AccessLex Institute is pleased to announce its support for the Streamlining Income-driven, Manageable Payments on Loans for Education (SIMPLE) Act, which would (i) automatically enroll new Direct Loan borrowers in an income-driven repayment plan after they are 120 days delinquent, (ii) develop procedures for automatically recertifying a borrower’s income for continued participation in an income-driven repayment plan, and (iii) authorize the Department of Education and the Department of Treasury to conduct a study on the effect of using IRS data on the deduction for personal exemptions as a proxy for family size in an income-driven repayment plan.
Data from the Department of Education show that between November 2013 and October 2014, nearly 60 percent of borrowers who were required to submit annual recertification forms, in order to stay enrolled in an IDR plan, failed to do so on time. Of those, over 30 percent went into a hardship-related forbearance or deferment. Allowing for automatic recertification of income each year ensures that borrowers remain in income-driven repayment plans and avoid payment increases that they cannot afford. Introduced on September 8, 2016, by Congresswoman Suzanne Bonamici (D-OR) and Congressman Ryan Costello (R-PA), the SIMPLE Act would ease this burden on borrowers and allow for seamless and continued participation in these plans.