Millions of student loan borrowers could see their payments increase as House Republicans push for budget plans that roll back Biden-era relief efforts. This marks a dramatic reversal from years of policies aimed at lowering monthly payments and providing debt relief to borrowers.
While GOP proposals are still subject to change, student loan forgiveness is now largely off the table, and borrowers are bracing for potential financial strain as student loans become a key target for budget reconciliation.
A Sharp Shift in Policy
Aissa Canchola Bañez, policy director for the Student Borrower Protection Center, criticized the proposed changes, calling them an attack on students and working families.
“We really see this as an attack on students and working families with student loan debt. We’ve seen an array of really problematic proposals that are on the table for congressional Republicans,” Bañez said. “Many of these would cause massive spikes for families with monthly student loan payments.”
The House and Senate are currently working on competing legislative packages to fund the government and advance former President Trump’s policy agenda. The House, led by Speaker Mike Johnson (R-La.), is expected to vote on its budget reconciliation resolution as early as Tuesday. With a slim Republican majority, Johnson can afford only a few defections.
Among the GOP’s proposals is the likely elimination of the Saving on Valuable Education (SAVE) plan, an income-driven repayment (IDR) initiative that lowered some borrowers’ monthly payments to $0. The 8th U.S. Circuit Court of Appeals recently ruled to block the program, opening the door for Republicans to end it entirely.
Higher Payments on the Horizon
In addition to ending SAVE, House Republicans propose streamlining all IDR plans into just two options for loans issued after June 30, 2023. The Congressional Budget Office (CBO) estimates this move could save the government $127.3 billion over the next decade. However, the impact on borrowers would be severe.
A recent analysis by the Institute for College Access and Success found that, under these proposals, the average student loan payment could increase by nearly $200 per month.
Republicans remain divided over aspects of the reconciliation package. Moderates worry about proposed Medicaid changes, while others are concerned about balancing tax cuts with spending reductions. The House is aiming for $2 trillion in spending cuts overall.
Despite internal disagreements, Speaker Johnson remains confident in passing the measure. “There’s a couple of folks who just have lingering questions, but I think all those questions can be answered, and we’ll be able to move forward,” he told reporters.
The Senate passed its own budget resolution last week but has yet to release details on higher education funding. Lawmakers face a March 14 deadline to finalize a plan to fund the government.
Rolling Back the Department of Education’s Authority
Another key element of the House GOP’s plan is to strip the Department of Education of regulatory power regarding student loan cancellations. This would prevent the agency from enacting sweeping forgiveness initiatives without explicit congressional approval.
Patrick Wright, vice president for legal affairs at the conservative Mackinac Center for Public Policy, defended these proposals. His organization sued the Biden administration over its attempt to cancel student debt for 800,000 borrowers.
“Our big concern with the student loan programs was it […] wasn’t done through Congress, where it wasn’t a matter where the people’s representatives had an opportunity to weigh in,” Wright said.
While some borrowers may feel blindsided, Wright argued that relief programs should be the result of legislative action, not executive orders. “If Congress decides, in the future, going forward, that they are going to offer some sort of relief, and that’s gone through the democratic process, that’s one thing,” he said. “But complaints based off of illegal actions taken by the previous presidential administration … those are not something that people should have been able to rely upon.”
Impact on Public Service Loan Forgiveness and Other Programs
Even programs that historically enjoyed bipartisan support, like Public Service Loan Forgiveness (PSLF), are now under scrutiny. The PSLF program forgives remaining student loan balances for teachers, police officers, and other public servants after ten years of payments. Republicans are considering restricting eligibility for PSLF, though details remain unclear.
Other proposed changes include:
Placing caps on borrowing limits for students
Restricting who can apply for loan discharges under Borrower Defense
Eliminating Parent PLUS loans
Implementing risk-sharing payments for colleges
Ending interest capitalization
Reforming Pell Grants
Natalia Abrams, president of the Student Debt Crisis Center, acknowledged borrowers’ anxiety over these potential changes.
“I think borrowers are concerned,” she said. “We understand their fears, but things like Public Service Loan Forgiveness in the past have had bipartisan support. It’s hard to know where that will go. What will it be like? Will they grandfather existing folks into the programs or not? It’s just a very concerning time for borrowers.”
What Borrowers Can Do Now
With uncertainty surrounding student loan policies, advocacy groups are urging borrowers to take proactive steps to protect themselves.
Abrams advised borrowers to document their payments and loan status in case future changes impact their accounts. “Borrowers should document and take screenshots of their studentaid.gov page and their loan servicer accounts,” she said.
She also suggested enrolling in programs that were legislatively established, as they may have a better chance of surviving GOP-led reforms. “If you’ve been thinking about enrolling in a program, now is the time,” she warned.
Beyond individual action, Abrams stressed the importance of political advocacy.
“Call your senators, call your members of Congress, send a letter. If you have the ability to show up at a local office, share your student loan story,” she urged. “They need to hear from folks, and advocacy does work.”
Looking Ahead
With Congress racing against a March 14 deadline, the fate of student loan programs remains uncertain. House Republicans are eager to reverse Biden-era relief measures, while student advocates fear the consequences of rising loan payments on millions of borrowers.
.jpg)
