SIMPLE Act

Key Points

• If a borrower falls 75 days behind on a federal student loan and hasn't picked a new plan, the Education Department would automatically enroll them in the income-driven plan with the lowest possible monthly payment, based on IRS income data.
• Borrowers get an early warning at 31 days delinquent that explains their options, estimates what their payments could be under different plans, and gives simple instructions for choosing a plan themselves before automatic enrollment happens.
• The Education Department would use tax return data shared by the IRS to figure out a borrower's income and family size automatically, but borrowers can opt out at any time and submit their own financial documentation instead.
• People rehabilitating a defaulted loan get automatically placed into an affordable income-driven plan after their 9th rehabilitation payment, which is meant to help them avoid slipping back into default once the loan is restored to good standing.
• Borrowers already using income-based repayment would gain the right to switch to any other eligible plan whenever they want, rather than being locked in.
• Most of these changes would not start until July 1, 2028, applying to the 2028-2029 award year and beyond, though the plan-switching rule would begin immediately once the bill is signed into law.