Chairman Cassidy Unveils Senate HELP Committee Budget Reconciliation Bill

On Tuesday, June 10, the Senate Health, Education, Labor and Pensions (HELP) Committee released the text of its budget reconciliation bill, accompanied by a section-by-section summary and a one-pager. This release follows the House Education and Workforce Committee’s publication of its education-related bill text and summary in April, and the subsequent passage of the comprehensive “One Big Beautiful Bill Act” by the full House on May 22.

After the House passed its version, the Senate undertook modifications to ensure compliance with the Byrd Rule and to address additional priorities and concerns raised by senators. The broader bill will proceed to the Senate floor for a vote before returning to the House for further consideration.

The following memo summarizes each of the subtitles included in the Senate HELP Committee’s bill.

Subtitle A – Student Eligibility

Sec. 80001. Student eligibility

• Amends the Higher Education Act of 1965 (20 U.S.C. 1091 (a)(5)) to further restrict aid eligibility for certain non-U.S. nationals.
• Requires aid recipients to be a citizen of the United States, a lawfully admitted permanent resident under the Immigration and Nationality Act, an alien who meets specific immigration requirements or an individual who lawfully resides in the United State in accordance with a Compact of Free Association.
• Effective July 1, 2026, and applicable to award year 2026-27 and each subsequent award year.

Sec. 80002. Exemption of farm and small business assets

• Excludes family farms and small businesses with 100 full-time employees or less as assets in the aid eligibility formula.
• Effective July 1, 2026, and applicable to award year 2026-27 and each subsequent award year.

Subtitle B – Loan Limits

Sec. 81011. Establishment of loan limits for graduate and professional students and parent borrowers; Termination of graduate and professional Loans

• Eliminates interest subsidized loans for graduate and professional students and limits the maximum annual amount of Federal Direct Unsubsidized Stafford loans a student may borrow in any academic year to an amount determined under section 428H of the Higher Education Act of 1965 plus an amount equal to the amount of Federal Direct Stafford loans a student would have received in the absence of this provision.
• Eliminates Grad PLUS loans and limits graduate and professional annual and aggregate limits for Federal Direct Unsubsidized Stafford Loans beginning on or after July 1, 2026.
• In any academic year, beginning on July 1, 2026, graduate students who are not professional students (masters) may borrow up to $20,500 and professional students (e.g., law, medicine) may borrow up to $50,000 in Federal Direct Unsubsidized Stafford Loans.
• Beginning July 1, 2026, the maximum aggregate amount of Federal Direct Unsubsidized Stafford loans, in addition to the amount borrowed for undergraduate education, is $100,000 for nonprofessional students and $200,000 for professional students. The $200,000 aggregate limit may be adjusted for professional and graduate students who have also been enrolled in either graduate or professional programs of study.
• Maintains Federal Direct PLUS loans for parents (Parent PLUS) with new restrictions. Specifically, parents of undergraduate students  may borrow no more than $20,000 per student per year and caps aggregate Parent PLUS loans to $65,000 per student, beginning July 1, 2026.
• Limits lifetime maximum aggregate loan amounts for all students to $257,500, except for Federal Direct PLUS loans and loans made to the student as a parent borrower on behalf of the student, beginning July 1, 2026.
• Sets lower limits for part-time students that are directly proportional to students’ enrollment during any academic year, rounded to the nearest whole percentage point (e.g., half-time students are eligible for half the maximum loan).
• Allows institutions of higher education to set lower loan limits as long as the limits are applied uniformly within programs.
• Provides an interim exception from the graduate and professional student loan termination (3)(C), graduate and processional annual aggregate limits for Federal Direct Unsubsidized Stafford loans (4), parent borrower annual and aggregate limits for Federal Direct PLUS loans (5) and lifetime maximum aggregate amount for all students (6), for students who are enrolled in an institution of higher education and have received one of these loans.
  • The exception is in place for the expected time to credential, which is the lesser of three academic years, or the difference between the program length (minimum amount of time that is specified in the institution’s academic catalogue for a full-time student) and the period of such program of study that the individual has completed.

