#529-reform

#529-reform

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.

With roughly nine million student borrowers in default, the Treasury Department will "assume operational responsibility for collecting" on those loans, the Education Department announced Thursday. The move is ED's latest effort to render itself obsolete as part of the Trump administration's plan to eliminate the department. This is the 10th interagency agreement it has signed to share with or spin off functions to other federal agencies.

Supporters of the legislation argue that it is designed to protect prospective applicants for executive positions at universities by keeping private all application records until finalists are named. This confidentiality is crucial for individuals who wish to apply without alerting their current employers.

Under the SAVE plan, a borrower's monthly payment would be calculated based on income and family size and could be set as low as $0 per month for the lowest-earning borrowers.

These new restrictions-which can be found throughout the appropriations bill for the Department of Education and other sections of the 11-part funding package that was signed into law last week-are part of what policy experts describe as a bipartisan attempt to rebuke the Trump administration's budget proposal and restore Congress's power of the purse. Historically, the language of these budget bills has largely stayed the same, serving as little more than a template into which lawmakers plug that year's dollar amounts and policy riders.

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

"The Biden Administration's regulation was over broad as it required all private institutional owners, including at faith-based colleges, to sign program participation agreements,"

"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,"

Lowering college costs, boosting accountability and reforming accreditation will likely be at the top of congressional Republicans' to-do list for 2026. But as public approval ratings for President Trump continue to decline and midterm elections loom, higher education policy experts across the political spectrum say congressional conservatives could be running out of time. The push for more affordable higher education has been gaining momentum for years,