Student Loan Simplification and Opportunity Act of 2011 - Amends title IV (Student Assistance) of the Higher Education Act of 1965 to repeal the Secretary of Education's authority, under the Direct Loan (DL) program, to purchase or enter into forward commitments to purchase: (1) Federal Family Education Loans (FFELs) from lenders, upon the determination that there is an inadequate availability of loan capital to meet the demand for such loans; and (2) rehabilitated loans that eligible lenders purchased under the FFEL default reduction program. (Currently, the Secretary's authority to purchase or enter into forward commitments to purchase such loans is set to expire in July 2010, as is the FFEL program.)
Authorizes the Secretary to offer borrowers FFEL Debt Conversion Loans, until October 2012, that cover FFELs that have not been purchased under the program this Act repeals, provided such borrowers: (1) are not in default or delinquent for 270 days or more on such loans, and (2) have an outstanding DL or an outstanding FFEL that was purchased pursuant to the program this Act repeals. (FFEL Debt Conversion Loans pay the holder of the FFEL the outstanding principal and interest on the loan, which the borrower is then obligated to repay to the Secretary under the terms of the converted FFEL.)
Authorizes the Secretary to offer benefits to borrowers of FFEL Debt Conversion Loans in an amount up to 2% of the amount advanced on the FFEL Debt Conversion Loan.
Requires federal proceeds from this Act's temporary authorization of FFEL Debt Conversion Loans to be used for the Pell grant program.