The United States House Committee on Education and Workforce voted to advance a new higher-education bill that will have a significant impact on students’ abilities to receive Pell Grants and student loan repayment plans. In addition, it would place restrictions on Parent and Grad PLUS loans. The advocates of these measures claim they are an effort to save hundreds of billions of dollars for potential incoming tax cuts. However, it would also have the effect of making higher education that much more unavailable to those who want the opportunity education affords.
The bill, the Student Success and Taxpayer Savings Plan, was cast by Tim Walberg, the Republican chair of the House’s education committee, in an effort to reform the student loan system, push colleges to lower their prices and help shrink the federal deficit. It advanced along party lines and no Democrats voted in favor of the bill.
In a summary statement from the House committee, the plan proposes changes including updating categories for noncitizens who are eligible to receive grants, loans or work assistance; capping the total amount of federal student aid a student can receive annually to the median cost of attendance for students enrolled in the same program; termination of authority to make Grad PLUS loans and subsidized loans for undergraduate students on or after July 1, 2026; and termination of all repayment plans authorized under income-contingent repayment.
Colleges would also share in the cost of unpaid interest and missed payments, with these funds being redistributed as PROMISE Grants to institutions with strong outcomes and high Pell Grant enrollment. While House Republicans believe these reforms will save money and hold colleges accountable, critics worry about the impact on low-income students and those with work and parenting responsibility outside of education.
The proposed changes would have an impact on students and their eligibility for higher education as well as those who are currently paying on their student loans. With the termination of a variety of repayment plans and moving toward one singular plan, borrowers may struggle to make the repayments on top of other debt burdens. The attorneys at Sader Law Firm are available to answer questions and determine if bankruptcy may be the best course of action for you as repayment plans change. Contact us at (816) 561-1818 for a free phone consultation and learn more about what actions might be your best decision.