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On Tuesday morning, the House Education & Workforce Committee will markup their proposed reconciliation language. The draft legislative text proposes sweeping changes to higher education in order to meet the reconciliation goal of saving $330 billion over ten years. It is one part of a larger GOP reconciliation bill aimed at reducing government spending to pay for the proposed extension of President Trump’s 2017 tax cuts, which are due to expire at the end of the year.

The draft text includes an overhaul of federal student loan programs, including the elimination of subsidized student loans and Grad PLUS loans, restricting Parent PLUS loans, and altering the aggregate borrowing limits.

The aggregate limit for undergraduate students would be $50,000. For graduate students in nonprofessional programs, the aggregate limit would be $100,000. For professional programs geared toward training for a specific field, like law or medicine, the limit would be $150,000.

A student or their parents, across all programs of study, could not borrow more than $200,000 in unsubsidized federal loans.

Additionally, the proposal would limit the availability of federal aid to the median cost of a specific program nationally.

The legislation would also make changes to federal Pell Grants. The text would make ineligible students who are enrolled less than half-time or whose student aid index 鈥� a calculation used by schools to determine aid eligibility 鈥� is greater than twice the maximum Pell Grant amount for that school year.

The text would also create a system of “workforce” Pell Grants to help students pay for workforce development programs. For students to be eligible, a workforce program would need to last between 8 and 15 weeks, have a completion rate of over 70 percent and have a job-placement rate of over 70 percent. The text would also condition a program鈥檚 eligibility for the grants on students’ earnings relative to the cost of the program. The legislation also proposes increasing the amount of funds appropriated to the Pell Grant program by $10.5 billion over the next three fiscal years.

Another consequential change offered in the text is the implementation of a risk-sharing program. The measure would institute required reimbursement payments by colleges and universities based on student graduation rates, earnings and failure to repay federal loans. The Education Department would calculate the reimbursement an institution would pay for a program of study by dividing federal loans among different cohorts of undergraduate and graduate students who finish their programs on time and those who do not. The repayment balance would be the total of payments students failed to make, interest waived under the income-based repayment plan and interest or principal the Education Department forgave. The department would use the risk-sharing payments to fund new grants to schools that meet certain criteria, including on price transparency and completion rates.

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