Thu Jul 03 19:00:00 UTC 2025: **Congress Nears Sweeping Overhaul of College Financial Aid**
**Washington, D.C.** – Congress is on the verge of enacting significant changes to the college financial aid landscape as Republicans push forward with their tax and spending megabill. The Senate recently unveiled its version of the higher education section, a 71-page component of the “One Big Beautiful Bill Act,” focusing on modifying student loan borrowing and repayment options.
While less drastic than the House version, the Senate proposal aligns on a key objective: streamlining student loan repayment plans. The current array of income-driven repayment plans would be replaced with just two options for borrowers taking out loans after July 1, 2026: a fixed repayment term based on the total loan amount, and an income-driven option tied to adjusted gross income. Lower earners would pay less and could see loan forgiveness after a set number of years, depending on their income and loan amount.
These changes would effectively eliminate President Biden’s SAVE program, which the previous administration hailed as the most affordable repayment plan. The plan has been held up in courts, and has placed eight million people in forbearance. The Senate version also removes economic hardship and unemployment deferments, instead directing struggling borrowers to the Repayment Assistance Plan or Income-Based Repayment. Discretionary forbearance would be capped at nine months per 24-month period.
The Senate is expected to vote on the bill as soon as late Monday. If passed, it will return to the House for another vote before potentially heading to the President’s desk. Republicans are aiming to finalize the megabill by their self-imposed July 4th deadline. The House passed its version in May by a narrow margin of 215-214, highlighting the potential for further debate and adjustments as the bill moves forward.
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