Tag: House

  • How the House Budget Threatens Student-Athletes – Edu Alliance Journal

    How the House Budget Threatens Student-Athletes – Edu Alliance Journal

    A Uniquely American Model Under Threat

    June 8, 2025, by Dean Hoke: Intercollegiate athletics occupy a powerful and unique place in American higher education—something unmatched in any other country. From the massive media contracts of Division I football to the community pride surrounding NAIA and NJCAA basketball, college sports are a defining feature of the American academic landscape. Unlike most nations, where elite athletic development happens in clubs or academies, the U.S. integrates competitive sports directly into its college campuses.

    This model is more than tradition; it’s an engine of opportunity. For many high school students—especially those from underserved backgrounds—the chance to play college sports shapes where they apply, enroll, and succeed. According to the NCAA, 35% of high school athletes say the ability to participate in athletics is a key factor in their college decision [1]. It’s not just about scholarships; it’s about identity, community, and believing their talents matter.

    At smaller colleges and two-year institutions, athletics often serves as a key enrollment driver and differentiator in a crowded marketplace. International students, too, are drawn to the American system for its academic-athletic fusion, contributing tuition revenue and global prestige. Undermining this model through sweeping changes to federal financial aid, without considering the downstream effects, risks more than athletic participation. It threatens a distinctively American approach to education, access, and aspiration.

    A New Threshold with Big Impacts

    Currently, students taking 12 credit hours per semester are considered full-time and eligible for the maximum Pell Grant, which stands at $7,395 for 2024-25 [2]. The proposed House budget raises this threshold to 15 credit hours per semester. For student-athletes, whose schedules are already packed with training, competition, and travel, this shift could be devastating.

    NCAA academic standards require student-athletes to maintain full-time enrollment (typically 12 hours) and make satisfactory academic progress [3]. Adding another three credit hours per term may force many to choose between academic integrity, athletic eligibility, and physical well-being. In sports like basketball, where teams frequently travel for games, or in demanding STEM majors, completing 15 credit hours consistently can be a formidable challenge.

    Financial Impact on Student-Athletes

    Key Proposed Changes Affecting Student-Athletes:

    • Pell Grant Reductions: The proposed budget aims to cut the maximum Pell Grant by $1,685, reducing it to $5,710 for the 2026–27 academic year. Additionally, eligibility criteria would become more stringent, requiring students to enroll in at least 15 credit hours per semester to qualify for full-time awards. These changes could result in approximately 700,000 students losing Pell Grant eligibility [4].
    • Elimination of Subsidized Loans: The budget proposes eliminating subsidized federal student loans, which currently do not accrue interest while a student is in school. This change would force students to rely more on unsubsidized loans or private lending options, potentially increasing their debt burden [5].
    • Cuts to Work-Study and SEOG Programs: The Federal Work-Study program and Supplemental Educational Opportunity Grants (SEOG) are slated for significant reductions or elimination. These programs provide essential financial support to low-income students, and their removal could affect over 1.6 million students [6].
    • Institutional Risk-Sharing: A new provision would require colleges to repay a portion of defaulted student loans, introducing a financial penalty for institutions with high default rates. This could strain budgets, especially at smaller colleges with limited resources [7].

    Figure 1: Total student-athletes by national athletic organization (NCAA, NAIA, NJCAA).

    While Figure 1 highlights the total number of student-athletes in each organization, Figure 2 illustrates how deeply athletics is embedded in different types of institutions. NAIA colleges have the highest ratio, with student-athletes comprising 39% of undergraduate enrollment. Division III institutions follow at approximately 8.42%, and the NJCAA—serving mostly commuter and low-income students—relies on athletics for 8.58% of its total student base [8].

    Even Division I, with its large student populations, includes a meaningful share (2.49%) of student-athletes. These proportions underscore how vital athletics are to institutional identity, especially in small colleges and two-year schools where athletes often make up a significant portion of campus life, retention strategy, and tuition revenue.

    Figure 2: Percentage of student-athletes among total undergraduate enrollment by organization (NCAA Divisions I–III, NAIA, NJCAA).

    The Pell Grant Profile: Who’s Affected

    Pell Grants support students with the greatest financial need. According to a 2018 report, approximately 31.3% of Division I scholarship athletes receive Pell Grants. At individual institutions like Ohio State, the share is even higher: 47% of football players and over 50% of women’s basketball players. In the broader NCAA system, over 48% of athletes received some form of federal need-based aid in recent years [9].

    There are approximately 665,000 student-athletes attending college. The NCAA reports that more than 520,000 student-athletes currently participate in championship-level intercollegiate athletics across Divisions I, II, and III [10]. The National Association of Intercollegiate Athletics (NAIA) oversees approximately 83,000 student-athletes [11], while the National Junior College Athletic Association (NJCAA) supports around 60,000 student-athletes at two-year colleges [12].

    The NAIA and NJCAA systems, which serve many first-generation, low-income, and minority students, also have a high reliance on Pell Grant support. However, exact figures are less widely published.

    The proposed redefinition of “full-time” means many of these students could lose up to $1,479 per year in aid, based on projections from policy experts [13]. For low-income students, this gap often determines whether they can afford to continue their education.

    Fewer Credits, Fewer Dollars: Academic and Athletic Risks

    Another major concern is how aid calculations based on “completed” credit hours will penalize students who drop a class mid-semester or fail a course. Even if a student-athlete enrolls in 15 credits, failing or withdrawing from a single 3-credit course could drop their award amount [14]. This adds pressure to persist in academically unsuitable courses, potentially hurting long-term academic outcomes.

    Athletic departments, already burdened by compliance and recruitment pressures, may face added strain. Advisors will need to help students navigate increasingly complex eligibility and aid requirements, shifting focus from performance and development to credit-hour management.

    Disproportionate Effects on Small Colleges and Non-Revenue Sports

    The brunt of these changes will fall hardest on small, tuition-dependent institutions in the NCAA Division II, Division III, NAIA, and NJCAA. These colleges often use intercollegiate athletics as a strategic enrollment tool. At some NAIA schools, student-athletes comprise 40% to 60% of the undergraduate population [8].

    Unlike large Division I schools that benefit from lucrative media contracts and booster networks, these institutions rely on a patchwork of tuition, modest athletic scholarships, and federal aid to keep programs running. A reduction in Pell eligibility could drive enrollment declines, lead to cuts in athletic offerings, and even force some colleges to close sports programs or entire campuses.

