Senate Republicans Halt Measure to Repeal Trump-Era Student Loan Caps

Democrats attempted to reverse what they called a “gift to predatory lenders,” but Senate Republicans blocked their measure on June 24. The proposal aimed to repeal Trump administration regulations that introduce new limits on federal student loans for graduate school.

The Democratic initiative, which failed along party lines, was a last effort before the July 1 deadline, when these borrowing limits will take effect nationwide. These changes were included in the “One Big, Beautiful Bill” Act and finalized through U.S. Department of Education regulations. Although some congressional Republicans initially supported the Act, they have since expressed concerns about the impact on fields like graduate nursing amid health care workforce shortages.

Under the new rules, the Grad PLUS lending program will end, and Parent PLUS loans face limitations. Undergraduate lending remains mostly unchanged. Notably, the Education Department had discretion over which disciplines might qualify for a $200,000 borrowing limit, but nursing did not make the list.

Senator Jeff Merkley, a Democrat from Oregon, introduced the measure on June 24. He argued that the new regulations will drive borrowers to the private market, calling it a “gift to predatory lenders.” Merkley disputed the idea that making loans less accessible would push schools to lower tuition, citing ongoing expenses like faculty salaries and infrastructure costs.

Opposing this view, Senator Bill Cassidy, a Republican from Louisiana and chair of the Senate’s education committee, countered that the new rules could pressure schools to reduce costs. He maintained that reversing the changes would restore what he termed the “Biden administration’s student loan disaster.” Despite his opposition, Cassidy shared concerns over the policy’s impact on graduate health care programs, a point he considered a separate issue for further discussion.