11. Department of Education · Major · Needs Congress
Privatize all federal student lending programs
Printed page 353 11. Department of Education
“Privatizing all lending programs, including subsidized, unsubsidized, and PLUS loans (both Grad and Parent). This would allow for market prices and signals to influence educational borrowing, introducing consumer-driven accountability into higher education. Pell grants should retain their current voucher-like structure.”
What has happened
- Partially done
The Department's "Reimagining and Improving Student Education" final regulations implemented the statute — new graduate, professional and parent loan limits and the Grad PLUS phase-out — effective 2026-07-01.
- Partially done
Public Law 119-21 (H.R. 1) phased out the Grad PLUS program outright and set new annual and aggregate borrowing limits for graduate, professional and parent borrowers — pushing that borrowing to private lenders, which is the market outcome the Quote is after. It is not privatization: subsidized and unsubsidized Direct Loans and Parent PLUS remain federal programs, and the law added $1 billion for federal servicing (sec. 82005).
Research log
What was searched, and what didn’t count as evidence
Research notes
- Pell grants kept their existing structure, as the Quote asks, and were expanded to short-term Workforce Pell (final rule 2026-05-19, FR 2026-10013).
- No bill in the 119th Congress corpus proposes transferring federal lending to private lenders; the Treasury operational partnership of 2026-03-19 (#824) moves collections inside the federal government, not outside it.
- Action
- transfer
- Object
- Federal student lending programs
- ID
- 885