House Education Committee Releases Initial Reconciliation Bill
By Maria Carrasco, NASFAA Staff Reporter
The House Education & Workforce Committee on Monday released its portion of the reconciliation bill, which proposes several extensive changes to Department of Education (ED) programs and initiatives — including the federal Pell Grant program, federal student loan system, need analysis, and more.
Since Republicans currently control the House, the Senate, and the White House, Congress is using the reconciliation process — a tool that allows it to quickly advance legislation that directly relates to the federal budget — to implement several policy priorities. The reconciliation process only requires a simple majority of members to pass legislation in both the Senate and House.
Although the House Education & Workforce Committee has released its part of the bill—a key piece of the broader Republican agenda under President Trump—congressional Republicans still face a difficult path. Their narrow majorities in both chambers and the need for other committees to draft remaining provisions may pose significant challenges when the bill goes to a vote.
Earlier this year, the House Budget Committee directed the House Education & Workforce Committee to cut at least $330 billion in ED spending over the next 10 years. Rep. Tim Walberg (R-Mich.), chair of the House Education and Workforce Committee, confirmed in a statement that this legislation cuts over $330 billion, and “brings accountability and holds schools financially responsible for loading students up with debt.”
“For decades Congress has responded to the student loan crisis by throwing more and more taxpayer dollars at the problem — never addressing the root causes of skyrocketing college costs,” Walberg said in a statement. “The bill also includes other reforms that will lower costs for students and families while ensuring the fiscal sustainability of targeted programs like the Pell Grant. Bottom line, it’s time to fix this broken cycle that is costly to taxpayers and leaves students worse off than if they never went to college.”
The legislation proposes several changes to the federal Pell Grant program, including changing the definition of full-time enrollment for Pell Grant eligibility to 15 credit hours, as opposed to the current 12 credit hours. Additionally, the legislation proposes eliminating federal Pell Grant eligibility for any student enrolled less than half time. If the bill passes prior to July, which is highly unlikely, the effective date for these provisions would be July 1, 2025.
However, the legislation does seek to expand Pell Grant eligibility for short-term programs – a bipartisan initiative lawmakers have previously supported – and also addresses the pending Pell Grant funding shortfall, which experts have voiced concerns about. Earlier in March, NASFAA, as part of the Student Aid Alliance, called on congressional appropriators to address this shortfall in the upcoming fiscal year (FY) 2026 budget. The effective date for expanding Pell Grant eligibility for short-term programs would be July 1, 2026.
Notably, the legislation proposes several changes to the need analysis formula and the definition of a student’s “amount of need.” Effective for the 2026-27 award cycle and beyond, need would be calculated as the median national cost of a student’s program of study, minus the Student Aid Index (SAI), minus other financial assistance (OFA).
The legislation also targets federal student loans, proposing to terminate the subsidized loan program for undergraduate students and terminate the Graduate PLUS loan program for new borrowers, both effective July 1, 2026. Beginning July 1, 2026, the Parent PLUS loan program would only be available to parent borrowers whose student borrows the maximum annual amount of unsubsidized Direct Loans in an academic year. The legislation also introduces new annual and aggregate loan limits for all borrowers.
Other notable proposals in the legislation include increasing the amount of times borrowers can take advantage of loan rehabilitation from once to twice.
Beginning in the 2028-29 award cycle, the legislation proposes that institutions participating in the Direct Loan program must participate in institutional risk-sharing payments to ED for student loans not repaid in full.
NASFAA will have a deep-dive series on this reconciliation legislation, outlining specific details of the entire text for members to read in the following week.
NASFAA’s Interim President and CEO Beth Maglione said in a statement on Monday that this reconciliation bill “would turn the clock back for student access.”
“While the financial aid community supports some proposals, such as certain fixes to the need analysis formula that ensure Pell Grants only go to the neediest students, the benefits of those changes are far outweighed by other restrictions in eligibility, ending the subsidy for student loans for undergraduate students, eliminating the Grad PLUS loan program, and sunsetting unemployment and economic hardship deferments for struggling borrowers — to name just a few,” Maglione said.
