In a dramatic reshaping of the federal student aid system, House Republicans have introduced a 103-page legislative package that could raise the cost of college for millions of Americans while slashing $185 billion in federal spending over the next decade.
The legislation, a centerpiece of the GOP's budget reconciliation strategy, takes direct aim at key financial aid programs that have historically supported low-income, working-class, and underrepresented students. Education advocates and consumer protection groups warn the proposed cuts would deepen existing inequities in higher education and saddle a new generation of students with greater debt and fewer protections.
Tighter Pell Grant Requirements
Among the most contentious provisions is a proposal to tighten eligibility for the Pell Grant, the federal government’s primary need-based aid program. Under the bill, students would be required to complete 30 credit hours per academic year—up from the current 24—to receive the full grant. Those taking fewer than six credit hours would become ineligible altogether, even if they need just one class to graduate.
“While we support initiatives to reduce the time it takes for students to attain a degree, this approach may jeopardize time to completion for students who work part time,” said Kim Cook, CEO of the National College Attainment Network. “By increasing students’ unmet financial need, this proposal will also drive up student borrowing for millions.”
Cook’s organization estimates the new requirements would affect roughly 25% of current Pell Grant recipients, many of whom balance school with jobs or caregiving responsibilities.
Elimination of Subsidized Loans and Loan Access Limits
The bill also proposes to eliminate subsidized federal loans, which currently allow undergraduates to avoid interest accrual while in school. A limited three-year exemption would apply to students enrolled as of June 30, 2026.
“House Republicans propose charging low-income students more interest by ending the subsidized loan program for students with financial need,” said Abby Shafroth, co-director of advocacy at the National Consumer Law Center (NCLC).
Additionally, the bill would eliminate the PLUS Loan program for graduate students, capping lifetime borrowing at $100,000 for master’s degrees and $150,000 for law and medical students—figures that fall short of the actual cost of many programs.
Sweeping Changes to Repayment Plans
Perhaps the most far-reaching changes involve student loan repayment. The bill would consolidate the current four repayment options into just two: a standard 10-year plan and a single income-driven repayment (IDR) plan. The move would dismantle President Biden’s Saving on a Valuable Education (SAVE) plan, which is already facing legal challenges.
The new IDR plan would require borrowers to pay 15% of their discretionary income—defined as income above 150% of the federal poverty line. That represents a sharp increase over current IDR plans, where many borrowers pay 5% to 10%.
According to the NCLC, this change could more than triple monthly payments for borrowers enrolled in SAVE and force impoverished families to divert funds from essentials like food, rent, or medication.
The repayment timeline would also lengthen, with forgiveness arriving only after 20 years for undergraduate debt and 25 years for those with graduate loans. A new "Repayment Assistance Plan" would extend repayment to 30 years for many borrowers before they become eligible for forgiveness.
“These changes will add to the growing number of low-income older adults still burdened by student loan debt,” said Kyra Taylor, a senior attorney at NCLC. “It’s entirely possible that low-income Americans will still be paying off their own college debt when their children are entering college themselves.”
Rollback of Borrower Protections
The legislation also weakens borrower defense and school closure discharge rules, which offer relief to students defrauded by predatory institutions or impacted by sudden school closures.
The NCLC notes that the bill “rolls back common-sense regulations that would streamline relief for borrowers where the Department of Education has evidence that the school lied and used deception to enroll students in low-quality programs.”
Political and Economic Context
This legislation is part of a broader GOP initiative to slash $1.5 trillion in federal spending to fund former President Donald Trump’s proposed tax cuts, military expansion, and border security initiatives. House Education and Workforce Committee Chairman Tim Walberg (R-MI) has been charged with identifying $330 billion in cuts—placing higher education directly in the crosshairs.
The bill may clear the Republican-controlled House, but its prospects in the narrowly divided Senate remain uncertain. Nonetheless, its introduction signals a renewed ideological clash over the federal role in expanding access to higher education.
Dr. Jamal Watson, author of the forthcoming book The Student Debt Crisis: America’s Moral Urgency, argues the legislation would disproportionately harm students of color, first-generation college-goers, and adult learners.
“The policies in this bill reflect a profound misunderstanding—or disregard—for the lived realities of today’s students,” said Watson. “If passed, it will exacerbate inequality and leave millions further behind.”
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