Published July 22, 2019
Sponsored by Rep. Suzanne Bonamici, D-Ore., the representatives say their legislation will help people avoid such consequences as wage garnishments and a loss of Social Security benefits.
Bonamici and the legislation's co-sponsors — Reps. Paul Mitchell, R-Mich., Brian Fitzpatrick, R-Pa., and Seth Moulton, D-Mass. — aim to help people who can't afford full loan payments, have defaulted before, are in danger of default or have disabilities.
“Student loan defaults have damaging consequences for borrowers that can last a significant period of time,” Fitzpatrick said. “An investment in one’s education should not lead to long-term financial distress, and borrowers deserve more efficient access to the tools already at their disposal under the law.”
Automating the process borrowers use to access benefits is the key to preventing defaults, the representatives say, because so many are unaware of the options available to them or fail to register for programs.
The Streamlining Income-driven, Manageable Payments on Loans for Education Act — or The SIMPLE Act — would require the Department of Education to use income and other information from the Treasury Department to verify individuals' eligibility for these programs so they don't have to do the paperwork themselves.
As an example, the summary of the bill points out "permanently and totally disabled" borrowers can be released from their student loan payments, but they have to submit paperwork over a three-year period to certify their disability. Otherwise, their loans are reinstated.
Ninety-eight percent of the 61,000 disabled borrowers who had their loans reinstated in 2015 did so because they didn't submit the paperwork, the representatives say.
The bill would also automatically register those who have defaulted before or are on their way toward default in income-driven payment plans that allow people to pay back their loans based on their financial ability to do so.
The lawmakers say those who are in income-driven payment plans are five times less likely to default on their loans than those who aren't.
Bonamici and Moulton introduced a version of the SIMPLE Act in 2017 with two different sponsors but the bill never made it out of committee.
Fox News' Tyler Olson contributed to this report.