Higher Education Savings Options Compliant with Reconciliation Rules
The Senate version of the One Big Beautiful Bill Act (OBBBA) is currently undergoing the "Byrd bath," in which the Senate Parliamentarian offers guidance on whether specific provisions violate Byrd rule prohibitions against their inclusion in a reconciliation bill and would thus be subject to a 60-vote threshold to waive that violation. The Parliamentarian recently ruled that the changes to current student loan borrowers contained in the Health, Education, Labor, and Pensions (HELP) Committee title violate the Byrd rule, making those savings likely to be struck from the bill. This could reduce potential HELP Committee savings by $150 to $200 billion. Our Budget Offsets Bank includes numerous alternatives to replace lost savings.
Below are some simple potential adjustments:
Higher Education Savings Options for New Borrowers
| Policy (for new borrowers) | Savings Relative to Senate Proposal, FY 2025-2034 (billions) |
|---|---|
| Eliminate in-school interest forgiveness | $20 billion |
| Limit Public Service Loan Forgiveness to $50,000 | $15 billion* |
| Remove Pell shortfall bailout | $10 billion |
| Eliminate borrower defense and closed school discharge authority (if repealing rules violates Byrd)† | $10 billion* |
| Strengthen school accountability measures | $10 billion* |
| Remove interest rate cap on parent loans and raise interest rate on those loans by 1 percentage point | $5 billion* |
| Eliminate time-based forgiveness for new loans | $5 billion* |
* CRFB Estimate
† Strikes statutory language for new borrowers, bypassing recent Byrd rulings
