Republican education plan: reduced borrowing limits and fewer repayment choices for students
Republicans release a plan to overhaul the student loan and financial aid system, including caps on borrowing, fewer repayment options, and stricter Pell Grant eligibility.
In a move that could significantly impact the student loan landscape, Republicans on the House Education and Workforce Committee have unveiled their plan to overhaul the U.S. student loan and financial aid systems.
The proposal, known as the Student Success and Taxpayer Savings Plan, aims to tackle the student debt crisis by imposing caps on federal student loans and reducing repayment options for borrowers.
Key features of the GOP’s student loan overhaul
This new proposal looks to put a cap on federal student loans, limiting the borrowing amount for undergraduates to $50,000 starting July 1, 2026, while graduates would face a borrowing limit of $100,000. These circumstances would completely alter the current amount of people in college, as these caps represent a significant reduction on the current borrowing plans and loan limits.
This would also limit the available income-driven repayment (IDR) options to just one, affecting millions of borrowers who are currently enrolled in multiple IDR plans, designed to make monthly student loan payments more affordable according to their income.
GOP’s reduction in hardship protections
The proposal would also eliminate unemployment and economic hardship deferment options for federal student loan borrowers, applying for loans taken during or after July 2025, making it even more difficult for borrowers to manage their debt during periods of financial struggle.
Additionally, full eligibility for Pell Grants — one of the largest sources of financial aid for undergraduates — would mean an increase in the minimum credit hours required from 12 per semester to 30 per year. Meanwhile, the grants would be expanded for short-term workforce training programs.
