6 Ideas To Fix the Student Debt Crisis That Aren’t in Trump’s Bill

The Big, Beautiful Bill was already making its way through Congress in mid-May when I sat in a room of higher education financing thought leaders. These experts — comprising academics, financial aid representatives, policymakers and lenders, among others — presented ideas to make life easier for families financing college, improve Federal Student Aid and hold schools more accountable.

Unfortunately, very few of these proposals are in the Congressional legislation that, conservative lawmakers hope, could be enacted as soon as this summer. Here are the experts’ arguments for their inclusion, as voiced during the annual Education Finance & Loan Symposium in Alexandria, Va.

To assist families paying for college and repaying loans

1. Triple the Pell grant

Nationally-recognized student loan expert Mark Kantrowitz says he’s been calling for the Pell Grant — $7,395 for the 2025-2026 school year — “to be tripled for over a decade.” Given where we are today, he says, it makes sense to renew that call.

“A low-income student grows up in a low-income neighborhood,” explains Kantrowitz. “After they graduate, they return to that neighborhood. They don’t get as high-paying jobs and are less capable of repaying their student loan debt. Whereas if you gave them that money as a grant, you’d have less of a problem with defaults.”

Replacing federal loans, which could be viewed as predatory for those who are less equipped to repay them, with Pell Grant funds for these students is a way of giving them a socioeconomic ladder to climb.

“We have significantly fewer college-capable, low-income students enrolling in college because they fear debt — it stops them from enrolling,” Kantrowitz says. “And if we were to eliminate it, we’d have more talented, low-income students pursuing a college education. The wealthy do not have a monopoly on intelligence.”

2. Freeze tuition and fees while students matriculate

Not all ideas are novel — they just have support for broader adoption. That’s an appropriate description for tuition-and-fee freezes, which seemed to have many fans in Virginia.

Purdue University is one example of a school that has kept these costs frozen since 2013. In-state tuition hasn’t budged from $9,992 in a dozen years. And it seems to be working: Purdue claims that 6 in 10 of its students graduate debt-free, compared to the national average of 4 out of every 10.

3. Lower interest rates to accelerate repayment

This pitch, from longtime student lending executive Henry B. Howard, echoed recently introduced student loan legislation.

I’d like to set up some kind of incentive program where you don’t have to pay any interest if you pay off your loan in the next 12 months, or you only have to pay one percent interest if you pay it off in the next 24 months.

— Henry B. Howard

The ramifications are clear: Motivate borrowers to repay their loans faster, creating a win-win for the borrower (who can avoid long-lasting education debt that hinders their other financial goals) and the federal government (which can restock its financial aid funding to support more students).

4. Expand PSLF to cover community service, by the hour

Public Service Loan Forgiveness, which offers to wipe away remaining balances for qualifying nonprofit and government employees after a decade of payments, has been a target of the Trump Administration’s early days. But a former Trump Administration official, A. Wayne Johnson, who served as the chief operating officer of Federal Student Aid (FSA) from 2017 to 2019, wants PSLF to be more accessible, not less. 

“I believe that it should be more directly tied to, if you give me 10 hours of community or public service, I’ll cancel $1,000 of debt,” Johnson said during a symposium panel.  “And I’ll also go one step further [to say] that if your sister, brother, mother or aunt wants to work off some of those hours for you, that will count as well.”

I’m very much a conservative, but… I get back to my [question of], how do you work it off in 10 years? To give you 10 hours of community public service, read kids’ books, take little old ladies’ groceries, pick up trash on the highway. I don’t care, but work it off, and get it done as quickly as you can, and let’s get that chapter closed, and move on.

— A. Wayne Johnson

To improve Federal Student Aid

5. Install a student loan czar in Washington, D.C.

Although he said he wouldn’t want the job — and would sympathize with whoever got it — Johnson also advocated for creating a new government leadership position.

The closest thing we have today to such a czar would be the Education Department’s undersecretary, the administration’s top official in higher education. But this person isn’t exclusively focused on education debt.

“Just as we have Tom Homan running [one aspect of] Homeland Security” as a so-called border czar, Johnson says, “we need a single person that has power and a voice that can listen to everybody, but basically… take the, let’s call it the direct-and-hard approach to ‘this is what we’re going to do and how we’re going to go about doing it.’”

Too many ideas float around, too many thoughts. A lot of stuff gets convoluted, but there’s really never that person that stands in front of the camera, in front of the nation and says, ‘This is what we’re doing, and how we’re going to do it and why we’re going to do it.’

— Johnson

To shift accountability to colleges and universities

6. Limit federal funding until a student proves they’re unlikely to drop out

A popular opinion expressed by many experts: If a student can’t repay their debt, they suffer. If the federal government doesn’t get repaid, they do, too. But the college that took the funding gets off seemingly scot-free.

This feeling has taken hold in Washington, D.C., too, where Education Secretary Linda McMahon has blamed colleges and universities for the current student loan default crisis.

One way to keep schools focused on their students’ debt — and avoid the likeliest-to-default loans — is to put guardrails in place.

“Enroll the [student], they’re set up to receive loans, but they’ve got to successfully get through that first semester or [the school does]n’t get paid,” Johnson, the former FSA CCO, says. “That would cause an unbelievable focus on universities, one, only admitting people that really will get through the first semester. And [two], providing remedial instruction to keep those in school.”

Another way to fund the first semester would be to rely on Parent PLUS Loans, which have among the lowest default rates in the federal loan portfolio.

“So, if you want to go to college, and you have a mommy or daddy, that mommy or daddy has to get a Plus Loan for you instead of you getting a student loan,” Howard says. “And furthermore, the PLUS Loan can’t be disbursed to the school until the student successfully completes the first semester with an acceptable GPA and enrolls for the second semester.”

Our advice for you

Take it from a certified student loan counselor: It’s easy to ride the roller coaster of promises — broken and kept — from elected officials and pending legislation. While tuning in to the student loan repayment debate can help you maneuver your own education debt, don’t let it overwhelm you. What’s being discussed in D.C. is likely to evolve over time. So, unless you’re motivated to call your congressperson or senator, it might behoove you to wait for the president’s signature. Then you’ll know it’s the law of the land.