After the overpass of the B-2 bomber, President Donald Trump signed a comprehensive policy bill on Friday to celebrate July 4 and commend Congressional Republicans for meeting his self-imposed deadline.
The legislation narrowly passed the House on Thursday, pledging to dramatically change the way universities work. Higher education groups and advocates warn that the bill would harm low-income families, while supporters praised the necessary reforms.
Much of the debate about the bill is called the A Big Beauty Act, which centers on nearly $1 trillion in cuts, as well as changes to tax laws that will benefit the rich. But the 870-page legislation also thoroughly and thoroughly tertiary education policies to limit some student loans, eliminate graduate Plus programs and use students’ income to keep the university responsible. Higher education experts say the legislation will change the department, hurt the university’s finances and hinder the college’s access.
However, the legislation does not include recommendations from some of the most concerned university leaders, such as cutting the Pell grant program and a 21% donation tax rate. Wealthy private universities will still face higher donation tax rates, up to 8%. (The current interest rate is 1.4%.)
Some higher education lobbyists praised Republicans for supporting some deeper cuts, but they fear many changes to the bill.
Eliminating graduate plus loans could mean students attending graduate school, which would be hit by the university’s bottom line, especially in institutions that rely on tuition income for graduate programs. Similarly, capped parents of each student plus a capped loan of $65,000 could hurt Black and Latino families who use the loan disproportionately. The legislation also consolidates repayment plans, offering two options for future borrowers. Consumer protection advocates fear the bill will exacerbate the student debt crisis and drive students into private loans.
In July 2026, the student loan changes will take effect.
Catch up on our report on the bill
Legislators also agreed to extend Pell Grant to a short-term job training program, achieving long-term goals for community colleges and other groups. In the last minute changes, the expansion does not include unauthorized providers.
“Although it has improved with the original version, [the bill] Including a mix of new taxes and spending cuts, which will force harder decisions on chief business officials and further fatigue incomes, which helps make it affordable for college students and families,” said Kara Freeman, president of the National Association of College and University Business Officials. “The long-term impact of this legislation on higher education and U.S. innovation can be far-reaching. ”
Overall, a large beauty bill will add about $3.3 trillion in national debt over the next 10 years, according to the Congressional Budget Office. Republicans said they had hoped to curb spending and address the growing deficit in legislation, with some conservatives shutting out with price tags. Still, the pressure on the president to win the legislative victory was won, even as some lawmakers stayed for hours in favor of the bill. politics The report said Trump called lawmakers and met them in person to bring up the case.
Republican lawmakers and Trump administration officials praised the legislation, saying it would reduce college costs and increase accountability. One of the major changes in the college’s access to federal student loans for students’ income. Failure to show that graduates have more plans than adults with only high school diplomas earn. A rough analysis found that less than half of the two-year degree program will pass the income test, but community colleges rely on loans.
“Overall, the Senate’s ‘no harm’ proposal will strengthen the higher education system,” wrote Preston Cooper, senior fellow at the conservative American Corporate Academy who conducted the analysis. “However, the current political environment was once a lifetime opportunity to address the federal role in higher education. Legislators should not miss out on further opportunities.”
Another analysis by the Center for Post-secondary Education and Economics Research in American Colleges found that it would enable the income test to be entered into the program of about 1% of students. However, the test does not apply to the certificate program, and one in five students are pursuing certificates that do not provide the necessary benefits. Other experts believe that the cost of the program and student debt burden should be considered.
Colleges generally prefer income-based liability programs, which is similar to the Biden administration’s paid employment rules, although lobbyists want legislators to make some changes. House Republicans plan to get institutions to pay annual fines based on students’ unpaid loans, which could cost colleges billions of dollars.
Jason Altmire, president of the National Trade Association Vocational Education College and University, representing the for-profit organization, congratulated Congress in a statement on Thursday to pass “memorial legislation.”
He praised Pell’s short-term expansion and the “tag-free tax” policy and other regulations. But he is concerned about part of the new accountability framework, despite “we strongly support the fact that the measure is equally applicable to all schools in all areas of higher education, which is a long-term priority for CECU.”
Altmire and CECU oppose loan caps and cancel graduates plus loans. “These cuts will negatively impact students and limit access to those in need,” he said in a statement. “These provisions are unwise and we hope Congress will revisit them in the future. Overall, we are grateful that our voices are heard and that many of our long-term priorities are included in the final bill. We look forward to working with Congress to improve through future legislation.”
Charles Welch, president of the American State University and University Association, said in a statement that cuts in Medicaid and other programs would hurt regional public universities, which are often “the first victim of tightening budgets.”
“The federal government has never divested financial responsibility within such a scope, which has led to damage to state and local budgets that have previously been seeking to bear the burden of new obligations,” Welch said.
Welch added that the association’s universities must be “deeply disappointed with the settlement bill” to focus on the grant process, which will be launched this month. Congress’s appropriations bill sets spending limits and how direct agencies eliminate federal funding. The Trump administration has proposed in-depth cuts to the education sector’s budget, including zeroing in on a university visit plan such as the trio.
“The American State University and University Association urged Congress to reaffirm its constitutional empowerment of government spending, thereby eliminating over-division of executives and fully funding programs, grants and institutions serving middle school students in our country,” Welch said.
