H.R. 1759 — Affordable PLUS Repayment Options for Parents Act of 2025

This section expands eligibility for the income-contingent repayment (ICR) plan under the Federal Direct Loan Program to borrowers of Federal Direct PLUS Loans made on behalf of dependent students (i.e., Parent PLUS loans) and Federal Direct Consolidation Loans used to repay such PLUS loans (previously ineligible under subsection (d)(1)(D)). (The ICR plan bases monthly payments on 20% of discretionary income, with forgiveness of any remaining balance after 25 years of qualifying payments.)

This section expands eligibility for the income-based repayment (IBR) plan available under the Federal Direct Loan Program by eliminating the prior exclusion of Federal Direct PLUS Loans made on behalf of dependent students and Federal Direct Consolidation Loans used to repay such PLUS Loans or FFEL PLUS Loans. (As background, IBR caps monthly payments at 15% of discretionary income—i.e., adjusted gross income minus 150% of the poverty line—for borrowers demonstrating partial financial hardship, defined as when the standard 10-year repayment amount on total eligible loans exceeds that percentage; remaining balances are forgiven after 20 or 25 years of qualifying payments.) It further revises the IBR statute by (1) clarifying the partial financial hardship definition to base it explicitly on the standard repayment amount exceeding 15% of discretionary income and (2) removing exclusions for "excepted" PLUS Loans and Consolidation Loans from IBR payment caps, special terms for married borrowers, and forgiveness provisions.

This section specifies that the amendments made by this Act take effect on the date of enactment and apply to borrowers who, on or after such date, (1) have an outstanding balance on a Federal Direct PLUS Loan (or Federal Family Education Loan Program [FFEL] PLUS Loan under section 428B) made on behalf of a dependent student or a Federal Direct Consolidation Loan the proceeds of which were used to repay such a PLUS loan; and (2) are repaying or will repay the loan under an income-contingent repayment plan or income-based repayment plan.