The new GOP plan for student-loan borrowers: longer repayment periods and fewer options for debt relief
House Republicans unveiled their bill to overhaul the education system on Monday.
It proposes reducing student-loan repayment plans to two options and eliminating federal PLUS loans.
It would scrap the most generous plans, likely meaning higher payments and less debt relief.
House Republicans' education plan would mean sweeping changes — and fewer avenues for relief — for millions of student-loan borrowers.
Rep. Tim Walberg, chair of the House education committee, unveiled on Monday the committee's legislation to reshape education and the student financial aid system. The 100-page budget bill would have big implications for student-loan borrowers — if passed, the bill would scrap existing affordable repayment plans and penalize colleges that load students up with unaffordable debt.
The committee said in a press release that the bill is intended to save over $330 billion by "strengthening accountability for students and taxpayers, streamlining student loan options, and simplifying student loan repayment."
"The bill also includes other reforms that will lower costs for students and families while ensuring the fiscal sustainability of targeted programs like the Pell Grant," Walberg said in a statement. "Bottom line, it's time to fix this broken cycle that is costly to taxpayers and leaves students worse off than if they never went to college."
One proposal within the bill calls for condensing the existing repayment plans into just two plans: one of them is a standard repayment plan with a fixed monthly payment amount over a fixed period of time, and the second option is what the legislation calls the Repayment Assistance Plan, which allows for loan cancellation after 360 qualifying payments. The plan ensures that borrowers who are consistent with their monthly payments would not see their balances increase due to interest.
Notably, the bill would eliminate former President Joe Biden's SAVE plan. Biden created the plan in 2023 to give borrowers cheaper monthly payments with a shorter timeline to debt relief, but it's currently blocked in court, and President Donald Trump's administration said it would not revive the plan.
The bill also proposed eliminating federal direct PLUS student loans, which allow parents and graduate or professional students to borrow up to the full cost of attendance for their programs. Those starting their education on or after July 1, 2026, would not be eligible for PLUS loans, which have the highest interest rate of all federal loans.
Other provisions in the bill include measures to hold colleges financially accountable if students take out debt they cannot afford, along with expanding the Pell Grant to low-income students in short-term programs while removing access to the grant for students enrolled in under six credit hours.
Some advocates criticized the GOP proposal. Aissa Canchola Bañez, policy director at the advocacy group Student Borrower Protection Center, said in a statement that "this is a return to the worst failures of the past: 30 years of traps, tricks, and broken promises, where only a handful of borrowers ever see relief."
Sameer Gadkaree, president and CEO of The Institute for College Access and Success, said in a statement that the GOP's "current proposal would severely restrict college access by slashing financial aid programs, eliminating basic consumer protections, and making it harder to repay student loan debt."
The bill is being marked up on Tuesday and is still subject to change. It comes as Trump's administration seeks to overhaul higher education; also on Tuesday, the Department of Education is holding public hearings on its proposal to limit eligibility for Public Service Loan Forgiveness. The department is also restarting collections on defaulted student loans beginning May 5, after a five-year pause.
"As we plan for the department's future, we won't leave the loan portfolio in disarray," Education Secretary Linda McMahon wrote in The Wall Street Journal. "We are committed to ensuring that borrowers are paying back their loans, that they are fully supported in doing so, and that colleges can't create such a massive liability for students and their families, jeopardizing their ability to achieve the American dream."
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