The White House and Republican lawmakers are considering the elimination of at least 10 or more student loans and federal aid programs administered by the Department of Education. simultaneously steps are being taken to dismantle the Department of Education which administers the federal student aid and Direct federal student loan system. The administration is expected to issue an executive order later this month calling on the department to be dismantled. While legal experts are doubtful that the department can be eliminated without action by Congress, the administration is already taking other steps to undermine the department’s functions by sidelining dozens of staff. Republican lawmakers are looking at capping or reducing new disbursements of federal Direct student loans going forward.
Republican lawmakers also want to phase out and eventually end the federal Direct Graduate PLUS program. This program allows borrowers pursuing a graduate or professional degree to take out federal student loans covering the full cost of their graduate school education. Republican leaders in Congress also want to sunset the Parent PLUS loan program on the same timeline as the Graduate PLUS program. Parent PLUS loans are issued to the parents of undergraduate students to pay for their child’s college education. The parent, not the student, is the borrower for these types of loans.Republican leaders in Congress also want to sunset the Parent PLUS loan program on the same timeline as the Graduate PLUS program. Parent PLUS loans are issued to the parents of undergraduate students to pay for their child’s college education. The parent, not the student, is the borrower for these types of loans.
Given fairly low borrowing limits for undergraduate federal student loans, the elimination of the Parent PLUS option would mean that families who cannot cover the remaining cost of their child’s education may have to turn to riskier private student loans like graduate school borrowers, or forego higher education. Republican leaders in Congress may also eliminatet a number of popular federal student loan forgiveness and repayment programs administered by the Department of Education. If implemented, the changes could impact millions of borrowers. Republican lawmakers are also discussing repealing regulations governing two additional federal student loan programs: the Borrower Defense to Repayment program, which allows borrowers misled or defrauded by their school to request student loan relief; and the Closed School Discharge program, which can wipe out the federal student loan debt for borrowers who were unable to complete their program to the closure of their school. The Biden administration implemented new rules in 2023 that expanded relief and eased the application process for these two programs.
Jeff Newman JD MBA, represents whistleblowers nationwide relating to customs and tariff fraud concerning imported Chinese goods as well as corporate whistleblowers in major claims under the False Claims Act (Qui Tam), and SEC, CFTC and FINCEN whistleblower programs. He can be reached at Jeff@JeffNewmanLaw.com or at 617-823-3217
