Senate Republicans Propose Sweeping Student Loan Reforms
Student loan reform 2025: Congress is inching closer to a historic overhaul of the U.S. student loan system. On June 10, Senate Republicans introduced their version of the “One Big Beautiful Bill Act”, proposing significant reforms to federal student aid and repayment structures.
At 71 pages, the Senate bill is considered less extreme than the House version released in April, but still proposes major structural changes to how Americans pay for college.
Student Loan Caps and Repayment Plan Cuts
Among the Senate bill’s biggest shifts:
- Caps on federal student loans for graduate students and parents
- Reduction of repayment plans from several to just two, ending President Biden’s SAVE program
- SAVE, once lauded as the “most affordable” repayment option, has already been stuck in legal limbo. This bill could officially eliminate it.
Though some cuts to subsidized loans were proposed by House Republicans, those did not make it into the Senate bill.
Pell Grants Get Softer Changes
The Senate approach to Pell Grant eligibility is less severe than the House plan. It:
- Avoids stricter credit hour requirements
- Excludes higher-income students from receiving grants
- Expands eligibility to some unaccredited programs, a movie critics fear could waste public money
New Accountability Rules for Colleges
A major addition in the Senate bill is a performance-based accountability measure:
Programs must prove that graduates earn more than high school grads—or risk losing federal funding.
While it has bipartisan appeal, some say it might not survive the budget-focused process Republicans are using to bypass Democratic votes.
Critics Warn of Private Loan Risks
Higher education groups worry that fewer repayment options and lower borrowing caps could push students toward private loans, which:
- Aren’t as flexible
- Have higher interest rates
- Lack federal protections
“Some aspects of this bill will make college less affordable,” said Melanie Storey, president of NASFAA.
What’s Next?
This legislation is still in early stages. But experts say it’s the closest Congress has come to reshaping student aid in decades.
Whether or not all proposals survive, massive changes are on the horizon for student borrowers—especially if President Trump’s broader fiscal plan gets fast-tracked through the budget reconciliation process.
Source: USA Today
