New Economic Analysis Projects Current Borrowers in Income-Driven Repayment will Pay Thousands of Dollars More Per Year, New Proposal to Drain at Least $40 Billion from U.S. Economy in Year One
April 29, 2025 | WASHINGTON, D.C. — Republican leaders on the House Education and Workforce Committee released their draft budget reconciliation bill, which is scheduled to be marked up by the Committee later today. The Student Borrower Protection Center (SBPC) also sent a letter to the Committee Chairman Tim Walberg and Ranking Member Bobby Scott warning of the dire economic effects posed by this legislation. Also view a quote sheet from borrowers across the country on the need for affordable student debt payments and relief.
In response, SBPC Policy Director Aissa Canchola Bañez released the following statement:
“House Republicans showed their hand—tens of millions of students and working families across the country will see an affordable higher education pushed further out of reach and be forced to pay President Trump’s government thousands of dollars more per year so that right-wing lawmakers can deliver trillions in tax cuts to Elon Musk and his billionaire buddies.
“Every borrower with a student loan signed a contract with the government promising affordable payments and a path out of debt. Instead, today, House Republicans have proposed to break these contracts—jacking up loan payments, cutting off pathways to debt relief and justice, and forcing these borrowers to pay for another round of billionaire tax cuts.
“This is a return to the worst failures of the past: 30 years of traps, tricks, and broken promises, where only a handful of borrowers ever see relief. While House Republicans hand trillion-dollar tax breaks to billionaires, they’re telling working families: take on debt you’ll never escape just to access a higher education, and good luck.
“Instead of bringing down the cost of college, House Republicans want to punish millions of borrowers desperately trying to repay their debts, pushing them further into the red while allowing some of the most predatory actors in higher ed to profiteer at their expense. Students and borrowers deserve so much better.”
SBPC’s letter to Committee Chairman Walberg and Ranking Member Scott details that:
- A typical current student loan borrower with a college degree will be forced to pay an additional $2,928 per year in student loan payments should Congress enact this proposal, when compared to the Saving on a Valuable Education (SAVE) plan.
- A typical current student loan borrower with some college but no degree would be forced to repay an additional $1,761 per year in student loan payments should Congress enact this proposal, when compared to the SAVE plan.
A copy of SBPC’s economic analysis of the student loan provisions in the House Republican draft budget reconciliation bill is available here: https://protectborrowers.org/wp-content/uploads/2025/04/Economic-Analysis-of-EW-Recon-Markup_04-29-2025.pdf
As the U.S. economy is projected to enter a recession later this year, SBPC’s letter also warned about the broader economic headwinds created by this legislation, finding that:
“Specifically with respect to the eight million borrowers whose payments are currently paused due to litigation around the SAVE plan, the current proposal will force these families to repay approximately $41.5 billion in additional loan payments in the first year alone. This is also $41.5 billion that will be diverted away from household expenses like buying groceries, paying off rent or mortgages and car loans, and other purchases that help grow the economy.”
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About Student Borrower Protection Center
Student Borrower Protection Center (SBPC) is a nonprofit organization focused on eliminating the burden of student debt for millions of Americans. We engage in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance racial and economic justice.
Learn more at protectborrowers.org or follow SBPC on Twitter @theSBPC.