Controversial Budget Bill Protects Pell but Sharply Cuts Other Supports for Low-Income Americans 

July 3, 2025

Seven minutes

By Catherine Brown, Senior Director, Policy and Advocacy

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After a protracted and at times contentious legislative process, the budget reconciliation bill has passed in the US Congress by one vote in the Senate and four votes in the House of Representatives. President Trump is expected to sign it into law tomorrow.

The law includes three National College Attainment Network (NCAN) advocacy priorities: (1) maintaining current maximum Pell Grant credit eligibility requirements, (2) providing $10.5 billion to avoid cuts to grant amounts, and (3) maintaining the subsidized undergraduate federal student loan program. These are important victories for students from low-income backgrounds. Nevertheless, this legislation makes large cuts to other critical supports for low-income families to provide tax cuts for wealthy Americans and dramatically increases spending on immigration enforcement.

“NCAN thanks Members of Congress who understand that Pell Grants and subsidized federal student loans are this country’s best economic mobility strategy,” NCAN CEO Kim Cook said. “But we know that meeting the basic needs of students and their families—food, health care, and a fundamental sense of safety—is also critical to ensuring that low-income students can enroll, persist, and complete education after high school. In the wealthiest country in the world, we should not be trading off the maintenance of Pell Grants and federal student loans against health insurance and anti-hunger assistance so millionaires and billionaires can pay lower taxes.”

The higher education title of the legislation closely resembles the version proposed by the Senate HELP Committee on June 10. NCAN members worked hard to educate members of Congress about the importance of protecting Pell Grants, and Congress delivered, rejecting the House proposal that would have increased the number of credits required to receive a maximum Pell award and providing $10.5 billion to address the Pell shortfall. Congress also rejected the House proposal to eliminate subsidized student loans, another key NCAN advocacy priority.

Although we appreciate these improvements relative to the House bill, unfortunately the legislation cuts more than $300 billion from federal student aid, which will almost certainly negatively affect postsecondary access and completion. The following provisions are particularly problematic:

• Under current law, student borrowers may opt into income-driven repayment programs that provide loan forgiveness after 20 or 25 years. The new bill extends the repayment period to 30 years before students can receive forgiveness.
• The bill prorates student loans based on enrollment intensity. This provision could make it harder for part-time students to meet their expenses, leading to more dropouts.
• The bill eliminates GRAD Plus loans and places limits on graduate borrowing, which will make it more difficult for many students to go to graduate school, particularly professional programs like law and medical school.

On balance, though, NCAN’s greatest concern about this bill is not the higher education provisions; it’s the net effect of this legislation on the lives of low-income students and the future young people will confront. This legislation cuts taxes for the wealthy, spends $350 billion more in border security and the military, including $45 billion for migrant detention, and terminates most federal support for clean energy, while slashing safety net programs to fund these investments. According to the Congressional Budget Office (CBO), this bill will result in 11.8 million people losing health insurance and end food assistance for 2.9 million people, representing the largest cut to the U.S. safety net in decades. The bill also endangers economic growth by adding $3 to $5 trillion to the national debt, according to CBO and the nonpartisan Committee for a Responsible Federal Budget.

These massive cuts to the safety net will reduce access to health care and healthy food and likely cause states to cut funding to public colleges and universities, where the vast majority of NCAN students enroll. At a time of peak wealth inequality, this bill represents the largest transfer from the poor to the well-off in American history. NCAN’s vision that “all students—especially first-generation students, students from underrepresented racial/ethnic backgrounds, and those from low-income backgrounds—have an equitable opportunity to achieve social and economic mobility through higher education” is set back by this bill.

Still, we are deeply grateful to the NCAN community for its strategic, effective, and relentless advocacy on behalf of our students. Whether you wrote an op-ed, met with your Member of Congress or their staff, signed a coalition letter, talked to the media, or activated your community to take action, you made a difference. And thanks to your dedication and hard work, and the work of many of our partners, Congress came to understand that the Pell changes proposed by the House were unworkable and that the reconciliation process represented the best vehicle to address the Pell shortfall. Sometimes the most significant advocacy wins are bad things that do not come to pass. NCAN’s team will continue to provide updates, analysis, and opportunities to make our voices heard as the Trump Administration implements this legislation.

The table below provides a side-by-side comparison of existing law, the original House and Senate bills, and the final bill.