By Maria Carrasco, NASFAA Staff Reporter

Editor's Note: This article was updated to include more details on how the Senate's reconciliation bill differs from the House's bill. 

The reconciliation process continued to move through Congress on Tuesday as the Senate Health, Education, Labor, and Pensions (HELP) Committee released its own portion of the text, with changes to several higher education related provisions, including Pell Grant eligibility and added limitations, retaining subsidized loans for undergraduate students, and more. Meanwhile, the House sorted through a "technical fix" required to keep the bill compliant with the process. 

Earlier in April, the House Education and Workforce Committee released its initial reconciliation bill focused on higher education, making several extensive changes to the federal Pell Grant program, federal student loan system, need analysis, and more. Last month, the House finalized and narrowly passed its version of the sweeping reconciliation bill, titled the “One Big Beautiful Bill Act,” which prompted the Senate to begin rolling out amended legislative text to bring the bill closer to enactment. 

Sen. Bill Cassidy (R-La.), chair of the Senate HELP Committee, said late Tuesday evening that the Senate’s reconciliation bill fixes the broken higher education system and saves American taxpayers at least $300 billion.

“We need to fix our broken higher education system, so it prioritizes student success and ensures Americans have the skills to compete in a 21st century economy,” Cassidy said in a statement. “While Biden and Democrats unfairly attempted to shift student debt onto taxpayers that chose not to go to college, Republicans are taking on the root causes of the student debt crisis to lower the cost of tuition and improve Americans’ access to opportunities that set them up for success.” 

While the Senate’s reconciliation bill does reject some of the most harmful provisions from the House-passed bill, NASFAA President and CEO Melanie Storey noted that there are still several areas of concern. 

“Still, there are several concerning aspects of this bill that would ultimately make college less affordable for students, such as the elimination of the Grad PLUS loan program, the elimination of deferment options for student loan borrowers facing economic hardship or unemployment, and new limits imposed on the Parent PLUS loan program that may drive borrowers to riskier private loans, which are not available to all borrowers,” Storey said in a statement.

Furthermore, Storey stressed that the Higher Education Act (HEA) reflects a promise that no student should be denied a college education because of cost​​, and urged Congress to “hold that promise close” as it finalizes this legislation. 

What’s in the Senate’s Reconciliation Bill and How It Compares to the House Proposal:

NASFAA previously published a three-part deep dive series outlining all the provisions of the House’s education reconciliation bill. This article reflects some key provisions in the Senate’s proposal and how they differ from the House’s reconciliation bill. 

Student eligibility: The House’s legislation proposed cutting Title IV eligibility for students who belong in specific non-citizen categories. The House’s legislation excludes certain categories of refugees, asylees, parolees, human trafficking victims, and battered immigrants, all of whom  are currently eligible for Title IV aid. The Senate’s legislation would expand on those restrictions to also exclude Ukrainian and Afghan parolees as Title IV eligible non-citizens, effective July 1, 2026. 

Median cost of college: The House included a provision in its legislation regarding changing the calculation of a student’s need as the median cost of college (MCOC) minus the Student Aid Index (SAI) minus other financial aid, beginning with the 2026-27 aid year. The MCOC would be the national median of all programs with the same 6-digit Classification of Instructional Programs (CIP) code at the same credential level, meaning need would be capped at a figure lower than the institution’s actual cost of attendance (COA) for half of all institutions. NASFAA had serious concerns about institutions’ ability to offer their own aid funds under this proposal, as well as many questions about how such a complex framework could be operationalized.

The Senate’s legislation does not include this provision. 

Asset Exemptions: The Senate bill, as the House bill also did, reinstates the exemption of family farm and small business assets from the SAI calculation, effective July 1, 2026.

Subsidized loans: The House’s legislation would eliminate subsidized loans for undergraduate students. The Senate’s legislation does not include this provision, and undergraduate students would retain eligibility to receive subsidized loans. 

Parent PLUS loans: The House’s legislation proposed that parents could only borrow if their dependent student has already taken out their maximum annual unsubsidized loan amount. The House’s bill also proposed a $50,000 aggregate limit per parent borrower, regardless of the number of dependent students they support. 

