House Republicans mull taxes on scholarships and changes to student loan programs

The Associated Press

Cheyanne Mumphrey

February 8, 2025

As Republicans in Congress look for ways to slash spending, some legislators are floating new taxes on college scholarships, an end to student loan repayment plans and a big hike in taxes on university endowments.

The ideas affecting higher education are among many in circulation among House committees that are exploring ways to cover the cost of extending and expanding tax cuts passed in President Donald Trump’s first term.

The recommendations are still evolving, and it’s unclear how close any of them will get to being implemented. Regardless, advocates across higher education say they are alarmed to see such proposals gain traction at all with Republicans.

“It’s shocking to me because this amount of cuts is not happening in reaction to like a budget crisis, like a recession. This really feels different in the sense that it is not something that there is an external push or a need for. So, it feels more ideological in a way,” said Jessica Thompson, a higher education policy expert with The Institute for College Access and Success.

Here is a look at possible federal budget cuts that would affect higher education under the Trump administration:

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