By Christian Collins and Sarah Erdreich 

As Congress works to advance the proposed budget reconciliation bill of 2025, CLASP’s series “The 2025 Budget Reconciliation’s Impact on People with Low Incomes” will examine the policies put forward that have particular resonance for the children, families, and communities with low incomes. This is the second blog in the series.  

On April 29, the House Education & Workforce committee marked up its portion of the House’s reconciliation bill. The committee voted to advance the legislation, which makes drastic changes to Department of Education programs and initiatives, by a party-line vote of 21-14. 

Republicans claim that their legislation will save over $330 billion and make federal education policy more effective. But the details of this plan make it clear that the GOP is sacrificing the future of the country for working people to fund planned tax cuts for the ultra-wealthy. Below, we examine some of the most concerning proposals. 

Pell Grants
The committee’s bill would increase funding for the Pell Grants program by $10.5 billion from fiscal year (FY) 2026 to FY2028. However, students would need to take at least 15 credit hours each semester to maintain eligibility, up from the current requirement of at least 12 credit hours per semester. This change would place an unnecessary burden on students who also work, parent, or have other time-consuming responsibilities in addition to pursuing a degree in higher education. As a result, fewer students would be eligible for Pell grants. 

Student Loans and Financial Aid
The bill also changes how student loan programs would operate, including ending subsidized loans altogether and causing loan interest to accumulate immediately. In addition, schools would be required to repay a portion of their students’ loans if the students miss payments. Moreover, federal aid would be eliminated if the number of students who miss payments is considered too high. According to the committee’s own data, 98 percent of institutions would have to make these payments, and 75 percent would experience a net loss of federal funding, even factoring in the performance-based incentives and grants included in this bill.

Republicans claim that this will impel schools to put more effort into ensuring their graduates find high-quality jobs. This assertion ignores the fact that schools with higher populations of students having low incomes are more likely to need student loans in the first place, will be disproportionately at risk of losing federal funding, and may be reluctant to even consider accepting students who need aid.  

It is also notable that this Republican proposal would change the way that financial aid eligibility is determined. Currently, the amount of federal aid a student receives is based on the cost of attending the school in which they plan to enroll. This new proposal would base the amount on the median cost of attending a similar program nationally. However, no clarity was offered as to how the Department of Education will determine median costs; if they have the workforce to do this, given widespread cuts at the department; and how this would be enforced if the GOP makes good on Donald Trump’s oft-stated vow to dismantle the department altogether. 

Loan Forgiveness
Access to all existing income-based plans would be eliminated and replaced with a new “Repayment Assistance Plan,” which could cause borrowers to see a disproportionate spike in their monthly payment whenever they move across the proposal’s arbitrary income thresholds. The bill also proposes collapsing the current standard, graduated, and extended repayment plans into a single “standard” plan with varying repayment lengths based on a borrower’s loan balance. These changes would leave borrowers paying more per month, becoming more likely to land in defaults, and ultimately affect the economic security of millions of borrowers.  

The Republican proposal on behalf of the House Education & Workforce Committee is nothing more than a brazen sacrifice of our higher education system to further enrich the wealthy through tax cuts. These measures do not increase educational access for students, make investments into institutions that reflect their role as a public good, or adequately address the growing national concern around student debt. Republicans claim that American higher education needs fiscal reform to maintain future sustainability, but they have only presented policies meant to decimate the system and ensure that only students who are already wealthy can earn degrees.