Major Updates

Congress Passes President Trump’s OBBB—Workforce Pell Included, but Higher Ed Gets $300 Billion Slash

President Trump’s newly signed One Big Beautiful Bill Act (OBBB) overhauls the federal approach to higher education policy. Short-term Pell advocates (of which UPCEA has been a long supporter) have something to be thankful for, as it opens Workforce Pell Grants to short-term training programs of 150-600 clock hours delivered in 8-15 weeks of length. This program opens for the award year starting July 1, 2026 but is only applicable to programs which have been in existence for a full year prior to becoming eligible.

Performance metrics set for the new Workforce Pell-eligible programs set restrictions to those programs which provide greater than or equal to 70% completion rate, as well as greater than or equal to 70% job placement rate within 180 days of completion. There is also a metric that relates to earning requirements that the program outcomes must lead to students’ value-added income earnings that exceed the median price of the program. Noncredit programs are not excluded from eligibility and  it will be up to the U.S. Department of Education to decide whether the program meets the guidelines set. States will also be assessing these programs for eligibility via the governor or state workforce boards. There is a requirement that the program lead to a recognized credential that is stackable and portable, unless it leads to a single industry-recognized credential.

There are a lot of outstanding questions about how Workforce Pell will be functionally enacted and the details of the plan. The Department of Education has announced that there will be an upcoming negotiated rulemaking session taking place, and you can find more details on that process included in a dedicated section below. One notable change from the House-passed bill that did not make its way to the final law’s language was that of making unaccredited providers eligible to receive this Workforce Pell aid. And, in another dodging of the worst of the House-backed proposals, the final bill does not tighten broader Pell eligibility for full- and part-time qualifications, however it does restrict Pell grants from any student who receives full-ride or total cost of tuition covered by a combination of financial aid offers. 

Overall, however, most higher education advocates see this bill as a significant backsliding in the federal support for higher education, as it trims nearly $300 billion from federal student-aid spending overall, in addition to other non-calculable/scored losses that will be incurred by functional policy shifts. And, in a significant development that will affect almost all programs at all institutions, beginning in 2027, a program’s access to federal student loans will hinge on whether its graduates earn more than the typical high-school graduate; early modeling suggests as many as half of two-year programs could fail that test. Although UPCEA members should note that certificate programs were exempted under the same restrictions under this framework. 

The bill also has the following changes which will impact UPCEA institutions and the students they serve: 

• Collapses the set of student loan repayment options into just two plans—one of them a 30-year income-driven scheme with higher minimum payments and sharply limited forgiveness. It also caps on the aggregate amount of public loans for graduate students to $100k, and $200k for professional students—changes analysts say will push more families into pricier private lending options
• Raises the endowment-tax rate on certain colleges up to 8 percent
• Eliminates Grad PLUS loans and caps Parent PLUS borrowing at $65,000 per student

Although supporters hail the OBBB package as a fiscally responsible reset, the Congressional Budget Office projects it will add $3.3 trillion to the deficit over the next decade, largely due to broader tax cuts which benefit more greatly those at the highest end of the income spectrum. This, while the higher education provisions shift more risk onto students, graduate programs, access-oriented campuses that serve low-income and working learners, and institutions themselves. Read more.

• The bill’s implications for higher education are wide-reaching, and we know there are many questions for institutions. Our partners at Thompson Coburn LLP can help you uncover how the One Big Beautiful Bill Act (H.R. 1) could reshape higher education in a three-part webinar series. Partners Aaron Lacey and Chris Murray will break down everything from new loan-limit rules and Pell Grant reforms to sweeping accountability measures. It all starts with the first in the series on August 12, 2025 ​3-4:30 PM ET with “Soup to Nuts: A Review of the OBBBA’s Higher Education Provisions,” with two other webinars on August 14, and 19, all open now for registration. This series will assist institutions with the insights they need to navigate the Act’s political, regulatory, and operational impact. Register for this webinar series.

Negotiated Rulemaking on OBBBA for Student Loan and Workforce Pell Regulations Announced
Mark your calendar: The U.S. Department of Education will hold a virtual public hearing on August 7, 2025 to gather public input for its next round of Title IV higher‑education rulemaking resulting from new changes to financial aid due to the One Big Beautiful Bill Act (OBBBA). After the hearing, two negotiated‑rulemaking panels will meet in person (with livestream access): the Reimagining and Improving Student Education (RISE) Committee addressing student loan changes on Sept. 29-Oct. 3 and Nov. 3-7, 2025, and the Accountability in Higher Education and Access through Demand‑driven Workforce Pell (AHEAD) Committee working through the new short-term Pell legislation on Dec. 8-12, 2025 and Jan. 5–9, 2026. Sessions will run daily from 9 AM-12 PM and 1-4 PM ET. Individuals can submit written comments via Regulations.gov until August 25. Registration links for observers will be posted to this site one week before each negotiating session. The Department is also seeking a set of negotiators for each group, and nominations are due by August 25. Read more and submit nominations or comments.

Other News

• Trump brings elite institutions to heel in $1.2 billion settlement spree (Axios)
• Supreme Court says Trump’s efforts to close the Education Department can continue (NPR)
• Nationwide Injunctions: Going, Going, Gone (Thompson Coburn LLP)
• Under Pressure From Trump, UVA President Resigns (Inside Higher Ed)
• Trump Admin Tweaks 90-10 Rule (Inside Higher Ed)
• Harvard and University of Toronto make contingency plan for international students (Reuters)