- AACC summary of the One Big Beautiful Bill
- ED guidance restricts CTE, ABE and dual enrollment for undocumented students
- Democrats demand information on $7B in withheld education funding
- ED restarts interest accrual for borrowers in SAVE Plan forbearance
- Register for Advocates in Action 2025
AACC summary of the One Big Beautiful Bill
The American Association of Community Colleges (AACC) has released its analysisopens PDF file of H.R. 1 – Fiscal Year (FY) 2025 budget reconciliation legislation, which the president signed into law on July 4.
From AACC’s perspective, the bill’s higher education provisions turned out almost as well as could be expected, given the context. Most significantly, the bill does not include the House bill’s Pell Grant eligibility changes based on enrollment intensity. The legislation also provides additional funds for the Pell Grant program that should keep the program whole for the next two award years.
The One Big Beautiful Bill Act finally establishes Workforce Pell grants, which community colleges had championed for years. In addition, the legislation’s new higher education accountability provisions are far preferable to the “risk-sharing” scheme that was in the House version of the bill.
Most of the changes in the bill are set to take effect on July 1, 2026. However, many of them will need to be regulated by the Education Department (ED), and regulations subject to the Master Calendar must be finalized by November 1 to take effect the following July. As a result, opens in a new windowimplementation of some of these provisions may be delayed.
The document provides a summary of the higher education provisions included in the bill, as well as a brief overview of relevant Medicaid and SNAP changes.
ED guidance restricts CTE, ABE and dual-enrollment for undocumented students
ED has announced that it will restrict access to postsecondary education programs, career and technical education (CTE), adult education and dual enrollment for undocumented students. The opens in a new windownew interpretative rule rescinds a 1997 Dear Colleague Letter (DCL) that allowed undocumented students to access certain federal education benefits and exempted them from the citizenship-based eligibility restrictions in the Personal Responsibility and Work Opportunity Reconciliation Act. That law limits public benefits eligibility only to U.S. citizens, U.S. non-citizen nationals and certain categories of “qualified aliens.”
While undocumented students still have a legal right to a public education under Plyler v. Doe, ED now interpretes that precedent to mean only a “basic public education” and not postsecondary (to include dual enrollment, concurrent enrollment and early college experiences), CTE, or adult education opportunities, even if they are offered at or in conjunction with secondary institutions.
AACC is monitoring this development and will have more information on its potential effect on community colleges soon. Other agencies, including the Department of Labor, have issued similar regulations.
Democrats demand information on $7B in withheld education funding
opens in a new windowHouseopens PDF file and opens in a new windowSenate Democrats have sent several letters to the Department of Education (ED) demanding more information on a disbursement timeline for the nearly $7 billion in federal education grants that were not awarded as scheduled on July 1.
This includes more than $715 million for Adult Basic Education (ABE) grants. ED said that it is “reviewing FY 2025 funding” for affected programs and that “decisions have not yet been made concerning submissions and awards for this upcoming year.” It is not yet clear how the new guidance on citizenship requirements for federal education benefits will affect if and when ED releases this funding. So far, no Republicans have led or joined similar letters.
AACC has heard from several states and individual colleges about the importance of ABE funding and the potential consequences of this disruption, including reduced services for students and staff layoffs and furloughs. AACC urges stakeholders to continue to raise the importance of ABE with their congressional representatives.
ED restarts interest accrual for borrowers in SAVE Plan forbearance
ED announced this week that interest would begin accruing for the 7.7 million student loan borrowers in forbearance who had enrolled in the Biden-era Saving on a Valuable Education (SAVE) repayment plan.
More than 8 million borrowers had enrolled or been placed in the SAVE plan, which was the most generous repayment plan ever introduced. When the plan was challenged in court, those 8 million borrowers were placed in interest-free forbearance. While some borrowers elected to transition to another repayment plan, many have stayed in repayment limbo for a full year. Litigation is still ongoing.
ED said this week that it did not have the authority to extend zero-percent interest to borrowers in forbearance and that interest will begin accruing for these borrowers on August 1, 2025. The notice states that borrowers will not be retroactively charged interest.
ED is sending communications to these borrowers on how to enroll in another income-driven repayment (IDR) plan to avoid the interest capitalization associated with forbearance. While there is a significant backlog of IDR applications at the department, the notice says that borrowers switching from SAVE to another plan can “expect quick and timely processing.”
Register for Advocates in Action 2025
Registration is open for AACC’s annual opens in a new windowAdvocates in Action in Washington, D.C., September 17 and 18.
The program is designed for community college leaders who want an insider’s view on how Washington formulates higher education policy and who want to become more involved in the federal legislative process. Sessions with executive branch officials and senior congressional staff will provide valuable insights into the current dynamics and issues surrounding key funding and other pending legislation. Time is reserved for attendees to meet with their federal legislators to advocate for community college priorities.
Community college presidents, trustees, government relations directors and other campus administrators are encouraged to take advantage of this opportunity to network, discuss key policy issues and advocate for critical federal programs. The agenda for the program will be released soon.