    Already, schools like San Francisco State University, Cleveland State, and Mississippi College have recently announced program eliminations, citing budgetary constraints [15]. NJCAA institutions—the two-year colleges serving over 85,000 student-athletes—also face a precarious future under this proposed budget.

    Economic Importance by Division

    Division I: Athletics departments generated nearly $17.5 billion in total revenue in 2022, with $11.2 billion self-generated and $6.3 billion subsidized by institutional/government support or student fees [16]. Many Power Five schools are financially resilient, with revenue from TV contracts, merchandise, and ticket sales.

    Division II: Median revenue for schools with football was around $6.9 million, but generated athletic revenue averaged only $528,000, leading to significant deficits subsidized by institutional funds [17].

    Division III: Division III schools operate on leaner budgets, with no athletic scholarships and total athletics budgets often under $3 million per school. These programs are typically funded like other academic departments [18].

    NAIA and NJCAA: These schools rely heavily on student-athlete enrollment to sustain their institutions. Athletics are not profit centers but recruitment and retention tools. Without Pell Grants, many of these athletes cannot afford to enroll [11][12].

    Figure 3: Estimated number of NAIA, Division III, and NJCAA programs by state.

    Unintended Tradeoffs: Equity and Resource Redistribution

    Attempting to offset lost federal aid by reallocating institutional grants could result in aid being shifted away from non-athletes. This risks eroding equity goals, as well as provoking internal tension on campuses where athletes are perceived to receive preferential treatment.

    Without new revenue sources, institutions may also raise tuition or increase tuition discounting, potentially compromising their financial stability. In essence, colleges may be forced to choose who gets to stay in school.

    The High-Stakes Gamble for Student-Athletes

    Figure 4: Estimated impact of Pell Grant changes on student-athletes, including projected dropouts and loan default rates.

    For many student-athletes, especially those from low-income backgrounds, the Pell Grant is not just helpful—it’s essential. It makes the dream of attending college, competing in athletics, and earning a degree financially feasible. If the proposed changes to Pell eligibility become law, an estimated 50,000 student-athletes could be forced to drop out, unable to meet the new credit-hour requirements or fill the funding gap [19]. Those who remain may have no choice but to take on additional loans, risking long-term debt for a degree they may never complete. The reality is sobering: Pell recipients already face long-term student loan default rates as high as 27%, and for those who drop out, that figure climbs above 40% [20]. Stripping away vital support will almost certainly drive those numbers higher. The consequences won’t stop with individual students. Colleges—particularly smaller, tuition-dependent institutions where athletes make up a significant share of enrollment—stand to lose not just revenue, but the very programs and communities that give purpose to their campuses.

    Colleges, athletic associations, policymakers, and communities must work together to safeguard opportunity. Student-athletes should never be forced to choose between academic success and financial survival. Preserving access to both education and athletics isn’t just about individual futures—it’s about upholding a uniquely American pathway to achievement and equity.

    Dean Hoke is Managing Partner of Edu Alliance Group, a higher education consultancy. He formerly served as President/CEO of the American Association of University Administrators (AAUA). With decades of experience in higher education leadership, consulting, and institutional strategy, he brings a wealth of knowledge on small colleges’ challenges and opportunities. Dean is the Executive Producer and co-host for the podcast series Small College America. 

    References

    1. NCAA. (n.d.). Estimated probability of competing in college athletics. Retrieved from https://www.ncaa.org/sports/2021/11/4/estimated-probability-of-competing-in-college-athletics.aspx
    2. Federal Student Aid. (2024). Federal Pell Grants. Retrieved from https://studentaid.gov/understand-aid/types/grants/pell
    3. NCAA. (n.d.). Academic Standards and Eligibility. Retrieved from https://www.ncaa.org/sports/2021/6/17/academic-eligibility.aspx
    4. Washington Post. (2025, May 17). Most Pell Grant recipients to get less money under Trump budget bill, CBO finds. Retrieved from https://www.washingtonpost.com/education/2025/05/17/pell-grants-cbo-analysis/
    5. NASFAA. (2024). Reconciliation Deep Dive: House Committee Proposes Major Overhaul of Federal Student Loans, Repayment, and PSLF. Retrieved from https://www.nasfaa.org/news-item/36202/Reconciliation_Deep_Dive_House_Committee_Proposes_Major_Overhaul_of_Federal_Student_Loans_Repayment_and_PSLF?utm
    6. U.S. Department of Education, FY2025 Budget Summary. (2024). Proposed Cuts to Campus-Based Aid Programs. Retrieved from https://www2.ed.gov/about/overview/budget/index.html
    7. Congressional Budget Office. (2025). Reconciliation Recommendations of the House Committee on Education and the Workforce. Retrieved from https://www.cbo.gov/publication/61412
    8. NJCAA, NAIA, and NCAA. (2023). Student-Athlete Participation Reports.
    9. NCAA. (2018). Pell Grant data and athlete demographics. Retrieved from https://www.ncaa.org/news/2018/4/24/research-pell-grant-data-shows-diversity-in-division-i.aspx
    10. NCAA. (2023). 2022–23 Sports Sponsorship and Participation Rates Report. Retrieved from https://www.ncaa.org/research
    11. NAIA. (2023). NAIA Facts and Figures. Retrieved from https://www.naia.org
    12. NJCAA. (2023). About the NJCAA. Retrieved from https://www.njcaa.org
    13. The Institute for College Access & Success (TICAS). (2024). Analysis of Proposed Pell Grant Reductions. Retrieved from https://ticas.org
    14. Education Trust. (2024). Consequences of Redefining Full-Time Status for Financial Aid. Retrieved from https://edtrust.org
    15. ESPN. (2024, March); AP News. (2024, November). Athletic program eliminations at Cleveland State and Mississippi College.
    16. Knight Commission on Intercollegiate Athletics. (2023). College Athletics Financial Information (CAFI). Retrieved from https://knightnewhousedata.org
    17. NCAA. (2022). Division II Finances: Revenues and Expenses Report. Retrieved from https://www.ncaa.org/sports/2022/6/17/finances.aspx
    18. NCAA. (2023). Division III Budget Reports and Trends. Retrieved from https://www.ncaa.org
    19. Internal projection based on available data from NCAA, NAIA, NJCAA, and CBO Pell Grant impact estimates.
    20. Brookings Institution. (2018). The looming student loan default crisis is worse than we thought. Retrieved from https://www.brookings.edu/articles/the-looming-student-loan-default-crisis-is-worse-than-we-thought

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  • Higher education postcard: University of Cambridge, the Senate House

    Higher education postcard: University of Cambridge, the Senate House

    Greetings from Cambridge!

