the Repayment Assistance Plan.
Section 2(a)(3), amending HEA Section 455(e)(8)(A) and (B)
Streamlined Automatic Recertification for $0 Payments
This amendment streamlines existing automatic recertification procedures for income-contingent repayment plans. For borrowers with covered loans who would have a $0 monthly payment under an income-contingent repayment plan (based on a specific definition of discretionary income), the Secretary is no longer required to obtain income information and will ensure a $0 payment. It also clarifies that automatic recertification applies to "covered loans."
Section 2(a)(5), amending HEA Section 494(a)
Borrower Approval for IRS Data Disclosure
This provision amends the process for the Secretary of Education to obtain tax return information from the IRS. For delinquent borrowers or those rehabilitating loans, it requires them to affirmatively approve ongoing disclosure of their tax information as a condition for the automatic enrollment procedures. Borrowers are given the option to opt out of this disclosure and instead provide alternative documentation of their income.
This clause explains that for borrowers with only covered loans made prior to July 1, 2026, if they select an income-driven repayment plan where individuals not required to file taxes *may* have a calculated monthly payment greater than $0, they will be required to provide other income documentation. Conversely, if they select an IDR plan where such individuals *would* have a calculated monthly payment of $0, they are not required to provide documentation and will have a $0 payment.
Section 2(a)(1), new HEA 455(d)(8)(B)(v)
Why it matters:This is standard legislative practice to address specific edge cases or transitional rules for different loan cohorts and IDR plan structures, ensuring fairness and consistency across various program iterations.
Case for: Supporters would argue this provides necessary clarity and fairness for older loan cohorts, preventing unintended payment obligations for low-income borrowers while maintaining appropriate documentation requirements for plans that might otherwise generate a payment.
Case against: Critics might find the distinction complex and potentially confusing for borrowers, requiring them to understand nuances of IDR plan definitions and their interaction with tax filing requirements.
Estimated impact: This provision affects a specific subset of low-income borrowers with older federal loans, potentially simplifying their repayment process or requiring additional documentation depending on their chosen IDR plan.