ACE - American Council on Education

07/11/2025 | News release | Distributed by Public on 07/11/2025 14:31

How Does the Final Reconciliation Bill Impact Higher Ed? Read the ACE Summary to Find Out

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​When President Trump signed the final reconciliation bill into law July 4, that capped a fast-moving and deeply partisan process that reshapes federal tax and spending policy across the board. For colleges and universities, the implications are wide-ranging and, in some cases, still evolving. While some provisions take effect immediately, others-including major changes to federal student aid-will roll out over the next year.ACE has put together a summary of the provisions impacting students and institutions. Click here to download it.

Some provisions and time frames of note:

  • Student loan changes, including new borrowing limits for graduate students, the end of Grad PLUS, a $65,000 cumulative cap on Parent PLUS, and new repayment plan options, will take effect in July 2026.
  • An expansion of Pell Grants to short-term programs at accredited providers, a key late-stage fix, will also take effect in July 2026.
  • Endowment tax changes apply to fiscal years beginning on or after Jan. 1, 2026, with higher rates kicking in for some institutions despite a narrower scope than originally proposed.
  • A new earnings test for all degree programs remains in the bill but applies only to completers and would affect eligibility only for federal student loans, not all federal aid.

This Inside Higher Ed story has a detailed list of time frames for various provisions, as well.

ACE will be tracking implementation closely as federal agencies begin to translate the law's broad strokes into specific measures.

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