Last week was a busy one in Washington DC with several changes to higher education proposed. The House Education and Workforce Committee released and passed out of committee it’s legislation “Student Success and Taxpayer Savings Act.” And President Trump released his high-level proposed plan for federal fiscal year 2026 (colloquially called the “skinny budget”), which precedes a full budget proposal that includes programmatic level information.

Both of these proposals will need to go through the full legislative process. For the House bill, it will need to be compiled by the House Budget Committee into one legislative proposal that incorporates the work done by all the committees they gave instructions for reconciliation in their budget resolution before being voted on by the full House. From there it will then go the Senate for approval of the chamber or additional changes that would then send it back to the House. For the President’s budget proposal, Congress will consider his recommendations but ultimately must pass legislation for the discretionary funding levels for 2026.

Before we dive into the details, there are a few important terms to keep in mind:

1. Reconciliation: Budget process that addresses mandatory federal spending and only requires 51 votes in the Senate to pass.
2. Appropriations: Annual funding process Congress must complete to provide discretionary funding to federally authorized programs. To enact funding levels, a simple majority is needed in the House, while 60 votes are needed in the Senate.
3. Mandatory Funds: Funds for programs that are required to be paid and do not change without a change to their underlying law. Examples: Social Security, Medicaid
4. Discretionary Funds: Funds for programs that must be allocated each year and do not include a guaranty benefit. Examples include Federal Work Study, Strengthening Institution Programs, and Strengthening Community College Training Grants.

A Note on the Pell Grant: The Pell Grant program receives both discretionary and mandatory funds to reach the maximum Pell award established annually. Congress has always funded the Pell Grant program with enough funds so that it can operate as a mandatory program despite not being written into law as such. Facing a shortfall in funds, Congress must either add more funds, change eligibility, or have the Department of Education operate the program on a first come, first served basis.

President Trump’s “Skinny” Budget
As is typical in the first year of a term, the President released his budget later in the spring and with fewer details than is typical for a full budget proposal. This version of the budget does not include every government program but rather focuses on the areas where the President wants to see either increases or reductions. A full budget proposal is still expected to be published, possibly later this month, but the “skinny budget” helps inform Congress where the Administration is prioritizing spending increases or cuts.

Key Areas Addressed in Higher Education and Workforce (all losses compared to Fiscal Year 2024):

• Student Aid:

1. Federal Work Study is cut by 80% compared to FY 24, down to $250 million
2. Eliminates the Supplemental Education Opportunity Grants (SEOG), a loss of $910 million in student aid for students from the lowest income background

• Eliminates funding for all seven TRIO Programs, such as Upward Bound (UB), Student Support Services, and Veterans UB; a loss of $1.191 billion
• Eliminates funding for the Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP), a loss of $388 million to prepare students for postsecondary education
• Eliminates the Strengthening Institutions Programs (SIP), a flexible grant that supports under-resourced institutions, many of them being community colleges; a loss of $112 million in institutional support
• Eliminates the Fund for the Improvement of Postsecondary Education (FIPSE), which houses competitive grants such as the Basic Needs Grant and the Postsecondary Student Success Grant; a loss of $171 million
• Eliminates the Child Care Access Means Parents in School (CCAMPIS) Program, a loss of $75 million to support parenting students not only enroll but persist and complete postsecondary education programs
• Eliminates Adult Basic Education, a loss of $729 million to support basic literacy and numeracy amongst the adult population in the country

Pell Grants are not mentioned in the proposal so we will have to wait for the full Budget request to see if the Administration plans to make changes in that area.

For many of the programs that are proposed to be eliminated, the Administration justifies the cuts by describing the programs as either outdated and no longer needed or emphasizing that the initiatives these funds support should be the responsibility of states or institutions of higher education.   

The President’s funding request overview also proposes creating a Make America Skilled Again block grant funding program that consolidates several workforce training focused programs at the Department of Labor, with a carveout of 10% of the funding for apprenticeships. While we won’t know which programs they seek to consolidate into this block grant, it’s likely that WIOA Title I programs will make up the bulk of them and may include various national activity programs such as the Strengthening Community College Training Grants.

House Reconciliation Bill for Higher Education
The “Student Success and Taxpayer Savings Act” is the bill proposed by Rep. Tim Walberg, chair of the Education and Workforce Committee, as his committee’s piece of the budget reconciliation process. The committee was instructed by the budget resolution to cut $330 billion dollars. At current estimates, this bill would cut over $350 billion.

This bill, if passed, would make significant changes to the landscape of higher education.

• Pell Grant Eligibility Changes:

1. Students must be enrolled half-time to receive a prorated Pell grant
2. Students must be enrolled 30 credits per year to receive a full Pell Grant
3. Students with a Student Aid Index double the maximum Pell grant will not be Pell eligible
4. Students with small businesses or family farms will again be able to exempt those assets from the aid eligibility calculation

• Create Workforce Pell: This version maintains several guardrails for program eligibility but also would allow for profit institutions and entities not defined as institutions of higher education by law to participate
• Adjust Loan Limits and Remove Subsidized Loans: The federal direct loan program would no longer include subsidized loans for income qualifying students. All undergraduate students would have only unsubsidized loans with the new lifetime limit for programs through bachelor’s degree set to $50,000. Parent plus loans for undergraduates would be significantly changed and eliminated as well.
• Student Loan Repayment Plans: While current borrowers would be grandfathered into old plans, new borrowers would have one standard plan and one income-based plan, called Repayment Assistance Plan, to choose from. All borrowers would be required to pay a minimum of $10 per month regardless of payment plan type.
• Regulatory Relief and Changes: Eliminates “gainful employment” language from the higher education act and significantly limits the Secretary from conducting rulemaking in the future.

For additional information and more specifics on the changes proposed, you can check out our fact sheet on the proposal at acct.org/advocacy.

ACCT and AACC joined together to send Congress a letter regarding this bill, including our opposition to risk-sharing and the enrollment intensity changes for the Pell Grant as well as our support for the Workforce Pell Program. Given the major changes to the federal financial aid landscape proposed through reconciliation and the drastic cuts to postsecondary education programs in the President’s budget, ACCT has put together two Action campaigns urging community college leaders, stakeholders, and supporters to reach out to their members of Congress to both reject harmful provisions in the reconciliation proposal and support investments in education in the annual Appropriations process. You can find both campaigns in ACCT’s Action Center.

May will continue to be a busy month with both Congressional chambers in session until Memorial Day and the expected full budget from the White House near the end the month. To receive the latest updates, subscribe to ACCT’s Latest Action in Washington update emails on the ACCT Now home page.

Carrie Warick-Smith is the Vice President for Public Policy at ACCT
José  Miranda is the Director of Government Relations at ACCT