On Tuesday, April 29th, the House Committee on Education and Workforce passed legislation to advance its portion of the 2025 budget resolution – a massive legislative package that would cut mandatory spending over ten years, increase spending for defense and border security, and cut taxes.

Meanwhile, the impact on students could be felt much sooner depending on how quickly Congress finalizes the budget reconciliation process.

What would the legislation do?

• Increase the number of credits required to meet the definition of full-time enrollment for Pell Grant eligibility from 12 credits per semester to 15 credits per semester. According to NCAN, this change would result in a $1,479 cut to the maximum Pell Grant of $7,395 for any student taking 12 credits, which is approximately a quarter of Pell recipients. Those students’ Pell award would drop to $5,916 if the legislation were enacted. 
• Eliminate Pell Grant eligibility for students who are enrolled less than half-time. According to the Hope Center, this provision alone could cut off access to more than 912,000 low-income students attending college. 
• Eliminate new subsidized loans for all undergraduate students starting with the award year 2026-27, making exceptions for presently enrolled students. Students would be required to take on higher-cost unsubsidized loans up to a certain cap, determined by the median cost of attendance of the degree program in which they are enrolled. This would only pertain to new borrowers and would not impact students who already have an unsubsidized loan.
• Requires institutions of higher education to repay portions of unpaid loans.  This requirement may lead to admissions selection bias and ultimately limit access to higher education for lower income households.

Why does SHC oppose this bill?

Education beyond high school remains the surest path out of poverty and into stability for youth who have experienced homelessness or foster care. Higher education is also a protective factor against homelessness for youth and young adults, helping them achieve economic independence.

Yet the House bill would shut the door to higher education for many youth and young adults who have experienced homelessness or foster care. These youth are more likely to be part-time students because they need to work and/or support their families, and therefore will receive less aid under this legislation. Homeless and foster youth are also more likely to need subsidized loans, and flexible repayment options, which would no longer be available to them.

What’s Next?

• There are many steps in the budget reconciliation process:
  • The House committees overseeing nutrition, healthcare, and more will hold their meetings next week to determine policies for SNAP, Medicaid, and taxes.
  • The Senate committees also must meet to determine their proposals.
  • In order to pass, the House and Senate provisions must be identical.
• The House aims to pass its bill by Memorial Day, while the Senate aims to pass a final bill by July 4th recess.