SIMPLE Act
Bill: H.R.8522 | Sponsor: Rep. Bonamici, Suzanne (D-OR)
Policy area: Education

Summary:
Streamlining Income-driven, Manageable Payments on Loans for Education Act or the SIMPLE Act
This bill directs the Department of Education to establish certain notification and automatic enrollment procedures for borrowers who are delinquent on federal student loans or who are rehabilitating defaulted student loans, including to automatically enroll these borrowers in income-driven repayment plans.

To amend the Higher Education Act of 1965 to include notification and 
  automatic enrollment procedures for borrowers who are delinquent on 
                     loans, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Streamlining Income-driven, 
Manageable Payments on Loans for Education Act'' or the ``SIMPLE Act''.

SEC. 2. NOTIFICATION AND AUTOMATIC ENROLLMENT PROCEDURES FOR BORROWERS 
              WHO ARE DELINQUENT ON LOANS AND FOR BORROWERS WHO ARE 
              REHABILITATING DEFAULTED LOANS.

    (a) Amendments.--
            (1) Notification and automatic enrollment procedures.--
        Section 455(d) of the Higher Education Act of 1965 (20 U.S.C. 
        1087e(d)) is amended by adding at the end the following:
            ``(6) Notification and automatic enrollment procedures for 
        borrowers who are delinquent on loans.--
                    ``(A) Authority to obtain income information.--The 
                Secretary shall establish and implement, with respect 
                to any borrower described in subparagraph (B), 
                procedures to--
                            ``(i) use return information of the 
                        borrower (and the borrower's spouse, if 
                        applicable) disclosed under section 6103(l)(13) 
                        of the Internal Revenue Code of 1986, pursuant 
                        to approval provided under section 494, to 
                        determine the income and family size of the 
                        borrower (and the borrower's spouse, if 
                        applicable) without further action by the 
                        borrower;
                            ``(ii) allow the borrower (or the spouse of 
                        the borrower), at any time, to opt out of 
                        disclosure under such section 6103(l)(13) and 
                        instead provide such information as the 
                        Secretary may require to determine the income 
                        and family size of the borrower (and the 
                        borrower's spouse, if applicable); and
                            ``(iii) provide the borrower with an 
                        opportunity to update the return information so 
                        disclosed before the determination of the 
                        income and family size of the borrower for 
                        purposes of this paragraph.
                    ``(B) Borrower notification.--With respect to each 
                borrower of a covered loan who is at least 31 days 
                delinquent on such loan and who has not been subject to 
                the procedures under this paragraph for such loan in 
                the preceding 120 days, the Secretary shall, as soon as 
                practicable after such 31-day delinquency, provide to 
                the borrower the following:
                            ``(i) Notification that the borrower is at 
                        least 31 days delinquent on at least 1 covered 
                        loan, and a description of all delinquent 
                        covered loans, nondelinquent covered loans, and 
                        noncovered loans of the borrower.
                            ``(ii) A brief description of the repayment 
                        plans for which the borrower is eligible and 
                        the covered loans and noncovered loans of the 
                        borrower that may be eligible for such plans, 
                        based on information available to the 
                        Secretary.
                            ``(iii) Clear and simple instructions on 
                        how to select the repayment plans.
                            ``(iv) In the case of a borrower of a loan 
                        under section 428B, or a Federal Direct PLUS 
                        Loan, that is made, insured, or guaranteed on 
                        behalf of a dependent student, an explanation 
                        that the borrower may qualify for an income-
                        driven repayment plan if the borrower 
                        consolidates such loan into a Federal Direct 
                        Consolidation Loan, and the amount of the 
                        monthly payment of such consolidation loan if 
                        the borrower does so consolidate.
