Federal student loan borrowers would gain a new income-driven repayment option called the Savings Opportunity and Affordable Repayment (SOAR) plan under this House bill, which amends the Higher Education Act of 1965. Borrowers would pay $0 on the portion of household adjusted gross income at or below 250 percent of the federal poverty line, 5 percent on income above that line for undergraduate loans, and 10 percent above that line for graduate loans. Monthly payments calculated under $5 would round to $0, and amounts between $5 and $10 would round to $10. Each payment would be split 50/50 between principal and interest/fees, and any interest not covered by the payment would not be charged to the account. Remaining balances would be canceled after 120 monthly payments (10 years) for borrowers with only sub-2-year undergraduate loans, and after 180 monthly payments (15 years) for everyone else. Beginning 2 years after enactment, new enrollment in the existing Pay As You Earn and ICR plans would be phased out, with re-enrollment prohibited for borrowers who switch off.
Average Household Impact
- income-protected portion — $0 payment up to 250% of federal poverty line
- loan cancellation timelines — 10 years (sub-2-year undergrad) or 15 years (other loans)
- unpaid interest accrual — not charged to the borrower's account on SOAR
- PAYE and ICR plan availability — closed to new enrollees 2 years after enactment
- re-enrollment in PAYE or ICR — prohibited once borrower switches off
Transparency & Accountability
- automatic cancellation tracking — Secretary must cancel without borrower application
- annual income recertification procedures — codified with IRS data-sharing path
Congressional Summary
Savings Opportunity and Affordable Repayment ActThis bill creates a new income-driven repayment plan for student loans called the Savings Opportunity and Affordable Repayment (SOAR) plan. The SOAR plan has similar provisions to, but further expands on, the Department of Education's (ED's) final rule published on July 10, 2023, that created the Saving on a Valuable Education (SAVE) plan. The SAVE plan was blocked by federal courts.The bill directs ED to carry out a SOAR plan program that complies with specified requirements. The bill allows all federal student loan types to be eligible for repayment under the SOAR plan, including Parent PLUS Loans and Federal Family Education Loans.Under the SOAR plan, a federal student loan borrower whose income is at or below 250% of the federal poverty level (FPL) has $0 monthly payments. A borrower whose income is over 250% of the FPL pays 5% of their discretionary income on loans obtained for undergraduate study and 10% of their discretionary income for all other outstanding loans (e.g., loans obtained for graduate study).Additionally, under the SOAR plan, holders of eligible federal student loans (e.g., ED or private lenders) must apply 50% of the borrower's monthly payment toward outstanding principal. The other 50% must be applied in the following order: (1) accrued charges and collection costs on the loan, (2) outstanding interest, and (3) outstanding principal.ED must forgive any loan balance that remains outstanding after a specified maximum repayment period (e.g., 10 years or 15 years).
Details
- Congress
- 119th
- Chamber
- House
- Status
- summarized
- Action
- Introduced in House
- Action Date
- 2026-04-23
- Date Added
- 2026-05-19
- Source
- Congress.gov →
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