A controversial budget reconciliation bill making its way through the House of Representatives has drawn sharp criticism from higher education advocates, who warn the proposed legislation would slash student aid, burden universities with new taxes, and undermine health care access for millions of students.
The American Council on Education (ACE) is calling on the academic community to push back. “It is a full-out assault on the ability of students—especially low-income students—to access and afford higher education,” said Jon Fansmith, ACE’s senior vice president, in an interview with Inside Higher Ed.
The legislation—part of a broader GOP-led effort to advance tax policy objectives—includes deep spending cuts across multiple committees. The House Education and Workforce Committee’s proposal alone would strip $351 billion from education and workforce programs, with low-income students bearing the brunt. Provisions include limiting Pell Grant eligibility, eliminating subsidized loans, and imposing new restrictions on Parent PLUS and Grad PLUS programs, all of which help make college more attainable.
In parallel, the House Ways and Means Committee is proposing a steep hike in the endowment tax for private institutions, introducing rates as high as 21%—up from the current 1.4%. “It’s always been a scholarship tax,” ACE’s Steven Bloom told Higher Ed Dive, adding that the expansion “will be incredibly detrimental” to financial aid at impacted colleges. Additional provisions in the tax package may suppress charitable giving and tighten regulations on nonprofit status, prompting concern over potential misuse of federal authority.
The proposed cuts to Medicaid, advanced by the House Energy and Commerce Committee, also threaten to destabilize health care services that millions of college students rely on. ACE President Ted Mitchell noted in a letter that 3.4 million students currently depend on Medicaid. Slashing the program, he said, would “jeopardize support of student health, medical training, and public higher education.”
While the bill recently faced a setback in the House Budget Committee—where several Republicans broke ranks to block it—GOP leaders continue to negotiate with party hardliners pushing for even deeper cuts.
ACE is urging students, faculty, and education leaders to contact their representatives using its online “Contact Congress” tool, emphasizing the far-reaching damage this bill could inflict on college affordability, access, and the nation’s future workforce.
More information and tools to contact lawmakers are available through ACE’s Tax Reform and Higher Education in 2025 resource page.