                            ``(v) The amount of monthly payments for 
                        the covered and noncovered loans under the 
                        repayment plans for which the borrower is 
                        eligible, based on information available to the 
                        Secretary, including, if the income information 
                        of the borrower is available to the Secretary 
                        under subparagraph (A)--
                                    ``(I) the amount of the monthly 
                                payment under each income-driven 
                                repayment plan for which the borrower 
                                is eligible for the borrower's covered 
                                and noncovered loans, based on such 
                                income information; and
                                    ``(II) the income, family size, tax 
                                filing status, and tax year information 
                                on which each monthly payment is based.
                            ``(vi) An explanation that in the case of a 
                        borrower for whom adjusted gross income is 
                        unavailable--
                                    ``(I) if the borrower selects to 
                                repay the covered loans of such 
                                borrower pursuant to an income-driven 
                                repayment plan that defines 
                                discretionary income in such a manner 
                                that an individual not required under 
                                section 6012(a)(1) of the Internal 
                                Revenue Code of 1986 to file a return 
                                with respect to income taxes imposed by 
                                subtitle A of such Code may have a 
                                calculated monthly payment greater than 
                                $0, the borrower will be required to 
                                provide the Secretary with other 
                                documentation of income satisfactory to 
                                the Secretary, which documentation the 
                                Secretary may use to determine an 
                                appropriate repayment schedule; and
                                    ``(II) if the borrower selects to 
                                repay such loans pursuant to an income-
                                driven repayment plan that is not 
                                described in subclause (I), the 
                                borrower will not be required to 
                                provide the Secretary with such other 
                                documentation of income, and the 
                                borrower will have a calculated monthly 
                                payment of $0.
                            ``(vii) An explanation that the Secretary 
                        shall take the actions under subparagraph (C) 
                        with respect to such borrower, if--
                                    ``(I) the borrower is 80 days 
                                delinquent on one or more covered loans 
                                and has not selected a new repayment 
                                plan for the covered loans of the 
                                borrower; and
                                    ``(II) in the case of such a 
                                borrower whose repayment plan for the 
                                covered loans of the borrower is not an 
                                income-driven repayment plan, the 
                                monthly payments under such repayment 
                                plan are higher than such monthly 
                                payments would be under an income-
                                driven repayment plan for such loans.
                            ``(viii) Instructions on updating the 
                        information of the borrower obtained under 
                        subparagraph (A).
                    ``(C) Secretary's initial selection of plan.--With 
                respect to each borrower described in subparagraph (B) 
                who has a repayment plan for the covered loans of the 
                borrower that meets the requirements of clause (vi)(II) 
                of subparagraph (B) and has not selected a new 
                repayment plan for such loans in accordance with the 
                notice received under such subparagraph, and who is at 
                least 80 days delinquent on such a loan, the Secretary 
                shall, as soon as practicable--
                            ``(i) in a case in which any of the 
                        borrower's covered loans are eligible for an 
                        income-driven repayment plan--
                                    ``(I)(aa) provide the borrower with 
                                the income-driven repayment plan that 
                                requires the lowest monthly payment 
                                amount for each covered loan of the 
                                borrower, compared to any other such 
                                plan for which the borrower is 
                                eligible; or
                                    ``(bb) if more than one income-
                                driven repayment plan would offer the 
                                borrower the same lowest monthly 
                                payment amount, provide the borrower 
                                with the income-driven repayment plan 
                                that has the most favorable terms for 
                                the borrower;
                                    ``(II) if the plan selected under 
                                subclause (I) is not the income-driven 
                                repayment plan that would have the 
                                lowest monthly payment amount if the 
                                borrower were eligible for such plan 
                                for the borrower's covered loans and 
                                noncovered loans, notify the borrower 
                                of the actions, if any, the borrower 
                                may take to become eligible for such 
                                income-driven repayment plan; and
                                    ``(III) authorize the borrower to 
                                change the Secretary's selection of a 
                                plan under this clause to any plan 
                                described in paragraph (1) for which 
                                the borrower is eligible; and
                            ``(ii) in a case in which none of the 
                        borrower's covered loans are eligible for an 
                        income-driven repayment plan, notify the 
                        borrower of the actions, if any, the borrower 
                        may take for such loans to become eligible for 
                        such a plan.