    Today’s card shows the Senate House at the University of Cambridge. Building started in 1722, the Senate House opened in 1730, and it was completed in 1768 (yes, that is the right order of events). It was designed by the Jameses Gibbs and Burroughs (the latter being master of Gonville and Caius); woodwork by James Essex the Elder; and ceiling plaster by Artari and Bagutti.

    As the name suggests, it was built as a meeting place for the university’s senate. And until 1926, the senate was a very big deal at Cambridge, being the governing body, in charge of everything. And since its members comprised everybody who held a Cambridge MA, it was a quite a thing to get a decision made. (I’ve blogged previously on the Microcosmographia academica, which is concerned with the politics of getting things agreed within the University of Cambridge senate).

    In 1926 things took a turn for the senate – its governance functions were given to the Regent House. Senate is now mostly responsible for electing the university’s chancellor and for electing the High Steward, who oversees senate procedure.

    There’s currently an election on for the University of Cambridge chancellor, which is all very exciting. For certain values of exciting. There’s ten candidates, including a big ticket HE name (Lord John Browne, he of the Browne review); big political names (former MP and cabinet minister Lord Chris Smith; Brexit campaigner Gina Miller); and the ubiquitous Sandi Toksvig. Voting takes place in person at the Senate House for two days in July; or online for about a week in July.

    When it’s not being used for cancellarial (it’s a real word, honest) elections – which is most of the time, in fact – Senate House is also used for graduation ceremonies at Cambridge. I’ve written before about one aspect of these; safe to say that there’s lots of other local peculiarities. At Cambridge, for example, each graduation is a separate decision of the governing body, so a special meeting of the Regent House (and before then, of the senate) is held for each ceremony. I suspect this may be where be get the notion of the degree congregation, which language I’ve heard used at other universities.

    There’s also an order of precedence for the colleges at graduation, established in the Statues and Ordinances. It is: King’s College, Trinity College, St John’s College, Peterhouse, Clare College, Pembroke College, Gonville and Caius College, Trinity Hall, Corpus Christi College, Queens’ College, St Catharine’s College, Jesus College, Christ’s College, Magdalene College, Emmanuel College, Sidney Sussex College, Downing College, Girton College, Newnham College, Selwyn College, Fitzwilliam College, Churchill College, Murray Edwards College, Darwin College, Wolfson College, Clare Hall, Robinson College, Lucy Cavendish College, St Edmund’s College, Hughes Hall, and Homerton College. And this isn’t strictly the order in which the colleges were established or admitted as colleges. If anyone knows why, please let me know!

    Senate House has seen its share of high jinks. Most notable, perhaps, is the 1958 incident where students contrived to place an Austin Seven on its roof. Here’s the Liverpool Daily Post, reporting with an admirable straight face on plans for its retrieval.

    Eagle eyed readers may remember that this stunt was followed by a similar, suspending an Austin from the Bridge of Sighs.

    Here, as always, is a jigsaw of the card – hope you enjoy it.

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  • Four Things to Know About the House Budget Plan

    Four Things to Know About the House Budget Plan

    After much back-and-forth and late-night dealing, House Republicans have passed a sweeping budget plan to cut spending and taxes that is moving on to the Senate—a significant milestone for legislation that seemed dead in the water a week ago amid concerns that the bill didn’t include deeper cuts.

    The plan, called the One Big Beautiful Bill Act, narrowly advanced Thursday morning by a one-vote margin. All Democrats opposed the legislation, arguing that the spending cuts would hurt the working class and vulnerable populations while raising the deficit and giving tax breaks to wealthy individuals.

    Among other changes, the legislation would levy new taxes on colleges, require institutions to pay millions to the federal government, change how students pay for college and limit eligibility for the Pell Grant. In the lead-up to Thursday’s vote, higher education leaders warned that the proposal would make trying to attend and pay for college much more complicated and raise costs for those who do enroll. The bill does include some wins for colleges, institutional lobbyists say, but those don’t outweigh the negatives.

    Republicans, who say the cuts are necessary, are using a legislative procedure known as reconciliation to advance the bill. That process allows lawmakers to fast-track the legislation and pass it with a simple majority of votes in both chambers. (Typically, the Senate requires 60 votes to cut off debate for a bill.)

    “It’s time we stopped asking a factory worker in Michigan or a rancher in Texas to subsidize the student debt of a lawyer in Manhattan so colleges can continue to spike their tuition to whatever they want,” said Rep. Tim Walberg, a Michigan Republican and chair of the House Committee on Education and the Workforce, in a statement. “By capping loan amounts and giving some financial responsibility to schools, this legislation addresses the root cause of high college costs and provides schools an incentive to deliver real value for students and taxpayers.”

    With the measure now in the Senate’s hands and lawmakers eyeing a July 4 deadline, here’s what else you should know about the legislation that could reshape American higher education.

    1. Students Set to Lose Pell Money

    Many House committees had a hand in the legislation, but the proposals that will have the biggest impact on colleges are from the Committee on Education and the Workforce. The 103-page Student Success and Taxpayer Savings Plan, which is part of the broader reconciliation bill, would reduce spending by nearly $350 billion over the next 10 years.

    Most of those savings stem from rolling back a Biden-era student loan repayment plan that never fully took effect and from capping how much students can borrow. But lawmakers are also planning to increase spending on Pell Grants by $2.8 billion as they aim to address a looming shortfall and open up the program to short-term workforce-training classes.

    To make the math work, Republicans are changing who qualifies for a Pell Grant, proposing that students would have to take at least 15 credits a semester in order to receive the full award. They’ll also have to take at least 7.5 credits to get any money. Currently, the Pell Grant is prorated based on how many credits students take, and there’s no floor.

    Changing the full-time-award definition would save $7.1 billion, according to the Congressional Budget Office, which estimated that more than half of students currently enrolled would see their Pell Grant reduced.

