According to a recent survey, nearly three-quarters of college students will likely be affected by the new tax bill proposed by Donald Trump. We’re particularly focused on what this bill does to reshape federal student loan borrowing and repayment options. The bill would not go into effect for loans released until the summer of 2025. It sets hard borrowing caps and severely restricts loan repayment choices for students.
The survey suggests that 61% of the students think they are going to personally be affected by the bill. The cap restricts borrowing to $20,500 per year for master’s and doctoral programs, with an overall borrowing limit of $100,000. For professional practice doctoral degrees—including, of course, medicine and law—the borrowing limit is a whopping $50,000 per year. Combined, they are able to access up to $200,000 in loans. These changes represent a huge reduction from today’s borrowing caps. For students in graduate programs such as law or medicine, they can immediately borrow the full value of $138,500 for their education.
The unexpected new legislation has created a sense of alarm among the student population. Only 20% of respondents say they know what the change in policy will mean for them. 19% concede they don’t understand it whatsoever. About 39% of students indicate they have a vague understanding of how the new rules will apply to them, while 22% are unsure.
More than 17,800 students have written to let their voices be heard on the changes that are being proposed. Perhaps more importantly, 51% specifically oppose any change in student loans as included in the bill. Nearly one-third of students—32%—believe the ending of repayment options, such as the Save Plan, will have a direct effect on them. This proposed change would further complicate their ability to navigate their debt responsibly.
To many first generation college students, the future looks especially daunting right now. In fact, 45% are planning to drop out of school, and 44% are planning to switch majors specifically due to the new law. And 35% of students say they’re considering taking fewer classes. At the same time, more than a third (32%) are considering altering their degree trajectories. Moreover, 31% of students are considering finishing their studies abroad. At the same time, 26% would join the armed forces to help pay for college education.
The uncertainty surrounding this new tax bill raises questions about its long-term effects on higher education accessibility and student financial health. As colleges and universities plan for the next academic years, countless students are making difficult choices about their educational futures.
“I wanted to go to medical school, but now I won’t.” – Anonymous student
The uncertainty surrounding this new tax bill raises questions about its long-term effects on higher education accessibility and student financial health. As colleges and universities prepare for the upcoming academic years, many students face tough decisions regarding their educational futures.