The U.S. Senate Appropriations Committee's Labor, Health and Human Services, Education and Related Agencies Subcommittee Chair Shelley Moore Capito, R-W.V., talks with ranking Democrat Sen. Tammy Baldwin of Wisconsin on June 3, 2025 before Education Secretary Linda McMahon testified to the panel about President Donald Trump's budget request for the Education Department.  The proposal includes a reduction in the maximum Pell Grant award. (Photo by Chip Somodevilla/Getty Images)

WASHINGTON — President Donald Trump wants to cut nearly $1,700 from the maximum Pell Grant award as part of his fiscal 2026 budget request — a move that would leave the subsidy for low-income students at its lowest level in more than a decade.

The proposal would have a devastating effect on college affordability and drive up costs for states because they’d have to fill in the missing federal dollars, education advocates and experts say.

The request — part of the president’s wish list for appropriations in fiscal 2026 — faces steep odds in Congress, where key members of both parties responded to the proposal with alarm.

“I don’t want to cut the Pell Grant,” U.S. Sen. Shelley Moore Capito, a West Virginia Republican and chair of the Senate Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies, told States Newsroom.

“I’m concerned about that — I’m hoping that we’ll get that resolved,” she said.

Opposition from Capito, whose panel writes the annual bill to fund the Education Department, makes Trump’s wish unlikely to make its way into the upcoming legislation.

The Pell Grant is a government subsidy that helps low-income students pay for college and is the foundation of federal student aid in the United States.

Catherine Brown, senior policy and advocacy director at the National College Attainment Network, said the cut would be “absolutely devastating,” noting that “college is already out of reach for millions upon millions of low-income students.”

Funding gap

The Pell Grant program is seeing a projected budget shortfall of $2.7 billion heading into the next fiscal year, according to the nonpartisan Congressional Budget Office. The administration has cited the shortfall as a reason to decrease the maximum award.

The request calls for reducing the maximum Pell Grant for the 2026-2027 award year from $7,395 to $5,710. The last time the maximum award stood below this level was during the 2013-2014 award year, at $5,645. 

Trump’s fiscal 2026 budget request includes $12 billion in total cuts to the Education Department as he and his administration seek to dismantle the agency and dramatically reshape the federal role in education.

Democrats: Cut would be ‘crazy’

Democrats have raised strong opposition, while even the Republican chair of the House Appropriations subcommittee that oversees Education Department funding was noncommittal about pursuing Pell Grant cuts.

“We want to make sure that (Pell Grants are) serving the people they need to,” Rep. Robert Aderholt of Alabama said when asked about any concerns he has on the proposed cut.

Aderholt said he’s hearing “a lot” from his constituents about the proposed reduction, and that it’s “certainly something we’re going to look at.”

Meanwhile, the leading Democrats on the House and Senate education spending panels were quick to blast the proposed cut.

Rep. Rosa DeLauro, ranking member of the full House Appropriations Committee and the education spending subcommittee, called the nearly $1,700 reduction “crazy.”

“People are not going to be able to do it, and that’s the tragedy of what they’re doing here is dismantling all of the constructs that are there to provide people particularly with public education and a pathway to success,” the Connecticut Democrat said.

“You take away Federal Work-Study, you lower the Pell Grant, that says to me, you want to destroy public education,” DeLauro said.

The budget request proposes slashing $980 million of Federal Work-Study funding and requiring employers to pay 75% of students’ hourly wages, with the government contributing 25%.

The program gives part-time employment to students with financial need in order to help cover the cost of college. 

Sen. Tammy Baldwin, ranking member of the Senate subcommittee, said she “strongly” opposes the proposed reduction.

The Wisconsin Democrat said she also recognizes that “there’s a looming shortfall in Pell funding that we need to address.”

“I am hopeful that we’ll be able to work together to do that,” Baldwin said.

Advocates, experts weigh in

Higher education advocates and experts are also sounding the alarm on the proposed reduction, both over the harm to low-income students’ access to higher education and the impact on states and colleges.

