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Senate Majority Leader John Thune of South Dakota is leading the effort to pass the reconciliation bill this week.
Andrew Harnik/Getty Images
Senate Republicans revamped their plan to expand eligibility for the Pell Grant to students enrolled in short-term job training programs in the latest version of their sweeping budget megabill, which makes significant changes to higher education policy.
Other changes to the legislation headed toward a final vote include tweaks to the accountability measure for student outcomes, added protections for small business owners when calculating student aid eligibility and alterations to the endowment tax that soften the financial blow for institutions across the board—particularly small liberal arts colleges.
The changes to the workforce Pell proposal came after a nonpartisan Senate official, known as the parliamentarian, said the provision violated Senate rules for the legislative process known as reconciliation. (The process allows the Senate to pass a bill with 51 votes instead of the typical 60.) The parliamentarian didn’t explain her decision, but generally to pass the sniff test, each section must be focused on budgetary spending, savings and revenue, not other policies.
The Senate had originally planned to expand federal aid access to unaccredited providers, but now those programs would be excluded from workforce Pell.
Higher education advocates were shocked when the initial workforce Pell proposal was nixed, as it had largely received bipartisan support. They hope the changes will be enough to keep it in the megabill.
“Community colleges are extremely thankful that the [Health, Education, Labor and Pensions] committee found a route to securing inclusion of the workforce Pell Grant in the reconciliation bill,” said David Baime, senior vice president of government relations for the American Association of Community Colleges. “This means that thousands of students will now be able to access an array of workforce education programs that will benefit both them and the economy.”
The Senate is aiming to vote on the legislation dubbed the One Big Beautiful Bill Act either late Monday night or early Tuesday morning, though it’s unclear if the bill will pass. The latest version only advanced to the Senate floor for debate after a narrow 51-to-49 vote Saturday night. When the Senate resumed Monday morning, it kicked off a marathon of votes on proposed amendments.
But just because the bill is on the floor doesn’t mean it will ultimately make it to President Donald Trump’s desk, as some Republicans are expressing hesitancy about a final vote. Sen. Susan Collins, a Republican from Maine who voted to advance the bill, told multiple news organizations that she’s “leaning against” voting for it on final passage. If four Republicans vote no, the bill would fail.
The legislation also is facing mounting criticism from House Republicans, who also need to sign off in order for the bill to become law by Congress’s self-imposed July 4 deadline.
In addition to workforce Pell, here are three key changes in the Senate’s latest version of the bill.
Endowment Tax
Wealthy small colleges caught a break in the new bill, which now exempts those that have 3,000 students or fewer from a tax on their endowments.
Originally introduced in 2017 under the first Trump administration, the current 1.4 percent tax on investments only applies to a select few of the wealthiest colleges that had more than $500,000 in endowment value per student. Under the first draft of the Senate bill, colleges would pay different rates depending on the value of their endowment per student, and some could pay as much as 8 percent. The tax applied to any college that receives federal financial aid and enrolls more than 500 students.
But the rate hike faced a lot of pushback, particularly from small liberal arts colleges that argued the tax would be debilitating and harm their ability to provide low-income students with scholarships. The Senate finance committee appears to have listened.
Anne Harris, president of Grinnell College, a private institution in Iowa that enrolls about 1,750 students, was hesitant to celebrate, though. Since negotiations are still underway, Harris said she couldn’t “confidently predict” how the bill would impact her institution.
But we “appreciate the attention that Iowa’s delegation has given to this matter,” she added.
At the same time, the Senate removed an exemption for religious institutions, which the parliamentarian struck down.
College Accountability Measures
Senate Republicans on the HELP committee slightly tweaked their plan to hold colleges accountable, addressing a key concern for higher education lobbyists.
The proposed quality test—known as the “Do No Harm” standard—aimed to ensure a positive return on investment for college enrollees by comparing their median salaries to those of adults with a high school diploma.
In the first version of the bill, senators were using the earnings for all undergraduates four years after they stop taking classes, regardless of whether they completed their degree. But now, under the latest version of the bill, the test would only apply to students who graduate.
Emmanual Guillory, senior director of government relations at the American Council on Education, had previously told Inside Higher Ed that it was unfair to factor in the income of a student who dropped out of college. He described the change as a demonstration of “responsiveness” from the Hill.
“It is evident that the staff is listening to stakeholders and working to produce the most balanced and realistic approach,” Guillory said.
Graduate programs would also be evaluated under this new standard by comparing their students’ incomes to those of bachelor’s degree holders. Originally, the graduate comparisons would have been made six or 10 years after a student stopped taking classes, depending on the type of program. Now, it will be made four years after graduation.
FAFSA Assets
When Congress passed a law ordering the Department of Education to simplify the Free Application for Federal Student Aid, it made adjustments to the student aid index formula that required farmers and small business owners to list their properties and equipment as assets.
Senators already planned to reverse that change in their initial reconciliation bill, but the updated version goes a step further by adding an exemption for commercial fishers. It states that family-owned fishing vessels, permits and any other related expenses do not have to be listed.