                    ``(D) Secretary's additional selection of plan.--
                            ``(i) In general.--With respect to each 
                        borrower of a covered loan who selects a new 
                        repayment plan in accordance with the notice 
                        received under subparagraph (B) and who 
                        continues to be delinquent on such loan for a 
                        period described in clause (ii), the Secretary 
                        shall, as soon as practicable after such 
                        period, carry out the procedures described in 
                        clauses (i) and (ii) of subparagraph (C) for 
                        the covered loans of the borrower, if such 
                        procedures would result in lower monthly 
                        repayment amounts on such loan.
                            ``(ii) Description of period.--The duration 
                        of the period described in clause (i) shall be 
                        the amount of time that the Secretary 
                        determines is sufficient to indicate that the 
                        borrower may benefit from repaying such loan 
                        under a new repayment plan, but in no case 
                        shall such period be less than 60 days.
            ``(7) Notification and automatic enrollment procedures for 
        borrowers who are rehabilitating defaulted loans.--
                    ``(A) Authority to obtain income information.--The 
                Secretary shall establish and implement, with respect 
                to any borrower who is rehabilitating a covered loan 
                pursuant to section 428F(a), procedures to--
                            ``(i) use return information of the 
                        borrower (and the borrower's spouse, if 
                        applicable) disclosed section 6103(l)(13) of 
                        the Internal Revenue Code of 1986, pursuant to 
                        approval provided under section 494, to obtain 
                        such information as is reasonably necessary 
                        regarding the income and family size of the 
                        borrower (and the borrower's spouse, if 
                        applicable);
                            ``(ii) allow the borrower (or the spouse of 
                        the borrower), at any time, to opt out of 
                        disclosure under such section 6103(l)(13) and 
                        instead provide such information as the 
                        Secretary may require to obtain such 
                        information; and
                            ``(iii) provide the borrower with an 
                        opportunity to update the return information so 
                        disclosed before the determination of income 
                        and family size of the borrower (and the 
                        borrower's spouse, if applicable) for purposes 
                        of this paragraph.
                    ``(B) Borrower notification.--Not later than 30 
                days after a borrower makes the 6th payment required 
                for the loan rehabilitation described in subparagraph 
                (A), the Secretary shall notify the borrower of the 
                process under subparagraph (C) with respect to such 
                loan.
                    ``(C) Secretary's selection of plan.--With respect 
                to each borrower who has made the 9th payment required 
                for the loan rehabilitation described in subparagraph 
                (A), the Secretary shall, as soon as practicable after 
                such payment--
                            ``(i) in a case in which any of the 
                        borrower's covered loans, without regard to 
                        whether the loan has been so rehabilitated, is 
                        eligible for an income-driven repayment plan--
                                    ``(I)(aa) provide the borrower with 
                                the income-driven repayment plan that 
                                requires the lowest monthly payment 
                                amount for each covered loan of the 
                                borrower, compared to any other such 
                                plan for which the borrower is 
                                eligible; or
                                    ``(bb) if more than one income-
                                driven repayment plan would offer the 
                                borrower the same lowest monthly 
                                payment amount, provide the borrower 
                                with the income-driven repayment plan 
                                that has the most favorable terms for 
                                the borrower; and
                                    ``(II) if the plan selected under 
                                subclause (I) is not the income-driven 
                                repayment plan that would have the 
                                lowest monthly payment amount if the 
                                borrower were eligible for such plan 
                                for the borrower's covered loans and 
                                noncovered loans, notify the borrower 
                                of the actions, if any, the borrower 
                                may take to become eligible for such 
                                income-driven repayment plan; and
                            ``(ii) in a case in which none of the 
                        borrower's covered loans are eligible for an 
                        income-driven repayment plan, notify the 
                        borrower of the actions, if any, the borrower 
                        may take for such a loan to become eligible for 
                        such a plan.''.