“This would just much further exacerbate that gap and drive millions of students out of pursuing post-secondary education or set them on a different path,” Brown, with the National College Attainment Network, said.

Katharine Meyer, a governance studies fellow at the Brown Center on Education Policy at the nonpartisan Brookings Institution, described the proposed decline as “truly unprecedented.”

She added that when the Pell Grant is smaller, states have to spend more on higher education, creating a challenge for state officials potentially grappling with other cuts in federal support in the budget reconciliation package Republicans are scrambling to pass.

“States don’t necessarily have the flexibility to spend more money when they have budgets that they need to balance, and they’re facing other federal constraints, including potentially having to take on additional health care costs depending on what happens with health care negotiations in budget reconciliation,” she said.

Capito also said she thought a reduction to Pell Grants would ripple out to the state level.

At the institutional level, Meyer pointed out that if a state has a smaller bucket to allocate for higher education but wants to prioritize financial aid, it would “come at the cost of” the money appropriated to universities.

“Then institutions are not going to be able to spend as much on their operating funds,” she said. “They’re not going to be able to do capital improvement campaigns, which are often very necessary.”

Ties to reconciliation bill

House Republicans have also proposed major changes to Pell Grant eligibility as part of GOP lawmakers’ separate “big, beautiful bill.” The legislative package would slash billions of dollars in federal programs to offset the cost of other parts of Trump’s agenda, including extending the 2017 tax cuts and boosting border security funding.

GOP lawmakers are using the complex reconciliation process to move a package through Congress with simple majority votes in each chamber and avoid the Senate’s 60-vote threshold that generally requires bipartisanship.

The House narrowly passed its version of the reconciliation package in late May. That measure included a provision that would raise the minimum number of credit hours to qualify for the maximum Pell Grant award from 12 per semester to 15. The move would save $7.1 billion in federal spending over 10 years, the Congressional Budget Office estimated.

That new eligibility requirement is not included in the draft proposal for the reconciliation package that Republicans on the Senate Committee on Health, Education, Labor and Pensions released in June. 

The U.S. Capitol building in Washington, D.C., is pictured on Wednesday, May 7, 2025. (Photo by Jennifer Shutt/States Newsroom)

This report has been updated.

WASHINGTON — The U.S. House early Thursday approved the “big, beautiful bill” that Republican leaders spent months negotiating with centrists and far-right members of the party — two distinct factions that hold vastly different policy goals — over intense opposition from Democrats.

The 215-214 vote ships the package to the Senate, where GOP lawmakers are expected to rewrite much of it, before sending it back across the Capitol for final approval, a process likely to stretch through the summer.

President Donald Trump, who said he backed the House version, would then need to sign the legislation, which under the complicated process being used by Republicans can pass with just a majority vote in the GOP-controlled Senate.

Trump called on the Senate to pass the legislation as quickly as possible, writing in a social media post that “(t)here is no time to waste” and that the bill is “arguably the most significant piece of Legislation that will ever be signed in the History of our Country!”

Speaker Mike Johnson said minutes before the vote that he expects lawmakers to give the measure final approval before the Fourth of July.

“Now, look, we’re accomplishing a big thing here today, but we know this isn’t the end of the road just yet,” Johnson, R-La., said. “We’ve been working closely with Leader (John) Thune and our Senate colleagues, the Senate Republicans, to get this done and delivered to the president’s desk by our Independence Day. That’s July 4. Today proves that we can do that, and we will do that.”

House Democratic Leader Hakeem Jeffries, D-N.Y., argued against the legislation, saying it “undermines reproductive freedom, undermines the progress that we have made in combating the climate crisis, undermines gun safety, undermines the rule of law and the independence of the federal judiciary. It even undermines the ability of hard-working and law-abiding immigrant families to provide remittances to their loved ones, who may just happen to live abroad.”

Jeffries raised concerns with how the proposals in the bill would impact the economy and the federal government’s financial stability.

