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S. 1220: Savings Opportunity and Affordable Repayment Act

119th Congress · introduced 2025-04-01 · Education · Latest: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.

federal

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Official title

Savings Opportunity and Affordable Repayment Act

Plain summary

Savings Opportunity and Affordable Repayment Act This 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).

Congressional Research Service summary (Introduced in Senate), quoted unchanged (nonpartisan). Read the source.

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What does this mean? (plain words)

Official text

Savings Opportunity and Affordable Repayment Act

Source: Congressional Research Service summary (Introduced in Senate)

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Officials and money

Sponsor: Sen. Merkley, Jeff [D-OR] · 17 cosponsors

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Words on this page, explained (1)
Bill
A proposed law. It becomes law only if it passes the legislature and is signed by the president or governor (or a veto is overridden).

Plain meanings written from linked sources. All words.

Sources

Record fed-us-cong119-s1220 · catalog fed-us-congress-bills-cong119 · updated 2026-11-03 by psicol fed-bills