            (2) Definitions.--Section 455(d) of the Higher Education 
        Act of 1965 (20 U.S.C. 1087e(d)), as amended by paragraph (1), 
        is further amended by adding at the end the following:
            ``(8) Definitions.--In this subsection:
                    ``(A) Covered loan.--The term `covered loan' 
                means--
                            ``(i) a loan made under this part;
                            ``(ii) a loan purchased under section 459A; 
                        or
                            ``(iii) a loan that has been assigned to 
                        the Secretary under section 428(c)(8).
                    ``(B) Income-driven repayment plan.--The term 
                `income-driven repayment plan' means a plan described 
                in subparagraph (D) or (E) of paragraph (1).
                    ``(C) Noncovered loan.--The term `noncovered loan' 
                means a loan made, insured, or guaranteed under this 
                title that is not a covered loan.''.
            (3) Automatic recertification.--
                    (A) Borrower for whom adjusted gross income is 
                unavailable.--Section 455(e)(8)(A) of the Higher 
                Education Act of 1965 (20 U.S.C. 1087e(e)(8)(A)) is 
                amended--
                            (i) by striking ``and'' at the end of 
                        clause (ii);
                            (ii) by redesignating clause (iii) as 
                        clause (iv);
                            (iii) in clause (iv) (as so redesignated), 
                        by striking the period at the end and inserting 
                        ``; and''; and
                            (iv) by inserting after clause (ii), the 
                        following:
                            ``(iii) in the case of a borrower who has 
                        selected to repay a covered loan (as defined in 
                        subsection (d)(8)) pursuant to an income 
                        contingent repayment plan that defines 
                        discretionary income in such a manner that the 
                        borrower would have a calculated monthly 
                        payment equal to $0, not require the borrower 
                        to provide the Secretary the information 
                        described in clause (i) or (ii), and ensure 
                        that the borrower will have a calculated 
                        monthly payment of $0; and''.
                    (B) Inclusion of covered loans.--Section 
                455(e)(8)(B) of the Higher Education Act of 1965 (20 
                U.S.C. 1087e(e)(8)(B)) is amended by striking ``a loan 
                made under this part'' and inserting ``a covered loan 
                (as defined in subsection (d)(8))''.
            (4) Changing plans.--Section 493C(b)(8) of the Higher 
        Education Act of 1965 (20 U.S.C. 1098e(b)(8)) is amended to 
        read as follows:
            ``(8) a borrower who is repaying a loan made, insured, or 
        guaranteed under part B or D pursuant to income-based repayment 
        may elect, at any time, to terminate repayment pursuant to 
        income-based repayment and repay such loan under any repayment 
        plan for which the loan is eligible in accordance with the 
        requirements of part B or part D, respectively; and''.
            (5) Procedure and requirement for requesting tax return 
        information from the irs.--Section 494(a) of the Higher 
        Education Act of 1965 (20 U.S.C. 1098h(a)) is amended--
                    (A) in paragraph (2)--
                            (i) in subparagraph (A), in the matter 
                        preceding clause (i), by striking ``a loan 
                        under part D'' and inserting ``a covered loan 
                        (as defined in section 455(d)(8))''; and
                            (ii) in subparagraph (B), by striking ``a 
                        loan under part D'' and inserting ``a covered 
                        loan (as defined in section 455(d)(8))''; and
                    (B) by adding at the end the following:
            ``(4) Loan delinquency and rehabilitation.--
                    ``(A) Borrowers delinquent on loans.--In the case 
                of an individual who is a borrower of a covered loan 
                and who is at least 31 days delinquent on such loan, 
                the Secretary, with respect to such individual and any 
                spouse of such individual, shall--
                            ``(i) provide to such individuals the 
                        notification described in paragraph (1)(A)(i); 
                        and
                            ``(ii) require, as a condition of 
                        eligibility for the notification and automatic 
                        enrollment procedures for borrowers who are 
                        delinquent on loans under section 455(d)(6), 
                        that such individuals--
                                    ``(I) affirmatively approve the 
                                disclosure described in paragraph 
                                (1)(A)(i) and agree that such approval 
                                shall serve as an ongoing approval of 
                                such disclosure until the date on which 
                                the individual elects to opt out of 
                                such disclosure under section 
                                455(d)(6)(A)(ii); or
                                    ``(II) provide such information as 
                                the Secretary may require to carry out 
                                the procedures under section 455(d)(6) 
                                with respect to such individual.
