Congress·In Committee·S. 1220

Sen. Merkley Introduces SOAR Act to Lower Student Loan Payments and Speed Up Debt Forgiveness

Savings Opportunity and Affordable Repayment Act

12 months ago·View on Congress.gov

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Key Points

The bill creates a new income-based student loan repayment plan called the Savings Opportunity and Affordable Repayment (SOAR) plan. Borrowers earning under 250% of the federal poverty level would owe $0 per month, shielding the lowest earners from any payment burden.
Monthly payments above the income threshold are capped at 5% of discretionary income for undergraduate loans and 10% for graduate or professional loans, keeping bills tied to what borrowers can actually afford.
The government would stop charging interest that a borrower's monthly payment doesn't cover, preventing loan balances from ballooning over time — a major pain point for current borrowers.
From policy text
“the Secretary shall not charge the borrower's account any accrued interest that is not covered by the borrower's monthly payment obligation”
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Remaining loan balances would be forgiven after 10 years of payments for borrowers with short-term undergraduate loans (2 years or less of study), and after 15 years for all other borrowers — significantly faster than the current 20-25 year timelines.
Older income-driven repayment plans like PAYE and ICR would be phased out over two years. Borrowers already enrolled could stay, but new enrollment and re-enrollment would be blocked after the transition period.
From policy text
“on or after the date that is 2 years after the date of enactment of the Savings Opportunity and Affordable Repayment Act, only if the borrower meets the conditions described in subclause (I) and was repaying a loan under such plan before such date”
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Married borrowers who file taxes separately — or who are separated or can't access their spouse's income — can have payments calculated using only their own income and loan debt, giving couples more flexibility.

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Impact Analysis

Personal Impact

Who is affectedScoreImpactCertaintyScopeDurationSentiment

Scores: 1 = low, 5 = highSentiment: -5 to +5 (net benefit)

Milestones

2 milestones2 actions

Apr 1, 2025Senate

Read twice and referred to the Committee on Health, Education, Labor, and Pensions.

Apr 1, 2025

Introduced in Senate

What Happens Next

Projected impacts based on AI analysis

180 days after enactment

SOAR plan becomes available for enrollment

If enacted, borrowers could sign up for the new repayment plan 180 days after the law takes effect, immediately gaining access to lower payments and interest relief.

2 years after enactment

PAYE and ICR plans close to new enrollees

Two years after enactment, the older Pay As You Earn and Income Contingent Repayment plans would stop accepting new borrowers. Anyone already enrolled could stay, but those who leave cannot return.

10-15 years after enactment

First wave of borrowers could receive loan forgiveness

Borrowers with short-term undergraduate loans who have been making qualifying payments could see their remaining balances canceled after reaching the 10-year (120 payment) threshold under the SOAR plan.

Related News

3 articles

CNET·12 months ago

Is This Student Loan Forgiveness Plan Getting Rescued?

The SOAR Act aims to rescue the blocked SAVE plan by creating a new income-driven repayment option. While it offers more generous income protection (250% of poverty line) and interest subsidies, experts warn it faces a difficult path in a Republican-controlled Congress.

The Corvallis Advocate·12 months ago

DC Report: Hoyle gets Kudos, Wyden Words Finger-Wag, Merkley and Who?!

Sens. Jeff Merkley and Tim Kaine are introducing the Savings Opportunity and Affordable Repayment (SOAR) Act to protect borrowers from runaway balances and unaffordable payments. The act would codify the SAVE Plan and offer a clearer path to debt relief after a decade of payments.

NASFAA·12 months ago

Can the SOAR Act Rescue the SAVE Student Loan Plan?

The National Association of Student Financial Aid Administrators highlights the SOAR Act as a legislative effort to codify the SAVE plan's benefits. The bill would protect income up to 250% of the federal poverty level and cap undergraduate loan payments at 5% of discretionary income.