New Report Highlights Need for Bipartisan Legislation to Connect Student Loan Borrowers with Income-Driven Repayment Plans

Bonamici, Costello’s SIMPLE Act Aims to Reduce Student Loan Defaults

WASHINGTON, DC [10/19/16] — A new report by the Consumer Financial Protection Bureau (CFPB) found that one third of all student loan borrowers who have defaulted on their loans will fall back into default within two years because they lack support and access to affordable repayment plans. Legislation introduced by Congresswoman Suzanne Bonamici (D-OR) and Congressman Ryan Costello (R-PA) aims to help struggling student loan borrowers enroll in affordable repayment plans. The legislation also automates the annual process of updating borrowers’ income information while enrolled in income-driven repayment plans, which will help keep payments affordable.

The CFPB report found that many borrowers who have defaulted would have qualified for a lower payment in an existing income-driven repayment plan. The SIMPLE (Streamlining Income-driven, Manageable Payments on Loans for Education) Act helps more borrowers participate in these plans. You can read a summary of the SIMPLE Act here and the full text of the bill here.

“The report by the CFPB highlights the difficulties faced by student loan borrowers at risk of default when they try to access plans designed to make their payments more affordable,” said Congresswoman Suzanne Bonamici. “The bipartisan, commonsense legislation I introduced with Congressman Ryan Costello will protect many people from default by making income-driven repayment plans easier to access and by automatically updating income information. The SIMPLE Act is an important step toward making higher education accessible and affordable.”

“The importance of the SIMPLE Act is made clear to me each time I hear from Pennsylvanians who are struggling to make their student loan payments,” said Congressman Ryan Costello. “The administrative hurdles that students face just to make payments on their loans are unreasonably burdensome, and our bipartisan bill will help make sure borrowers do not miss their payments and are enrolled in repayment plans they can afford.”

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-based repayment plans to prevent unexpected increases in loan payments.