                    ``(B) Loan rehabilitation.--In the case of any 
                written or electronic application by an individual for 
                the rehabilitation of a covered loan pursuant to 
                section 428F(a), the Secretary, with respect to such 
                individual and any spouse of such individual, shall--
                            ``(i) provide to such individuals the 
                        notification described in paragraph (1)(A)(i); 
                        and
                            ``(ii) require, as a condition of 
                        eligibility for loan rehabilitation pursuant to 
                        section 428F(a), that such individuals--
                                    ``(I) affirmatively approve the 
                                disclosure described in paragraph 
                                (1)(A)(i) and agree that such approval 
                                shall serve as an ongoing approval of 
                                such disclosure until the date on which 
                                the individual elects to opt out of 
                                such disclosure under section 
                                455(d)(7)(A)(ii); or
                                    ``(II) provide such information as 
                                the Secretary may require to carry out 
                                the procedures under section 455(d)(7) 
                                with respect to such individual.
                    ``(C) Covered loan defined.--In this paragraph, the 
                term `covered loan' has the meaning given the term in 
                section 455(d)(8).''.
    (b) Secure Disclosure of Tax-Return Information.--
            (1) In general.--Section 6103(l)(13) of the Internal 
        Revenue Code of 1986 is amended by redesignating subparagraphs 
        (D), (E), and (F) as paragraphs (E), (F), and (G), 
        respectively, and by inserting after subparagraph (C) the 
        following new subparagraph:
                    ``(D) Notification and automatic enrollment for 
                certain borrowers.--The Secretary shall, upon written 
                request from the Secretary of Education, disclose to 
                any authorized person, only for the purpose of (and to 
                the extent necessary in) carrying out paragraphs (6) 
                and (7) of section 455(d) of the Higher Education Act 
                of 1965, return information described in clauses (i) 
                through (vi) of subparagraph (A) from returns of an 
                individual certified by the Secretary of Education as 
                having provided approval under section 494(a)(4) of 
                such Act (as in effect on the date of enactment of this 
                paragraph) for such disclosure.''.
            (2) Conforming amendments.--
                    (A) Section 6103(l)(13)(A) of the Internal Revenue 
                Code of 1986 is amended by striking ``loans under part 
                D of such title'' and inserting ``covered loans (as 
                defined in section 455(d)(8) of such Act)''.
                    (B) Section 6103(l)(13)(E)(i) of the Internal 
                Revenue Code of 1986 (as redesignated by paragraph (1)) 
                is amended by striking ``and (C)'' and inserting ``(C), 
                and (D)''.
                    (C) Subparagraphs (F) and (G) of section 
                6103(l)(13) of the Internal Revenue Code of 1986 (as 
                redesignated by paragraph (1)) are each amended by 
                striking ``or (C)'' and inserting ``(C), or (D)''.
    (c) Effective Date; Application.--
            (1) Automatic enrollment.--The amendments made by 
        paragraphs (1), (2), (3), and (5) of subsection (a) shall--
                    (A) apply to all borrowers of covered loans (as 
                defined in section 455(d)(8) of the Higher Education 
                Act of 1965, as added by subsection (a)); and
                    (B) take effect on July 1, 2024, and shall apply 
                with respect to award year 2024-2025 and each 
                subsequent award year, as determined under the Higher 
                Education Act of 1965.
            (2) Changing plans.--The amendment made by subsection 
        (a)(4) shall take effect on the date of enactment of this Act.
            (3) Disclosure.--The amendments made by subsection (b) 
        shall apply to disclosures after the date of enactment of this 
        Act.
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