Higher education leaders are facing the most sweeping set of federal regulatory and funding changes in over a decade. In this Washington Update episode of the Changing Higher Ed® podcast, Dr. Drumm McNaughton welcomes back frequent guest Tom Netting, president of TEN Government Strategies, to discuss the July 2025 budget reconciliation bill—federal legislation that significantly alters student loans, Pell Grants, institutional accountability, and the rules governing program eligibility.
While not a formal reauthorization of the Higher Education Act, the bill introduces statutory earnings-based accountability for degree programs, lifetime loan caps, professional judgment changes, and new eligibility requirements for short-term Pell programs.
Netting also discusses concurrent developments in accreditation and distance education oversight, including the rise of a new accreditor in Florida and its potential implications for NC-SARA and federal triad stability.
This episode is a must-listen for presidents, trustees, CFOs, and compliance officers preparing for upcoming reporting deadlines, new negotiated rulemaking cycles, and long-term institutional planning under new federal constraints.
Topics Covered
- How the July 2025 reconciliation bill rewrites federal student aid and accountability rules
- What the new earnings-based accountability measure means for degree programs
- Pell Grant expansion for short-term workforce programs and the required outcomes thresholds
- The elimination of Grad PLUS loans and new lifetime borrowing caps for students and families
- Changes to professional judgment authority and how institutions can apply it by cohort
- New 90/10 revenue guidance and how it affects distance education classifications
- Delayed implementation of Borrower Defense and Closed School Discharge regulations
- The emergence of Florida’s state-based accreditor and its expected NACIQI review
- Why NC-SARA recognition may be impacted by nontraditional accreditation
- The likelihood of a second reconciliation bill or technical corrections package
Three Key Takeaways for Leadership
- Institutional leaders must prepare now for dual accountability frameworks and new reporting obligations.
- Expanded professional judgment offers new flexibility but must be applied with consistency and clear documentation.
- Accreditation and state authorization pathways are shifting—compliance teams must monitor evolving standards across federal and state lines.
This episode provides critical insights for leaders navigating a changing regulatory environment, with practical implications for finance, compliance, and academic planning.
Recommended For: Presidents, trustees, chief financial officers, compliance officers, and accreditation liaisons responsible for institutional strategy and Title IV eligibility.
Read the transcript: https://changinghighered.com/washington-update-july-2025-reconciliation-bill-impact-on-higher-ed/
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