Senate GOP Reconciliation Bill Targets These 4 Student Loan Borrower Groups

This week, the Senate Republicans on the Committee on Health, Education, Labor, and Pensions (HELP) released a draft reconciliation bill that, if enacted, will have substantial impacts for millions of current and future federal student loan borrowers.The bill would implement significant reforms across the federal student loan system, including disbursements, repayment plan programs, and student loan forgiveness.The bill is Senate Republicans’ response to the House GOP reconciliation bill that was passed on a largely party-line vote last month.The Senate version retains many of the elements of the House bill, although it does contain a few notable tweaks.

Republicans in both chambers of Congress have cast the proposed reforms as necessary to rein in an overly complex and costly federal student loan system.The bill “Makes higher education more affordable by eliminating inflationary loan programs that have resulted in higher tuition costs,” and “Prevents taxpayer-subsidized loans for degrees that leave students worse off than if they never went to college,” said a statement released by Republicans on the Senate HELP committee on Tuesday announcing the release of the bill.But student loan borrower advocacy groups have warned that the bill, if enacted in its current form, would have significant negative impacts for millions of student loan borrowers, parents, and college-bound individuals and families.Here are the groups that would be hit the hardest.

Student loan borrowers enrolled in the SAVE plan would see payments spike One of the most sweeping provisions of the Senate GOP reconciliation bill is that it would completely overhaul the current income-driven repayment (IDR) system, including for current student loan borrowers.IDR plans provide borrowers with affordable student loan payments using a formula tied to their income and family size, with any remaining balance eligible for student loan forgiveness after 20 or 25 years.The Senate bill would fully repeal three critical IDR plans — Income-Contingent Repayment (ICR), Pay As You Earn (PAYE), and Saving on a Valuable Education (SAVE).These borrowers would be moved into a modified version of the Income-Based Repayment (IBR) plan.

Borrowers who first took out federal student loans on or after July 1, 2014, would still be eligible for a newer and more affordable version of IBR (which is an important difference compared to the House reconciliation bill, which would strike this plan as well).But for many federal student loan borrowers, this would mean a significant increase in monthly IDR payments.The older version of IBR would result in payments that are at least 33% higher than those under the PAYE plan, and even higher for those who had been repaying their student loans under SAVE.“A typical current student loan borrower with a college degree will be forced to pay an additional $2,929 per year in student loan payments should Congress enact this proposal, when compared to the SAVE plan,” said the Student Borrower Protection Center (SBPC) in a letter sent to Senate HELP Committee Chari Bill Cassidy (R-La) on Wednesday.

“It is clear that a vote for this bill is a vote to saddle millions of borrowers across the country with more student loan debt, at the same moment that a slowing economy, a reckless trade war, and spiraling costs of living squeeze working families from every direction.” Borrowers could access the Repayment Assistance Plan (RAP), a new IDR option that the bill would create if it is passed.However, payments under RAP would still not be nearly as affordable as those under the SAVE plan.And the RAP plan would keep borrowers in debt for at least 30 years before they could qualify for student loan forgiveness — a significantly longer repayment term than under any current IDR option.Parent PLUS borrowers could lose access to affordable student loan payments Parent PLUS borrowers could also be severely impacted by the Senate bill.

Like the House version, the Senate bill essentially cuts off any access to IDR plans for many Parent PLUS borrowers.Parent PLUS loans, by themselves, are ineligible for IDR plans.However, if consolidated into a Direct Consolidation loan, these borrowers can access certain IDR options (in most cases, this option would be limited to the ICR plan).Under the bill, Parent PLUS borrowers who have already consolidated their loans and enrolled in an IDR plan would be moved to IBR, like most other borrowers currently enrolled in ICR, PAYE or SAVE.

But all other Parent PLUS borrowers would effectively be cut off from any repayment plan tied their income, as the bill would repeal all existing IDR plans except for IBR, and block them from accessing both IBR and RAP, even if they consolidate.This could lead to a spike in defaults for Parent PLUS borrowers who experience a reduction in their income and can no longer afford their regular student loan payments.Graduate students would lose access to federal student loan options The Senate GOP bill, if it is enacted, could have devastating consequences for borrowers pursuing a graduate degree.The bill would end the Graduate PLUS program, a key federal student loan program that allows students to borrow up to the cost of their attendance.

The only remaining federal student loan option — unsubsidized federal Stafford loans, which are capped — would be inadequate to cover the costs associated with most graduate degree programs, particularly the most expensive terminal degree programs like law, dentistry and medicine.Critics have warned that passage of the bill will cause some borrowers to rely more on private student loans to fund their graduate school education.Private student loans are generally costlier, riskier and far more likely to go into default during times of economic distress.Other prospective students may simply decide not to enroll at all in a graduate degree program, which could worsen already-existing shortages in key professions.

“The combined effect of the elimination of GRAD PLUS loans along with a borrowing cap for Direct Unsubsidized Loans that is $62,000 below the mean amount needed to graduate from medical school will severely limit the number of individuals that can afford a medical degree and likely exacerbate the looming shortage of 86,000 physicians,” wrote the American Medical Association (AMA) in a letter to House leaders in May.New doctors and dental residents to be cut off from student loan forgiveness The Senate bill also targets doctors and dentists in a more direct way by retaining a House provision that would eliminate eligibility for student loan forgiveness under the Public Service Loan Forgiveness (PSLF) program for new medical and dental residents.“The term ‘public service job’ does not include time served in a medical or dental internship or residency program… by an individual who, as of June 30, 2026, has not borrowed a Federal Direct PLUS Loan or a Federal Direct Unsubsidized Stafford Loan for a program of study that awards a graduate credential upon completion of such program,” reads the bill’s text.This means that current residents who have already graduated and won’t be taking out any additional federal student loans would be effectively grandfathered in, but many borrowers currently in medical or dental school would not be.

Critics have warned that cutting off these professions from student loan forgiveness benefits would make it more difficult for hospitals and other employers to fill these important roles.“Studies show that the PSLF program has the ability to incentivize physicians to work for qualifying employers, which ultimately equates to more physicians practicing for 10 or more years in underserved communities,” said the AMA in its letter.“However, if time as a resident does not count towards loan forgiveness, significantly fewer physicians will participate in this program and in turn access to much needed medical care for patients in rural and underserved communities will be diminished.”