The Senate’s bill does not require students to have borrowed the maximum unsubsidized loan in order for parents to borrow a PLUS loan, and includes new Parent PLUS loan limits: a $20,000 per year cap per dependent student and a $65,000 aggregate limit per dependent student (without regard to amounts forgiven, repaid, canceled, or discharged). The Senate’s proposal would be effective July 1, 2026. 

Undergraduate loan limits: The House proposed calculating the annual limit using the national median cost of the specific program of study, less the amount of any Federal Pell Grant received by the student, and limiting aggregate undergraduate borrowing to $50,000. The Senate rejected the House proposals, maintaining the current limits for annual and aggregate borrowing. 

Graduate PLUS loan: Like the House bill, the Senate eliminates the Graduate PLUS program, effective July 1, 2026, with legacy provisions for current borrowers to complete their program of study.

Graduate loan limits: The Senate proposed that the annual graduate loan limits be capped at $20,500 for graduate students and $50,000 for professional students. The aggregate limit would be capped at $100,000 for graduate students and $200,000 for professional students. The House version capped annual graduate/professional borrowing at the national median cost of the student’s program of study, with a $100,000 aggregate cap on graduate program borrowing and $150,000 aggregate cap for professional study.

Annual, aggregate, and lifetime loan limits effective date: The Senate’s provisions on loan limits would become effective on July 1, 2026, with a legacy provision included for current borrowers to borrow under current limits for the remainder of their expected time to credential. 

Lifetime borrowing cap on all federal loans: The House proposed that borrowers have a federal loan borrowing cap of $200,000 total, including loans borrowed as a student and parent. The Senate proposed a $257,500 borrowing cap on all federal student loans, excluding borrowed Parent PLUS loan amounts.

Institutionally-determined loan limits effective date: The House’s legislation included a provision allowing institutions to impose their own program-level loan limits. The Senate’s legislation included text that this provision would become effective on July 1, 2026. 

Loan proration for less-than-full-time enrollment: Both bills include a requirement for institutions to prorate annual loan amounts in direct proportion to the percent of full-time the student is enrolled.

Repayment Assistance Plan terms: Under the House legislation, the Repayment Assistance Plan (RAP) would become the only Income-driven Repayment plan, one of ​​two repayment pathways, along with a standard repayment plan. A House provision would not allow borrowers to switch from RAP to the standard repayment plan once enrolled in RAP. The Senate included the RAP in its legislation, but did not include this limitation. 

Repayment Assistance Plan monthly payments calculation: The Senate’s proposal is similar to the House’s proposal, but adds a provision that borrowers who either don’t have an Adjusted Gross Income (AGI) or whose AGI doesn’t reasonably reflect the borrower’s current income will need to provide the Department of Education (ED) with documentation to calculate their monthly payments.  

Repayment Assistance Plan monthly payment amount: The Senate made several tweaks to the House’s proposal on the monthly payments for borrowers under the RAP. While the $10 minimum monthly payment remains, the Senate proposed that a borrower’s RAP monthly payment will be based on their AGI, which includes their spouse, regardless of tax filing status whereas the House bill excluded spouses of borrowers who filed tax separately from their spouses.

Repayment Plan options for Current Borrowers: Under both versions, borrowers with no new loans made on or after July 1, 2026 would continue to be eligible to enroll in the current Standard, current Income Based (IBR), Graduated, and Extended repayment plans, and could also opt in to the new RAP.

Income Based Repayment (IBR) plan changes: The House had proposed to remove the cap on monthly payments made under the IBR plan to no more than the borrower would have paid under the Standard 10-year repayment plan, while the Senate version retains the cap. Both bills remove the requirement for borrowers to demonstrate a partial financial hardship in order to enroll in IBR. The Senate bill retains cancellation for balances of loans repaid under IBR at 25 years while the House proposed earlier cancellation, at 20 years, for undergraduate borrowers. 

PROMISE Grants: The House’s legislation included the creation of a new campus-based Promise Grant program. The Senate excluded this provision in its legislation. 

Addressing the Pell Grant shortfall: Both the House and Senate bills add about $10 billion in mandatory funding for the Pell Grant program. The House version adds the funding over the next three fiscal years (FY), while the Senate bill adds it for FY 2026. 

Workforce Pell Grant program: The Senate’s proposal is mostly the same as the House’s proposal to create a Workforce Pell Grant program, but the Senate would exclude these grants from being available to remedial, non-credit, English language learning, or study abroad coursework. 

