The One Big Beautiful Bill Act includes the largest overhaul to the federal student aid system in decades, limiting loan repayment and debt forgiveness options for borrowers.
As the Federal student aid portfolio soars to nearly $1.7 trillion and with nearly a quarter of student loan borrowers in default, Americans know that the Department of Education has failed to effectively manage and deliver these critical programs. By leveraging Treasury's world-renowned expertise in finance and economic policy, we are confident that American students, borrowers, and taxpayers will finally have functioning programs after decades of mismanagement.
In the coming weeks, the Department will issue clear guidance on next steps for borrowers enrolled in the illegal SAVE Plan, including details regarding how borrowers can move into a legal repayment plan. The Trump Administration will continue to realign the federal student loan portfolio to better serve students and taxpayers.
The 13-member panel, comprised largely of state officials, think tank researchers and higher ed lawyers, spent the last four days negotiating the rules of a new college earnings test called Do No Harm-which applies to all degree programs-as well as changes to the existing gainful-employment rule, an accountability metric that only applies to certificate programs and for-profits. The department's proposal, which aligns the two accountability
It can be scary to borrow large student loans to finance an expensive college degree. There is a market failure, however, every time a student does not attend their preferred college, study their preferred major, or pursue their preferred career because they are afraid of student loans. Students should be free to pursue their passions - not forced into second-best choices because of the cost of the degree or the prospect of a lower income in the future.
"Here's the reality: When you come to the table prepared with smart and dedicated people that are focused on a clear goal, you can move quickly and intentionally without sacrificing the thoroughness and the careful deliberation that this process deserves,"
While overall more people are choosing college, there are important shifts happening in where students are going and where they're not. Enrollment at private four-year colleges is down. Fewer people are enrolled in master's degree programs. But enrollment is up at four-year public universities and at community colleges. There, it's driven by students choosing short-term credentials tied to the workforce.
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