^{Sen. Bill Cassidy, R-La., leaves the senate luncheons in the U.S. Capitol on Tuesday, June 3, 2025. |Tom Williams | CQ-Roll Call, Inc. | Getty Images}

A controversial proposal by Senate Republicans to reshape the federal student loan system is drawing fierce criticism from education policy experts and consumer advocates, who warn it could push millions of borrowers into default and significantly increase their repayment burden over time.

On June 10, the Senate Committee on Health, Education, Labor and Pensions released the latest draft of a reconciliation bill, which includes sweeping changes to higher education finance. At the heart of the plan are two redesigned repayment programs—one of which stretches loan terms up to 25 years or more and delays loan forgiveness for decades.

Sameer Gadkaree, president of The Institute for College Access & Success (TICAS), called the bill “a dangerous step backward,” saying it would “make student debt significantly more difficult to manage” and “unleash an avalanche of student loan defaults.” He emphasized the harm this could inflict on millions of American households already navigating inflation, stagnant wages, and mounting financial pressure.

A System Already Under Stress

Currently, over 42 million Americans owe federal student loans, totaling more than $1.6 trillion. As of April 2024, over 5 million borrowers were in default, according to the Department of Education. Under the proposed Republican framework, that number could double to 10 million in the near term, a trajectory not seen since the peak of the 2008 financial crisis.

The new plan would apply to federal student loans disbursed after July 1, 2026, offering only two repayment options: a restructured fixed payment plan and a new income-based plan called the Repayment Assistance Plan (RAP).

What Would Change for Borrowers?

Under the proposed fixed payment structure:

• Borrowers would repay loans over 10 to 25 years, depending on their total debt.
• Those with over $50,000 in loans would be on a 15-year term.
• Borrowers exceeding $100,000 would make payments for up to 25 years.

The RAP option, by contrast, bases monthly payments on income:

• Borrowers would pay 1% to 10% of their income.
• A minimum monthly payment of $10 would apply, regardless of earnings.
• Forgiveness wouldn’t occur until after 30 years of payments—five to ten years longer than under current Income-Driven Repayment (IDR) plans.

While the RAP offers a modest $50 deduction per child dependent in a household, education finance expert Mark Kantrowitz warned, “Many low-income borrowers will be locked into repayment for the full 30 years with little chance of escape.”

Costlier Than Biden’s SAVE Plan

The Student Borrower Protection Center (SBPC) conducted a comparative analysis that underscores the increased financial pressure this GOP plan would impose.

According to their June 11 report, the average college graduate under the RAP system would pay an additional $2,929 per year compared to what they would have paid under President Biden’s now-blocked SAVE (Saving on a Valuable Education) plan.

Mike Pierce, executive director of the SBPC, voiced his concern in a letter to the Senate Committee, writing, “This bill would bury borrowers in unmanageable debt just as families are facing economic pressures from every direction—soaring housing costs, stagnating wages, and a volatile job market.”

GOP: Plan is About “Fairness” for Taxpayers

Republicans argue the bill ensures that individuals who did not attend college are no longer forced to subsidize those who did. Sen. Bill Cassidy (R-La.), chair of the Senate HELP Committee, defended the proposal, saying it “ends the unjust practice of forcing working-class taxpayers to bail out college graduates.”

He claims the bill would save taxpayers at least $300 billion, positioning it as a fiscally responsible alternative to previous Democratic proposals that aimed to cancel broad swaths of student debt.

“The Biden administration’s efforts to erase student loans amounted to a regressive giveaway at the expense of everyday Americans who never went to college,” Cassidy said.

Broader Concerns and Unanswered Questions

Critics point out that the Republican proposal does little to address the root causes of the student debt crisis, such as rising tuition costs, predatory lending practices, and inadequate borrower protections. It also raises serious questions about borrower equity, as those from low-income backgrounds or underrepresented communities are more likely to be negatively impacted.

In the absence of comprehensive reform to college affordability or oversight of for-profit institutions, experts fear the new repayment framework will simply perpetuate cycles of debt and financial instability.

With more than 43 million borrowers in the U.S. and higher education costs continuing to climb, the stakes of this legislative battle are enormous.

The Bottom Line

The Senate GOP’s student loan proposal represents a fundamental shift in how higher education debt is managed—and who ultimately bears the cost. While framed as a plan to protect taxpayers, its critics argue it risks deepening financial distress for millions of Americans.

If enacted, this bill could reshape the economic future of an entire generation of students—many of whom are already struggling to keep up.