New Bill Seeks to Restore Education Loan Options Affected by Trump-Era Legislation

Representative Shomari Figures, a Democrat from Alabama, has introduced a new bill aiming to reverse a significant change in student loan regulations implemented during President Trump’s administration. The proposed Restoring Opportunity for Advanced Education Act seeks to reinstate access to Grad PLUS loans and eliminate borrowing caps for graduate and professional students that were introduced under Trump’s One Big Beautiful Bill (OBBA).

Why the Bill Matters

The borrowing limits were established by the Department of Education to address the rising student debt and press colleges to control tuition costs. However, critics argue that these limits might make graduate and professional education inaccessible for middle-income students who cannot afford high out-of-pocket expenses or qualify for private loans. Programs like medicine, law, and psychology often have high tuition costs, making the potential outcome of this legislation crucial for future professionals.

Key Changes in the OBBA

The OBBA, signed into law last year, significantly altered federal student aid programs. The elimination of the Grad PLUS loan program limited graduate students to borrowing $20,500 annually and $100,000 in total. Professional students faced caps of $50,000 annually and $200,000 in total. A lifetime federal student loan limit of $257,500 was also established. According to the Trump administration, these reforms aimed to prevent excessive borrowing and reduce educational costs.

High Costs of Professional Degrees

Pursuing degrees in fields like dentistry, veterinary medicine, and elite MBA programs can exceed $200,000 to $300,000 when including tuition and living expenses. Dental degrees can even surpass $500,000. Legal and medical professions often entail significant student debt burdens.

Proposed Changes in the New Bill

Figures’ legislation aims to reverse the borrowing caps set by the OBBA. His office states that the bill would repeal annual and lifetime borrowing limits for graduate and professional students while reinstating the Grad PLUS loan program.

Kevin Thompson of 9i Capital Group has expressed concerns, saying that reversing these caps could lead to increased funds in degree programs, opposing the current administration’s goals of aligning borrowing with expected incomes and reducing educational costs.

Legislative Voices

In announcing the bill, Figures emphasized that current borrowing limits restrict access to education for students unable to prepay high costs. He highlighted the importance of education as a pathway to career opportunities and suggested that his bill would make graduate education accessible to more students.

Impact on Students

Higher education experts warn that the existing restrictions could severely impact many students needing federal loans for advanced degrees. Research from American University indicates that about 370,000 graduate and professional borrowers annually might face difficulties due to the limits, potentially leading them to depend on private loans, which offer fewer protections.

Alex Beene, a financial literacy instructor, noted that repealing these limits could expand access but might reduce institutions’ motivation to control pricing.

The Future of the Legislation

The bill could face challenges in a Republican-led Congress. Kevin Thompson mentioned that Republican legislators, who implemented the caps, are unlikely to reverse the policies they recently introduced.