House Republicans are moving forward with a bill that would overhaul student-loan repayment and make it harder for Biden to get relief to borrowers

Ayelet Sheffey
Updated Wed, January 31, 2024 

Rep. Virginia Foxx.Tom Williams/CQ-Roll Call, Inc via Getty Images

House Republicans are reviewing a bill that would overhaul the student-loan system.


It proposes limits on the education secretary for getting new forms of relief to borrowers.


Democrats introduced their own package to address student debt, but it's unlikely to advance.

House Republicans are moving forward with a bill that could make it harder for student-loan borrowers to get new forms of relief.

On Wednesday, the House education committee is set to move forward with a review and debate over the College Cost Reduction Act, introduced in early January by the GOP chair of the committee, Rep. Virginia Foxx.

The legislation outlines various priorities, including strengthened guidelines for college accreditation, caps on certain forms of financial aid, and limits to the education secretary's authority to implement new repayment and relief programs for borrowers.

While Foxx said in a statement that there's bipartisan agreement that student debt in the country is spiraling, there's likely to be some Democratic pushback when it comes to her proposals to put an end to President Joe Biden's efforts to shorten student-loan repayment for many borrowers.

"Student-loan debt is skyrocketing, and completion rates are plummeting. There's bipartisan agreement that lasting reforms are needed to correct course," Foxx told Business Insider.

However, she said her plan was "a responsible alternative to the Biden administration's free-college agenda, which is placing an enormous burden on students and taxpayers." She added: "This bill offers reforms to the Higher Education Act that will lower college costs, rein in executive overreach, and prevent colleges from endlessly raising the cost of tuition."

Lawmakers on both sides of the aisle have offered solutions to combat the student-debt crisis, but there's disagreement on the best way to do so. The Education Department is in the process of implementing student-debt relief for borrowers after the Supreme Court struck down Biden's first attempt. Along with that, the department has carried out targeted batches of forgiveness through account adjustments and has set up upcoming relief through its SAVE income-driven repayment plan.

However, many Republicans have opposed the department's efforts to make new repayment plans and implement streamlined processes for relief, saying the burden of debt forgiveness falls on taxpayers. Here's how Foxx's legislation would change things for borrowers.

What the GOP bill means for student-loan borrowers

Caps student borrowing. According to the bill's fact sheet, the bill would cap student-loan borrowing at $50,000 for undergraduate students, $100,000 for graduate students, and $150,000 for students in graduate professional programs.

The legislation would also sunset the grad and parent PLUS loan programs, which offer sums graduate students and parents can borrow in their own names to cover up to the full cost of attendance.

BI has previously spoken with parents who have struggled to repay their PLUS loans because of the high interest rates that can leave them with balances far larger than what they originally borrowed.

Streamlines repayment plans. When it comes to student-loan repayment in particular, the legislation aims to put constraints on the Education Department's ability to implement new programs. Specifically, the bill would establish two types of repayment plans: a 10-year "mortgage-style" plan and an income-driven repayment plan.

Limits debt relief. The fact sheet said the bill would prohibit "the Secretary from creating new repayment plans and from modifying an existing repayment plan in a manner that increases costs to the government."

The legislation would also repeal the Education Department's efforts to streamline the process for borrowers who say they were defrauded by their schools to get relief, along with rules that would ensure debt forgiveness for borrowers whose schools abruptly shut down.

The education secretary would also be required to confirm that any new rules related to student-loan programs would not increase costs to the government — if they did, the rules couldn't be implemented.

What Democrats are proposing

A day before the markup on the GOP bill, House Democrats on the education committee introduced their plan to address college affordability: the Roadmap to College Student Success.

It consists of a package of Democratic-led legislation that addresses strengthening the Pell Grant, improving the Public Service Loan Forgiveness program, and making student loans more affordable.

Other bills in the package touch on pricing transparency when students are applying for financial-aid packages, along with partnerships with states to bolster tuition-free community-college programs.

"This campaign has three main objectives: first, bring down the cost of college; second, help students access a quality degree; and third — once students are in school — provide them with the support they need to graduate," the top Democrat on the committee, Rep. Bobby Scott, said in a video about the package.

"A college degree is the best investment students can make for their future," he said. "And with our help, future generations may have the opportunity to enjoy the lifelong benefits that come with a college degree."

While Scott's proposal is unlikely to make headway in a GOP-controlled House, it's a reflection of where Democrats stand on college affordability — and where they differ with Republicans — ahead of the presidential election.