Full-time Pell Grant definition: The House's legislation includes a proposal to amend the definition of a full-time student, increasing the required enrollment from the current 24 credit hours to at least 30 credit hours per academic year. The Senate excluded the House’s proposal, keeping the definition of full-time at 24 credits. 

Pell Grant for students enrolled less than half-time: Unlike the House, which proposed barring students enrolled less than half-time from Pell Grant eligibility, the Senate bill maintains their eligibility under existing law.

Pell Grant limitations: The Senate proposed that students who receive grants or scholarships covering their entire cost of attendance (COA) will be ineligible to receive a Pell Grant, even if otherwise eligible for the program. Students who would have been eligible for Pell but can’t receive it will still see their Pell Lifetime Eligibility Usage (LEU) reduced as if they had been awarded. 

Pell Grant Eligibility with a High SAI: The House’s legislation included a provision that prevents students from receiving Pell Grants if their SAI exceeds twice the maximum Pell Grant award. The Senate’s legislation also included this language, with an effective date of July 1, 2026.

Economic Hardship Deferment and Unemployment Deferment: The Senate’s legislation included the same provision as the House to eliminate the Economic Hardship Deferment and Unemployment Deferment for borrowers. The Senate, however, changed the effective date for borrowers who received a loan on or after July 1, 2026. 

Public Service Loan Forgiveness (PSLF): The House proposed to change the definition of public service to exclude time spent in a medical or dental internship or residency program from counting towards PSLF forgiveness. This exclusion would apply to individuals who, as of June 30, 2025, have not already borrowed a GradPLUS or an unsubsidized loan for a graduate-level program.

The Senate maintained this change in their legislation with an effective date for new graduate-level borrowers on or after July 1, 2026.

Institutional accountability and risk-sharing: The House’s proposal included the creation of an institutional risk-sharing model for schools participating in the federal Direct Loan program that would become effective in the 2028-29 academic year. 

The Senate’s proposal does not include a risk-sharing model, but does create an accountability measure for institutions. The provision compares median earnings of cohorts of students who have exited the program within a certain timeframe, depending on the credential level, against the earnings of high school or bachelor’s degree graduates, again, depending on the program credential level. Similar to the Gainful Employment framework, programs failing to meet this earnings threshold in 2 of 3 years would lose eligibility to participate in the Direct Loan Program for 2 years. After one year of failure, institutions would have to provide disclosures to students. This measure would become effective on July 1, 2026. 

Regulatory relief: The House’s proposal eliminated the 90/10 rule entirely from the statute, and repealed the 2022 closed school discharge and borrower defense to repayment rules promulgated under the Biden administration. It also removed the phrase “gainful employment” from several definitions throughout the Higher Education Act (HEA).

The Senate’s proposal does not include any language related to the 90/10 rule or gainful employment, but keeps the provision to repeal the 2022 rules on closed school discharge and borrower defense to repayment.

Where Does the Reconciliation Bill Go From Here?

Meanwhile, the House has scheduled a floor vote to incorporate “technical changes” into its original reconciliation package, which the chamber passed on May 22 by a narrow party-line vote of 215-214. That bill was not formally sent to the Senate; instead, the House held onto it and consulted with the Senate parliamentarian to ensure it complied with reconciliation rules and could advance through all stages of consideration without requiring a 60-vote threshold in the Senate.

This upcoming House vote is necessary to integrate these technical revisions, formally enabling the Senate to begin its reconciliation process.

Once the revised bill reaches the Senate, it will then amend the House legislation. While Senate committees are unlikely to hold markups, the respective chairs – including Sen. Cassidy, who oversees education-related policy – have begun unveiling amended portions of the bill that will eventually be combined on the Senate floor. 

Since the Senate will be making changes to the House-passed bill, the legislation will still need to be passed by the Senate and cleared by the House with another vote before it can be sent to the president to be signed into law. 

Congress has floated July 4 as an intended deadline to have the bill finalized and enacted, but the absolute deadline is September 30, when the reconciliation instructions will expire and need to be rewritten to comply with the change in the fiscal year.

As a reminder, NASFAA has created a reconciliation Call to Action advocacy campaign and will be updating it to reflect recent developments and where things currently stand.

Stay tuned to Today’s News for more updates on the reconciliation process, and be sure to check out our Reconciliation Web Center. 

Publication Date: 6/11/2025

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