This week, the U.S. Department of Education announced plans to convene two negotiated rulemaking (Neg Reg) committees to implement the sweeping changes in higher education policy under the One Big Beautiful Bill Act (OBBBA).
Signed into law by President Trump on July 4, the law overhauls federal loan repayment, increases accountability for low-performing programs and establishes a long awaited federal Workforce Pell program. It also marks the second and third Neg Reg efforts of 2025, as the Trump administration continues its dizzying pace of higher education rulemaking and executive orders and efforts to follow through on its higher education policy goals.
Two Tracks, One Big Overhaul
- The Reimagining and Improving Student Education (RISE) committee will meet in September and November to create new rules around federal loans. Among the issues on their docket are consolidation of repayment plans into a single income-driven option, loan rehabilitation, the phase-out of the Graduate PLUS loans, and new annual and lifetime borrowing limits (and possible waivers for institutions to apply lower annual limits).
- Meanwhile, the Accountability in Higher Education and Access through Demand-Driven (AHEAD) Workforce Pell Committee will be charged with defining requirements for the new Workforce Pell Grant. Eligible programs must be short-term (8–15 weeks), stackable toward a credential or degree, and approved by a governor as meeting workforce needs (check out our Workforce Pell primer). AHEAD will also address major accountability changes, including a new “gainful for all” rule that would cut off federal loans for any program—regardless of profit status—if its graduates earn no more than high school diploma holders.
- Meeting in December and January, the AHEAD Committee will also set the rules on a new—and often overlooked—limit on Pell grants to students who receive full ride scholarships, with potentially mammoth implications for the way private and state financial aid is determined.
Why it matters:
The rulemaking process ahead will shape the real-world impact of the OBBBA. At stake:
- Workforce Pell dollars. Which programs qualify, how eligibility is measured, and what role governors play in approving programs.
- Earnings thresholds for degree programs. The rules will carve out the details for the new benchmarks and how they will interface with the existing Gainful Employment rule, including the Biden administration’s Financial Value Transparency requirements.
- Borrowing and repayment changes. Simplified repayment plans to tighter limits on graduate borrowing could reshape how students and families finance education.
- Pell grant exclusions. The proposed ban on awarding Pell to students with full-ride scholarships could convert Pell from a first-dollar to a last-dollar program, dramatically impacting how states structure financial aid.
For education leaders, employers, and policymakers, the next six months represent a critical window to influence how these policies take shape. The W/A higher ed team will be tracking the negotiations closely. For more about our due diligence and policy research services, please reach out to us.
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