Senate Bill Targets Student Loans: Here’s How Borrowers Will Be Affected

Senate Bill Student Loans: A new bill in the Senate is aiming to shake up how millions of Americans pay back their student loans. This bill, known as the Student Loan Repayment Simplification Act, is backed by President Donald Trump and led by Republicans in the Senate.

It’s designed to make the repayment system simpler, but also stricter, especially for people who are using income-driven repayment plans. These are plans where monthly payments depend on how much money a person earns. The bill has caused a lot of debate because while it aims to make things easier, it also takes away some benefits that many borrowers depend on.

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The plan would replace all the current income-driven repayment programs, like SAVE, PAYE, REPAYE, and IBR, with just one option. In this new single plan, people would have to pay 10% of their leftover income after basic expenses. If someone took out loans for college (undergraduate), they could have their loans forgiven after 20 years. But if the loan was for graduate school, forgiveness would only happen after 25 years, which makes it harder for those with big graduate school debt to get rid of their loans earlier like before.

Bill Changes Interest Payment System

There’s another important part of the bill that changes how interest works. the government helps pay for some of the unpaid interest on loans in these repayment plans. That helps stop the debt from growing too fast. But under this bill, that help would stop. This could lead to bigger loan balances over time, especially for borrowers with low monthly payments.

The bill also says that anyone who earns more than $125,000 a year would no longer qualify for forgiveness at all. Senator Bill Cassidy, a Republican from Louisiana, said, “The current system is riddled with complexity and loopholes. This legislation simplifies repayment and ensures fairness across income levels.” Republicans say that the system gives too much to higher earners and needs to be more fair and cost-effective.

Senate Bill Student Loans: Biden’s SAVE Plan getting Targeted

President Trump has made changing the student loan system a big priority since he returned to office in January 2025. He has strongly criticized President Biden’s SAVE Plan, calling it too generous and expensive. Trump’s administration supports this new bill as a way to reduce government spending and end what they call “blanket forgiveness” of loans for people who didn’t pay much.

If the new bill becomes law, it would completely cancel the SAVE Plan, even for people who already signed up for it. That means many people, especially those who are low-income and were getting forgiveness based on very small monthly payments, could lose those benefits. The plan would also make borrowers with larger loan amounts or graduate school debt pay more each month. This could be really hard for people struggling with today’s high cost of living.

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The bill just passed a key step in the Senate, getting through a close vote of 51 to 49. That vote now opens up time for more debate before the full vote happens. There were some changes made to follow Senate rules, which allow bills like this to pass with just a simple majority vote. Because of those changes, the repeal of the current repayment plans like ICR, PAYE, and SAVE will not happen right away. Instead, borrowers who are already using those plans will be allowed to keep them until 2028. After that, they will be moved into the new version of IBR.

People who take out new loans on or after July 1, 2026, will not be able to sign up for the older repayment options. But there is a bit of good news for those who borrowed after July 1, 2014. They’ll still be able to use the newer version of IBR, which offers lower payments for some. The Repayment Assistance Plan (RAP) will also still be available.