    The CBO also estimated that cutting off Pell for part-time students would save about $687 million over the next 10 years. Currently, about 10 percent of Pell Grant recipients enroll less than half-time. Of those students, the CBO predicts that one-third of students who stand to lose their grant under this change would enroll in more classes. Presumably, the other two-thirds would either stop out or pay for their education with loans or their own money. (The CBO report was based on a minimum of six credits, but that threshold has since increased to 7.5, so the number of students affected could be higher.)

    Over all, about 700,000 students would no longer be eligible for the Pell Grant after all the changes take effect. The changes are currently set to take effect in summer 2026.

    2. Colleges on the Hook for Unpaid Student Loans

    In addition to the Pell Grant cuts, college leaders are particularly worried about a provision known as risk-sharing, which would require institutions to pay a financial penalty based on students’ unpaid loans. How much colleges would have to pay is unclear, but the CBO estimates that by 2034, payments would total $1.3 billion and then continue to increase each year. Risk-sharing is expected to save the government $5.3 billion over the next 10 years.

    Because of risk-sharing and other changes in the bill aimed at limiting student borrowing, the CBO predicts that the volume of student loans would drop by about 20 percent.

    College leaders and lobbyists argue that the formula that would determine institutions’ payments is untested, and without more information, they can’t accurately gauge the ramifications. One lobbyist said the proposal represented “an astonishing level of federal overreach.” Critics of the plan also worry that underresourced and minority-serving institutions would be hit the hardest.

    “The risk is not equal among colleges,” Tuskegee University president Mark Brown told senators this week.

    Risk-sharing is just one of several proposed changes that would upend the student loan system. House Republicans also want to end Grad PLUS loans along with subsidized loans, restrict Parent PLUS loans and tie how much students can borrow to the median cost of a program. Some consumer protection advocates argued that these changes would drive students to private lenders, which often charge higher interest rates.

    3. More Taxes and Medicaid Cuts Threaten Colleges’ Bottom Lines

    Other proposals in the bill from the Ways and Means Committee would levy a host of new or expanded taxes against universities.

    First, the committee created new brackets to tax wealthy universities’ endowments. Currently, private universities with endowments that are worth more than $500,000 per student pay a 1.4 percent tax. But under the plan, some could see their endowments taxed at 21 percent.

    Institutions with endowments valued at $750,000 to $1.25 million per student would be hit with a 7 percent tax. That rate would climb to 14 percent for colleges with endowments worth $1.25 million to $2 million per student, while colleges with endowments of $2 million or more per student would pay 21 percent. Colleges also can’t include international students in their tally of students, which could subject more institutions to the tax.

    In addition to the endowment tax, the proposal also taxes a college’s intellectual property by stating that the endowment tax should include all forms of investment income. This means that any royalties from a private university’s intellectual property, including patents and copyrights, would be taxable. Additionally, the legislation removes colleges’ exemption from the unrelated business income tax so that all institutions, public and private, would be taxed for royalties from licensing their name and logo.

    House Republicans in other committees also proposed cuts to the Medicaid and Supplemental Nutrition Assistance programs, which critics say would hurt students and states’ budgets. And if states do take a hit financially, public colleges might see their budgets cut.

    “If federal Medicaid funding is reduced in a new federal tax law, no public college or university will be immune from future state budget reductions and the austerity that will result. Public higher education must be prepared,” two professors wrote in an Inside Higher Ed op-ed earlier this year.

    4. Warnings From Higher Ed Pile Up

    Higher education groups warned before and after the vote of damaging consequences if the legislation becomes law.

    American Federation of Teachers president Randi Weingarten called it a “big, ugly betrayal,” while Kara D. Freeman, president and CEO of the National Association of College and University Business Officers, said in a statement that “the implications for student access, research, and innovation could be far-reaching.”

    Freeman said the endowment tax is especially concerning and cited NACUBO data that shows colleges and universities spent $30 billion from their endowments in fiscal year 2024—nearly half of which funded student financial aid.

    “This scholarship tax takes funds away from students and makes it less possible for colleges to support them,” she said.

    Meanwhile, the American Council on Education took issue with the use of the reconciliation process to advance sweeping changes, along with the provisions in the bill.

    “The totality of the funding cuts, policy changes, and tax increases included in this reconciliation package will have a historic and negative impact on the ability of current and future students to access postsecondary education, as well as on colleges and universities striving to carry out their vital educational and research missions,” ACE wrote in a letter to the House.

    So far, senators have said little about the higher ed provisions in the bill, so it’s not yet clear whether they’ll agree with the House plan. Generally, while the House prefers risk-sharing, the Senate is expected to back a measure that judges programs by their students’ employment rates and income levels after graduation.

    But, with President Donald Trump backing the legislation and a fragile majority in the House, senators have few options if they want to change the legislation.

    “This is arguably the most significant piece of Legislation that will ever be signed in the History of our Country!” Trump wrote on Truth Social. “Now, it’s time for our friends in the United States Senate to get to work, and send this Bill to my desk AS SOON AS POSSIBLE! There is no time to waste.”

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  • The reconciliation bill cleared the House. Here’s how it would change higher ed.

    The reconciliation bill cleared the House. Here’s how it would change higher ed.

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    House Republicans on Thursday narrowly passed a massive tax and spending bill that, if signed into law, would add new financial pressures on U.S. colleges and students while extending the tax cuts instituted in 2017. 

    Backed by President Donald Trump and dubbed the “One Big Beautiful Bill Act,” the proposal includes provisions for dramatically increasing the endowment tax, a risk-sharing policy that would put colleges on the hook for unpaid student loans, and changes to the federal student aid program that critics say would reduce access to higher education. 

    It also includes work requirements to the Medicaid health insurance program, changes to which could impact university hospitals and leave many college students without health insurance.

    The bill is headed to the Senate after it passed the House by one vote, with every Democrat and two Republicans voting against it. Three other Republicans either abstained or did not participate in the vote. 

    The Senate, held by Republicans with a 53-person majority, is widely expected to add changes to the bill.

    Since lawmakers passed the legislation as part of the reconciliation process — a rule allowing the Senate to approve spending-related policies with a simple majority — Republicans can avoid a filibuster that would take 60 votes to break.  

