Higher Education Portion of the House Subcommittee’s Fiscal Year 2027 Proposal Would Once Again Reshape Higher Education

Overview
Earlier today the House Labor, Health and Human Services, Education, and Related Agencies Subcommittee voted along party lines to advance legislation allocating federal funds for fiscal year 2027 (October 1, 2026 – September 30, 2027). Contained within the broad legislation funding the Departments of Labor, Health and Human Services, and Education, the overall allocation of funds for the Department of Education was reduced to a total of $70.7 billion – $8 billion less than current year spending (10% below the current FY26 enacted funding level).

CSPEN is in the process of developing a more detailed summary of the Subcommittee’s bill, which we will provide next week in both email transmissions and as part of next week’s CSPEN Federal Legislative & Regulatory Update webinar. However, given the significance of several key proposals contained within the legislation, we wanted to highlight them immediately.

Below is a brief summary of key facets of the bill as they relate to higher education.

Federal Pell Grants
The bill allocates an increase of $250 million in the Federal Pell Grant program, raising the overall line funding to $22.7 billion. The overall funding increase would provide for a proposed $50 proposed increase in the Federal Pell Grant maximum ($7,395 would come $7,445).

Federal Student Loans
The bill, among several specific student loan provisions, proposes the elimination of Federal Direct Stafford Loan subsidies for undergraduate students/borrowers seeking a long on or after July 1, 2027. Student borrowing to finance their undergraduate education if the proposal becomes law would be obtained under a revised Federal Unsubsidized Stafford Loan framework.

Outcomes Data Collection
The bill provides directed funds for the Department of Education to “carry out rigorous and independent evaluations and to collect and analyze outcome data for any program authorized by the HEA.”

Prohibition on Implementation of Specific Regulations
The bill prohibits the implementation, administration, or enforcement of the regulatory changes to the Borrower Defense to Repayment regulations published on November 1, 2022, and the 90/10 Rule regulations published on October 28, 2022.