Subtitle C – Loan Repayment

Section 82001. Loan Repayment

• For loans made on or after July 1, 2026, borrowers will be offered two income-based plans for repayment, eliminating all other repayment plans:
  • The Repayment Assistance Plan
  • A Standard Repayment Plan
• Requires that the secretary of education take steps to transition loans of borrowers in repayment status on the day before enactment of this title.
• Waives the requirement for guidance or regulations issued or modified within the 270-day period after enactment of this title to go through the negotiated rulemaking process.
• Establishes a new income-driven repayment (IDR) plan, the Repayment Assistance Plan.
  • Under the plan, monthly payments must be at least $10. Monthly payments are equal to the applicable base payment divided by 12, minus $50 for each dependent. The adjusted gross income and corresponding base payments are as follows:
    • Less than $10,000: $120
    • $10,001–$20,000: 1% of borrower’s adjusted gross income
    • $20,001–$30,000: 2% of borrower’s adjusted gross income
    • $30,001–$40,000: 3% of borrower’s adjusted gross income
    • $40,001–$50,000: 4% of borrower’s adjusted gross income
    • $50,001–$60,000: 5% of borrower’s adjusted gross income
    • $60,001–$70,000: 6% of borrower’s adjusted gross income
    • $70,001–$80,000: 7% of borrower’s adjusted gross income
    • $80,001–$90,000: 8% of borrower’s adjusted gross income
    • $90,001–$100,000: 9% of borrower’s adjusted gross income
    • More than $100,000: 10% of borrower’s adjusted gross income
  • For borrowers who are not in deferment or forbearance and make on-time monthly payments that reduce the total outstanding principal balance by less than $50 per month, the outstanding principal balance will be reduced either by $50 or the monthly payment minus the amount paid towards the principal balance, whichever is less.
  • A borrower must make monthly payments until the principal and interest is $0 or until the borrower makes 360 qualifying monthly payments, which amounts to 30 years of payments. Any outstanding balance will be canceled after 30 years of payments.
  • For distressed borrowers who make on-time monthly payments, which are insufficient to pay the interest accrued that month, the interest shall not be charged to the borrower.
• The Standard Repayment Plan will have a fixed monthly repayment amount paid over a fixed period of time. Borrowers who do not opt into a repayment plan will be automatically enrolled in the standard repayment plan. The repayment time period will be determined based on the total outstanding principal of all loans of the borrower on or after July 1, 2026. The total outstanding principal and corresponding time periods are as follows:
  • Less than $25,000: 10 years
  • $25,000–$49,999: 15 years
  • $50,000–$99,999: 20 years
  • More than $100,000: 25 years
• Borrowers are required to pay each loan under the same selected repayment plan. Changes between plans may be made at any time.
• Consolidated loans made on or after July 1, 2026, may only be repaid using the Repayment Assistance Plan and the Standard Repayment Plan.
• Excepted loans made on or after July 1, 2026:
  • Borrowers with excepted loans will be required to use the standard repayment plan. An excepted loan is defined as a Federal Direct PLUS Loan made on behalf of a dependent student or a Federal Direct Consolidation Loan.
• Eliminates the authority to provide income-contingent repayment plans, and all existing income-contingent plans are eliminated.

Section 82002. Deferment; Forbearance

• Eliminates economic hardship and unemployment deferments for borrowers who receive a loan on or after July 1, 2026.
• A borrower who receives a loan made on or after July 1, 2026, may only be eligible for a forbearance on a loan that does not exceed nine months during any 24-month period.

Section 82003. Loan Rehabilitation

• Allows borrowers to rehabilitate defaulted loans under the Federal Family Education Loan (FFEL) program and the Perkins Loan (Part D) program twice, instead of once.
• Changes the monthly payments for rehabilitation from $5 to $10 for borrowers who have one or more defaulted loans on or after July 1, 2026.