    In a Wednesday letter to House leaders, American Council on Education President Ted Mitchell wrote that the higher ed policy changes would have “a historic and negative impact on the ability of current and future students to access postsecondary education, as well as on colleges and universities striving to carry out their vital educational and research missions.”

    Here is a look at some of the major higher ed provisions:

    Endowment tax

    Today, the richest private colleges — the few dozen with at least 500 students and at least $500,000 endowment assets per student — pay an endowment excise tax set at 1.4%.

    Wednesday’s bill would implement a graduated rate structure, with levels starting at 1.4%, and rising to 7%, 14% and 21% depending on endowment assets per student. Under that tiered system, the wealthiest college would be taxed the same as the current corporate income rate. 

    When House Republicans advanced the endowment tax proposal earlier this month, they decried “woke, elite universities that operate more like major corporations.”

    The lowest tax bracket targets colleges whose endowments are valued between $500,000 and $749,999 per student.

    Endowment taxes would rise to 21% for the nation’s wealthiest private colleges

    Excise tax tiers for private colleges based on endowment funds per student

    Industry experts and insiders worry the tax could hurt colleges’ long-term missions and diminish the resources they rely on to recruit lower-income students. 

    In a statement Thursday, Kara Freeman, president and CEO of the National Association of College and University Business Officers, pointed to research by her organization and Commonfund finding that nearly half of endowment spending went toward student aid in fiscal 2024. 

    “This scholarship tax takes funds away from students and makes it less possible for colleges to support them,” Freeman said. 

    Colleges spend the largest share of endowment funds on student financial aid

    Endowment spending distribution by function in fiscal 2024

    Financial aid changes

    The bill eliminates federal subsidized loans for undergraduates and Direct Plus loans for graduate students beginning on July 1, 2026.

    It also limits Parent Plus Loans, capping how much parents can borrow and only allowing them to take out loans if their dependent student has already taken out the maximum in unsubsidized loans. 

    The bill sets an overall lifetime student loan limit of $200,000 for any single borrower across all federal loan types.

    Additionally, it raises the course hours for the full-time student designation needed to receive the maximum Pell Grant from 24 to 30 per academic year, and it changes the formula for Pell eligibility.

    ACE’s Mitchell called the proposed changes to Pell Grants “crippling,” saying some 700,000 students could lose eligibility under the bill. 

    Regarding changes to federal student funding writ large, Mitchell described them as “deep cuts and damaging changes to important federal student aid programs” that would limit access to education. 

    The bill also cuts several student loan repayment programs, consolidating a “litany” of repayment plans into two, according to the House Committee on Education and Workforce.

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  • What’s in House Republicans’ Risk-Sharing Plan?

    What’s in House Republicans’ Risk-Sharing Plan?

    Under a new accountability measure recently proposed as part of a larger House budget bill, colleges would have to pay millions of dollars each year to reimburse the government for their students’ unpaid loans.

    The plan builds on an idea—known as risk-sharing—that lawmakers and policy analysts have been toying with since at least 2015. As the federal student loan portfolio grew, the goal was to require colleges to have some skin in the game and incentivize them to improve student outcomes.

    And while the concept has gained some bipartisan support in theory, higher education institutions have repeatedly argued that it is difficult to create a fair accountability system when many of the variables involved are out of an institution’s control and depend on the decisions of individual students and borrowers.

    So far, the higher ed lobby has successfully defeated proposed risk-sharing plans such as the one included in a Republican bill from the last Congress, known as the College Cost Reduction Act. But now, an almost identical proposal is back and at the heart of House Republicans’ plan to cut at least $330 billion from higher education programs over the next 10 years. The overall legislation, which aims to cut $1.5 trillion from the budget, could receive a vote on the House floor this week, though some lawmakers have threatened to block the measure amid concerns that it doesn’t include deeper cuts. Even if the bill fails, it serves as a marker of what House Republicans hope to accomplish moving forward.

    Many higher education policy experts warn that practically speaking, the latest risk-sharing plan relies on a complicated formula that’s essentially a black box. Released in late April, the proposal has not been tested enough to know its ramifications, they say, and the limited data available is inconclusive. Some analyses released by conservative groups say the program will be a financial boost for efficient public institutions and penalize bloated private ones. But one study conducted by a lobbying group suggests that public regional and minority-serving institutions that serve high populations of low-income students will get hit the hardest.

    “Fundamentally it’s an astonishing level of federal overreach to essentially lump in all institutions of higher education together—public, private, for-profit—and run a convoluted formula to determine winners and losers at the federal level and then redistribute funding,” said Craig Lindwarm, senior vice president of government affairs for the Association of Public and Land-grant Universities.

    Democratic politicians also argue that the purpose of the legislation is not truly to hold colleges accountable for student outcomes like graduation rates and income levels, but to crack down on what the government considers overly liberal institutions and fund President Donald Trump’s priorities.

    Even some conservative supporters acknowledge that it’s difficult to know the full scope of the bill’s potential impact this early. But they say risk-sharing is a necessary tool to penalize colleges that provide a poor return on investment and ensure the production of a well-prepared, financially stable workforce. They also suggest that the incentives such as additional grant funding to institutions that keep costs low and graduation rates high will offset the penalty for most public institutions.

    “With any policy change, we’re not going to be able to predict in advance 100 percent of how this is going to affect everyone, everywhere, all the time. But I don’t think that should be an excuse to not make policy changes,” said Preston Cooper, a senior fellow at the conservative think tank the American Enterprise Institute. “I still think the data we have gives us a general idea of which sorts of institutions would be affected and the magnitudes of the penalties involved.”

    So How Does It Work?

    The proposed risk-sharing plan would kick in for new loans starting in July 2027, said an aide for Republicans on the House Education and the Workforce Committee. That means colleges wouldn’t be penalized for disruptions to the student loan system that occurred during the pandemic or efforts during the Biden and Trump administrations to overhaul repayment.

    If we don’t even understand how this works, why the heck are we passing it? I mean, it’s a concept, but I don’t think it’s the concept that people think it is.”

    Jason Delisle, nonresident senior fellow at the Urban Institute

    And because borrowers don’t have to start paying back their loans until six months after they graduate or stop out, institutions likely won’t have to pay a penalty until 2029 or 2030 at the earliest, the aide added.

