Episode 9: Higher Ed and the One Big Beautiful Bill

How could the One Big Beautiful Bill affect how we pay for college? New America's Antoinette Flores breaks it all down.

Flores is the Director of Higher Education Accountability and Quality in the Higher Education initiative at New America, where she works to advance federal policies to increase accountability, quality, and equity in higher education.

Transcript

Shannon Lynch: Do you have student loan debt? Do you or someone you love plan to go to college in the future? If so, you may have heard of the Student Success and Taxpayer Savings Plan. This proposed law has now been rolled into the larger spending bill known as the One Big Beautiful Bill Act and is now making its way through Congress. So how might you be affected?

Welcome to Democracy Deciphered, the podcast where we analyze the history, present, and future of American democracy. I'm your host, Shannon Lynch. Today, I'll be joined by my colleague, Antoinette Flores, to discuss the proposed cuts to higher education in the One Big Beautiful Bill Act.

Antoinette Flores is the Director of Higher Education Accountability and Quality in the Higher Education Initiative at New America, where she works to advance federal policies to increase accountability, quality, and equity in higher education. Before joining New America, Antoinette served in multiple roles in the Office of Post-Secondary Education at the U.S. Department of Education, including Deputy Assistant Director of Policy, Planning, and Innovation, where she oversaw policy development, regulatory activities, and accreditation issues. She also worked as a Senior Advisor, where she coordinated distribution, guidance, and oversight of the Higher Education Emergency Relief Fund. Previously, she worked at the Center for American Progress as the Managing Director for Post-Secondary Education.

Flores is a first-generation college graduate, a Pell recipient. And holds degrees from Amherst College and George Mason University. Antoinette, thank you so much for joining me today!

Antoinette Flores: Thanks for having me, Shannon.

Shannon Lynch: So, to start, what is the Student Success and Taxpayer Savings Plan?

Antoinette Flores: It's legislation that was introduced by congressional Republicans as part of the budget reconciliation process. And it would make $350 billion in cuts to higher education, including federal student grants and loans that students use to pay for college. The budget reconciliation process is an expedited process used for considering policies that address spending and revenue. And it's typically used when a party controls both chambers of Congress because policymakers can get legislation through with a simple majority rather than the 61 votes that are typically required. And in this case, it's being used to make drastic cuts to everything from education to healthcare in order to pass tax cuts to benefit billionaires.

Shannon Lynch: Thank you for describing the reconciliation process. That was really helpful. Let's get into more of the specifics. How would this bill affect Pell Grants?

Antoinette Flores: So, the Pell Grant is the premier grant that is used to help low income students attend college. And the important part about a grant is that it doesn't have to be repaid. The legislation makes a number of changes to Pell Grants.

The first thing it does is increases the number of credits that are required in order to be considered full-time and get the full grant. So today, students taking 24 credits in a year are eligible for the full grant. Under the legislation, you would have to take at least 30 credits in order to get the full grant amount.

The second thing that it does is increase the number of credits to be considered part-time from six per semester to seven and a half. And the reason why that matters is because the legislation also eliminates eligibility for anyone attending less than part time. And so today, if you're considered part-time, you wouldn't be eligible for a grant at all. This is gonna be particularly hard for students that are parents that are working because they can't necessarily just increase the number of classes and be able to complete those courses successfully because they have a lot of other obligations.

Finally, the changes also eliminate eligibility for people with certain higher incomes. And while that can be understandable, it would impact, for example, families that might have a higher income, but their income is spread more thin because they more. Uh, children within their family. So overall, this cuts eligibility for a lot of people that rely on the Pell Grant to go to college.

Shannon Lynch: Thanks for that explanation. So what about student loans? How will this affect borrowers who have student loans?

Antoinette Flores: Yeah, there are a number of ways that the legislation impacts student loans. So the first thing it does is limit aid eligibility. This includes Pell Grants, but also student loans to what is called the median cost of college by program. What that means is there would be a calculation that would take, for example, all of the Bachelor degree programs in English across the country take the median cost of that and limit students' aid eligibility to that median. That doesn't mean the college necessarily charges less. It's hard to say exactly what the impact will be because the data on what the median costs by program is does not currently exist. But what it will mean for some students is that they will have less aid than their program costs. For others, they might have access to more aid than their programs costs and could potentially run through student loan eligibility before their program completes.

The bill also puts a number of caps on loans. It puts in place a lifetime $50,000 amount for undergraduate students. It puts in place a lifetime cap of $100,000 to $150,000 for graduate students, depending on the type of program that you attend. It completely eliminates what are called subsidized loans, which are loans that are used by low-income students to attend undergraduate program and don't accrue interest while the student is in school. So these loans would become more costly. It also eliminates what's called the graduate plus program, which is a loan program for graduate students to help them afford the full cost of college. And then finally, it makes changes to what's call the parent plus loan, which is alone that parents can take on to help their children attend college. That is for students that would be going to college in the future.

It also makes a number of large changes to student loan repayment. Which would impact any and all of the 43 million current people in the country with student loans. So there's a program called Income-Based Repayment. There are a number of them with different terms that provide more affordable monthly payments to borrowers. It would eliminate all of those programs and condense those programs into one. That for most people would result in higher monthly payments. It would also create a new income-based repayment plan that allows borrowers to pay their loans on a more affordable monthly payment like the programs that exist today, but over a much longer period and under less favorable terms. So it would make student loan repayment more expensive for a lot of borrowers.

Shannon Lynch: What other cuts are proposed in this bill that might pertain to higher education or just education in general?

Antoinette Flores: Yeah. So the other thing that the legislation does is eliminate a lot of the current protections for students. So an example of that is under the Biden administration, the Department of Education passed regulations that would make it easier for student loan borrowers to receive forgiveness in some cases. So if you were attending a school and your school closed, there are regulations put in place to make it easier to discharge your debt. Another example of that is a program called borrower defense to repayment. And if you were misled by your college, those regulations help provide easier access to forgiveness if you can demonstrate that you were misled your college. The legislation would eliminate those regulations and put in placed earlier regulations that made it. Much more difficult, if not impossible, to get relief in those instances. There are a number of pieces like that that take away what are current protections for students and student loan borrowers.

Shannon Lynch: Where are we now? We know that the bill passed in the House. So, where is the bill now, and what do we expect will happen in the coming weeks?

Antoinette Flores: The Student Success and Taxpayer Savings Plan was rolled into what's being called the One Big Beautiful Bill that passed the House and now the legislation heads to the Senate. We do expect there will be a number of changes to specifically the higher education pieces. Some of the more complicated policy proposals may fall out. I do expect that many of the things like changes to student loan repayment will remain the same. But the ball is now in the Senate's court to put out their own proposal, and then the House and Senate will have to reconcile the differences.

Shannon Lynch: Great, great. Well, Antoinette, thank you so much for joining me today and explaining all of this for us.

Antoinette Flores: Thanks so much for having me.