With a March 14 deadline to finalize FY 2025 appropriations, Congress faces mounting pressure to prevent a partial government shutdown. If lawmakers fail to act by the end of April, automatic spending cuts will take effect under the Fiscal Responsibility Act.
Earlier this week, the Associated Press reported that congressional appropriators have abandoned negotiations on overall funding levels and will instead pursue a yearlong continuing resolution, effectively maintaining federal government funding at last year’s levels.
Meanwhile, efforts by congressional Republicans to move a massive reconciliation bill advanced this week, despite major difference between the House and Senate approaches. The ultimate outcome of this effort could have major implications for institutions and students.
The House has proposed a sweeping budget plan that includes $4.5 trillion in new or extended tax breaks alongside at least $1.5 trillion in spending cuts. As for the potential cuts, several concerning proposals have emerged, including steep tax increases on university endowments, new taxes on college scholarships, and the elimination of critical student loan repayment options like SAVE. The Senate is advancing a more targeted $350 billion package focused on border security and defense, avoiding the broader tax and spending debates for now.
Proposals from the College Cost Reduction Act (CCRA) introduced last Congress, could be folded into budget reconciliation. The House budget resolution mandated that the House Committee on Education and the Workforce find at least $330 billion in savings, while the Senate’s requires the education committees in both chambers find at least $1 billion, but likely far more.
ACE and the higher education association community are concerned with the possible inclusion of CCRA’s risk-sharing model, which would force colleges and universities to pay an annual penalty based on their former students’ repayment, among other factors. While the groups share the goal of accountability, this approach could have devastating consequences, particularly for institutions that serve low-income students.
With Republicans using reconciliation to bypass the Senate filibuster, these proposals could advance quickly.