Bill Overview
Title: SIMPLE Act
Description: This bill directs the Department of Education to establish certain notification and automatic enrollment procedures for borrowers who are delinquent on federal student loans or who are rehabilitating defaulted student loans, including to automatically enroll these borrowers in income-driven repayment plans.
Sponsors: Rep. Bonamici, Suzanne [D-OR-1]
Target Audience
Population: People with delinquent or defaulted federal student loans
Estimated Size: 9000000
- The bill focuses on borrowers who are delinquent or rehabilitating defaulted federal student loans.
- In 2023, the U.S. Federal Student Aid office reported approximately 45 million borrowers with student loan debt.
- Roughly 20% of borrowers are currently delinquent or in default according to historical data.
- The SIMPLE Act could potentially impact those currently in or at risk of default across various repayment plans.
- While this targets mainly U.S. citizens, foreign students with U.S. federal loans are also affected.
Reasoning
- Since the policy targets delinquent or defaulted student loan borrowers, I projected a sample of individuals fitting these criteria. The policy aims to alleviate financial stress by enrolling them in income-driven repayment plans, likely affecting their self-reported wellbeing positively due to decreased financial burden.
- Budget constraints may limit the policy's reach in year 1, so the impact might be minimal for some until expanded efforts are made in subsequent years. Therefore, I've modeled both immediate and gradual improvements in wellbeing scores over the timeframe of the policy, particularly significant for those facing severe financial strain.
- Considering different occupations and life stages, individuals from various fields such as part-time workers, low-income earners, and some professionals later in their careers when income levels may not have kept pace with cost of living, were featured to encompass a broader perspective of impacted individuals.
Simulated Interviews
Retail associate (Chicago, IL)
Age: 25 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 20.0 years
Commonness: 15/20
Statement of Opinion:
- The automatic enrollment into income-driven repayment seems like a lifeline. I've been struggling to keep up with standard payments.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 6 | 3 |
| Year 3 | 6 | 3 |
| Year 5 | 7 | 3 |
| Year 10 | 8 | 3 |
| Year 20 | 8 | 3 |
Freelance writer (Dallas, TX)
Age: 33 | Gender: male
Wellbeing Before Policy: 3
Duration of Impact: 10.0 years
Commonness: 12/20
Statement of Opinion:
- It really helps to know I can automatically be put on a repayment plan that's based on my income, instead of defaulting.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 3 |
| Year 2 | 5 | 3 |
| Year 3 | 5 | 3 |
| Year 5 | 6 | 2 |
| Year 10 | 7 | 1 |
| Year 20 | 5 | 1 |
Tech support specialist (Seattle, WA)
Age: 29 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 15.0 years
Commonness: 14/20
Statement of Opinion:
- While I was aware of income-driven plans, the process to enroll was daunting. Automatic enrollment is a relief.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 7 | 3 |
| Year 10 | 7 | 2 |
| Year 20 | 6 | 2 |
Elementary school teacher (Orlando, FL)
Age: 40 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 20.0 years
Commonness: 10/20
Statement of Opinion:
- Teaching doesn't pay much, and my loans have been a constant stressor. This policy could ease that.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 7 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 7 | 3 |
| Year 10 | 8 | 2 |
| Year 20 | 8 | 1 |
Part-time barista (New York, NY)
Age: 38 | Gender: male
Wellbeing Before Policy: 2
Duration of Impact: 10.0 years
Commonness: 11/20
Statement of Opinion:
- I barely make enough to survive, let alone pay student loans. This helps me avoid default.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 3 | 2 |
| Year 2 | 4 | 2 |
| Year 3 | 5 | 1 |
| Year 5 | 6 | 1 |
| Year 10 | 7 | 0 |
| Year 20 | 5 | 0 |
Marketing specialist (Denver, CO)
Age: 27 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 13/20
Statement of Opinion:
- I hoped for some kind of relief, and I think automatic enrollment lifts one burden.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 4 |
| Year 5 | 7 | 4 |
| Year 10 | 7 | 3 |
| Year 20 | 6 | 3 |
Nurse (Atlanta, GA)
Age: 46 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 5.0 years
Commonness: 9/20
Statement of Opinion:
- I wish this relief had come sooner, but I'm glad others won't face what I did.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 5 | 4 |
| Year 5 | 6 | 4 |
| Year 10 | 7 | 4 |
| Year 20 | 4 | 3 |
Warehouse worker (Columbus, OH)
Age: 30 | Gender: male
Wellbeing Before Policy: 3
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- It should ease my repayments with my low income, but it's not solving everything.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 3 |
| Year 2 | 5 | 3 |
| Year 3 | 5 | 2 |
| Year 5 | 5 | 2 |
| Year 10 | 5 | 1 |
| Year 20 | 4 | 1 |
Education consultant (Phoenix, AZ)
Age: 52 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 7/20
Statement of Opinion:
- I have managed to adapt over years, but appreciate what this can mean for new graduates and younger individuals.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Actress (Los Angeles, CA)
Age: 31 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 15.0 years
Commonness: 10/20
Statement of Opinion:
- This is a much-needed change. Income-driven payments make far more sense for my unpredictable earning.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 4 |
| Year 10 | 8 | 4 |
| Year 20 | 7 | 3 |
Cost Estimates
Year 1: $30000000 (Low: $20000000, High: $50000000)
Year 2: $15000000 (Low: $10000000, High: $25000000)
Year 3: $10000000 (Low: $5000000, High: $20000000)
Year 5: $10000000 (Low: $5000000, High: $15000000)
Year 10: $5000000 (Low: $2000000, High: $10000000)
Year 100: $1000000 (Low: $500000, High: $5000000)
Key Considerations
- Initial IT and procedural changes bear significant upfront costs but could moderate over time.
- Ensuring effective communication channels to reach target borrowers is critical for the program's success.
- Operational costs may rise due to the need for increased customer service and troubleshooting during the transition phase.
- Reduction in high default rates could alleviate broader systemic risks within the student loan landscape.