Trump's Terms Republicans plan to overhaul the federal student loan system. Here's what to know
Apr 30, 2025
House Republicans have introduced an ambitious plan to overhaul the federal student loan system. Key changes include replacing income-contingent repayment options with a new Repayment Assistance Plan. They aim to eliminate the Grad PLUS loan program and impose strict limits on Parent PLUS loans. There's also a proposal for colleges to help shoulder the burden if their students default on loans. This reform sparks a discussion on the potential impacts, particularly for low-income students and the education sector.
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Major Changes to Student Loans
- Republicans propose eliminating Grad PLUS loans and capping Parent PLUS loans, cutting subsidized undergraduate loans.
- They aim to simplify repayment to two plans and hold universities accountable for loan defaults.
Holding Colleges Accountable
- Colleges would reimburse the government for some debt when students fail to repay loans.
- Protections for students from sudden school closures and fraud would be cut back under the plan.
Student Loan Reform Linked to Tax Cut Funding
- Republicans seek to reform student loans and rein in college costs while offsetting the cost of tax cuts.
- Education committee Republicans say their plan could save over $330 billion in federal spending.