Section 82004. Public Service Loan Forgiveness

• Adds that on-time payments made under the Repayment Assistance Plan will count towards the 120 monthly payments required for forgiveness under the Public Service Loan Forgiveness plan. This provision is intended to streamline and simplify the process for public service workers, ensuring that participation in the new repayment plan does not disqualify them from PSLF.
• States that a public service job does not include time served in a medical or dental internship or residency program by an individual who as of June 30, 2026, has not borrowed a Federal Direct PLUS Loan or a Federal Direct Unsubsidized Stafford Loan for a program of study that awards a graduate credential upon completion.

Section 82005. Student Loan Servicing

• Requires $1 billion be made available for administrative costs related to loan repayment, such as servicing the direct student loan programs.

Subtitle D – Pell Grants

Section 83001. Eligibility

• Requires foreign income of the student’s parents or, in the case of an independent student, the student and student’s spouse, to be included in the adjusted gross income calculation when determining Pell Grant eligibility for academic years beginning on or after July 1, 2026.
• Sunsets a provision that allows a student to receive a Pell Grant if it is determined they were eligible but did not initially receive the grant. This provision is applicable for academic years beginning before July 1, 2026.
• Makes students who have a student aid index that is equal to or exceeds twice the amount of the total maximum Federal Pell Grant for that academic year ineligible for a Pell Grant, effective July 1, 2026.

Section 83002. Workforce Pell Grants

• Expands eligibility for Pell Grants to students enrolled in an eligible workforce program, for the award year beginning on July 1, 2026. An eligible workforce program is a program between 150 and 600 clock hours of instruction, or the equivalent number of credit hours, for eight to 15 weeks. The governor of the state where the program is offered must determine the program:
  • Provides an education aligned with the requirements of high-skill, high-wage or in-demand industry sectors or occupations;
  • Meets the hiring requirements of such potential employers or occupations;
  • Prepares students to pursue one or more certificate or degree programs at one or more institutions of higher education by ensuring the student will receive academic credit that will be accepted toward meeting a certificate or degree requirement;
  • Leads to a recognized post-secondary credential;
  • Prepares students for employment in an occupation with only one recognized postsecondary credential; and
  • Provides the student with a credential upon completion.
• Following this determination by the governor, the secretary of education must determine the program:
  • Has been offered by the eligible institution for at least one year;
  • Has a completion rate of at least 70%;
  • Has a verified job placement rate of at least 70%, measured 180 days after completion; and
  • The total amount of published tuition and fees does not exceed the value-added earnings of students who received federal financial aid through this program and who completed the program three years prior to the award year.
    • Earnings are determined by calculating the difference between the median earnings of students based on the location and 150% of the poverty line for such year.
• An eligible institution means an institution of higher education or another entity that has not been subject to any of the following in the past three years:
  • Any suspension, emergency action or termination under the Pell Grant title;
  • For institutions of higher education, any adverse action by the institution’s accrediting agency or association that revokes or denies accreditation for the institution; or
  • Any final action by the state in which the institution or other entity holds its legal domicile, authorization or accreditation that revokes the license or other authority to operate in the state.
• To be eligible for a Workforce Pell Grant, the student may not be enrolled or accepted for enrollment in a program of study that leads to a graduate credential or have attained a graduate credential.
• Students who are enrolled or accepted for enrollment in a program that is less than an academic year may still be eligible for a Workforce Pell Grant in an amount that is prorated based on the program’s length.

Section 83003. Pell Shortfall

• Increases funding for Pell Grants to $12,670,000,000 from $2,170,000,000.

Section 83004. Federal Pell Grant Exclusion Relating to Other Grant Aid

• Makes students who are receiving grant aid from additional sources, such as federal sources, states, institutions of higher education or private sources, of an amount that is equal to or exceeds the student’s cost of attendance, ineligible for a Pell Grant.
• States that the maximum period for which a student may receive federal Pell Grants shall be reduced by any period where a student was not eligible for a Pell Grant.

