Washington, D.C. — President Donald Trump and congressional Republicans’ “Big Beautiful Bill” is raising monthly bills and weakening the safety net for struggling student loan borrowers, according to a new report from the Center for American Progress. The report provides new data analysis demonstrating the range of ways this law—which cut $300 billion in federal support for higher education to fund tax cuts for rich households and corporations—harms vulnerable borrowers and creates new barriers to graduate education.
New student loan repayment plans, limits on federal loans for graduate degrees, and the elimination of unemployment and economic hardship deferments will ultimately increase the financial burden on 42.6 million Americans with student debt and restrict access to graduate programs, according to CAP’s report. These changes will disproportionately affect women and students of color, increasing the gender and racial wealth gaps, CAP’s authors argue.
Key findings from the report include:
- Transitioning from the Saving on a Valuable Education (SAVE) to the Repayment Assistance Plan (RAP) will increase annual student loan payments by an average of $1,796 for community college borrowers and $2,482 for borrowers with a bachelor’s degree.
- RAP will require borrowers of all income levels to pay significantly more per month than SAVE, ranging from about 2.7 times more for borrowers earning $75,000 annually to almost 4 times more for borrowers earning $45,000.
- Lifetime loan payments will increase by 70 percent for women borrowers, 80 percent for Hispanic or Latino borrowers, 91 percent for American Indian/Alaska Native borrowers, and almost double (98 percent more) for Black borrowers on RAP compared with the SAVE plan.
- New borrowing limits will create steep education financing gaps for 12 percent of graduate students and 46 percent of professional students, disproportionately forcing women and students of color into the more expensive private loan market and even cutting off access entirely for up to an estimated 40 percent of Americans who may not qualify for private student loans.
- The Big Beautiful Bill eliminates economic hardship and unemployment deferments for new borrowers while removing $0 monthly payment protections for low-wage earners.
- It also removes the income-based backstop for parent borrowers, costing low-income parent borrowers up to $1,100 more per month compared with the income-based payments, depending on their borrowing levels.
“The data tell a clear story: The administration is treating struggling student borrowers like a piggy bank to offset the Trump administration’s tax cuts for corporations and billionaires,” said Sara Partridge, associate director of Higher Education Policy at CAP and co-author of the report. “By eliminating basic protections and raising monthly costs, the Big Beautiful Bill is increasing financial hardship for student loan borrowers who are already struggling and pricing lower-income students out of graduate and professional opportunities.”
Instead of removing federal support, the report’s authors argue that policymakers should champion initiatives that boost college affordability. That includes increasing funding for federal Pell Grants, campus-based financial aid, and direct support for schools that serve a high share of low-income students.
Read the report: “The Devil Is in the Details: Trump Student Loan Changes Raise Costs and Weaken Safety Net for Borrowers” by Sara Partridge, Madison Weiss, and Kavin Haldo
For more information or to speak with an expert, contact Mishka Espey at [email protected].