Republicans’ Reforms to Make Education More Affordable and Increase School Choice

Majority Leader | Research | The Leader Board | THE NEWSR...Skip to primary navigation Skip to content×Close THE NEWSROOMRemarks Press Releases The Leader Board Op-Eds Videos SENATE RESOURCESRepublican Senators Committees Congressional Record Congress.gov Senate Floor Webcast ABOUT LEADER THUNE×Close THE NEWSROOMRemarks Press Releases The Leader Board Op-Eds Videos SENATE RESOURCESRepublican Senators Committees Congressional Record Congress.gov Senate Floor Webcast ABOUT LEADER THUNExxsearchxMENUFacebookXInstagramFacebookXInstagramVisit Leader Thune's South Dakota Site Here THE NEWSROOMRemarks Press Releases The Leader Board Op-Eds Videos SENATE RESOURCESRepublican Senators Committees Congressional Record Congress.gov Senate Floor Webcast ABOUT LEADER THUNExxsearchxMENUHomeTHE NEWSROOMThe Leader Board01.27.26Republicans’ Reforms to Make Education More Affordable and Increase School ChoiceThis School Choice Week, Americans Are Getting Relief From High Education Costs and New Opportunities in Education Thanks to Republicans’ Working Families Tax Cuts Law “Our higher education system has failed students, workers, and families. Students are graduating with degrees that won’t get them a job and insurmountable debt that they can’t pay back. President Trump and Republicans delivered historic reforms to lower college costs, hold universities accountable for failing programs, and increase hard-working Americans’ access to opportunities that set them up for success.” – Senate Health, Education, Labor & Pensions Committee Chairman Bill Cassidy (R-La.)THE COST OF HIGHER EDUCATION HAS RISEN RAPIDLY IN RECENT YEARS, WHICH WAS ONLY ENCOURAGED BY BIDEN’S STUDENT LOAN TRANSFER SCHEMEOver the last 30 years, as of 2024, tuition and fees at private non-profit colleges have risen by 75%. (College Board: Trends in College Pricing and Student Aid 2024 – Oct. 2024)Worse, public four-year colleges have gone up by 102%. (College Board: Trends in College Pricing and Student Aid 2024 – Oct. 2024)As the cost of higher education has dramatically increased, students have been saddled with long-lasting debt and negative financial implications:23% of bachelor’s degree programs and 43% of master’s degree programs now have a negative return on investment for students. (The Foundation for Research on Equal Opportunity: Does College Pay Off? A Comprehensive Return On Investment Analysis – accessed 1/27/26)“Today, 42.7 million borrowers owe more than $1.6 trillion in student debt.”“More than 5 million borrowers have not made a monthly payment in over 360 days and sit in default—many for more than 7 years—and 4 million borrowers are in late-stage delinquency (91-180 days).”“Only 38 percent of borrowers are in repayment and current on their student loans. Most of the remaining borrowers are either delinquent on their payments, in an interest-free forbearance, or in an interest-free deferment.” (U.S. Department of Education: U.S. Department of Education to Begin Federal Student Loan Collections, Other Actions to Help Borrowers Get Back into Repayment – 4/21/25)Instead of doing anything to address the rising costs of education, the Biden administration flouted the Supreme Court and unilaterally transferred at least $138 billion in taxpayer money to people who owed student loans. (Politico: Biden will email 153,000 student loan borrowers: I’m canceling your debt – 2/21/24; The Wall Street Journal: Editorial: Biden’s Student Loan Boast: The Supreme Court ‘Didn’t Stop Me’ – 2/23/24)These actions primarily benefitted upper-income borrowers and “mostly helped middle-aged borrowers, since most federal programs require payment for at least a decade before eligibility for cancellation.” (Bloomberg: Biden’s New Student Debt Plan Faces Pressure From Civil Rights, Labor Groups – 1/18/24)REPUBLICANS’ WORKING FAMILIES TAX CUTS LAW ENACTED MAJOR REFORMS TO 529 SAVINGS ACCOUNTS, INCREASING EXPENSE LIMITS AND EXPANDING ELIGIBLE EDUCATION AND WORKFORCE EXPENSESThe Working Families Tax Cuts law expands 529 savings accounts, widening the scope of qualified expenses on which funds can be used and increasing the accounts’ annual expense limit from $10,000 to $20,000. (U.S. Senate Committee on Finance: Expanding Educational Opportunity and Affordability – accessed 1/27/26; Fortune: New 529 plan rules let Gen Z invest in careers, not just college—and it reflects a seismic shift in education – 7/28/25)“Like Roth IRAs, 529s let account holders invest after-tax money in stock and bond funds, with income and qualified withdrawals free of federal taxes.” (The Wall Street Journal: op-ed: The 529 Education Revolution Is Here – 6/27/25)“Congress has made federal policy far more favorable for all types of