“Costs aren’t going down. They’re going up. Inflation is out of control. Insurance rates remain stubbornly high,” Jeffries said. “Our Moody’s rating, our credit rating, has been downgraded, and you’ve got people losing confidence in this economy. Republicans are crashing this economy in real time and driving us toward a recession.”

Ohio’s Warren Davidson and Kentucky’s Thomas Massie were the only Republicans to vote against passing the bill, which members debated throughout the night prior to the vote just after daylight in the nation’s capital. All Democrats, who dubbed it “one big ugly bill,” were opposed. Maryland GOP Rep. Andy Harris, chairman of the Freedom Caucus, voted “present.”

Massie spoke against the bill overnight, calling it “a debt bomb ticking.”

“I’d love to stand here and tell the American people: We can cut your taxes and we can increase spending, and everything’s going to be just fine. But I can’t do that because I’m here to deliver a dose of reality,” Massie said. “This bill dramatically increases deficits in the near term, but promises our government will be fiscally responsible five years from now. Where have we heard that before? How do you bind a future Congress to these promises?”

White House press secretary Karoline Leavitt said during a briefing later in the day that Trump wants Davidson and Massie to face primary challenges next year during the midterm elections.

“I believe he does,” Leavitt said. “And I don’t think he likes to see grandstanders in Congress.” 

In the works for weeks

The 1,116-page package combines 11 bills that GOP lawmakers debated and reported out of committee during the last several weeks.

The legislation would:

• Extend the 2017 tax law, including tax cuts for businesses and individuals;
• Bolster spending on border security and defense by hundreds of billions of dollars;
• Rework energy permitting;
• Restructure higher education aid such as student loans and Pell Grants;
• Shift some of the cost of the Supplemental Nutrition Assistance Program food aid program for low-income Americans to state governments; and
• Overhaul Medicaid, the nation’s program for health care for low-income people and some people with disabilities.

The bill would make deep cuts to Medicaid spending, reducing the program by $625 billion over 10 years under the latest estimate by the Congressional Budget Office.

The budget measure would also raise the debt limit by $4 trillion.

A new Congressional Budget Office analysis released late Tuesday showed the package tilted toward the wealthy, projecting it would decrease resources for low-income families over the next decade while increasing resources for top earners.

Republicans hold especially thin majorities in the House and Senate, meaning that nearly every GOP lawmaker — ranging from centrists who barely won their general elections to far-right members who are more at risk of losing a primary challenge — needed to support the bill.

Balancing the demands of hundreds of lawmakers led to nearly constant talks during the last few days as Johnson struggled to secure the votes to pass the bill before his Memorial Day deadline.

Any deal Johnson made with far-right members of the party risked alienating centrist GOP lawmakers and vice versa.

An agreement finally came together Wednesday evening when GOP leaders released a 42-page amendment that made changes to various sections of the package, including the state and local tax deduction, or SALT, and Medicaid work requirements and nixed the potential sale of some public lands.

Tax cuts

House debate on the package fell largely along party lines, with Democrats contending it would benefit the wealthy at the expense of lower-income Americans, including millions who would lose access to Medicaid.

Republicans argued the legislation is necessary to avoid a tax hike at the end of the year, when the 2017 GOP law expires, and to curb government spending in the years ahead.

Ways and Means Chairman Jason Smith, R-Mo., said the tax section of the package would halt a tax increase for many that would have taken place after the vast majority of the provisions in that law expire at the end of this year.

“Working families, farmers and small businesses win with this bill,” Smith said. “We expand and make permanent the small business deduction and increase the child tax credit, the standard deduction and the death tax exemption.”

The legislation would increase the tax rate for colleges and universities with substantial endowments, which would match the corporate tax rate, he said.

Massachusetts Democratic Rep. Richard Neal, ranking member on that tax-writing committee, said the legislation would lead the United States to “borrow $4 trillion and with interest payments over the next 10 years, $5 trillion, to justify a tax cut for the billionaire class.”

