Congress Passes Sweeping Higher Education Overhaul That Could Reshape College Access
The Republican-backed domestic policy bill that cleared Congress on Thursday introduces dramatic changes to federal higher education policy—measures that university leaders warn could make college less affordable and accessible while disproportionately impacting graduate students and low-income learners.
Key Provisions Spark Outcry From Educators
The legislation, which the White House has championed as a necessary accountability measure for higher education, includes three major reforms:
- Strict Caps on Graduate Student Loans
- Master’s students limited to $100,000 in federal borrowing
- Doctoral, medical, and professional students capped at $200,000
- Phaseout of Grad PLUS loan program
- Expanded Endowment Taxes on Wealthy Universities
- Schools with endowments exceeding $2 million per student (e.g., Harvard, Princeton) face an 8% tax on investment income
- Down from earlier proposals of 21-35% but still draws ire as targeting elite institutions
- New Earnings Thresholds for Federal Aid Eligibility
- Degree programs risk losing federal aid if graduates’ salaries fall below set benchmarks
- Raises concerns for lower-paying fields like social work and humanities
Political Divide Over “Accountability” vs. “Accessibility”
Republican Perspective:
- Framed as reining in “runaway” tuition and debt
- Fulfills Trump-era promises to scrutinize elite endowments
- Projects $300B+ in savings over a decade (CBO estimate)
Higher Education Opposition:
- “This will shrink economic and racial diversity on campuses,” said Lynn Pasquerella, president of the American Association of Colleges and Universities
- Medical schools warn of shrinking applicant pools as debt ceilings bite
- Endowment taxes could reduce financial aid funds at targeted schools
Hidden Ripple Effects
- Medicaid cuts in the bill may force more low-income students to prioritize work over studies
- Private loan reliance expected to surge, excluding borrowers from forgiveness programs
- Short-term training programs gain Pell Grant eligibility—a rare bipartisan win for workforce development
What’s Next?
With the bill headed to the President’s desk, universities are bracing for operational shifts while students face tougher financial calculations. As Jon Fansmith of the American Council on Education noted: “Not every degree’s value is measured in salary—but now, federal policy disagrees.”