Congress Considers Caps on Federal Student Loans, Potential $300 Billion Taxpayer Savings

Congress is currently debating President Trump's "big, beautiful" budget bill, which includes significant changes to the federal student loan system aimed at saving taxpayers at least $300 billion. A key element of both the House and Senate proposals is the introduction of caps on how much individuals can borrow, particularly affecting graduate students and parents using the Parent PLUS loan program. The House plan would limit parent borrowing to $50,000 per student, while the Senate plan sets the cap at $65,000, compared to the current unlimited borrowing. Supporters argue these limits are necessary to prevent colleges from exploiting unlimited loans to raise tuition, but advocacy groups warn the changes could make college less affordable for low-income students and push borrowers toward riskier private loans. Professional organizations like the American Medical Association have expressed concerns that the caps could deter medical students and exacerbate the physician shortage. Overall, the proposed borrowing limits represent a major overhaul with potential consequences for students, families, and the higher education landscape.