Trump's bill proposes drastic changes to federal student loan programs

In recent months, the United States has seen the introduction of a sweeping domestic policy bill proposed by President Donald Trump, which targets federal student loan programs. This legislation aims to overhaul the repayment plans available to borrowers, altering the landscape of student debt in the country. Under the proposed changes, most existing repayment plans will be abolished, limiting borrowers to just two options: a standard repayment plan with a fixed monthly payment and a new Repayment Assistance Plan (RAP) based on annual income. Borrowers currently benefiting from various repayment plans may find themselves facing increased financial burdens as the bill moves forward. The proposed bill also introduces maximum borrowing limits for federal student loans. Under this new structure, undergraduate students would only be able to borrow a total of $50,000, while graduate students would face caps of $100,000 to $150,000 based on their field of study. Furthermore, total borrowing for both undergraduate and graduate loans is capped at $200,000. These restrictions are set to take effect in July 2026, which could potentially deter students from pursuing higher education or push them toward private loans, significantly affecting their long-term financial stability. Moreover, the proposed changes will impact borrowers who currently hold Pell Grants. The bill stipulates that students can only receive Pell Grants if they are enrolled at least half-time, and it raises the required annual credit load from 24 to 30 credits. This modification could disqualify a large number of low-income students who attend school part-time, thus diminishing their chances of accessing crucial financial aid. The Student Borrower Protection Center projects that over 61% of Pell Grant recipients may lose their grants or see them reduced under these proposed rules, exacerbating the financial challenges for many. With reports indicating that a considerable fraction of borrowers are already struggling under the existing system, the proposed changes add a layer of complexity and concern. Financial difficulties among student loan borrowers are highlighted by a recent survey conducted by the Consumer Financial Protection Bureau, showing that nearly 30% of borrowers have prioritized loan payments over essential needs like food and medication. The ongoing developments and potential consequences of Trump's legislative efforts leave many borrowers and families anxious about their educational funding and repayment ability in the near future, while the tuition and loan landscape in the U.S. is set to transform significantly.