The opening of this next part may be the easiest section of the entire bill. Section 72001 simply raises the U.S. debt limit by $5 trillion. That means the federal government is now allowed to borrow up to $5 trillion more to help pay for things like Social Security, defense, interest on the national debt, and other government programs. Not saying you are going to like it, just that it is easy.
The next section is not much longer and should make some of you happy. It’s called Ending Unemployment Payments to Jobless Millionaires. Basically section 73001 stops people who earned over a million the year from getting unemployment benefits funded by the federal government. If someone wrongly receives unemployment payments, they must pay the money back.
Starting in section 80001 we are moving into education benefits. With kids in college this is an area I am clearly interested in. Starting in 2026 some family assets like family farms, small family businesses, and fishing businesses won’t count against federal student aid eligibility, protecting family livelihoods. Next, loans for graduate students, professional students and parents will have new yearly borrowing limit to reduce excessive debt. By July 2028, all borrowers on income-driven plans must switch to either a new Repayment Assistance Plan (RAP) or updated Income-Based Repayment (IBR). RAP offers income-based payments, interest subsidies, and loan forgiveness after 30 years. This part could be tough, but unemployment and economic hardship deferments will end for new loans from July 2027, and forbearance will be limited to 9 months per 24-month period. On the flip side, borrowers can now rehabilitate defaulted loans twice instead of once. Public Service Loan Forgiveness will count payments made under the new RAP. Finally, the government will provide an extra $1 billion to improve student loan servicing and management. Overall, these changes aim to protect families, limit borrowing, simplify repayment plans, and improve loan management.
Section 83001 talks about Pale Grants. Starting in the 2026–2027 the government will begin counting foreign income when deciding who qualifies for a Pell Grant. Also, students whose financial need is too low will no longer be eligible. Also starting next year a new Workforce Pell Grant will be offered to students in short-term job training programs (8–15 weeks long) that lead to high-demand, good-paying jobs. These programs must be approved by the state and meet certain performance benchmarks, like having 70% of students finish and get jobs. Students cannot receive both regular and Workforce Pell Grants at the same time, and the aid counts toward their lifetime Pell limit. To ensure funding is available for all eligible students, the government is increasing its backup Pell Grant reserve to $12.67 billion. Lastly, students won’t be eligible for a Pell Grant if they already receive enough non-federal grant money (like from their state, school, or private scholarships) to fully cover their cost of attendance (tuition, fees, etc.). This prevents students from getting more grant money than their education costs.
Section 84001 is called accountability and it’s a doozy. Basically, is says students can’t get loans for majors that consistently produce low earnings for graduates, meaning they earn less than typical working adults with only a high school diploma. those programs will lose eligibility for federal loan funding. Schools will be given a chance to appeal before funding is cut and must warn students if their program is at risk of losing eligibility. Programs that improve after at least two years can reapply for eligibility. This change aims to prevent students from taking on debt for programs that don’t lead to decent-paying jobs. One of you directors out there needs to hire my son for your next movie at a good wage if you want to keep your major alive. Don’t do it for us, do it for the future program.
The next section 85001 to 85002 basically stops people from being able to sue their college for being misled when they borrowed money or because their college closed down. They were able to under the 2022 Department of Education rules but are going back to the 2020 rules.
Good stuff today, hopefully I will be able to wrap this all up in the next couple days.
