This week, the House of Representatives passed its budget reconciliation proposal. The bill passed the House in a 215-214 vote, along party lines. The process now shifts to the Senate where it is certain to face many changes from Senators.
Separate from the appropriations process, budget reconciliation allows for changes to tax and mandatory spending programs and can sidestep the filibuster in the Senate. It cannot impact discretionary spending, which will be addressed in the FY 2026 appropriations bills.
This reconciliation bill is the culmination of a series of markups from different committees who were tasked with putting together their portions of the bill based on instructions they received in the budget resolution that passed earlier this year. The House Education and Workforce Committee had produced legislation in April to contribute to the broader bill that was ultimately passed by the House. In some positive news, the reconciliation bill would authorize the Workforce Pell Grant Program, designed to expand Pell Grant eligibility to students enrolled in short-term training programs.
However, the primary goal of the education portions of the bill was to reduce mandatory spending by at least $330 billion over 10 years. To accomplish this, the bill would implement several critical changes to financial aid and student loan eligibility, limits and repayment options. Key changes include:
- Placing new maximum caps on student loans for students and parents, and eliminating some loan options
- Eliminating the “SAVE” student loan repayment plan
- Consolidating other loan repayment options into one fixed plan and one income-driven repayment plan (with higher payments than current options)
- Instituting a “risk-sharing” program where colleges are responsible for some defaulted loans
- Eliminating some student loan borrower protections as well as the gainful employment rule
- Limiting Pell grants only to students who are enrolled at least half-time, and redefining full-time as 15 credit hours per semester compared with the current 12 hours
Additionally, lawmakers included in the Ways and Means portion of the bill a proposal that would use the tax code to offer vouchers that students could use to attend private secular or religious schools. The Educational Choice for Children Act would create a federal tax credit for individuals who donate to groups that provide school choice scholarships to students. ACTE opposes any proposal that would take resources away from public education.
In the coming weeks, the Senate will take up the bill. If the Senate makes changes, which is likely, then it will head back to the House for final passage and to President Trump’s desk.
ACTE will continue to monitor the bill and communicate the latest developments as they occur. If you have any questions, please don’t hesitate to reach out to ACTE’s Government Relations Manager, Jimmy Koch ([email protected]).
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