Savings Opportunity and Affordable Repayment Act

Reduced Monthly Payments: The bill establishes a monthly payment obligation that is $0 for those with adjusted gross income less than or equal to s 250 percent of the poverty line (Section 493E(a)(1)(A)(i)).

Loan Cancellation: Borrowers may have their remaining loan balances canceled after a specific period of payments: 120 months for those repaying loans for undergraduate study in a program of no more than 2 years, or 180 months for other eligible loans (Section 493E(b)(5)).

Interest Protections: During repayment, the Secretary is prohibited from charging the borrower's account any accrued interest that is not covered by the monthly payment obligation (Section 493E(b)(3)).

Payment Application: Under this plan, 50 percent of the monthly payment is applied directly toward the outstanding principal (Section 493E(b)(2)(A)).

Simplified Forgiveness Tracking: The Secretary is required to track a borrower's progress toward loan cancellation and cancel the loans once criteria are met without requiring an application or additional documentation from the borrower (Section 493E(c)(3)(J)).

Restrictions on Existing Plans: The bill includes "phase outs" that restrict when borrowers can choose or re-enroll in the Pay As You Earn and ICR repayment plans once a two-year period after the act's enactment has passed (Section 455(d)(6)).

Consequences for Missing Documentation: If a borrower fails to provide necessary documentation required by the Secretary to recalculate a monthly payment, they will be removed from the Savings Opportunity and Affordable Repayment plan and placed on an alternative plan with a monthly payment based on a 10-year standard repayment plan (Section 455(d)(6)(3)).

Income Inclusion for Spouses: For married borrowers who do not file separately or certify they are unable to access their spouse's income, the spouse's income must be included in the monthly payment calculation (Section 493E(d)(2)(A)).