Savings Opportunity and Affordable Repayment Act
Sponsored By: Senator Jeff Merkley
Introduced
Summary
SOAR: a new income-contingent repayment plan tied to income and the share of undergraduate debt. This bill would create the Savings Opportunity and Affordable Repayment (SOAR) plan that sets monthly federal student loan payments based on family income and how much of a borrower’s debt comes from undergraduate loans.
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Bill Overview
Analyzed Economic Effects
3 provisions identified: 1 benefits, 1 costs, 1 mixed.
New SOAR repayment plan for borrowers
This bill would create a new SOAR income-based repayment plan 180 days after enactment. You would pay $0 a month if your AGI is up to 250% of the poverty line. If your AGI is higher, you would pay 5% of the excess for your undergraduate loan share and 10% of the excess for other loans, each prorated by your original undergraduate share and divided by 12. If the calculated monthly amount is under $5 you would pay $0; if it is $5 to under $10 you would pay $10. Half of each SOAR payment would go to principal. The other half would go first to fees and collection costs, then interest, then principal. The Secretary would not charge interest beyond what your monthly payment covers and unpaid principal would be deferred. Certain months of deferment or forbearance count as qualifying months. After 120 qualifying months (in some undergraduate-only cases) or 180 qualifying months (if you have other loans), the remaining balance could be canceled. You would need to recertify income each year or be moved to a 10-year standard repayment-based plan if you fail to provide paperwork.
Limits on PAYE enrollment
This bill would restrict who may choose or re-enroll in the Pay As You Earn (PAYE) plan. Before two years after enactment, you could choose PAYE only if your loans meet rules in effect on January 19, 2025 and you had a partial financial hardship when you first entered PAYE. On or after the two-year cutoff, only borrowers who were repaying under PAYE before that date could choose PAYE. If you were repaying under PAYE and left after the cutoff, you could not re-enroll.
Changes to income-contingent repayment rules
This bill would expand which loans can use the Income-Contingent Repayment (ICR) plan. It would add certain Direct PLUS loans made for dependent students and certain consolidation loans that repay those PLUS loans. The bill would also amend ICR to include the SOAR plan starting 180 days after enactment and set a 25-year maximum repayment period. At the same time, the bill would exclude the borrower of a Federal Direct PLUS loan made for a dependent student from ICR and would limit who may choose or re-enroll in ICR after a two-year cutoff. After that cutoff, only borrowers who were already repaying under ICR before the date could choose or re-enroll, and borrowers who leave ICR after the cutoff could not return.
Sponsors & CoSponsors
Sponsor
Jeff Merkley
OR • D
Cosponsors
Chris Van Hollen
MD • D
Sponsored 6/18/2025
Timothy Kaine
VA • D
Sponsored 4/1/2025
Charles Schumer
NY • D
Sponsored 4/1/2025
Mazie Hirono
HI • D
Sponsored 4/1/2025
Richard Blumenthal
CT • D
Sponsored 4/1/2025
Elizabeth Warren
MA • D
Sponsored 4/1/2025
Peter Welch
VT • D
Sponsored 4/1/2025
Kirsten Gillibrand
NY • D
Sponsored 4/1/2025
Alex Padilla
CA • D
Sponsored 4/1/2025
Cory Booker
NJ • D
Sponsored 4/1/2025
Tina Smith
MN • D
Sponsored 4/1/2025
Bernie Sanders
VT • I
Sponsored 4/1/2025
Ron Wyden
OR • D
Sponsored 4/1/2025
Andy Kim
NJ • D
Sponsored 4/1/2025
Edward Markey
MA • D
Sponsored 4/1/2025
Sen. Luján, Ben Ray [D-NM]
NM • D
Sponsored 10/29/2025
Tammy Duckworth
IL • D
Sponsored 11/6/2025
Roll Call Votes
No roll call votes available for this bill.
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