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Category: Higher Education

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House Republicans passed their multi-trillion-dollar reconciliation package this morning, a major victory for Speaker Johnson and President Trump. The passage comes after weeks of infighting amongst Republicans, with both moderate members and conservative hardliners threatening to withhold their support over certain provisions. Eventually, after a meeting with President Trump and last-minute changes made by Republican leadership, the bill passed by a 215-214-1 vote. Every House Democrat voted no. Reps. Thomas Massie (R-KY) and Warren Davidson (R-OH) were the two Republicans who voted against the legislation. House Freedom Caucus Chair Andy Harris (R-MD.) voted present.

The legislation includes $3.8 trillion in tax cuts and cuts to Medicaid and SNAP coupled with the phase out of clean energy tax credits from the Inflation Reduction Act. These programs were cut in order to offset the impact of the extension of President Trump’s 2017 tax cuts, and the Congressional Budget Office estimates that the bill will result in $698 billion in cuts to Medicaid and $267 billion in cuts to SNAP.

Additionally, the bill makes significant changes to higher education legislation — particularly student borrowing. If signed into law, this package would cap lifetime borrowing for a student or their parents at $200,000 and eliminate entirely subsidized student loans and Grad PLUS loans. The bill also includes changes to Pell Grant eligibility, the creation of a risk-sharing program for universities, and would cap the availability of federal aid to the median cost of a specific program nationally.

The reconciliation package now heads to the Senate for consideration, where it will likely be significantly altered.  While reconciliation bills are not subject to the filibuster in the Senate, meaning only a simple majority is needed for passage, there are stricter rules around what can be included in the Senate. Furthermore, many Senators have expressed misgivings over many of the cuts made by House lawmakers.

 

 

 

Reconciliation Update

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House Republicans are pushing forward with their reconciliation bill, an ambitious effort to enact the bulk of President Trump’s legislative agenda in a single package. Speaker Mike Johnson (R-LA) is determined to pass the final bill before Memorial Day, but obstacles remain as intraparty divisions and strong Democratic opposition threaten to complicate the process.

So far, two major steps in the reconciliation process have been completed. First, Congress adopted a budget resolution that outlines the framework for reconciliation, allowing lawmakers to fast-track legislation. Second, key committees—including Energy & Commerce, Ways & Means, Education & Workforce, and Agriculture—held exhaustive markups, working late into the night to finalize their respective proposals and move them out of committee.

Now, these committee proposals must be consolidated into a single reconciliation bill by the House Budget Committee. Once packaged into a bill, the House Rules Committee will set the terms for debate and determine how amendments will be handled on the floor. After this, the bill will be brought to the full House for a vote. Speaker Johnson has expressed optimism that Republicans can unite behind the bill, but divisions within the GOP present challenges. Conservative members have called for deeper spending cuts, while moderate Republicans are concerned about provisions that reduce Medicaid funding. Meanwhile, Democrats remain firmly opposed, arguing that the bill prioritizes tax cuts for high-income individuals at the expense of essential social programs.

If the bill passes the House, it will head to the Senate for further consideration. Senate committees may review the bill and propose amendments, but reconciliation guidelines such as the Byrd Rule prevent non-budgetary provisions from being added. Unlike other types of legislation, reconciliation bills are not subject to filibuster, meaning debate is strictly limited to 20 hours and only a simple majority is required for passage.

Although Republicans hold a majority in the Senate, it is likely that they will make substantial modifications to the House proposal. If changes are made, the bill must return to the House for final approval before it can be sent to the President for signature. With the Memorial Day deadline approaching, lawmakers will have to navigate difficult negotiations and political pressure to push the bill through both chambers.

Hearing on the State of Higher Education

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On Wednesday, May 21st at 10:00 a.m. in 430 Dirksen Senate Office Building, the Seante Committee on Health, Education, Labor, and Pensions will hold a hearing on the state of higher education in America.

GOP Tax Package Advances Out of Committee

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Early Wednesday morning, after more than 17 hours of debate, the House Ways and Means Committee voted to advance out of committee the legislative package containing a slew of President Trump’s top tax priorities. The panel advanced the legislation in a 26-19 party-line vote after rejecting numerous Democratic-led amendments.