    But from then on, institutional payments would be calculated annually—major by major—for each new cohort of borrowers and would continue until they’ve paid off their loans. The amount per cohort could change from year to year, depending on factors such as borrower behavior, postgraduation earnings and college costs. But it’s expected to grow as more and more cohorts are added to the lump sum.

    Under the bill, the amount per cohort would be calculated using a three-part formula, which is largely unchanged from what Republicans proposed last Congress in the CCRA.

    The first step is to determine a college’s risk-sharing liability, which is how much each institution owes the government. To do that, the formula looks at the difference between how much students were supposed to repay during a given year and how much they actually did. The calculation takes into account the value of any missed or partial payments as well as any interest that the government waived or principal contributions it matched, the committee aide said. It does not, however, include debt waived through programs like Public Service Loan Forgiveness, which was a concern for institutions.

    This is the part of the formula that raises the most questions for institutions, as the mechanics of exactly how the risk-sharing liability is calculated are not clearly outlined in the legislation or in a CCRA database published by the education committee Republicans in 2024. And even if it were, much of the data needed to run the formula is not publicly accessible.

    “How the formula works is the million-dollar question, and something that we’ve been trying to work on for a year and a half,” one policy expert said. “It’s very complicated and relies on metrics that aren’t publicly available.”

    House committee aides counter that colleges have access to student borrower data via the National Student Loan Data System, which can be used to predict future risk-sharing payments. They also point to a recent Dear Colleague letter reminding colleges of their responsibility to monitor borrower payments.

    But even then, higher ed lobbyists say, it’s not clear who will be responsible for calculating the liability. If any part of that responsibility falls to campus financial aid administrators, higher ed groups say the plan will increase the administrative burden on colleges.

    “If I were a lobbyist, I would just say to all of my members, go to your congressman and say, ‘We don’t know what this does,’” said Jason Delisle, a policy analyst who has worked at think tanks across the political spectrum but is now based at Urban Institute where he’s a nonresident senior fellow. “If we don’t even understand how this works, why the heck are we passing it? I mean, it’s a concept, but I don’t think it’s the concept that people think it is.”

    Incentives to Lower Costs

    Once that risk-sharing liability is known, the next step in the formula is to figure out how much of that liability fee a college will have to pay. That’s done using what the legislation calls an earning-price ratio, which compares students’ earnings to the federal poverty line and college cost. A higher EPR means a lower final payment. For example, if an institution’s EPR is 0.3, or 30 percent, then it has to pay 70 percent of the original liability.

    To further offset the risk-sharing penalty, colleges can also qualify for a new pot of funding proposed in the bill called the PROMISE Grant, which is the third step of the formula. How much a college would get in PROMISE funding depends on the total value of Pell Grants received and the graduation rate of Pell-eligible students. This grant is funded by other colleges’ risk-sharing payments.

    Rep. Tim Walberg, a Michigan Republican and chair of the House Education and Workforce Committee, is leading the effort to cut billions from higher education programs.

    Bill Clark/CQ-Roll Call Inc. via Getty Images

    So, according to data from the House committee, the State Technical College of Missouri should get $3,230,130.50 in PROMISE grants. But the community college would have to pay $9,688, bringing its net gain down to $3,220,442.50. Washington University in St. Louis, however, would receive no PROMISE Grant funding and lose about $3.5 million. (The House Committee data only lists the final risk-sharing payment—not original liability values or EPRs.)

    In theory, this data demonstrates how the EPR and the PROMISE Grant are supposed to support colleges that serve low-income students, but many higher ed lobbyists are worried the program will actually do the opposite. That’s largely because colleges can only receive a PROMISE Grant if they agree to lock in tuition rates for each new freshman class. If they can keep tuition costs low, then their EPR scores will only be strong. Some lobbyists say that neither is a feasible option for public colleges and minority-serving institutions, which rely heavily on funding from the state.

    “It’s not a coincidence that some of our schools that would get hit the hardest are in states that invest very little in public higher education. Some of our schools in Pennsylvania and Arizona, for example, would fare extremely poorly, and it’s by and large because tuition levels are such a determinative component as it relates to the penalty assessment,” said MacGregor Obergfell, director of governmental affairs at APLU. “To think of what traditional conservative orthodoxy is, it seems pretty unusual that a conservative position is using the federal government to punish state institutions for decisions made by their states.”

    Reward or Penalty?

    Some higher ed groups also noted that much of the formula either depends on or fails to acknowledge factors outside of a college’s control. Much of this has to do with unpredictable borrower behavior, but there are other factors at play, too; for example, when calculating discounts with the EPR, the formula doesn’t account for differences in the cost of living from college to college.

    “Institutions in higher-cost areas are at more of a disadvantage than other institutions,” said Karen McCarthy, vice president of public policy and federal relations for the National Association of Student Financial Aid Administrators. “They have to charge higher prices to reflect higher costs of labor, maintaining facilities and all those types of things.”

    The burden of risk-sharing payments may be so high that colleges elect to opt out of the federal student loans program entirely, she added: “Ultimately it would have an impact on lower-income students who have a need both for a Pell Grant and a direct loan to help them meet their cost of attendance.”

    Of colleges that enrolled 70 percent or more low-income, Pell-eligible students, 96 percent would have to pay a risk-sharing penalty and 91 percent would lose money over all when PROMISE Grant is factored in, according to the American Council on Education’s analysis of the House data.

    The committee countered that finding with its own analysis of the data, sent to Inside Higher Ed, showing how colleges that enroll the highest share of low-income students should see about $99 more per student, while those that enroll the lowest share would lose about $66 per student.

    The ACE analysis as well as the committee’s data are among the few studies that show the estimated impact of the previously proposed risk-sharing plan. None have been updated yet to reflect the latest iteration.

    Another analysis from Cooper, the AEI fellow, estimated that public institutions as a whole should get more money under the plan, but private nonprofits are expected to face a substantial penalty.

    Although critics point to how the plan would affect individual institutions, particularly small, underresourced schools, proponents argue that the focus should be on the impact to higher education over all, and that colleges can lower their costs to see a payoff.

    “Because the net gains are significantly larger, the sector as a whole sees a net gain even though more institutions have net losses,” Cooper said. “So, the upside for institutions here is that there are significant rewards available to those which can improve their outcomes.”

    At the end of the day, it’s all about how you choose to look at the data.

