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Category: College Costs

Dept. of Ed Proposes Stricter Rules on Low-Earning College Programs

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Last week, the Department of Education released a Notice of Proposed Rulemaking (NPRM) that would establish a postsecondary education accountability framework imposing stricter rules related to federal student loans and earning thresholds.

Under the proposed rule, if the typical graduate of a particular program does not earn as much as a high school graduate, the program would be ineligible for federal student loans. Similarly, graduate programs would need to demonstrate leading to earnings above those of an average bachelor’s degree holder.

These accountability measures stem from the One Big Beautiful Bill Act, and the agency characterizes this as the latest step in a promise to “break the cycle of low return on investment for students and taxpayers.”

The full NPRM can be found here.

Trump administration announces student loan office will move to Treasury Department

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As part of the Trump administration’s ongoing pledge to dismantle the Education Department, the agency plans to shift the federal government’s student loan portfolio to the Treasury Department.

Moving the nearly $1.7 trillion portfolio out of ED has been a longtime goal for conservatives. In March, President Trump caught many by surprise by announcing the student loan portfolio would transfer to the Small Business Authority, a move which promoted immediate backlash and legal challenges. The Treasury Department has been a more popular choice for others in the administration. Following the announcement on Thursday, Secretary Scott Bessent said, “Treasury has the unique experience, the operational capability and the financial expertise to bring long overdue financial discipline to the program and be better stewards of taxpayer dollars.”

Senior officials at ED did not offer a timeline or estimated cost of this move, but said it would unfold in three stages, beginning with shifting management of student loans for borrowers in default. Those loans add up to $180 billion, roughly 11% of the student loan portfolio. Eventually, the Treasury Department plans to take responsibility for all student loans.

A fact sheet provided by the administration highlighted decades of mismanagement with the student loan portfolio, and promised that with this change, students and families “will continue to receive the high-quality service they have come to expect under the Trump administration.”

But critics feel undertaking a move of this magnitude will be costly and complex, the latest in a string of interagency agreements that aim to gradually dismantle the Education Department. Shutting down the department would require Congressional approval, but the Trump administration has moved to transfer more responsibilities away from ED throughout the last year. In November, the department moved the Office of Elementary and Secondary Education and the Office of Postsecondary Education to the Labor Department.

Senate HELP committee to vote on key bills

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 On Thursday, February 26, the Senate Health, Education, Labor, and Pensions (HELP) Committee will vote on several significant bills regarding access to quality education and health care.

The bills under consideration include:

  • S. 1602, Mathematical and Statistical Modeling Education Act
  • S. 1558, Understanding the True Cost of College Act of 2025
  • S. 3747, Home School Graduation Recognition Act
  • S. 1782, Charlotte Woodward Organ Transplant Discrimination Prevention Act
  • S. 1552, Living Donor Protection Act of 2025
  • S. 3315, Health Care Cybersecurity and Resiliency Act of 2025

Date: Thursday, February 26, 2026

Time: 10:00 AM ET/ 9:00 AM CT

Location: 430 Dirksen Senate Office Building

Link to watch live

Student Loan Changes

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After a marathon of overnight voting and intense intra-party negotiations, the Republican-controlled Congress has passed the long-anticipated “Big, Beautiful Bill” championed by President Trump. The sweeping legislation, signed into law on July 4, introduces significant changes across key policy areas—including taxation, defense, immigration, healthcare, and education.

One of the bill’s most consequential changes involves a complete restructuring of the federal student loan system, aimed at curbing government spending to offset substantial tax reductions. Although initial proposals varied between the House and Senate, lawmakers ultimately reached a compromise that is now law.

New Borrowing Limits (Effective July 1, 2026):

  • Graduate students: $20,500 annually, $100,000 lifetime cap
  • Professional students: $50,000 annually, $200,000 lifetime cap
  • Parents (combined per student): $20,000 annually, $65,000 lifetime cap
  • Lifetime borrowing cap for all students: $257,000
  • Grad PLUS and Parent PLUS programs: Eliminated
  • Undergraduate annual borrowing limits: Unchanged

Repayment Changes: Starting July 1, 2026, all existing income-driven repayment (IDR) plans will be discontinued for new borrowers. Instead, two new plans will be introduced:

  1. Standard Repayment Plan: Payment periods range from 10 to 25 years, depending on the original loan balance
  2. Repayment Assistance Plan (RAP): Payments set at 1% to 10% of income, with remaining balance forgiven after 30 years

Current borrowers can remain on existing repayment plans through July 1, 2028, after which they will be transitioned to RAP or a revised version of the Income-Based Repayment (IBR) plan.

See the table below for more:

OBBBA Student Loan Chart

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House Republicans passed their multi-trillion-dollar reconciliation package this morning, a major victory for Speaker Johnson and President Trump. The passage comes after weeks of infighting amongst Republicans, with both moderate members and conservative hardliners threatening to withhold their support over certain provisions. Eventually, after a meeting with President Trump and last-minute changes made by Republican leadership, the bill passed by a 215-214-1 vote. Every House Democrat voted no. Reps. Thomas Massie (R-KY) and Warren Davidson (R-OH) were the two Republicans who voted against the legislation. House Freedom Caucus Chair Andy Harris (R-MD.) voted present.

The legislation includes $3.8 trillion in tax cuts and cuts to Medicaid and SNAP coupled with the phase out of clean energy tax credits from the Inflation Reduction Act. These programs were cut in order to offset the impact of the extension of President Trump’s 2017 tax cuts, and the Congressional Budget Office estimates that the bill will result in $698 billion in cuts to Medicaid and $267 billion in cuts to SNAP.

Additionally, the bill makes significant changes to higher education legislation — particularly student borrowing. If signed into law, this package would cap lifetime borrowing for a student or their parents at $200,000 and eliminate entirely subsidized student loans and Grad PLUS loans. The bill also includes changes to Pell Grant eligibility, the creation of a risk-sharing program for universities, and would cap the availability of federal aid to the median cost of a specific program nationally.

The reconciliation package now heads to the Senate for consideration, where it will likely be significantly altered.  While reconciliation bills are not subject to the filibuster in the Senate, meaning only a simple majority is needed for passage, there are stricter rules around what can be included in the Senate. Furthermore, many Senators have expressed misgivings over many of the cuts made by House lawmakers.