NASFAA is encouraging members to contact their representatives and urge them to vote against this bill.
The House Education & Workforce Committee is scheduled to mark up the legislation on Tuesday. This is the first in a series of House committee markups for the eventual bill, where committees will address the sections that fall within their respective jurisdictions.
The Senate has not weighed in on the House’s approach, nor has the Senate Committee on Health, Education, Labor and Pensions (HELP) introduced reconciliation text containing education provisions. As a reminder, both chambers will need to come to an agreement on identical bills that can clear both chambers before a reconciliation bill can be enacted.
Any provisions included in a final reconciliation measure must also pass the “Byrd Rule” as assessed by the Senate parliamentarian, whose role it is to determine whether provisions are extraneous to the federal budget. In previous reconciliation measures, the parliamentarian has removed policies from reconciliation bills that did not address the debt limit or alter federal spending levels.
Although House Speaker Mike Johnson previously expressed hopes that the House would pass a reconciliation measure by Memorial Day, Senate Majority Leader John Thune said on Monday that he does not anticipate the Senate will follow as fast of a timeline.
While some provisions could become effective as early as July 1, 2025, the legislation has several hurdles it must clear before it would become law. NASFAA advises institutions not to adjust aid offers for 2025-26 until and unless proposed changes are signed into law.
Stay tuned to Today’s News for updates on the reconciliation process.
Publication Date: 4/29/2025
Kenneth C | 4/30/2025 11:33:10 AM
This is so big brain.
Tony L | 4/29/2025 5:46:51 PM
Somebody needs to point out to Congress how ridiculous these proposals are. Compare the number of student loans, outstanding debt, and default rate with the nationwide number of mortgage loans, outstanding mortgage debt, and default rate of mortgages...are they forcing banks into risk-sharing, requiring them to pay part of the loan back on behalf of the borrower, when people cannot pay their mortgages? Imagine the incentive for the borrower to NOT make any more payments on their loans! I won't even address removing the Subsidized Loan and other proposals...we have people up in Congress who have no clue how the financial aid system works telling us how they think it should work...that's like the average American telling Congressmen how to do their jobs...and THEY don't even know what they're doing. Frustration from a 30 year financial aid administrator...that's all.
Tara V | 4/29/2025 2:41:11 PM
Attempting to push these risky changes through a recon bill is bogus. What’s needed is a proper reauth of the HEA, which is well past due, with bipartisan support. Financial aid, loan debt, and affordability of higher education require thoughtful precision and care.
David S | 4/29/2025 11:25:42 AM
Thank you, Beth, for pointing out that as written, this proposal would do significant damage to college access. Unfortunately, it's very obvious that the Republican Party now stands firmly against increased access, Virginia Foxx appeared on a NASFAA podcast and said that point blank, and this bill just demonstrates some of the ways they want to do it. Everything we are seeing from the White House and both chambers of Congress continues to put the disaster of Project 2025 in place.
Making all loans unsubsidized just flat out makes college more expensive. Eliminating Grad PLUS will not only increase students' costs, but will reduce the number of Americans earning graduate degrees; yes, private lenders will take up the slack (their stock prices have probably gone up this morning), and while there's certainly a place for private lenders, we have seen them redline certain schools and programs before, and it wouldn't surprise me if we saw full COA graduate/professional loans from some sources limited to MD/JD/MBA types of programs. And to claim to be "ensuring the fiscal sustainability of targeted programs like the Pell Grant" while increasing the definition of full-time study and eliminating less than half-time students from Pell eligibility...talk about gaslighting. Won't be sustainable for the students it's intended to help. Risk-sharing - a concept that as far as I know exists nowhere else in the American economy - will inevitably drive up tuition costs.
Nothing in this bill will make college more affordable or accessible, and the people it will hurt most are those our profession exists to help. Sadly, as they say, that's not a bug, it's a feature.
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