    “I would just like to see [the formula of risk-sharing] play out for a couple of hypothetical colleges based on data that has some bearing on reality,” said Delisle from Urban Institute. “And that’s a hard thing to come by right now.”

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  • House Introduces Bipartisan Paid Leave Legislative Proposal – CUPA-HR

    House Introduces Bipartisan Paid Leave Legislative Proposal – CUPA-HR

    by CUPA-HR | May 13, 2025

    On April 30, Representatives Stephanie Bice (R-OK-5) and Chrissy Houlahan (D-PA-6) introduced the More Paid Leave for More Americans Act, the result of more than two years of work by the House Paid Family Leave Working Group, which Bice and Houlahan co-chair. The package consists of two parts: the Paid Family Leave Public-Private Partnerships Act and the Interstate Paid Leave Action Network (I-PLAN) Act.

    The Legislation

    The first bill of the package — the Interstate Paid Leave Action Network (I-PLAN) Act — would create a national framework “to provide support and incentives for the development and adoption of an interstate agreement that facilitates streamlined benefit delivery, reduced administrative burden, and coordination and harmonization of State paid family and medical leave programs.” It is intended to help resolve the confusion and inconsistencies across the state programs, in particular for the distribution of benefits to workers who work across state lines. The network will also work to identify best practices from existing state paid leave programs, help states harmonize their policies and resolve conflicts with other states’ programs, and help employees access their benefits.

    The second bill — the Paid Family Leave Public-Private Partnerships Act — would establish a three-year pilot program in which the Department of Labor would provide competitive grants to states that establish paid family leave programs that meet certain criteria. To qualify, states would be required to partner with private entities via Public-Private Partnerships (PPP) and participate in I-PLAN. The state programs would be required to offer at least six weeks of paid leave for the birth or adoption of a new child and provide a wage replacement rate between 50% and 67% depending on the income of the individual. Individuals at or below the poverty line for a family of four must receive 67% of their wages, while individuals earning more than double the poverty line for a family of four must receive 50% of their wages. The maximum benefit a worker can receive is 150% of a state’s average weekly wage.

    Looking Ahead

    Bice and Houlahan are optimistic about the package’s prospects, as both bills do maintain bipartisan support and President Trump has indicated an interest in pursuing a federal paid leave program. That said, it is uncertain if and when the House and Senate labor committees would take up these bills for a markup, which is the first step in getting the bill to a floor vote. CUPA-HR will continue to keep members apprised of updates related to this bill and other paid leave proposals that emerge from Congress.



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  • House Republicans Propose Significant Endowment Tax Increase

    House Republicans Propose Significant Endowment Tax Increase

    Efforts to raise endowment taxes are in motion as the House Ways and Means Committee reportedly plans to unveil changes next week that will increase rates and include more colleges.

    Education leaders have worried about such a rate increase for months. Now the GOP-led committee is expected to propose raising endowment excise taxes from 1.4 percent to up to 21 percent, depending on endowment value per student, Punchbowl News, Politico and other outlets reported. 

    The proposed endowment tax would only apply to private institutions, as it does currently.

    Under the proposed formula, institutions with endowments of $750,000 to $1.25 million per student would reportedly be hit with 7 percent excise tax. That number would climb to a 14 percent tax for colleges with endowments valued at $1.25 to $2 million per student. Colleges at the highest level with endowments of $2 million or more per student would pay 21 percent. (Currently, colleges with endowments worth $500,000 per student or more pay the 1.4 percent tax.)

    The specifics of the tax increase aren’t final and could shift before the committee’s hearing Tuesday.

    Republicans are preparing to move forward with endowment tax increases as part of a broader effort known as reconciliation to cut billions in federal spending and pay for President Donald Trump’s priorities. Other House committees have unveiled their proposed cuts for reconciliation, including a sweeping plan to upend the student loan system, but the Ways and Means bill is crucial to this process.

    GOP motivations for the tax increase appear to be twofold in that it would help fund tax cuts and serve as a punitive measure for colleges they believe have gone “woke.” In 2023, a total of 56 universities paid roughly $380 million in endowment excise taxes.

    “Seven years ago, the Trump tax cuts sparked an economic boom and provided needed relief to working families,” committee chairman Rep. Jason Smith, a Missouri Republican, said in a Friday statement. “Pro-family, pro-worker tax provisions are the heart of President Trump’s economic agenda that puts working families ahead of Washington and will create jobs, grow wages and investment, and help usher in a new golden age of prosperity. Ways and Means Republicans have spent two years preparing for this moment, and we will deliver for the American people.”

    The proposal comes amid the president’s full blown attack on higher education, which has seen the federal government clamp down on research funding, go after colleges for alleged antisemitism, take aim at diversity, equity, and inclusion programs, and attempt to deport international students.

    Since the 1.4 percent endowment excise tax was passed in 2017 during the first Trump administration higher education leaders have long worried that the president would raise it in his second term. 

    As universities increased their lobbying efforts in the early days of Trump 2.0, the potential increase to the endowment tax has been a key concern. Recent lobbying reports show that Harvard University, which has the largest endowment, recently valued at more than $53 billion, Princeton University, Northwestern University, and multiple others, have pressed Congress on the issue. (Northwestern’s chief investment officer said last week that the potential increase would be “destructive.”)

    Smaller institutions, some of which had never hired federal lobbyists before 2025, have also raised concerns about how expanding the endowment tax would harm their educational mission.

    According to an analysis from James Murphy, director of career pathways and post-secondary policy at Education Reform Now, only three universities would pay the highest rate at 21 percent – Princeton, Yale University and the Massachusetts Institute of Technology. Another 10 universities, including Harvard, would get hit with the 14 percent rate.

    An analysis published last month by the investment firm Hirtle Callaghan noted that recently proposed changes to the endowment excise tax would “significantly broaden the universe of colleges and universities that pay the tax from large, wealthy institutions to smaller, regional ones.” That analysis warned that such increases “threaten to do irreparable damage to many schools which are significantly weaker financially than the schools paying the current tax.”

    Multiple higher education associations have previously expressed opposition to the increase. 

    Last fall, American Council on Education president Ted Mitchell sent a letter to Congress, co-signed by 19 other associations, calling for the repeal of the existing endowment tax, arguing that “this tax undermines the teaching and research missions of the affected institutions without doing anything to lower the cost of college, enhance access, or address student indebtedness.”