Subtitle E – Accountability

Sec. 84001. Ineligibility based on low earning outcomes

Undergraduate Programs

• Deems certain undergraduate programs ineligible for federal loans if the median earnings of the programmatic cohort are less than the median earnings of a working adult aged 25–34 with only a high school diploma or GED, who is not enrolled in a higher education program. This measurement is taken four years after program completion or withdrawal, provided the student is not enrolled in another higher education program.
• The median high school diploma earnings are calculated using census data for the state where the institution is located, or, if a majority of students reside out of state, national census data.
• The programmatic cohort includes students who completed the program as well as those who ceased to complete or did not reenroll in the same program at any point throughout the year of determination. 
• For programs with small cohorts, defined as those with 30 students or less, data from additional years will be aggregated to determine median earning outcomes.
• Allows universities to appeal program eligibility through a process determined by the secretary of education.
• The program must fail the earnings test outlined above in two out of three years to be ineligible.

Graduate and Professional Programs

• Makes graduate and professional programs ineligible for federal student loans if:
  • For programs requiring less than three years of full-time coursework: The median earnings of the programmatic cohort are compared to the median earnings of a working adult aged 25–34 with only a bachelor’s degree. This median earnings measurement is taken six years after the cohort’s entry into the program, provided they are not enrolled in another higher education program.
  • For programs requiring more than three years of full-time coursework: The median earnings of the programmatic cohort are compared to the same benchmark. This median earnings measurement is taken 10 years after the cohort’s entry into the program, provided they are not enrolled in another higher education program.
  • In both cases, the program must fail this earnings test in two out of three years to be deemed ineligible for federal student loans.
• For graduate and professional students, the comparison median earnings level is calculated as the lowest of:
  • The median earnings of a working adult aged 25–34 with only a bachelor’s degree in the state;
  • The median earnings of a working adult in the same field of study in the state (based on two-digit CIP code);
  • The median earnings of a working adult in the same field of study in the entire United States (based on two-digit CIP code).
• For small cohorts (fewer than 30 students), data from additional years (and, if necessary, degrees of equivalent length) are aggregated to reach a minimum of 30 students.
• Requires institutions of higher education that do not meet the median earning requirements for one year during the applicable covered period (three years immediately preceding the date of a determination), but have not yet failed to meet such requirements for two years, to inform each student enrolled in the program of the low median earnings of the cohort and share that the program is at risk of losing eligibility.
• Requires that the secretary of education establish a process to regain programmatic eligibility by allowing programs to apply to regain eligibility after two years of ineligibility.

Subtitle F – Regulatory Relief

Sec. 85001. Repeal of rule relating to borrower defense to repayment

• Repeals subpart D of part 685 of title 34, Code of Federal Regulations relating to borrower defense repayment on the date of enactment of this section.
• Restores regulations relating to borrower defense to repayment from July 1, 2020, during President Trump’s first administration.

Sec. 85002. Repeal of rule relating to closed school discharges

• Repeals the provisions of sections 674.33(g), 682.402(d), and 685.215 of title 34, Code of Federal Regulations relating to closed school discharges, beginning on the date of enactment of this section.

Subtitle G – Limitation on Authority

Sec. 86001. Limitations on authority of Secretary to propose or issue regulations and executive actions

• Amends Part G of title IV of the Higher Education Act of 1965 by inserting language that requires the secretary of education to determine whether a draft regulation would be economically significant, and if so, determine whether the regulation would result in an increase in a subsidy cost. If the secretary determines a regulation would result in an increase in a subsidy cost, the secretary cannot take any further action related to the regulation.
• Restricts the secretary from issuing a proposed regulation, final regulation or executive action if that regulation or executive action is economically significant and would result in a subsidy cost.
• Establishes that “economically significant” legislation is likely to be determined by the secretary to have an annual effect on the economy of $100 million or more or adversely affect the economy as a whole or specific sectors of the economy.

Subtitle H – Funding Cost Sharing Reduction Payments

Sec. 87001. Funding cost sharing reduction payments

• Prohibits appropriated funds from being used to make payments for a qualified health plan that provides health benefit coverage that includes coverage of abortion.
• Provides an exception to the above if an abortion is necessary to save the life of the mother or if the pregnancy is a result of an act of rape or incest.

Subtitle I – Garden of Heroes

• Directs $40 million to the National Endowment for the Humanities for the procurement of statutes as related to Executive Orders to build the National Garden of American Heroes.