Higher Education and Student Debt

Americans owe about 1.7 trillion dollars in federal student loans, spread across 43 million borrowers, which is more than the country owes on credit cards. The price that produced it is still rising in nominal terms: published tuition and fees for 2025/26 run about 4,150 dollars a year at a public two-year college in district, 11,950 at a public four-year college in state, and 45,000 at a private non-profit one. Grants absorb a large part of that for the poorest students, but not the rent, the transport or the books, which is why a majority of community college students work while they study and why fewer than a third finish within three years. The repayment side was rebuilt in 2025 and the rebuild took effect on 1 July 2026: the Repayment Assistance Plan is now the only income-driven option for new borrowers, it sets payments between one and ten percent of adjusted gross income, it waives unpaid interest each month so balances cannot grow, and it forgives what is left after thirty years rather than twenty. The budget office scores that change as saving the federal government about 271 billion dollars over ten years, which is the same money seen from the borrowers' side. Of the older plans, SAVE, PAYE and ICR close to everyone by July 2028; income-based repayment stays open to eligible existing borrowers alongside the new plan and a tiered standard plan. Meanwhile the proposal that has been in front of Congress in some form for a decade — a federal-state partnership that would make community college tuition-free — has never had a floor vote.

• Very likely better · 100 %

  Effect large (+29)
  Free Community College

  Pay the tuition of every community college student through a federal-state partnership, with Washington covering three quarters of the bill and states the rest.

  Access to study America's College Promise Act, reintroduced in the 119th Congress
• Likely worse · 17 %

  Effect large (−34)
  The Repayment Overhaul

  Replace the five income-driven repayment plans with one that takes between one and ten percent of income, waives unpaid interest each month, and forgives what is left after thirty years instead of twenty.

  Student debt Student loan provisions of the reconciliation act of 2025, in force since 1 July 2026