Higher Ed Policy Roundup: Vol. 9 - Issue 19

On Wednesday, the Senate Committee on Health, Education, Labor, and Pensions held a hearing titled “The State of Higher Education.” The hearing addressed several topics including the Grad PLUS Loan Program, rising institutional costs, and student loan repayment. In his opening statement, Dr. Andrew Gillen, Research Fellow at Cato Institute, stated that the two ways to address college affordability are to institute caps on student loans and to determine aid eligibility based on the median cost of attendance. When asked by Chairman Bill Cassidy (R-LA) about his thoughts on excessive debt burdens that families face due to student loans, Dr. Mark A. Brown, President of Tuskegee University, agreed that loans create a financial burden, but that capping loans without simultaneously increasing Pell Grants would stop access to higher education. Watch the full hearing.

Early Thursday morning, the House passed its budget reconciliation bill by a vote of 215-214. The bill would make substantial changes to student aid programs, including:

• Eliminating the Grad PLUS Program;
• Setting annual caps on borrowing at the median cost of attendance;
• Setting aggregate caps on borrowing at $100,000 for graduate students and $150,000 for professional students;
• Creating a new repayment plan that ties monthly payment amounts to adjusted gross income, forgiving a borrower’s loan balance after 30 years of qualifying payments, and waiving monthly unpaid interest;
• Sunsetting all other income-driven repayment (IDR) plans; and
• Sunsetting economic hardship and unemployment deferments.

The bill now heads to the Senate where it's been reported that Republican Senators plan to provide revisions.

On Thursday, a federal court blocked the Trump Administration from shutting down the Education Department (ED), stating that there is “no evidence that Defendants are pursuing a 'legislative goal' or otherwise working with Congress” to do so. The ruling also halts ED’s plan to fire additional employees and its intent to transfer student loans from ED to another agency. The judge also ordered ED "to restore the Department to the status quo such that it is able to carry out its statutory functions" by reinstating all ED employees who were terminated in March. ED has announced that it “will immediately challenge this on an emergency basis.”

The budget reconciliation bill could mean billions for the private loan market.

How the risk-sharing plan in the One Big Beautiful Bill Act could impact institutions.

The following bill(s) have been recently introduced for consideration by the 119th Congress (2025-26):

S. 1845 – No Loan Forgiveness for Terrorists Act [Sen. Jim Banks (R-IN)] would amend the Public Service Loan Forgiveness (PSLF) Program to exclude employment with organizations that engage in activities that have a substantial illegal purpose.