"It's time to fix this broken cycle that is costly to taxpayers and leaves students worse off than if they never went to college," said Rep. Walberg.
The GOP proposal, the Student Success and Taxpayer Savings Plan, is intended to save over $330 billion by "strengthening accountability for students and taxpayers, streamlining student loan options, and simplifying student loan repayment," the committee said in a press release.
"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," Committee Chairman Tim Walberg (R-Michigan) said in a statement. "Colleges have ridden this gravy train of taxpayer dollars without any accountability for the quality of education they provide or whether students can find jobs when they graduate. This plan brings accountability and holds schools financially responsible for loading students up with debt."
Under the proposal, undergraduate students would face a borrowing cap of $50,000 in federal student loans, while graduate students can take out a maximum of $100,000. The law would take effect July 1, 2026, according to the bill. Additionally, the proposal calls for condensing existing repayment plans into just two options: a fixed monthly payment over a fixed period or utilizing the Repayment Assistance Plan (RAP), which would allow a loan to be cancelled after 360 qualifying payments. The RAP would guarantee that borrowers who adhere to their monthly payments are spared from an increase in their balances because of interest rates.
The bill would also eliminate former President Joe Biden's 2023 SAVE Plan, a student loan forgiveness program that provided borrowers with reduced monthly payments and a shorter fixed payment timeline. However, the SAVE Plan was temporarily blocked by the United States Supreme Court in 2024, and the Trump administration previously stated it would not revive the plan, per Business Insider.
Additional provisions in the measure would hold colleges financially responsible if students take out debt they cannot afford. I would also expand the Pell Grant to low-income students in short-term programs.
"It's time to fix this broken cycle that is costly to taxpayers and leaves students worse off than if they never went to college," said Walberg.
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