Neal said that the wealthy would see a greater benefit from the GOP tax provisions than working-class Americans.

“If you made a million dollars last year, you’re going to get $81,000 of tax relief. If you made less than $50,000 Guess what? Not quite so lucky,” Neal said. “But you know what? $1 a day goes a long way, because that’s where the numbers land.”

Neal said Democrats would have worked with Republicans to extend the 2017 tax cuts if the GOP had capped them for those making less than $400,000 a year, with people making more than that going back to the higher rate. 

Child tax credit

The child tax credit will increase to $2,500, up from the $2,000 enacted under the 2017 tax law. The refundability portion of the credit, or the amount parents could receive in a refund check after paying their tax liability, will remain capped but will increase with inflation by $100 annually. As of now, the amount a parent could receive back per child stands at $1,700.

While Republicans hailed the increase as a win for families, critics say it continues to leave out the poorest families as the refund amount is dependent on how much a parent earns. The credit phases in at 15 cents per income dollar, one child at a time.

“The Republican bill will leave out 17 million American children who are in families that don’t earn enough to receive the full child tax credit,” Rep. Suzan DelBene of Washington said Wednesday in the House Committee on Rules. Her amendment to make the tax credit fully refundable was rejected.

On the House floor Thursday morning, DelBene criticized the bill as a “big, broken promise.”

SALT

Republicans from high-tax blue states declared victory on the increase in the SALT cap, or the amount of state and local taxes that can be deducted from federal taxable income. After long, drawn-out disagreement, Republicans representing districts in California, New Jersey and New York secured a bump to $40,000, up from the $10,000 cap enacted under Trump’s 2017 tax law.

However, the cap comes with an income limit of $500,000, after which it phases down. Both the $40,000 cap and the $500,000 income threshold will increase annually at 1% until hitting a ceiling of $44,000 and $552,000.

Rep. Mike Lawler of New York said during debate that he “would never support a tax bill that did not adequately lift the cap on SALT.”

“This bill does that. It increases the cap on SALT by 300%,” Lawler said. “And I would remind my Democratic colleagues, when they had full control in Washington, they lifted the cap on SALT by exactly $0, zilch, zip, nada.”

Medicaid work requirements 

Energy and Commerce Chairman Brett Guthrie, R-Ky., said his panel’s bill would ensure Medicaid coverage continued for low-income families, individuals who are disabled and seniors through new work requirements and other changes.

“This bill protects coverage for those individuals by ensuring ineligible recipients do not cut the line in front of our most vulnerable Americans,” Guthrie said. “The decision by left-leaning state governments to spend taxpayer dollars on people who are ineligible for the program is indefensible. Medicaid should not cover illegal immigrants, deceased or duplicative beneficiaries, or able-bodied adults without dependents who choose not to work.”

The policy change would require those who rely on the state-federal health program, and who are between the ages of 19 and 65, to work, participate in community service, or attend an educational program at least 80 hours a month.

The language has numerous exceptions, including for pregnant people, parents of dependent children, people who have complex medical conditions, tribal community members, those in the foster care system, people who were in foster care who are below the age of 26 and individuals released from incarceration in the last 90 days, among others.

New Jersey Democratic Rep. Frank Pallone, ranking member on the committee that oversees major health care programs, said the Republican bill would not only cut funding for Medicaid, but also for Medicare, the program relied on by seniors and some younger people with disabilities.

“Republicans are stripping health care away from people by putting all sorts of burdensome and time-consuming road blocks in the way of people just trying to get by,” Pallone said. “The vast majority of people on Medicaid are already working. This is not about work. It’s about burying people in so much paperwork that they fall behind and lose their health coverage, and if someone loses their health coverage through Medicaid, this GOP tax scam also bans them from getting coverage through the ACA marketplace.”

While the GOP bill doesn’t directly address Medicare, he said, a federal budget law, known as the Pay-As-You-Go Act, would force spending cuts called sequestration to that health program.

