S. 1220 · Where this bill is now
In committee
Introduced in the Senate, Apr 1, 2025
What this bill does
In plain words · AI-written from the official summaryCreates new income-based student loan repayment plan
This bill creates a new federal student loan repayment option called the SOAR plan. If your income is very low, you'd pay nothing monthly. If your income is higher, you'd pay a small percentage of what's left after basic living expenses—5% for undergraduate loans and 10% for graduate or other federal loans. Lenders must put at least half of your payment toward reducing what you actually owe, and any remaining balance gets forgiven after a set time period.
How it affects you
If you have federal student loans, you could qualify for this plan as an alternative to current repayment options. People with lower incomes would benefit most, since very low earners would have no monthly payment obligation. After you've been in the plan for 10 to 15 years, depending on your loan type, any money you still owe would be forgiven.
Read the official summary (Introduced in Senate, Apr 1, 2025)
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).
Written by AI (Claude) using only the official summary by the Congressional Research Service, the Library of Congress’s nonpartisan research staff. It can miss nuance, so check the official summary and the bill text for details.
1st SessionS. 1220
A BILL
Savings Opportunity and Affordable Repayment Act
Sponsor: Sen. Jeff Merkley (D-OR) · Introduced Apr 1, 2025 · Education · 1 version of the text
Sources: Congress.gov actions and votes · bill text from GovInfo · latest official action Apr 1, 2025: “Read twice and referred to the Committee on Health, Education, Labor, and Pensions.”