Reverse the 2010 federalization of student lending
What the document says“The next Administration should completely reverse the student loan federalization of 2010”
The chapter asks that the Administration work with Congress to spin off Federal Student Aid and its student loan obligations into a new government corporation with professional governance and management. It says elsewhere that student loans and grants should ultimately be restored to the private sector, or at the least that the government should revisit its role as guarantor rather than direct lender.
What the document actually says“The next Administration should completely reverse the student loan federalization of 2010”
In 2010 the government took over student lending. That should be undone.
The government lends money for college. It took that job over in 2010. The book says that should be reversed.
To provide for reconciliation pursuant to title II of H. Con. Res. 14
2025-07-04 · 139 Stat. 72
Section 81001 pulls the federal government out of part of the lending the 2010 change brought in. A graduate or professional student may not receive a Federal Direct PLUS Loan for any period of instruction beginning on or after July 1, 2026, annual unsubsidized borrowing is capped at $20,500 for a graduate student and $50,000 for a professional student, parent PLUS borrowing is capped at $20,000 a year and $65,000 for each dependent student, and a student may borrow no more than $257,500 in a lifetime. That reduces direct federal lending, which is the object of the proposal. It is not the reversal the chapter describes. Nothing spins Federal Student Aid off into a government corporation, nothing restores origination to private lenders or revisits the government's role as guarantor, and the Direct Loan program continues for everyone else, the section adding limits rather than changing who lends.
The 2025 law cuts back federal lending to students. Grad students lose one loan type from July 1, 2026, and new caps limit what students and parents may borrow. But this is not the reversal the chapter asks for. The direct loan program goes on, and private lenders do not take it back.