Trump's 'Big, Beautiful Bill' Could Make College 'Less Affordable': What It Means For Student Loans In US?

(MENAFN- Live Mint) US President Donald Trump's 'big, beautiful' tax and spending bill is likely to have a significant impact on higher education. Higher education leaders told the New York Times that the bill passed in the House of Representatives on Thursday 'could make attending college less accessible.'

Trump announced on Thursday that the Republicans in the House of Representatives "have just passed the“ONE BIG BEAUTIFUL BILL ACT .” On the passage of the Bill, Trump said, "The biggest bill of its kind ever signed - and it's going to make this country into a rocket ship. It's going to be really great." '

Here's how this Act can impact student loans

The bill would“make college less affordable ,” Lynn Pasquerella, president of the American Association of Colleges and Universities, told the New York Times, adding that schools could become less economically and racially diverse.

Republicans said that the measures impose accountability on a sector that has failed to police itself. The caps on student borrowing are intended to reign in ballooning graduate student debt, they reportedly said, and the tax on university endowments, which schools often use to provide financial aid.

According to a Congressional Budget Office estimate, the student loan changes are expected to save the government more than $300 billion over a decade.

The NYT report claimed that Trump's bill shows that the Republican agenda for higher education extends far beyond the Ivy League of colleges such as Harvard, Columbia and the University of Pennsylvania.

"The sweeping cuts to Medicaid at the center of the bill could also have ramifications for higher education," the report added.

It quoted experts as saying that the changes, which include new work requirements, will make juggling work, education and family responsibilities even harder for low-income students.

Limiting student loans

The bill restricts the amount of money graduate students can borrow from the federal government to pay for school. As per the Bill, students cannot take out more than $100,000 for a master's degree and no more than $200,000 for doctoral, medical or professional degrees.

The Trump administration backed the Bill, saying,"“By reducing borrowing availability, we break the cycle of debt, making higher education more accessible for all Americans."

But those opposing Trump's Bill said that some students will be unable to pursue these programs while others will be forced into the private loan market. Private loans are not eligible for Public Service Loan Forgiveness programs, which help many students reduce their debt.

“Medical school may be impossible for these students at a time when we need more doctors,” said Jon Fansmith, a senior official at the American Council on Education. Graduates of medical schools owe on average more than $240,000, NYT reported while citing the Education Data Initiative.

The bill would also phase out the federal Grad PLUS loan program, which helps graduate students finance their studies.

By limiting student loans, Congress want to address the issue wherein some college graduates end up in poorly paid jobs.

Under the new policy, degree programs will be ineligible to use federal student aid if their graduates fail to meet certain income thresholds. This applies to both undergraduate and graduate programs.

Pell Grants for nondegree programs

The bill had included a controversial plan to expand Pell Grant eligibility to unaccredited programs, but the Senate's parliamentarian struck down the provision, NYT reported.

Students attending short-term work training programs, like for a cloud-computing credential or a forklift driver certification, are now eligible for Pell Grants, which millions of students rely on to pay for college.

The bipartisan move was welcomed by community colleges, which said it would make work-force training more accessible to nontraditional students.

(With inputs from the New York Times)

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