Senate Republicans pass landmark student loan reforms that limit borrowing

In the United States, recent legislation has been passed by Senate Republicans, marking significant changes to federal student loan programs. The legislative bill aimed at reforming higher education financing is a response to rising tuition costs and the impact of student debt on taxpayers. Various provisions were included in this legislation, which not only aimed to limit borrowing amounts but also revised loan repayment plans and eligibility for student loan forgiveness. Following significant debates, revisions were made following the Senate parliamentarian's rulings to align the changes with reconciliation rules. The changes affect several key areas of the federal student loan system. New caps on borrowing were introduced, limiting undergraduate and graduate student loans. Under the House-approved version, undergraduate borrowing would be capped at $50,000 while the Senate version set it slightly higher at $65,000. Additionally, the Graduate PLUS loan program was eliminated, and parent borrowing limits were also enforced, now set at $65,000 for Parent PLUS loans, down from unlimited borrowing. Moreover, significant alterations were introduced to repayment plans. Several income-driven repayment options were phased out, pushing borrowers toward a modified Income-Based Repayment plan (IBR) and a new Repayment Assistance Plan (RAP). Among the modifications, the RAP would require a minimum payment each month regardless of income, creating potential challenges for borrowers in financial distress. As federal student loan structures shifted, concerns arose about the implications for students, especially those from disadvantaged backgrounds. The legislation, consisting of 940 pages, now awaits final approval from the House of Representatives before moving to the President for signing. Education advocates have warned that these changes could undermine access to higher education, particularly for low-income students, while supporters argue that the proposed limits would ultimately save taxpayers money. With the edge of urgency given a July 4 deadline set by President Donald Trump, a sense of predictability looms over the final outcomes of this sweeping reform.