Just as the House passed its sweeping reconciliation bill, the U.S. Senate Committee on Health, Education, Labor & Pensions (HELP) has released its own “historic legislation” to reform student aid and higher education.
While both chambers address student debt and higher education costs, the Senate’s proposal takes a different approach, particularly regarding student aid and institutional accountability.
For college leaders, understanding these nuances is crucial to prepare for the evolving legislative landscape.
According to a press release from HELP Committee Chairman Cassidy (R-LA), the Senate’s proposal aims to “fix the broken higher education system” by focusing on affordability, preventing taxpayer-subsidized loans for underperforming degrees, ending current student loan schemes, and strengthening the Pell Grant program.
Student Aid and Graduate Outcome Provisions in the Senate Version
Accountability:
No Direct Institutional Risk Sharing: Unlike the House bill, the Senate proposal does not include direct institutional risk-sharing that would hold colleges financially liable for unpaid student loan balances. Instead, it establishes its own version of accountability, where college programs would become ineligible for Title IV funding if graduates fail to meet minimum median earnings criteria:
- New Accountability (Low Earnings Outcomes): This is the Senate’s alternative to institutional risk-sharing. It seeks to eliminate eligibility for both undergraduate and graduate/professional programs based on “low earnings outcomes.” For undergraduate programs, this means a program could lose eligibility if its graduates’ median earnings fall below the median earnings of a working adult (aged 25-34) with only a high school diploma for at least two of the three years preceding the determination. An appeals process would be established.
- No Repeal of 90/10 or FVT/Gainful Employment: The Senate bill does not repeal the 90/10 rule or the Financial Value Transparency (FVT) and Gainful Employment (GE) regulations. Rather, it adapts a variation of GE requirements as a new accountability metric applied to all programs at all institutions.
Pell Grants:
Crucially, the Senate bill does not revise the Federal Pell Grant program to establish new full-time enrollment requirements or exclude less-than-half-time students.
- Federal Workforce Pell Grants: The bill establishes Federal Workforce Pell Grants for all institutions that choose to participate. This includes significant guardrails and aims to increase access to career or technical-based education.
- Pell Grant Funding and Limits: It includes $10.5 billion to cover the anticipated shortfall in Federal Pell Grant assistance, a move aimed at strengthening the program’s future. However, it also introduces limits on Federal Pell Grant eligibility based on a student index.
Student Loans:
The Senate’s proposal, under its Loan Repayment section, mirrors the House’s intent to dramatically simplify income-driven repayment (IDR) options through the Repayment Assistance Plan. For all new federal student loans disbursed starting July 1, 2026, the current array of IDR plans (like SAVE, PAYE, and ICR) would be replaced by a singular new IDR plan.
- Loan Limits and PLUS Loan Termination: The bill places annual, aggregate, and lifetime caps on PLUS loan limits and terminates graduate and professional PLUS loans.
- Revised Forms of Professional Judgment: It provides for revised forms of Professional Judgment in limiting a borrower’s student loans.
Colleges Should Plan for Changes
The legislative process is dynamic, and the final bill could include more changes. However, it would be wise for colleges to be proactive, especially when it comes to tracking program outcomes and building financial aid strategies. IonTuition has been partnering with colleges for over 15 years. We help institutions with graduate outcome data and operate as a third-party student loan servicer.