All4Ed Flash: Senate Reconciliation Bill: What It Means for Pell Grants & Student Borrowers
⚡️ Welcome back to the All4Ed Flash!
In this episode of the All4Ed Flash, we break down the Senate’s newly released version of the reconciliation bill—and what it means for students, especially those relying on Pell Grants and federal student loans.
While the bill avoids some of the most damaging proposals—like cutting aid for millions of Pell recipients or charging interest while students are still in school—it still raises serious concerns. Most notably, it removes key borrower protections, leaving students vulnerable if they’re misled, defrauded, or their school closes unexpectedly.
Tune in to learn what’s at stake and why this matters for students, families, and policymakers working to ensure access, fairness, and accountability in higher education.
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A few weeks ago, we discussed the House’s version of the reconciliation bill. Recently, the Senate released its version—and here’s what you need to know, especially when it comes to higher education.
Let’s start with some good news.
Damaging changes to Pell Grants—ones that would have cut or stripped aid from two-thirds of recipients—are not in the Senate bill.
The bill even includes new funding to prevent future Pell cuts.
Also not included: proposals that would have charged interest while students are still in school—a major relief for borrowers.
But the bill isn’t all good news. There are still serious concerns.
The Senate bill removes key borrower protections—leaving students without recourse if they’re misled, defrauded, or their school closes unexpectedly.
It eliminates the most generous income-based repayment plans, forcing millions into costlier, longer-term payment options.
Graduate and parent borrowing is capped, pushing families into the private loan market with higher interest and fewer protections.
There’s also a concerning expansion of Pell to short-term, often unaccredited programs, which could leave students without real outcomes—implemented by an already under-resourced Department of Education.
The Senate bill ends Pell and Title IV eligibility for many non-citizens, including refugees, survivors of trafficking, and asylum seekers—mirroring the House bill.
It excludes families with a Student Aid Index more than twice the maximum Pell grant—also mirroring the House. And it eliminates Pell eligibility for students whose aid package already covers their full cost of attendance.
This could unintentionally penalize low-income students who benefit from generous state or institutional aid.
When it comes to student loans:
The Senate bill keeps subsidized loans—unlike the House, which would have eliminated them.
But it ends the Grad PLUS loan program, and caps how much graduate and professional students can borrow.
For parents, the bill caps PLUS borrowing too, likely forcing many to seek riskier private loans.
Repayment options are also narrowed—the Senate bill eliminates most current plans, replacing them with just two.
One new plan removes the ability to make $0 payments and eliminates protections for low-income borrowers.
The Senate also proposes new accountability measures for institutions.
Colleges where most graduates earn less than the median high school graduate in the same state could lose access to federal loans.
And finally, the bill limits the Department of Education’s authority, banning new regulations that could “increase costs”—which could restrict future debt relief, forgiveness, and repayment plans.
At All4Ed, we’re encouraged by what’s not in this bill—but we remain deeply concerned about what is.
We will continue to advocate for policies that protect students, make college more affordable, and ensure higher education leads to opportunity—not more debt.
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