GOP Proposes Major Overhaul of Student Loan System, Raises Costs for Millions

House Republicans have proposed a sweeping overhaul of the federal student loan system that would eliminate the Biden administration's SAVE plan and consolidate all existing income-driven repayment options into a single plan, requiring payments for up to 30 years before forgiveness. The reforms, part of the Student Success and Taxpayer Savings Plan, aim to save over $330 billion, with those savings intended to help fund an extension of the Trump-era tax cuts. Key features include strict caps on federal loan amounts, elimination of the Grad PLUS loan program, and tighter restrictions on Parent PLUS loans, which could significantly impact families dependent on federal aid. The changes would also introduce a 'skin in the game' policy holding colleges partially responsible for defaults, and overhaul Pell Grant eligibility, requiring students to take more credit hours. Critics warn these measures could dramatically raise costs for working families, push affordable higher education out of reach for many, and disproportionately impact low-income and part-time students. Supporters claim the reforms would streamline the repayment system and reduce government spending, but borrower advocates and education groups argue they could result in larger payments and increased financial hardship for millions of Americans.