The Senate has released its version of the reconciliation package that Republican congressional leaders and President Trump want approved as quickly as possible, though changes are still being made.In the wake of the House passing a
deeply damaging budget reconciliation package last month that would make college less affordable for millions of students and impose blunt new penalties and restrictions on institutions, the Senate Health, Education, Labor and Pensions committee (HELP) and Finance committee have released their versions of the bill.
Last week’s draft bill from the HELP committee backed off some of the worst House proposals, such as cuts to Pell Grant eligibility, thanks in no small part to higher education community advocacy. On Monday, the Senate Finance Committee released its section of the bill. It’s better than the House version but still includes troubling provisions, especially around the endowment tax. For a summary of the HELP bill,
click here.
A full
summary of the Finance Committee bill is available on the ACE website, but in brief: while the Senate version scales back the House endowment tax proposal in some respects, it still includes damaging increases to the current endowment tax. The bill replaces the existing 1.4 percent tax with a three-tiered structure of 1.4, 4, or 8 percent, based on an institution’s endowment size per student, and excludes international and undocumented students from the calculation. This change, while an improvement on the House’s top rate of 21 percent, still significantly expands the tax’s scope and impact.
The bill also makes the higher standard deduction permanent, further reducing the incentive to itemize and weakening charitable giving. It adds a new deduction for non-itemizers and imposes new minimum giving thresholds for individual itemizers and corporations starting in 2026. These new thresholds could discourage giving, particularly among middle-income donors and smaller businesses, posing a modest long-term risk to the charitable support higher education depends on.
The Senate bill also proposes steeper cuts to Medicaid than the House version. These cuts threaten health care access for millions of low-income students, strain state budgets that support higher education, and put academic medical centers and teaching hospitals—especially in rural and underserved areas—at serious risk.
All of this comes on top of harmful proposals still in the mix: eliminating Grad PLUS loans, gutting Parent PLUS, and a new accountability framework that could limit access and opportunity, particularly for graduate and low-income students.
President Trump wants a bill on his desk by July 4. That deadline may slip, but the president and GOP congressional leaders are pushing hard to get a final reconciliation package passed and sent to him as quickly as possible.
Higher education leaders, students, alumni and other stakeholders should continue to be active in communicating with lawmakers, particularly senators right now, to press for improvements to the reconciliation package.
ACE’s Advocacy Toolkit features a Contact Congress form that can be used to quickly and easily send letters on the various higher education reconciliation issues.