Significant changes are coming for Georgia’s universities and students after the U.S. House passed President Donald Trump’s trillion-dollar tax breaks and spending cuts bill on Thursday. He is expected to sign the bill on Friday.
The bill eliminates Grad PLUS loans, a popular loan program for graduate students. And it puts a cap on Parent PLUS loans, limiting them to $65,000 per student. Additionally, the bill offers future students fewer repayment options, giving them just two plans to choose from.
Without Grad PLUS loans, some worry students won’t be able to afford graduate school or will be forced to take out loans from a private market that offers borrowers fewer protections. And while a new repayment option may bring costs down for some students, Wesley Whistle, a project director with think tank New America, said high- and low-income students will both see their payments increase.
To increase college accountability, the bill will strip degree programs of federal loan access if their students don’t meet certain earning thresholds after graduating. That means those with a bachelor’s degree must make more money than the median area worker with only a high school diploma. Similarly, those who finish a graduate school program must go on to make more money than workers who only possess a bachelor’s degree.
Some accountability proponents say it doesn’t go far enough, noting that the measure only focuses on income without accounting for how much debt a student takes on to get the degree.
Taxes on endowments at private universities will be increased, as some schools will have to pay a rate of 4% or even 8%. Based on the formula outlined in the legislation, Emory University in Atlanta could see a significant tax on its roughly $10 billion endowment.
“Endowment funds are primarily used for student financial aid, so this is a tax on student financial aid that is instead being used to offset tax cuts for the wealthy and for corporations,” said Sara Partridge, a higher education policy researcher at the Center for American Progress.
The American Enterprise Institute, a conservative think tank, called the bill a “huge step forward” for higher education. It will “streamline the student loan program,” said AEI’s Beth Akers, while ensuring “that colleges handing out loans are delivering good outcomes for their students.”
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