The 119th Congress began on January 3rd, 2025. With a Republican majority in the House and Senate, and a new Presidential Administration, we may see significant change in higher education policy and funding. While we don’t have a crystal ball to tell
us exactly what is to come, we know that budget reconciliation will be first on the list of to-dos for the new Congress.
Budget reconciliation is a process to fast-track legislation on taxes and spending through the House and Senate. Only “mandatory” spending can be addressed in reconciliation. Reconciliation bills require only 50 votes in the Senate, and cannot be filibustered,
so the process is most often used when the same party controls both the House and the Senate. Because only 50 votes are needed in the Senate, it can be easier to cut programs or funding in a reconciliation bill – items do not need to have bipartisan
agreement. In other words, with a Republican majority in Congress, Democratic support isn’t needed for a bill to get to the President’s desk. Overall, the goals of the upcoming reconciliation package include funding for border security, defense spending,
tax cuts, and energy deregulation.
Budget reconciliation may be accomplished through one bill or two and is expected to begin in February. Republican leaders have laid out an ambitious timeline for the process: if Congress is able to mark up the resolution in the first week of February,
which would come to the House floor the following week, and the Senate after that, the goal is to pass a reconciliation package by late April or early May – within the first 100 days of the Trump Administration.
So, what might we see in a reconciliation bill, and particularly, what might be relevant for National College Attainment Network (NCAN) members?
The House Budget Committee has released a 50-page “menu” of options that provides a bit of a roadmap for the to the policy changes that
may be included.
Most notably, we will likely see elements of the College Cost Reduction Act (CCRA), H.R. 6951 in the reconciliation package, which was introduced last year
by Congresswoman Virginia Foxx (R-NC), then Chair of the House Committee on Education and the Workforce.
The CCRA reforms student loan repayment programs, replacing current Income-Driven Repayment (IDR) options, like the Biden Administration’s SAVE plan, with a set of two choices: a standard 10-year repayment plan, and a new repayment assistance plan. Reforming
the student loan repayment system has been a high priority for Republicans in Congress, in an attempt to combat spiraling student debt.
As another cost saver, the CCRA includes institutional risk-sharing as a provision for participation in the Direct Student Loan program, which would require colleges and universities to pay back a portion of the non-repayment balance of student borrowers
to the US Department of Education each year. The strategy is intended to incentivize institutions to lower costs of attendance and ensure a return on investment for their graduates. However, some higher education advocates are concerned that the risk-sharing
provision could have an unintended consequence: if a school is going to be held accountable for the outcomes of students post-graduation, they might think twice before admitting certain student populations. To combat this concern, the CCRA also includes
block grants to institutions who are enrolling low-income students in high-value programs.
Generally, the Republicans have been outspoken about the goal of reducing federal spending, and historically, education programs tend to get cut when funding is tight. Other education-related savers might include the elimination of the Lifetime Learning Credit, or expanding the applicability of the endowment tax established by the 2017 Tax Cuts and Jobs Act (TCJA), and
increasing the rate of taxation.
That said, there has been some discussion of attempts to include certain education and workforce related policy priorities in a reconciliation package, like the Bipartisan Workforce Pell Act, H.R. 6585,
which has support from all “four corners” – the House and Senate appropriations and authorization leaders – or a version of Workforce Innovation and Opportunity Act (WIOA) reauthorization.
Incoming Secretary of Education, Linda McMahon has also been a vocal supporter of workforce Pell.
Stay tuned for more updates as the budget reconciliation process unfolds.
To stay informed of NCAN's federal policy advocacy and opportunities for action, join our Rapid Response Policy Team or register for the 2025 Leadership Summit in Washington, DC, to make your voice heard on Capitol Hill!
Questions? Reach out to Louisa Woodhouse, Senior Associate, Policy, at woodhouse@ncan.org, or Catherine Brown, Senior Director, Policy and Advocacy, at
brownc@ncan.org.
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