Republicans Propose Limiting Graduate School Borrowing, Expanding Loan Transparency

• College affordability and transparency are central in this five-bill bundle from Republican senators.
• The most significant proposal would cap the amount of federal student loans someone can borrow for graduate school.
• The College Transparency Act, proposed many times through previous Congresses, is part of the bundle.

Republican lawmakers proposed a five-bill package that would limit the amount students could borrow for graduate school and increase transparency in the financial aid process, among other things.

A coalition of five Republican senators put forth the Lowering Education Costs and Debt Act on June 14, which is actually a bundle of five proposals that would impact higher education. These bills aim to temper rising college tuition and provide prospective students with more information about their federal student loans and financial aid before enrolling.

"Anyone with a college-aged child knows that college costs are soaring," U.S. Sen. Bill Cassidy, a Republican representing Louisiana, said in a statement. "Some colleges and universities have used the availability of federal loans to increase tuitions, and this has left many students drowning in debt with no pathway for success."

U.S. Sens. Chuck Grassley of Iowa, John Cornyn of Texas, and Tommy Tuberville of Alabama joined Cassidy in the press conference announcing the bundle.

The package of bills includes:

• The College Transparency Act (CTA), proposed earlier this year
• The Understanding the True Cost of College Act, proposed earlier this year
• The Informed Student Borrowing Act
• The Streamlining Accountability and Value in Education (SAVE) for Students Act
• The Graduate Opportunity and Affordable Loans (GOAL) Act

The GOAL Act would likely have one of the more sizable impacts on U.S. higher education.

This bill aims to put pressure on the rising cost of graduate school by limiting how much students can borrow from the federal government through Grad PLUS loans. Currently, there is no limit on how much students can take out in Grad PLUS loans, which isn't the case with undergraduate Direct Loans.

Graduate school borrowing through the Stafford Loan program would be capped at $20,500 per year and $65,000 in total, according to the bill's summary. Professional degree borrowing would be capped at $40,500 annually and $130,000 in total.

BestColleges previously reported that rising graduate school debt is decreasing students' return on investment (ROI).

Sen. Tuberville introduced the GOAL Act on June 14.

The SAVE Act is another newly introduced bill.

This bill would streamline the different repayment plans for federal student loans into two options: The standard 10-year repayment plan and the REPAYE+ income-driven repayment (IDR) plan.

The updated Revised Pay As You Earn (REPAYE) plan would offer tiered debt forgiveness depending on how much is owed over time, and the plan would not be as generous as the current REPAYE overhaul President Joe Biden is still tinkering with.

The SAVE Act would also prohibit federal loans from paying for undergraduate programs in which more than half of former students don't make more than the median high school graduate salary. That extends to graduate programs that don't produce salaries higher than those of the median bachelor's degree holder.

Sen. Cornyn introduced the SAVE Act on June 14, too.

The Informed Student Borrowing Act is the last newly introduced bill in this package, proposed by Republican U.S. Sen. Steve Daines of Montana that same day.

This bill would require potential loan borrowers to acknowledge details of their loans, including:

• Sample monthly payments under the 10-year repayment plan
• Median debt taken on by students at their institution and program
• Median earnings of former students at their institution and program
• Completion rate for undergraduate borrowers
• The interest rate of the loan

The College Transparency Act and Understanding the True Cost of College Act are older bills introduced before the other three bills.

CTA, in particular, has been a bill that has come close to passing multiple times in past Congresses. It even passed the U.S. House of Representatives as an amendment in February 2022, but failed to advance further.

It is notable that the bill, which would increase the outcomes data available to prospective students at both the undergraduate and graduate levels, is being championed by Republicans in the U.S. Senate. That's because Republican U.S. Rep. Virginia Foxx of North Carolina has staunchly opposed CTA, as it would repeal a part of the Higher Education Act that she helped institute in 2008.

The Understanding the True Cost of College Act would require institutions to use a universal financial aid letter that clearly outlines the different forms of aid offered. This comes after the Government Accountability Office (GAO) found in December 2022 that few colleges accurately disclose the cost of attendance and may mislead students through confusing financial aid letters.