The PROSPER Act, the House Republicans’ proposal for reauthorizing the Higher Education Act (HEA), changes to the federal student loan program to simplify repayment options but will result in longer repayment terms, especially for low-income borrowers.

PROSPER introduces a new income-based repayment plan that would be the only alternative to the standard repayment option for new borrowers, replacing current options, such as PAYE (Pay as You Earn) and REPAYE (Revised Pay as You Earn).

The PROSPER plan requires that borrowers pay 15 percent of their discretionary adjusted gross income (the amount above 150 percent of the federal poverty level) toward their student loans. Borrowers who have no discretionary income must still pay $25 a month toward their loans, though they may request a reduced payment of $5, for up to three years, because of financial hardship.

The PROSPER plan changes the math for potential student borrowers. Those with very low incomes will still be required to put $300 toward their loans each year. Further, without forgiveness, borrowers face the prospect of paying off their loans for more than 20 or 25 years.

Read the full article by Kristin Blagg about student loan repayment from Urban Institute