The "One Big Beautiful Bill" has significant implications for higher education in the US, with notable differences between the House and Senate versions. Here's an outline of the key distinctions in their impacts:
1. College Accountability Measures:
House Version (Risk-Sharing): The House bill proposes a controversial "risk-sharing" plan. This would require colleges to pay a penalty based on their students' unpaid federal loans. The idea is to incentivize institutions to ensure their graduates are able to repay their debt.
Senate Version (Earnings Test): The Senate version scrapped the House's risk-sharing and instead opts for an "earnings test." Under this plan, undergraduate programs could lose federal aid eligibility if their former students earn less than the median adult with a high school diploma. For graduate and professional programs, student earnings would be compared to those with a bachelor's degree. This approach aims for "up-front accountability" by tying aid eligibility to student outcomes.
2. Pell Grant Program:
Both versions: Both the House and Senate versions expand Pell Grant eligibility to include short-term workforce training programs at accredited institutions and provide funding to address the projected Pell Grant shortfall.
House Version (Stricter Eligibility): The House bill proposes more restrictive Pell Grant eligibility rules. It would increase the coursework required for a maximum grant from 12 to 15 credit hours per semester and cut off grant access entirely for students enrolled in fewer than 7.5 credit hours (part-time students). It also eliminates Pell Grant eligibility for students who receive scholarships covering their full cost of attendance.
Senate Version (More Protections): The Senate bill generally offers more protections for Pell Grants. It does not include a limit on traditional Pell Grant eligibility that would exclude part-time students and maintains the current credit requirements. However, it does disqualify students from receiving Pell Grants if their other scholarships already cover their full cost of attendance.
3. Student Loan Caps & Types:
Graduate Student Loans:
House Version: Caps graduate student loans at $100,000 and professional students (e.g., law, medical school) at $150,000.
Senate Version: Maintains the $100,000 cap for graduate students but allows professional students to borrow up to $200,000.
Parent PLUS Loans:
House Version: Caps Parent PLUS loans at $50,000 per parent, regardless of the number of dependents.
Senate Version: Caps Parent PLUS loans at $65,000 per student.
Subsidized Loans:
House Version: Ends subsidized loans for undergraduate students.
Senate Version: Maintains subsidized loans.
Grad PLUS Loans: Both versions eliminate Grad PLUS loans for new borrowers.
Undergraduate Loan Limits: The Senate bill does not limit undergraduate borrowing, while the House version proposes a lifetime limit of $50,000.
4. Regulatory Rollbacks:
House Version: Rolls back several Biden-era higher education regulations, including borrower defense to repayment, closed school discharges, the 90/10 rule (which restricts the percentage of revenue for-profit colleges can receive from federal student aid), and gainful employment rules.
Senate Version: Only rolls back the 2022 borrower defense and closed school discharge rules, and generally preserves a regulation that protects veteran students from predatory for-profit programs.
5. Other Key Differences:
Median Cost of College: The House bill introduces a "median cost of college" concept to determine need-based federal aid, replacing institution-specific costs. The Senate bill does not include this change.
Federal Voucher Program: The House version creates a national tax credit private school voucher program with a cap of $5 billion annually. The Senate version proposes a $4 billion annual cap and launches later, but a parliamentary decision in the Senate has raised uncertainty about its inclusion due to reconciliation rules.
Overall Savings: The House plan aims to save about $350 billion over 10 years, while the Senate bill saves an estimated $300 billion.
The differences, particularly in college accountability and Pell Grant eligibility, are significant and will likely be a major point of negotiation as the two chambers work to reconcile their versions of the "ONe Big Beautiful Bill."