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  • Student Loan Overhaul Clears House Committee

    Student Loan Overhaul Clears House Committee

    Over strong objections from Democrats, House Republicans on the Education and the Workforce Committee advanced legislation Tuesday that would make dramatic changes to the federal student aid system.

    For a full Inside Higher Ed analysis of what provisions are included in the reconciliation bill, read here.

    The sweeping 103-page bill, known as the Student Success and Taxpayer Savings Plan, passed on a party-line vote after more than five hours of debate. The legislation would cap the amount of federal loans a student can take out, cut off the Pell Grant for students who attend less than half time, consolidate income-driven repayment plans and introduce a risk-sharing program where colleges are partially responsible for unpaid student loans. The bill, which would also reverse multiple Biden-era student borrower protection regulations, could save more than $330 billion in federal funding over 10 years, committee Republicans say.

    It’s just one section of a larger budget bill that lawmakers are planning to use to fund some of President Donald Trump’s top priorities, like lofty tax cuts for the wealthy and a major crackdown on immigration. But House Republicans said the changes were more than just a means to fund his MAGA agenda.

    “If there is any consensus when it comes to student loans, it’s that the current system is effectively broken and littered with incentives that push tuition prices upward,” Rep. Tim Walberg, a Michigan Republican and committee chair, said in his opening statement. Higher education is “on a fiscally unsustainable path, so we must deliver on the promise of economic mobility to our students and families. Taken together, the provisions in this package will do just that.”

    Democrats on the committee argued the legislation is nothing more than a means to fund tax cuts for the wealthy that will force low-income and racial minority students to take on more debt and penalize the community colleges, regional universities and minority-serving institutions that educate those students. All in all, the bill will put the cost of a college degree out of reach for many, they said.

    “I appreciate that my colleagues acknowledge that the cost of college is too high, and that Congress should reform the system. But the committee print before us today … seriously misses the mark of making college more affordable,” said Rep. Bobby Scott, a Virginia Democrat and ranking member on the committee. “Put bluntly, this Republican proposal will limit how much money middle- and low-income students can borrow from the federal government.”

    Scott and other Democrats proposed 33 amendments—all of which Republicans voted down. They ranged from requests to prove the bill wouldn’t disproportionately affect certain institutions and increase costs for students to defending the Pell eligibility of part-time students and some consumer-protection regulations. Democrats also proposed replacing the income-driven repayment plan in the legislation with a more generous Biden-era alternative and striking the bill entirely. Other amendments touched on other issues unrelated to this section of the legislation, such as proposed cuts to Medicaid and the Department of Government Efficiency’s access to sensitive data.

    Republicans countered that Democrats’ allegations that the bill would make college less affordable were, as Rep. Burgess Owens of Utah said, “nothing further from the truth.” The proposed changes to the federal aid system will lead to better loan terms and repayment options that are also fair to taxpayers and avoid wasteful spending, they argued.

    The bill will now head to the House Budget Committee, where it will be folded into a complex omnibus bill before it is sent to the floor for a full House vote.

    But even if it clears the House, the legislation still has a long way to go. The House and the Senate have differing ideas about how much federal spending they wish to cut and what programs they are willing to slash. The Senate is aiming to make at least $1 billion in education cuts, which is less than 1 percent of the House committee’s $330 billion reduction.

    This reconciliation bill only needs a simple majority vote, or 51 yeas, to pass the upper chamber, but that will require almost all Republicans in the Senate to agree, which experts don’t think is a foregone conclusion.

    Risk Sharing

    One of the more contentious proposals in the bill is the risk-sharing provision, which would require colleges to repay the government a portion of students’ unpaid loans.

    Republicans on the committee described the risk-sharing proposal as critical, adding that it would penalize colleges for forcing their students into unmanageable debt and would incentivize them to lower their cost of attendance.

    “The best way for us to do that is not to loan [students] more money, but to reduce the cost so that they don’t need the loans,” said Rep. Randy Fine of Florida, who has been active in higher ed in the Sunshine State. “That’s what this bill does over and over and over again.”

    But Democrats said it is misleading to say the bill and provisions like risk-sharing would reduce costs and increase graduation rates, arguing it would actually incentivize colleges to accept fewer low-income students and increase tuition or cut critical student-support programs in order to foot the bill of new penalties.

    Rep. Alma Adams, a Democrat of North Carolina, called risk-sharing “a dire threat” especially to historically Black colleges and universities, which would have to pay an average of $1.7 million per year to account for the debt of their graduates.

    The students at these institutions “started behind but are determined to get ahead,” Adams said, adding that they don’t default because they are failing; they default because they are “carrying the burden of generations of inequity.”

    “This bill will tell colleges to take only the best students and leave the rest behind,” she added.

    Multiple student advocacy and higher education groups opposed risk-sharing and other proposals in letters to the committee and fact sheets.

    Third Way, a left-of-center think tank, noted in a memo Monday that the concept of risk-sharing “has a lot of intuitive appeal,” but the proposal “misses the mark for meaningful accountability.” Other provisions like loan limits and changes to the Pell Grant program will also “drive students into the private loan market,” the memo added.

    And the Association of Public and Land-grant Universities told the committee that, if passed, risk-sharing would amount to a “staggering level of federal overreach” that penalizes colleges and universities for “decisions beyond their control.”

    “The gravity of these changes would have a far reaching impact to current and future students,” APLU wrote. “There is a better way.”

    If Republicans “truly believed” the bill would not raise the cost of college and the burden of debt for students, then they would have no problem passing proposed amendments that certify its impact on students and institutions, said Adams, the North Carolina Democrat.

    “Let’s be clear about what this really means: This bill punishes students for being poor. It punishes students for needing to work. It punishes students for living in the real world,” she said. It transforms financial aid “from a bridge into a barricade.”

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  • White House order prioritizes AI in schools

    White House order prioritizes AI in schools

    Key points:

    • The Trump administration is elevating AI programs in K-12 education
    • The human edge in the AI era
    • Report details uneven AI use among teachers, principals
    • For more news on AI in education, visit eSN’s Digital Learning hub

    A new executive order signed by President Trump takes aim at AI policies in K-12 education by “fostering interest and expertise in artificial intelligence (AI) technology from an early age to maintain America’s global dominance in this technological revolution for future generations.”