“The Medicare cuts will lead to reduced access to care for seniors, longer wait times for appointments, and increased costs,” Pallone said.

States to share in food aid costs

House Agriculture Committee Chairman Glenn “GT” Thompson, R-Pa., pressed for support for his piece of the legislation, saying changes to the Supplemental Nutrition Assistance Program, or SNAP, are needed.

“SNAP is the only state-administered welfare program that does not have a cost-share component, and while the federal government funds 100% of the benefit, states are tasked with operating it,” Thompson said. “The only problem: They aren’t operating it well.”

He also cheered several of the package’s tax provisions, saying they would benefit farmers.

“The one big, beautiful bill makes permanent and expands the Trump tax cuts. It also prevents the death tax from hitting over 2 million family farms,” Thompson said. “It locks in the small business deduction, helping 98% of American farms stay afloat.”

Minnesota Democratic Rep. Angie Craig, ranking member on the panel, wrote in a statement that the proposed changes would “make America hungrier, poorer and sicker.”

“At a time when grocery prices are going up and retirement accounts are going down, we must protect the basic needs programs that help people afford food and health care,” Craig wrote. “As a mother and someone who needed food assistance at periods in my own childhood, I condemn this attempt to snatch food off our children’s plates to fund tax breaks for large corporations.”

Border security, air traffic control, EV fees

House Transportation and Infrastructure Chairman Sam Graves, R-Mo., said his piece of the package would combine “critical investments in border security, national defense and modernization of America’s air traffic control system, while eliminating wasteful spending and other deficit reduction measures.”

“Specifically, this bill addresses long overdue needs in the United States Coast Guard, which for over two decades has received less than half of the capital investment necessary to effectively carry out its critical missions,” Graves said.

The transportation section of the package, he said, includes $21 billion for the Coast Guard and $12.5 billion to modernize the air traffic control systems while establishing a $250 annual fee for electric vehicles and a $100 annual fee for hybrid vehicles that would go toward the Highway Trust Fund. That account has traditionally been funded through a gas tax. 

Washington Democratic Rep. Rick Larsen, ranking member on the transportation panel, said he wanted “to continue historic funding for transportation, infrastructure, and stronger and healthier communities.”

“Unfortunately, this reconciliation package leaves very little room for those investments,”  Larsen said.

“This bill causes immediate harm by yanking money from locally selected projects that our constituents in Republican and Democratic districts alike are counting on,” he added. “And for what? To help pay for the tax cuts for the richest Americans and largest and largest corporations.”

Student loan overhaul, medical research

House Education and Workforce Committee ranking member Bobby Scott, D-Va., urged opposition to what he called the “big, bad billionaires bill,” saying it would lead to a massive reshaping of higher education aid.

“The bill not only can increase the deficit, it has 4 million students who will lose their Pell Grants, 18 million children could potentially lose their free school lunch, 13.7 million people are set to lose their health care and everybody loses when the National Institutes of Health research is cut,” Scott said.

Natural Resources Committee Chairman Bruce Westerman, R-Ark., said his portion of the legislation would “generate over $20 billion in savings and new revenue for the federal government, primarily by direct royalty and lease fees from the sale of oil, gas, timber and mine resources, while curbing wasteful spending.”

“Our title reinstates onshore and offshore oil and gas lease sales, holds annual geothermal lease sales and ensures a fair process for critical mineral development nationwide,” Westerman said. “We’ve also directed the Forest Service and the Bureau of Land Management to utilize long-term timber sale contracts.”

The Trump administration released a Statement of Administration Policy on Wednesday urging GOP lawmakers to approve the legislation, when it still appeared several members of the party might delay or even block the bill in the House. 

“The One Big Beautiful Bill Act reflects the shared priorities of both Congress and the Administration,” the SAP states. “Therefore, the House of Representatives should immediately pass this bill to show the American people that they are serious about ‘promises made, promises kept.’

“President Trump is committed to keeping his promises, and failure to pass this bill would be the ultimate betrayal.”