A new report from the Congressional Budget Office confirms that the One Big Beautiful Bill Act is set to reduce the amount of money taxpayers lose on federally subsidized student loans, reducing federal deficits by hundreds of billions over the next 10 years. There is still more Congress can do to lower higher education costs, but the OBBBA reforms are a good start to build upon.

The federal government’s direct loan program was first established in 1994, but it did not become the primary method of student borrowing until the Affordable Care Act, signed by former President Barack Obama in 2010. The Democratic Party cooked the books on the expanded direct loan program, claiming it would deliver $61 billion in deficit reduction over the expansion’s first 10 years. But these savings never materialized, as always seemed likely. Student loan payments routinely came in much lower than initially projected, as some students simply did not repay their loans and others took advantage of increasingly generous income-driven repayment programs.