House Republicans’ Proposed Overhaul of Student Aid Would Reshape Federal Higher Education Policy

Clare McCann, Jordan Matsudaira, and Tia Caldwell
May 2025

Earlier this month, House Republicans introduced a bill that, if enacted, would dramatically transform the federal government’s role in helping Americans pay for college. It increases annual student loan borrowing limits for undergraduates by as much as five-fold, but leaves their aggregate limits largely unchanged; reduces borrowing limits for graduate loans; and increases student loan repayment for the lowest-income borrowers. It sets out a complex risk-sharing accountability system to require institutions to pay a fraction of their students’ unpaid loan balances, so that colleges bear some of the costs of loans from programs that leave students without good-paying jobs. And it makes significant changes to the Pell Grant program, including allowing very short-term training programs to access Pell Grants for the first time.

The Congressional Budget Office estimates the bill would net more than $350 billion in savings over the next decade (mostly from repealing a Biden-era loan repayment plan currently enjoined by the courts), and the House quickly moved it forward on a party-line vote in the education committee. The bill is just one component of a larger effort to pass legislation through reconciliation – a process that enables the Senate to pass legislation with a simple majority vote, often used when one party controls the House, Senate, and the White House – and its fate is tied up in the larger politics of developing and voting on that package.

This piece provides an overview of major policies included in the bill, and flags some of the most concerning provisions. Stay tuned for deeper analyses from the PEER Center in the coming weeks.
Read the full brief