New Bill Would Automatically Enroll Delinquent Student Loan Borrowers in Income-Driven Repayment

For borrower advocates, the federal student loan system is a bureaucratic trap where struggling graduates default simply because they cannot navigate the paperwork to lower their payments. For fiscal conservatives and some policy analysts, automatically enrolling borrowers in income-driven plans without their active consent risks masking the true cost of debt and shifting the burden onto taxpayers without addressing the root cause of tuition inflation.[2][4]

The legislative attempt to bridge that gap is the SIMPLE Act (H.R. 10220), reintroduced on September 2, 2026, by Representative Suzanne Bonamici (D-Ore.). If passed, the bill requires the Department of Education to notify borrowers once they are 31 days delinquent on a federal student loan. If the borrower remains delinquent at 75 days, the government would automatically move them into the income-driven repayment (IDR) plan that offers the lowest monthly payment.[2][4][5]

To execute this without requiring action from the borrower, the legislation authorizes the Internal Revenue Service to share tax return data directly with the Department of Education. This data pipeline allows the government to calculate a borrower's adjusted gross income and family size automatically. Borrowers retain the right to opt out of the data-sharing agreement and can manually select a different repayment plan if they prefer to submit their own paperwork.[1][5]

Defaulting on a federal student loan triggers severe financial penalties, including wage garnishment, the withholding of tax refunds, and damaged credit scores. According to the National Association of Student Financial Aid Administrators (NASFAA), these consequences disproportionately affect low-income borrowers and those who hold less than $10,000 in debt but never completed a degree. "Bureaucratic hurdles should not keep student loan borrowers from more affordable repayment plans," said Bonamici.[2][6]

The bill also alters the process for borrowers currently working to rehabilitate a defaulted loan. Under the proposed rules, the Department of Education must send a personalized notice after the borrower makes their sixth required rehabilitation payment. After the ninth required payment, the department would automatically enroll the borrower in the most favorable IDR plan available.[4][5]

For borrowers with older loans originating before July 1, 2026, who have no recent adjusted gross income data on file, the system would automatically assign a $0 monthly payment under most IDR plans. This removes the barrier of tracking down historical tax documents for individuals who have been out of the workforce or living below the filing threshold.[5]

The automatic enrollment provisions are not designed for immediate implementation. If enacted, the core mechanisms of the SIMPLE Act would take effect on July 1, 2028, applying to the 2028–2029 award year and subsequent years. Provisions allowing borrowers to switch out of Income-Based Repayment into any other eligible plan would take effect immediately upon enactment.[5][6]

The legislation, which carries six House Democratic co-sponsors, currently sits in the House Education and Workforce Committee and the Ways and Means Committee. A similar version of the bill was previously introduced in 2024, and its passage now relies on gaining bipartisan committee support before it can advance to a floor vote.[4][5][6]