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Republican senators Lisa Murkowski (left) and Susan Collins were key figures in final debates over the sweeping reconciliation bill.
Al Drago/Getty Images
The Senate’s sweeping reconciliation bill, which narrowly passed Tuesday after 37 hours of debate, could significantly change how American colleges and universities are run, even with some recent changes designed to soften the blow, higher education experts said.
“Despite all of the headwinds, [Republicans] continue to move this forward and they’re very close to getting [the bill] over the finish line and onto the president’s desk by July 4,” said Jon Fansmith, senior vice president for government relations and national engagement at the American Council on Education. “When you look at the magnitude of what’s in there for higher education, the fact that they’re able to do that is very concerning.”
Among other changes, the legislation increases the tax rate for university endowments, introduces a new metric to hold colleges accountable for student income levels after graduation, expands the Pell Grant to short-term job training programs and eliminates Grad PLUS loans. The megabill also limits access to the Supplemental Nutrition Assistance Program and cuts Medicaid.
The legislation now heads back to the House, where lawmakers face immense pressure to pass the Senate’s bill as is in order to meet the self-imposed July 4 deadline. They are expected to vote Wednesday.
If they do amend it, the bill would have to be sent back to the high chamber for yet another vote, which could be risky since Vice President JD Vance had to break the tie Tuesday.
But if anything is amended, experts add, it will likely be the $1 trillion slash to Medicaid funding in the Senate bill. Democrats have called the cut an attack on the working class, and moderate Republicans worry it could hurt them with constituents in the midterm elections.
Fansmith noted that though the massive cuts to state subsidies don’t directly concern higher education, the downstream effects could be devastating.
“When federal funding to states gets cut, states almost inevitably cut their support for higher education, because higher education can raise its own revenue source in a way that law enforcement, hospitals and K-12 can’t,” he said. He expects the number of student success programs offered to decrease, state aid offerings to be reduced and some colleges to close, “because there’s only so much you can generate from the tuition side, and only so high you can push tuition rates.”
As the House gears up to consider the Senate’s bill, Fansmith and others are also watching closely to see whether House lawmakers will try to resurrect controversial proposals such as cuts to the Pell Grant program and a plan to make colleges pay a penalty for students’ unpaid loans.
Even if the higher education section of the bill goes untouched, many higher education lobbying groups worry the legislation will significantly change how financial aid offices calculate their awards and how students pay for college.
For example, student advocates say that the proposed cap on loans for graduate and professional programs—at $100,000 and $200,000, respectively—could force many borrowers to either not pursue higher education or take out costly private loans. As a result, fewer students may enroll in medicine, teaching, social work, mental health and other in-demand fields.
Jeanette South-Paul, vice president and provost of Meharry Medical College, a historically Black graduate institution in Nashville, said in a statement to Inside Higher Ed that if the proposed changes take effect, health-care leaders will have to “work together to find creative solutions so students feel empowered to succeed, are free of financial barriers, and can follow their passion.”
“Our duty now is to protect the pipeline of health care providers, ensuring it remains robust and wide-ranging enough to care for all people,” South-Paul added. “Almost half of health care clinicians come from modest homes, dedicated to serving their communities, and choose careers with long educational pathways that require funding with the lowest interest rates possible to manage the educational costs.”
Education Secretary Linda McMahon praised the legislation on X, as did Republican lawmakers.
“By establishing loan limits, the bill closes the open spigot of federal subsidies that drive up college costs and burden families,” she wrote. “The bill also simplifies and streamlines student loan repayment for millions of borrowers.”
Sen. Bill Cassidy, the Louisianan who chairs the Health, Education, Labor and Pensions Committee and who voted for the bill, called the bill a necessary effort to “preserve the American Dream.” And Rep. Tim Walberg, the Michigander who chairs the Committee on Education and Workforce, described it as “decisive action to lower costs.”
“Although it differs from the House-passed version, the Senate-passed big, beautiful bill is an important step to bringing down costs for American students, families, and taxpayers,” Walberg said in a news release. “I look forward to passing the One Big, Beautiful Bill Act as it returns to the House for a vote and helping get more Americans back on the road to prosperity.”
Others, including Arnold Ventures, a philanthropic group, seem to have one foot in each camp: They doubt that the bill will actually address the nation’s growing debt, but they also largely support the higher education changes.
The bill makes “meaningful progress on improving higher education policy by better aligning federal spending with economic outcomes,” AV president Kelli Rhee said in a statement. “Provisions to cap graduate lending and hold programs accountable for poor performance are important steps forward.”
Still, as Congress heads into the Fourth of July holiday weekend, lawmakers will likely continue to face significant criticism from across the higher education sector.
“This is a big, ugly, obscene betrayal of American working families that was rammed through the Senate in the dead of night to satisfy a president determined to hand tax cuts to his billionaire friends,” Randi Weingarten, president of the American Federation of Teachers, said in a news release Tuesday. “Sadly, as we prepare to celebrate our independence, the promise of the American dream, of freedom and prosperity for all, is now further out of reach.”
