Big Changes to Higher Education in Budget Reconciliation Bill
August 26, 2025
On July 4, 2025, President Donald Trump signed into law the 2025 Budget Reconciliation Act (formally referred to as the “One Big Beautiful Bill”), a multifaceted reconciliation package that extends the Tax Cuts and Jobs Act of 2017 and includes broad changes to government spending. The Act makes significant changes to federal financial aid programs administered under Title IV of the Higher Education Act of 1965, as amended. These changes include eliminating Grad PLUS loans for new graduate and professional students, imposing new annual and lifetime borrowing limits across multiple loan programs, establishing a new accountability metric, enacting Workforce Pell and adopting new loan repayment options.
The Act emphasizes the return on student investment through new accountability metrics and limits on the loans that students and their parents can incur for their education. Institutions are advised to carefully review the proposed changes and develop a strategy for implementation and adjustments. It is important to recognize that implementation of the higher education provisions included in the Act will ultimately be finalized through negotiated rulemaking. The U.S. Department of Education has announced that the proposed loan changes will be addressed by the Reimagining and Improving Student Education (RISE) Committee. The RISE Committee will hold sessions from September 29 to October 3, 2025, and November 3 to 7, 2025. The changes to accountability and Pell Grant programs will be addressed by the Accountability in Higher Education and Access through Demand-driven Workforce Pell (AHEAD) Committee. The AHEAD Committee will hold sessions from December 8 to 12, 2025, and from January 5 to 9, 2026. See our previous Alert for more information about the negotiated rulemaking process.
