Washington Update: July 2025 Reconciliation Bill’s Impact on Higher Ed

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Jul 22, 2025

Tom Netting, President of TEN Government Strategies and a seasoned advocate in higher education policy, joins the conversation to dissect the transformative July 2025 reconciliation bill. He reveals how this legislation flips the script on student loans and Pell Grants with new accountability measures tied to earnings. Netting highlights the implications of short-term Pell programs and discusses rising changes in accreditation, shedding light on a new accreditor in Florida that could reshape federal oversight. An essential listen for education leaders!

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INSIGHT

Earnings-Based Accountability Introduction

The July 2025 reconciliation bill introduces earnings-based accountability for undergraduate and higher degree programs, excluding certificates and diplomas.
This accountability uses Census Bureau median earnings data comparing former students to working adults aged 24-35 for program performance assessment.

INSIGHT

Short-Term Pell Grant Revival

Short-term Pell Grant eligibility returns for workforce programs between 150-599.999 clock hours with strict guardrails.
Programs must demonstrate 70% completion, 70% placement, and align with high-demand occupations under state oversight to maintain eligibility.

INSIGHT

New Loan Caps and Grad PLUS Elimination

Grad PLUS loans are eliminated, and new lifetime borrowing caps are introduced: $20,000 per year and $65,000 total per dependent for undergraduates.
The bill sets a $257,500 lifetime loan cap overall, signaling efforts to reduce student debt and curb higher education costs.

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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/

#HigherEdPolicy #July2025ReconciliationBill #FinancialAidCompliance #FederalLegislation #HigherEducationPodcast