GOP student loan plan sparks debate over higher payments, fewer options
WASHINGTON (NEXSTAR) — Republican lawmakers are proposing major changes to federal student loan repayment plans, sparking sharp debate among education policy experts and borrower advocates.
Tucked inside the over 1,000-page 'Big Beautiful Bill,' the GOP-backed measure would eliminate existing income-driven repayment (IDR) options introduced during the Biden administration.
In their place, the plan introduces two simplified repayment paths: a fixed payment plan and a new income-driven alternative.
At a March hearing, Rep. Tim Walberg (R-Mich.), the chairman of the House Education and Workforce Committee, championed the provision. He says an overhaul is long overdue.
'This bill cleans up the mess,' Walberg said. 'It streamlines student loan options and creates accountability for students and taxpayers.'
Under the proposal, most borrowers would be automatically enrolled in a fixed payment plan with terms ranging from 10 to 25 years—similar to a mortgage. The new income-driven option would adjust monthly payments based on income but would require even the lowest earners to pay a minimum of $10 monthly. The plan retains a Biden-era policy that waives unpaid interest for borrowers who make consistent payments.
Conservatives say the changes will encourage repayment and reduce costs to taxpayers.
'The student loan portfolio is headed toward a fiscal cliff,' said Madison Marino, an education policy expert with the Heritage Foundation. 'Only 38% of borrowers are currently repaying their loans. This program is very reasonable.'
But critics argue the bill could make repayment harder for millions of Americans.
'What this bill is going to do is lock borrowers into much higher payments for the long term,' said Persis Yu, Deputy Executive Director of the Student Borrower Protection Center. 'The effects are going to be devastating—both for borrowers and for the broader economy.'
The bill passed the House without a single Democratic vote and now heads to the Republican-controlled Senate, where its future remains uncertain.
Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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