By Catherine Brown, Senior Director, Policy and Advocacy, Louisa Woodhouse, Senior Associate, Policy and Advocacy, and MorraLee Keller, Senior Consultant
Reading time: Nine minutes
Late last night, the Senate Health, Education, Labor and Pensions (HELP) Committee released its reconciliation bill.
In contrast to the House version, this bill does not make major, detrimental changes to Pell. Protecting and strengthening the Pell
Grant program was the National College Attainment Network's (NCAN) highest priority in this process, and NCAN members delivered effective and powerful grassroots advocacy.
“The Senate HELP reconciliation bill affirms that the longstanding bipartisan support for Pell remains intact. We appreciate that the bill provides $10.5 billion to address the Pell shortfall and does not increase the requirement for receiving a maximum
Pell Grant to 30 credit hours, a provision that would have made it harder for low-income students to afford college, said Kim Cook, NCAN CEO. “It’s imperative that Congress include these provisions if the bill advances.”
The bill also maintains the subsidized loan program for undergraduate students, another NCAN priority, does not cap federal
student aid at the median cost of college program nationwide, and does not include risk sharing, which could have created a disincentive for colleges
and universities to enroll students from low-income families. Instead, the bill excludes programs that produce low-earning graduates from participating in the federal student loan programs.
The Senate and House bill have some provisions in common, indicating that there is consensus in Congress on these issues and they are likely to be included if a bill moves forward. These provisions include:
Establishing a Workforce Pell Program for short-term programs
Excluding students with a high Student Aid Index (SAI) from receiving Pell
Including foreign income in the Pell calculation
Excluding small business and farm income from the aid eligibility calculation
Streamlining federal student loan repayment options and
Capping graduate and parent borrowing.
There are also some provisions in the Senate bill that raise questions, including:
Eliminating some categories of non-US citizen /eligibility for federal student aid without including a grandfather clause for students who are currently enrolled. This approach could force some students to stop out abruptly because they can’t afford
to complete their education and prevent others from enrolling at all
Prorating student loans for students who are enrolled less than full-time but still have to meet their living expenses
Excluding from Pell eligibility students who received scholarships covering the full cost of attendance, which could have an unintended effect on some low-income students, and
Repealing the Borrower Defense and Closed School Discharge regulations, which provided help to students who had been defrauded by postsecondary education institutions.
The Committee press release states that this bill “saves taxpayers at least
$300 billion.” The Congressional Budget Office (CBO) should provide a detailed breakdown of the cost associated with each provision soon, which NCAN will share with its members.
Here is a detailed table of the Senate bill in comparison with current law and the House-passed reconciliation bill. Rows in yellow represent areas of rough consensus between the two bills.
Provision
Current Law
House Reconciliation Bill
Senate Reconciliation Bill
Pell Grants and SAI Calculation
Enrollment requirements
Requires at least 12 credits per semester for full-time and six credits for half time enrollment for Pell
Requires at least 30 credits per year for full-time and eliminates eligibility for less than half-time for Pell
No change
Consideration of high assets, low-income in Pell eligibility calculation
Allows students with a low adjusted gross income (AGI), based on the poverty table, to receive Pell, regardless of their SAI. Typically, students with an SAI of more than ~$6,700 are not eligible for Pell unless their parental income meets
the poverty table minimum.
Excludes students whose SAI is greater than or equal to twice the maximum Pell Grant from eligibility
Excludes students whose SAI is greater than or equal to twice the maximum Pell Grant from eligibility
Workforce Pell program
Pell not available for
<15 week programs
Establishes a Workforce Pell program: Students enrolled less than half-time are eligible; program duration must fall between eight-15 weeks; the completion rate for the program must be at least 70%; and students will have to verify
financial need.
Establishes a Workforce Pell program: Program duration must fall between eight-15 weeks, have a completion and job placement rate of at least 70%, and prepare students for high-demand careers.
Prohibits students from receiving a Pell Grant and a Workforce Pell Grant simultaneously
Pell shortfall
N/A
Provides $10.5 billion in federal funds over the next three fiscal years to address the shortfall
Provides $10.5 billion in federal funds over the next fiscal year to address the shortfall.
Consideration of additional grant funding in Pell eligibility determination
Additional grants do not impact Pell eligibility.
No change
Excludes students who have received grants that equal or exceed their cost of attendance from Pell eligibility.
Consideration of foreign income in Pell eligibility determination
Considers foreign income as untaxed income and does not include as part of AGI
Includes foreign income as part of AGI, used to determine a student’s eligibility for the Pell Grant.
Includes foreign income as part of AGI, used to determine a student’s eligibility for the Pell Grant.
