Republicans on the House education committee announced a plan on Tuesday to restructure the federal student loan system. This proposal aims to eliminate Grad PLUS loans, impose strict limits on Parent PLUS loans, and create a system where colleges must reimburse the federal government for a portion of the debt if students fail to repay their loans. The plan is expected to cut over $330 billion in federal spending, which would help offset the costs of extending President Trump’s tax cuts. This proposal is part of a reconciliation package that could pass through Congress. Here are some of the key changes Republicans have outlined:
🎓 After July 1, 2026, new borrowers won't have the option of President Joe Biden's SAVE Plan, or other repayment plans like the Income-Contingent Repayment and Pay As You Earn. In their place will be a standard repayment plan with fixed monthly payments and a repayment assistance plan with monthly payments based on the borrower's adjusted gross income.
🎓 The definition of full-time college attendance for Pell Grant recipients to receive the maximum amount of money will be increased to 30 credit hours per year. To qualify for any Pell Grant at all, students will be required to be enrolled in 15 credit hours per year.
🎓 After July 1, 2026, the plan would eliminate the Grad PLUS loan program for graduate school borrowers, along with subsidized loans for undergraduate borrowers. These loans enable the government to cover interest on the loans while borrowers are still enrolled in school. |