H.R. 8475 — Savings Opportunity and Affordable Repayment Act

This section establishes the Savings Opportunity and Affordable Repayment (SOAR) plan as a new income-contingent repayment option—defined in new section 493E—for Federal Family Education Loan Program (FFEL), Federal Direct, and consolidation loans (i.e., loans under HEA parts B, C, and D), available beginning 180 days after enactment of this Act with varying annual repayment amounts based on borrower income over a period not to exceed 25 years (excluding Federal Direct PLUS Loans made on behalf of dependent students). (As background: Income-driven repayment plans cap monthly payments as a percentage of a borrower's discretionary income, with any remaining balance forgiven after 20-25 years of qualifying payments.) This section phases out the Pay As You Earn (PAYE) repayment plan by (1) limiting initial enrollment before two years after enactment to borrowers with eligible loans and partial financial hardship, (2) after two years, restricting it to borrowers already enrolled before that date, and (3) prohibiting re-enrollment after two years for those who switch plans. This section similarly phases out the Income-Contingent Repayment (ICR) plan by limiting enrollment after two years post-enactment to existing participants (with no re-enrollment for those who switch plans) and expands ICR-eligible loans to include Federal Direct PLUS Loans (and certain consolidations thereof) made on behalf of dependent students.