Republican lawmakers want to overhaul student loans. Here's what to know.
Republican lawmakers on Monday introduced a proposal to overhaul the nation's student loan system, including eliminating a popular repayment plan that had helped millions save money on their debt payments.
The proposal, which was released by the House Committee on Education and the Workforce, would save more than $330 billion, according to a statement by Committee Chairman Tim Walberg, a Republican from Michigan.
The plan comes as Republicans move to slash federal spending in order to pass legislation that would extend President Trump's 2017 tax cuts, as well as add measures such abolishing taxes on tips. The student loan proposal also takes aim at a major repayment program that sparked a lawsuit from Republican states last year over allegations the plan would result in lost revenue.
The new GOP proposal is aimed at "addressing the root causes of skyrocketing college costs," Walberg said in a statement.
The Republican plan could result in higher costs for people with college debt, with a typical borrower with a bachelors degree paying almost $3,000 more per year versus other government repayment plans, according to the Student Borrower Protection Center, an advocacy group for people with student debt.
The Republican proposal, which is in its early stages, may face changes as it progresses through the legislative process. Here's what to know.
How could income-based repayment plans change?
For Americans with student debt, the Republican proposal would eliminate existing income-contingent repayment arrangements, including the Saving on a Valuable Education, or SAVE, plan, which was created in 2023 by the Biden administration. These plans typically link a person's monthly loan payment to their income, with the goal of ensuring that borrowers aren't burdened with excessive loan costs.
SAVE proved popular with student borrowers, with more than 8 million enrollees by the time it was paused last year by the courts. The program was heralded by President Biden at the time as "the most affordable student loan plan ever."
Under the Republican proposal, the four existing income-based plans would be replaced with one program called the "repayment assistance plan." This would calculate monthly payments based on a borrower's adjusted gross income, ranging from 1% to 10% of that amount.
Borrowers would need to repay their loans for a maximum of 30 years, the proposal states. Under the SAVE plan, a borrower's student loan could be wiped out after 10 years.
"Based on our review of this proposal, contrasted with the benefits and protections available to borrowers under the Saving on a Valuable Education (SAVE) repayment plan, we found that a typical borrower will see monthly student loan costs spike by hundreds of dollars per month, or thousands of dollars per year," Mike Pierce, executive director of the Student Borrower Protection Center, said in an April 28 letter to Republican lawmakers.
What other repayment plans would be available?
The GOP plan would offer another option for repaying student loans called the "standard repayment plan." That would allow borrowers to repay their loans with a fixed monthly payment, with terms that extend from 10 to 25 years, based on the amount borrowed.
For instance, people with less than $25,000 in debt could repay their loans over 10 years, while those with $25,000 to $50,000 in loans would have 15 years of repayments, according to the proposed bill.
How could Pell grants change?
Under the Republican plan, the Pell grant program — geared to low- and middle-income students — would face new limits.
For instance, the proposal would change the definition of a full-time student to someone with at least 15 credit hours per semester, up from the current 12 credit hours. It would also bar students who are attending half-time from receiving Pell grants.
The plan would also make it tougher for families that own assets, yet have low incomes, to qualify for Pell grants.
What other changes could occur?
The Republican plan would scrap Grad PLUS loans, which are for graduate and professional students, as well as subsidized loans for undergraduate students, where students don't have to pay interest on the loans while in school.
The plan would also require undergrad students to take out their maximum loan amount — $50,000 under the proposal, up from $31,000 currently — before their parents could take out a Parent PLUS loan to cover the rest of their cost of attending college.
The Parent PLUS loans would be capped at $50,000, versus the current limit, which amounts to the total cost of attendance minus any student aid the student receives.