Treatment of small business and farm assets
Requires the net value of family farms and small businesses with less than 100 employees be used in the SAI calculation
Exempts the value of family farm and small businesses with less than 100 employees in SAI calculation
Exempts the value of family farm and small businesses with less than 100 employees in SAI calculation
Federal student aid eligibility for certain non-citizens
N/A
Appears to eliminate eligible non-citizens with I-94 from USCIS with designations of Refugee; Asylum Granted; Haitian Entrant; Conditional Entrant; Victims of Human Trafficking; T-visa (T-2,3 or 4); and Parolee
Appears to eliminate eligible non-citizens with I-94 from USCIS with designations of Refugee; Asylum Granted; Haitian Entrant; Conditional Entrant; Victims of Human Trafficking; T-visa (T-2,3 or 4); and Parolee, with the exceptions of
“aliens of the Additional Ukraine Supplemental Appropriations Act and Afghanistan Supplemental Appropriations Act.”
Federal Student Loans
Subsidized loans for undergraduate students
Provides subsidized loans of up to $3,500, $4,500, or $5,500, based on students’ class year.
Eliminates new subsidized loans for all undergraduate students starting with award year 2026-27, except for presently enrolled students.
No change
Grad and Parent PLUS loans
Allows graduate students to borrow Grad PLUS loans up to the annual cost of attendance, excluding any other financial aid awarded.
Allows parents to borrow PLUS loans up to the cost of attendance for their student and does not include borrowing requirements for students.
Eliminates new Grad PLUS loans, starting with award year 2026-27, except for presently enrolled students.
Requires undergraduate students to exhaust their unsubsidized loans before parents can use Parent PLUS to cover the remaining cost of attendance and sets an aggregate limit for Parent PLUS loans of $50,000.
Eliminates Grad PLUS loans for new borrowers, starting with award year 2026-27
Sets aggregate loan limit for Parent PLUS loans of $65,000, and an annual limit of $20,000, per dependent student and lifetime loan limit of $257,500
Loan limits
*Both bills propose significant changes to loan limits, though the specifics vary slightly
Sets loan limits of $5,500, $6,500, or $7,500, annually, based on class year, with an aggregate maximum of $31,000.
No annual loan limit for graduate students
No aggregate loan maximum for combined undergraduate and graduate borrowing
Caps loans at the median cost of college program annually, establishes a loan maximum of $50,000 in aggregate.
Caps graduate and professional borrowing at the median cost of program of study, annually, and establishes a loan maximum of $100,000 in aggregate for graduate students, or $150,000 in aggregate for professional students. These sums account
for any amounts borrowed as an undergraduate.
Adjusts annual loan maximums proportionally for students enrolled less than full-time
Limits student borrowing to $200,000 in aggregate
Caps loan limits at $20,500 for graduate students and $50,000 for professional students.
Sets aggregate loan limits of $100,000 for first-time graduate students, or $200,000 for professional students or those previously enrolled in a professional program, minus the sum of loans borrowed for previous programs.
Adjusts annual loan maximums proportionally for students enrolled less than full time (this is different than the current Pell Grant enrollment intensity regulations).
Loan repayment options
Includes multiple repayment options (Income-Based Repayment, Income-Driven Repayment, and Pay As You Earn) with time-based loan forgiveness, after 20 or 25 years of consistent, on-time payments.
Creates two repayment plans: a standard loan repayment plan, and a Repayment Assistance Plan (RAP) which would require a $10 minimum monthly payment, and forgiveness after 360 monthly payments (30 years).
Transfers those on Income-Contingent Repayment (ICR) to standard loan repayment plan.
Allows borrowers to choose from the current Income-Based Repayment (IBR) plan or the new Repayment Assistance Plan (RAP) which would cap payments at 15% of discretionary income, and 10% for recent borrowers.
Eliminates ICR and SAVE options
Public Service Loan Forgiveness (PSLF) for those in medical and dental residencies
Includes hours accrued through medical and dental internships in calculations for PSLF.
Excludes medical or dental internships and residencies from counting towards time accrued for PSLF. Instead, provides four years.
Excludes medical or dental internships and residencies from counting towards time accrued for PSLF.
Economic hardship deferment
Allows students incurring economic hardship to apply for a deferment of up to one year.
Allows borrowers to be in forbearance for up to 12 months at a time, for a total of four years.
Establishes that any loans after July 1, 2026, will not be eligible for deferment, and that for any loans after July 1, 2026, forbearance may not exceed nine months within a 24-month period.
Establishes that any loans after July 1, 2026, will not be eligible for deferment, and that for any loans after July 1, 2026, forbearance may not exceed nine months within a 24-month period.
Enrollment intensity caps
Allows students to borrow up to the annual limits, regardless of enrollment intensity.
No change
Pro-rates student loans for students enrolled full-time.
Accountability
Employment and earnings outcomes requirements
Requires colleges and universities to submit Financial Value Transparency and Gainful Employment reports (no elimination of federal student aid eligibility has occurred yet).
Requires institutions of higher education to make annual payments to the US Department of Education based on the non-repayment balance of borrower cohorts, starting for loans made on or after July 1, 2027.
Provides grants to institutions that provide a maximum price guarantee to support students from low-income backgrounds (PROMISE Grants).
Ends participation in the federal student loan program for any undergraduate program where graduates earn less than the average high school graduate in the state and any graduate program where graduates earn less than college graduates in
the same field and state for two out of three consecutive years.
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