Republicans in Congress have spent the last several months crafting a “Big Beautiful Bill” that has a sizable proportion of President Donald Trump’s agenda that he promised on the campaign trail. While the focus is understandably on cutting taxes for the American people, what this bill accomplishes for students in education has largely been overlooked.
Congress intends for the legislation to significantly overhaul student loans for postsecondary education. In May, members of the House Committee on Education and Workforce passed their part of the bill that would mandate colleges to pay “a portion of their students’ unpaid loans based on how much of a return on investment the degree provided.”
The House Committee explained institutions that continue to pile debt onto students will “risk loss of access to federal student aid.” In other words, the federal government will now hold colleges accountable for their actions.
If students amass significant debt earning a degree that did not help provide them with a career in the long run, colleges will now be responsible for that debt. This means that if universities continue to provide ideological degrees such as gender studies or ethnic studies, those same universities will bear the brunt of the costs for students who struggle to succeed in life. Universities that prioritize ideology over academia will now face the consequences and costs of their actions.
If Congress manages to pass the Big Beautiful Bill, caps will also be placed on how much debt students can take out for college. Undergraduate students will have a borrowing cap in place of $50,000 to ensure they do not sink into insurmountable debt. There will additionally be a $100,000 cap on loans for graduate students and a $150,000 cap for professional students.
In recent years, universities have increasingly raised the costs of their classes and created new programs that administrators know will not help their students in the real world. The bill introduces new safeguards for students while forcing universities to take responsibility for their predatory practices. Before the most recent presidential election, Joe Biden and his administration attempted to forgive billions of dollars in federal loans and succeeded to a certain extent. In 2022, the Biden administration attempted to forgive up to $20,000 in student loans for Americans.
The Supreme Court ruled a year later that the administration had overstepped its authority, but this did not stop Biden from carrying his plan forward. The Biden administration used already existing programs to cancel approximately $183 billion of federal student loans for more than 5 million people, essentially placing the burden on American taxpayers. Congress plans to ensure that a future administration can never do this again through the bill.
The bill will close and repeal regulations and programs that the Biden administration used to either forgive loans or pause them altogether, such as the “Saving on a Valuable Education” (SAVE) repayment plan that substantially lowered payments borrowers had to make depending on their income. After 20 to 25 years, the program would cancel the remaining debt. While a federal court has suspended the program for now, the bill would permanently eliminate it, ensuring that the federal government can never attempt to use the SAVE program to stall or forgive loans again. This eliminates the incentive for schools to continue increasing costs for students since loan debt will no longer simply disappear.
In another attempt to rein in the unchecked power of universities, the House’s version of the Big Beautiful Bill will raise the endowment tax up to 21 percent if an institution has a student adjusted endowment of $2 million or more. The Senate version raises the endowment tax to a lower 8 percent but still an increase. Universities that receive the largest endowments typically have wasted money promoting diversity, equity, and inclusion (DEI) initiatives, such as Harvard and Yale.
Until the current Trump administration, these universities have received federal funding as well as endowments without significant pushback. With a greater endowment tax in place, universities will now be forced to pay their fair share of taxes on their income.
The administration’s move to withhold federal funding from universities that promote DEI adds extra pressure for these schools to act in good faith now that endowments will likely be taxed. Overall, the Big Beautiful Bill is introducing much needed reforms that ensure students are protected from predatory universities that care more about expanding their profit margins than the crippling debt placed on their students. If the bill passes, students will have long overdue guardrails ensuring universities no longer have the power to take advantage of them.
Rather than keeping authority consolidated in the leadership of these universities, the Big Beautiful Bill finally gives the power to students to better control their own education.
Casey Ryan is a writer and investigative reporter at Defending Education.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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