The tax bill now heads to the House Budget Committee, which is tasked with combining all the portions of the Trump agenda bill into one package in advance of its consideration in the entire chamber.

The 389-page package makes the income tax rates from the Tax Cuts and Jobs Act of 2017 permanent and implements some of the president’s campaign promises, including no tax on tips or overtime through 2028 and a temporary increase of the child tax credit.

This bill also includes the Republican proposal to increase the endowment tax on some universities. Under the 2017 law, private universities with endowments of over $500,000 per student were subject to a 1.4% tax. The current GOP package creates a tiered excise tax system that would significantly increase taxes on some universities:

  • 1.4% tax for schools with endowments between $500,000 and $750,000 per student.
  • 7% tax for schools with endowments between $750,000 and $1.25 million per student.
  • 14% tax for schools with endowments between $1.25 million and $2 million per student.
  • 21% tax for schools with endowments above $2 million per student.

The bill also narrows the definition of students counted for tax calculations. International students on temporary visas and undocumented students will be excluded from the count, increasing the tax burden on institutions with large international student populations.

Crucially, the endowment tax would still only apply to private universities, although some religiously affiliated institutions will be exempt.

While voting the package out of committee is a significant step, there remains a strenuous process ahead of GOP leadership as they seek passage of the reconciliation legislation. The Ways and Means portion must be packaged together into one “big, beautiful bill” by the House Budget Committee before being voted on by the entire House, which will be difficult given concerns from different GOP factions and the razor-thin margin in the House. If the bill does manage to pass, it will be subject to potentially significant changes in the Senate, where it will also face staunch Democratic opposition.

Helpful links:

The Hill

Inside Higher Ed

 

 

GOP Reconciliation Proposals

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On Tuesday morning, the House Education & Workforce Committee will markup their proposed reconciliation language. The draft legislative text proposes sweeping changes to higher education in order to meet the reconciliation goal of saving $330 billion over ten years. It is one part of a larger GOP reconciliation bill aimed at reducing government spending to pay for the proposed extension of President Trump’s 2017 tax cuts, which are due to expire at the end of the year.

The draft text includes an overhaul of federal student loan programs, including the elimination of subsidized student loans and Grad PLUS loans, restricting Parent PLUS loans, and altering the aggregate borrowing limits.

The aggregate limit for undergraduate students would be $50,000. For graduate students in nonprofessional programs, the aggregate limit would be $100,000. For professional programs geared toward training for a specific field, like law or medicine, the limit would be $150,000.

A student or their parents, across all programs of study, could not borrow more than $200,000 in unsubsidized federal loans.

Additionally, the proposal would limit the availability of federal aid to the median cost of a specific program nationally.

The legislation would also make changes to federal Pell Grants. The text would make ineligible students who are enrolled less than half-time or whose student aid index — a calculation used by schools to determine aid eligibility — is greater than twice the maximum Pell Grant amount for that school year.

The text would also create a system of “workforce” Pell Grants to help students pay for workforce development programs. For students to be eligible, a workforce program would need to last between 8 and 15 weeks, have a completion rate of over 70 percent and have a job-placement rate of over 70 percent. The text would also condition a program’s eligibility for the grants on students’ earnings relative to the cost of the program. The legislation also proposes increasing the amount of funds appropriated to the Pell Grant program by $10.5 billion over the next three fiscal years.

Another consequential change offered in the text is the implementation of a risk-sharing program. The measure would institute required reimbursement payments by colleges and universities based on student graduation rates, earnings and failure to repay federal loans. The Education Department would calculate the reimbursement an institution would pay for a program of study by dividing federal loans among different cohorts of undergraduate and graduate students who finish their programs on time and those who do not. The repayment balance would be the total of payments students failed to make, interest waived under the income-based repayment plan and interest or principal the Education Department forgave. The department would use the risk-sharing payments to fund new grants to schools that meet certain criteria, including on price transparency and completion rates.

 

 

 

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