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But it's difficult to see how this leads anywhere, for a few reasons. The first is that there is nothing evidently wrong or unlawful about using the autopen. In 2005, the Justice Department's Office of Legal Counsel (under Republican President George W. Bush) conducted an extensive review of the legality of a president using the autopen. It found that 'the President need not personally perform the physical act of affixing his signature to a bill to sign it within the meaning of Article I, Section 7.' Trump has most often focused his autopen theory on Biden's pardons. (The idea that these are invalid would ostensibly allow Trump's Justice Department to investigate and charge the people Biden preemptively pardoned.) But there too, established legal advice from past administrations undermines the claim. A 1929 memo from the US solicitor general noted that the Constitution didn't even prescribe a method for issuing pardons. That means they don't necessarily even need to be publicly documented. (You might have heard in recent years about the prospect of 'secret' pardons.) And the memo explicitly says that pardons 'need not have the president's autograph.' The other key point is that many presidents have used this practice in one form or another. Thomas Jefferson bought and used such a machine back when it was first patented in 1803, according to the Shapell Manuscript Foundation. And even Trump himself has acknowledged using the autopen for certain things. Trump said back in March he has used it but 'only for very unimportant papers.' He specifically cited responding to people's letters. But in another case, Trump rather curiously seemed to indicate that he hadn't signed a major proclamation that bore his signature – the one at issue in his attempt to rapidly deport migrants using the Alien Enemies Act. That proclamation is a major issue in litigation that has already reached all the way to the Supreme Court. 'I don't know when it was signed, because I didn't sign it,' Trump said, adding: 'Other people handled it, but (Secretary of State) Marco Rubio has done a great job and he wanted them out and we go along with that.' Given the proclamation bore Trump's signature, that seemed to raise the possibility that the administration might have used the autopen for it. The White House later claimed Trump had in fact signed the proclamation and that he was instead referring to not having signed the original Alien Enemies Act. (But that argument strained credulity, given Trump cited how 'other people handled it' and the fact that the Alien Enemies Act dates to 1798. That means there is no way anyone could ever believe Trump might have signed it. The question Trump responded to also specifically referenced the proclamation, not the 1798 law.) In another way, Trump's Wednesday night memorandum isn't really about the autopen. It's about using that as a shorthand for something else entirely: what the memo calls Biden's 'cognitive decline.' Trump's order isn't just about reviewing whether any autopen signatures used by Biden were lawful; it also cites the idea that people used it as part of an effort to 'unconstitutionally exercise the authorities and responsibilities of the President.' 'I'm sure that he didn't know many of the things – look, he was never for open borders, he was never for transgender for everybody, he was never for men playing in women's sports. All of these things that changed so radically, I don't think he had any idea … what was going on,' Trump told reporters in the Oval Office on Thursday. 'Essentially, whoever used the autopen was the president.' This theory – if ever somehow proven – would actually matter. The 2005 Bush Justice Department memo, for instance, made clear that while presidents could outsource the signing of documents, that doesn't mean they could necessarily outsource the decisions to sign the documents. The OLC memo emphasizes that 'we do not question the substantial authority supporting the view that the President must personally decide whether to approve and sign bills.' But however compelling the evidence that Biden administration officials covered up his decline, there remains no evidence that he wasn't actually making decisions to sign things. That's taking things to an entirely different level. Biden's advisers have denied any coordinated effort to conceal from the public his deteriorating condition during the final years of his presidency. And the 2005 DOJ memo suggests it would have to prove more than just that Biden wasn't particularly engaged, but that he didn't make the final decisions. Trump was asked Thursday if he had uncovered 'anything specific' that was signed without Biden's knowledge or by people in his administration who acted illegally. Trump said, 'No.' Biden, for his part, issued some strong statements late Wednesday. 'I made the decisions about the pardons, executive orders, legislation, and proclamations,' the former president said. 'Any suggestion that I didn't is ridiculous and false.' The former president also called this 'nothing more than a distraction' to obscure Republicans' push for a dicey Trump agenda bill, which features Medicaid cuts in the House-passed version. The Congressional Budget Office estimated Wednesday that this could lead to millions of people losing their health insurance. Indeed, the political utility of the theory underlying Trump's memo is readily apparent. It's wildly popular in conservative media, with Fox News already devoting dozens of stories and extensive coverage to it. That includes this week when other outlets were focused on a decidedly less helpful story for the Trump administration: Elon Musk bashing the president's domestic policy bill. It's also nearly impossible to disprove it. History suggests that arriving at actual proof of Trump's theory is often besides the point for Trump. It's about repetition and seeding doubt. And Wednesday's action is clearly in line with that history.
