Blue State Raids ‘Emergency’ Funds to Pay Off Student Loans, Could Fuel ‘Unsustainable’ Borrowing

One blue state legislature is rolling out a statewide student loan program that will tap the state’s “emergency” fund to replace a federal program slashed under the “Big Beautiful Bill.”

Connecticut lawmakers are calling for the use of state emergency funds to replace the federal GradPLUS program, which offered graduate students up to the cost of their degree minus the $20,500 per year already available through unsubsidized loans.

According to the Connecticut Education Association, $20 million of the cost would be fronted by the Connecticut Higher Education Supplemental Loan Authority, a quasi-public organization. Another $10 million would potentially come from the state’s $500 million emergency reserve fund, originally created in November in response to “federal cuts toward health and human services” by the Trump administration.