education: foundational, postsecondary, workforce development and lifelong learning.” (The Wall Street Journal: op-ed: The 529 Education Revolution Is Here – 6/27/25)“For the first two decades after Congress created 529s, the accounts could be used only for higher education. That changed in 2017, when Congress expanded 529s to include K-12 tuition in the Tax Cuts and Jobs Act.” (The Wall Street Journal: op-ed: The 529 Education Revolution Is Here – 6/27/25)“Since then, 529s have surged in popularity, with more than $500 billion now invested in more than 17 million accounts.” (The Wall Street Journal: op-ed: The 529 Education Revolution Is Here – 6/27/25)“The latest amendments to 529 plans are transformative, expanding them into tax-free savings accounts for a range of K-12 expenses, job-training, workforce-development and even disability-related costs. Under the One Big Beautiful Bill, these accounts can be used to cover tutoring, vocational training in skilled trades such as plumbing and welding, professional licensing, credential programs and continuing education.” (The Wall Street Journal: op-ed: The 529 Education Revolution Is Here – 6/27/25)“529 accounts now serve not just as college savings plans but as comprehensive education savings vehicles adaptable to a variety of academic and professional needs. This flexibility recognizes modern realities, such as students pursuing alternative postsecondary training paths and adults shifting careers.” (Fortune: New 529 plan rules let Gen Z invest in careers, not just college—and it reflects a seismic shift in education – 7/28/25)THE WORKING FAMILIES TAX CUTS LAW ALSO INCREASES PELL GRANT FUNDING, CREATES A NEW SCHOOL CHOICE TAX CREDIT, AND PROTECTS TAXPAYERS FROM SUBSIDIZING RUNAWAY TUITION COSTSThe Working Families Tax Cuts law increases Pell Grant funding and expands eligibility to students in workforce training programs, opening up more opportunity for those pursuing non-traditional college education:Provides “$10.5 billion in additional Pell Grant funding to prevent a shortfall.” (The Wall Street Journal: Tax Cuts, Student Loans, Medicaid: What’s in the GOP’s Megabill – 7/3/25)“Creates Workforce Pell grants so that workers can take advantage of short-term programs that provide the skills needed for in-demand jobs.” (U.S. Senate Committee on Health, Education, Labor & Pensions: President Trump, Republicans Deliver Historic Wins in One Big Beautiful Bill, Reforming America’s Broken Higher Education System – 8/1/25)Republicans created a new school choice tax credit that will allow taxpayers to claim a federal tax credit for certain donations they make to Scholarship Granting Organizations (SGOs):“Beginning in 2027, taxpayers that make qualified charitable contributions to organizations that fund scholarships for low- and middle-income students will be eligible for a dollar-for-dollar tax credit, up to $1,700.”“These scholarships will provide families with more schooling options to choose for their children. By incentivizing contributions, the new tax credit will make school choice programs more affordable.” (U.S. Senate Committee on Finance: Expanding Educational Opportunity and Affordability – accessed 1/27/26)Righting the wrongs of the Biden administration, the Working Families Tax Cuts law also enacts several student loan repayment and regulatory reforms that protect taxpayers’ exposure to picking up the tab of colleges and universities:“Enacts common-sense protections to prevent federal loans from supporting programs that leave students worse off.” (U.S. Senate Committee on Health, Education, Labor & Pensions: President Trump, Republicans Deliver Historic Wins in One Big Beautiful Bill, Reforming America’s Broken Higher Education System – 8/1/25)Simplifies and streamlines student loan repayments: “Replaces today’s patchwork of repayment plans with just two: a new standard plan (fixed payments over 10–25 years) and a new Income- Driven Repayment (IDR) plan that protects taxpayers and borrowers while ensuring personal responsibility.”(U.S. Senate Committee on Health, Education, Labor & Pensions: Fixing America’s Broken Higher Education System – accessed 1/27/26)“Permanent extension of the employer student loan repayment exclusion, up to $5,250 annually,” which “encourages employers to contribute tax-free dollars to repay their employees’ student loans.” (U.S. Senate Committee on Finance: Expanding Educational Opportunity and Affordability – accessed 1/27/26)“Delays costly regulations, including expansion of Closed School Discharge and Borrower Defense Rules.” (U.S. Senate Committee on Health, Education, Labor & Pensions: Fixing America’s Broken Higher Education System – accessed 1/27/26)PrintEmailTweetNextPreviousTHE NEWSROOMSENATE RESOURCESABOUT LEADER THUNEFacebookXInstagram