Editor's Note: This statement is taken in part from an article by Teresa Manning published with American Greatness on May 06, 2025.
The National Association of Scholars (NAS) commends the House Committee on Education and Workforce for proposing the Student Success and Taxpayer Savings Plan (SSTPS), which addresses out-of-control college costs and unprecedented student loan debt. The House Committee proposes the first plan to address the real roots of the student loan crisis—a plan with a real chance of success. We hope that the core of the House Committee’s proposal survives its negotiations with the Senate to become law.
The SSTPS proposes three main reforms. First, it simplifies repayment. The bill offers just two methods: a regular repayment schedule or an income-driven repayment plan, called an “IDR.” The latter has a graduated scale, so those making less money would pay a lesser percentage of their monthly income, with the maximum percentage capped at 10 percent. If the monthly payment doesn’t cover interest, the government waives the interest portion while also paying a subsidy of $50 per month against the principal. This ensures the outstanding balance is decreasing as borrowers repay, avoiding the problem of negative amortization, where borrowers see the balance increase even as regular payments are made. Finally, if borrowers make payments for 30 years, any outstanding balance is then discharged.
Second, schools are required to pay a portion of the balance when a graduate defaults, meaning they have skin in the game.
Third, annual borrowing limits for students would vary by course of study, calculated using the median cost of an academic program (so the limit for a year of medical school would presumably be higher than the limit for a year studying history). However, the aggregate limit for four undergraduate years—an entire course of study—would increase from $31,000 to $50,000.
The bill also regulates other areas, such as eligibility for certain loans or grants and lower loan limits for graduate degrees. But these three aspects—repayment plans, borrowing limits, and schools having skin in the game—will likely be the most discussed, as they most directly affect students, graduates, and institutions.
NAS has proposed similar reforms since 2017: our Federal Student Aid policy recommendations include versions of all these core policy elements. Our 2021 report, Priced Out: What College Costs America, focused further public attention on the twin crises of student loans and administrative bloat. Our proposals and the SSTPS differ in details but share the same priorities. We are delighted that the House Committee agrees largely with NAS’s vision for reforming Federal Student Aid.
We want to emphasize a point we underscored in Priced Out, as well as in our recent comment on the Education Department’s (ED) decision to resume repayment plans and involuntary collection of defaulted federal student loans: the current system is shockingly cruel to students. It encourages them to enter a world of multigenerational debt, while postsecondary institutions profit from their loans. SSTPS’s reforms are meant, above all, to end postsecondary institutions’ abuse of students by changing those institutions’ financial incentives. This is reform that will make it possible for a new generation of ambitious young Americans to enter adulthood without the shackles of debt slavery.
More reforms might follow SSTPS. Some academic disciplines are pseudo-disciplines devoted to activism rather than to intellectual inquiry. The federal government might designate those pseudo-disciplines with a specific College Major Codeand declare that no Federal Student Aid can be used for courses with that College Major Code. The federal government might also decide that higher education should not aim to justify itself by a vicious cycle of increasing its bloated employment through the employment of former students. The government might instead designate employment in higher education administration as a “Zero” when calculating return on investment, and corollary federal support. The federal government should not subsidize educational tracks devoted to careers in activism and administrative bloat.
These would be reforms for tomorrow. For today, the Student Success and Taxpayer Savings Plan provides systematic and beneficial reform to America’s student loan system, and to higher education as a whole. It is a welcome complement to ED’s new policy initiatives to restore accountability to federal student loans. We hope it swiftly becomes law.
Photo by Alexander Grey on Unsplash
