Republicans have unveiled their plan to overhaul the federal student aid system, and the new rules they seek to implement would significantly limit the options available to borrowers when it comes time to repay their loans. The proposed changes would also impact the amounts students could borrow and the requirements for Pell Grants.
Dialing back options for student borrowers
The Republican majority of the House Education and Workforce Committee released its Student Success and Taxpayer Savings Plan on Monday. CNBC reported that the new rules would set borrowing caps for federal student loans, with undergraduates limited to $50,000 and graduate students to $100,000. The caps, set to take effect July 1, 2026, would lower the amounts many students can borrow. The proposal would also implement a single option for income-driven repayment, which refers to plans that cap monthly student loan repayment bills based on borrowers’ incomes.
Additionally, those taking out loans on or after July 1, 2025, would no longer be able to claim unemployment or economic hardship deferments for their repayments. The Republican plan also raises the bar for students to receive Pell Grants, requiring students to be enrolled in at least 30 hours per academic year, up from 12 hours per semester. Institute for College Access & Success President and CEO Sameer Gadkaree warned that “the committee’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.”
Critiques and disagreements about proposed cuts
In a news release describing the plan, Committee Chairman Tim Walberg, R-Mich., stated, “For decades Congress has responded to the student loan crisis by throwing more and more taxpayer dollars at the problem — never addressing the root causes of skyrocketing college costs.” The committee’s statement framed the new requirements as “strengthening accountability for students and taxpayers,” as well as “streamlining student loan options” and “simplifying student loan repayment.”
The changes to the student loan program are part of a larger plan by Republicans to pass a sweeping budget that cuts hundreds of billions of dollars in spending in order to pay for massive tax cuts, according to Inside Higher Ed. The exact amounts to be cut from federal education spending remain unclear, with the House Education and Workforce Committee seeking to slash $330 billion. In comparison, its counterpart in the Senate has resolved to cut $1 billion from education. The proposals also come as the Trump administration has announced that it will vigorously enforce student loan repayment.
With Democrats and education advocates opposing these potential changes and Republicans in the two congressional chambers divided on how much to cut, it is unclear how this initial proposal will translate into law. But the plan released Monday sends a clear signal that the GOP hopes to significantly change the way student loans work and the options available to students.
