In the final part of this series, this blog post will examine a few additional  education provisions that were included in the final version of the One Big Beautiful Bill Act.

A New Accountability Standard for Degree Programs

One of the more significant changes is the creation of a new accountability regime for college degree programs, similar to Gainful Employment. Under the new system, any degree program that provided students with federal student loans must prove that its graduates are earning more than they likely would have with just a high school diploma.

Specifically, for undergraduate programs to remain eligible for the federal student loan program, the median former student (who’s working and not enrolled in more education) must earn more than the median earnings of 25–34-year-olds in their state who hold only a high school diploma or equivalent. If a program repeatedly fails this test (in two out of three consecutive years), it loses access to federal loans.

The new accountability system would not apply to non-degree certificate programs.

Expanded Uses for 529 Plans

The bill broadens the uses of 529 savings plans. Originally limited to college costs and up to $10,000 per year in K–12 tuition, 529 funds can now cover additional educational expenses like standardized test fees, specialized educational therapies and workforce credentials, giving families more flexibility to use these tax-advantaged savings.

Caps to Student Loans

Graduate and parent borrowers will face tighter federal loan limits. The bill eliminates the Grad PLUS loan program entirely, which currently allows graduate students to borrow up to the full cost of attendance beyond their Stafford loans. Instead:

• Graduate students in nonprofessional programs like Master’s and PhD tracks will be capped at $20,500 per year and $100,000 total in unsubsidized Stafford loans.
• Professional students (law, medical, dental) will have a higher cap of $50,000 per year, with a $200,000 lifetime maximum.

Parent PLUS loans, which parents can use to help pay for their child’s undergraduate education, are also scaled back. The current system allows parents to borrow up to the full cost of attendance. Under the new law, that limit would drop to $20,000 per year per dependent student, with a lifetime cap of $65,000.

All federal borrowers, regardless of program or loan type (except Parent PLUS), will face a new aggregate borrowing limit of $257,500. Notably, this cap does not adjust for any amounts already paid back or forgiven. Students currently enrolled can keep borrowing under the old limits for up to three more years or until they finish their degree.

Updates to Student Loan Repayments

Finally, the new law eliminates nearly all existing repayment plans for new borrowers. Instead, the law creates two options: a single standard repayment plan and a new income-driven option called the Repayment Assistance Plan (RAP).

RAP would gradually raise the percentage of a borrower’s income used to calculate payments, starting at 1% and rising to 10% over time. For many, this means slightly higher monthly payments compared to current income-driven repayment (IDR) plans, especially for higher-income borrowers. However, the government would help cover unpaid interest and chip away at the principal balance each month for low-income borrowers. The maximum repayment term for RAP would stretch to 30 years, compared to 20 or 25 years under the current IDR plans (or as short as 10 years under the SAVE plan).

If you have any questions or would like to discuss this more in-depth, please contact ACTE’s Government Relations Manager, Jimmy Koch (jkoch@acteonline.org).

In the next part of this series, we will take a closer look at the other changes made to the Pell Grant program made in the One Big Beautiful Bill Act.

Addressing the Looming Pell Shortfall

Beyond short-term Pell, the bill also tackles the projected shortfall in the Pell Grant program’s funding. The Congressional Budget Office (CBO) has estimated a significant gap beginning in fiscal year (FY) 2026 or roughly $70 billion over the next decade.

To help close part of this gap, the reconciliation bill provides $10.5 billion in mandatory funding as a stopgap measure. While this will not fully eliminate the projected shortfall, it represents a critical down payment to help stabilize the program for the near term and protect students from unexpected funding cuts.

Eliminates Pell Eligibility for Certain Students

The bill would eliminate eligibility for students and their families with high enough incomes and assets that their Student Aid Index (SAI) is twice the amount of the maximum Pell Grant.

For students receiving other non-Title IV grant aid, the bill would also restrict Pell eligibility. Specifically, for “any period” that the student receives grant aid from other federal programs, institutional aid, state aid, or a private source that together equals or exceeds the student’s cost of attendance (COA), the student would not be eligible to receive a Pell Grant.

This could exclude institutional merit scholarship recipients and students receiving grants from free college programs, private foundations, or other entities so long as those funds fully cover the student’s COA (i.e., not just tuition, but also housing, transportation, books, childcare, etc.). Additionally, these periods would count against a student’s 12 semesters of Pell eligibility even though students would not receive Pell grants.

ACTE will continue to post about the various provisions included in the One Big Beautiful Bill Act. If you have any questions or would like to discuss this more in-depth, please contact ACTE’s Government Relations Manager, Jimmy Koch (jkoch@acteonline.org).

In the next segment of this series, ACTE will take a closer look at the school voucher provisions included in H.R. 1, the One Big Beautiful Bill Act. The purpose of this provision is to make private and religious K-12 schools more accessible.

At the heart of the provision is a dollar-for-dollar federal tax credit that fully reimburses donors for the first $1,700 they contribute to non-profit organizations that provide tuition vouchers. These scholarship-granting organizations help families pay for private school tuition, opening new options beyond traditional public schools.

Unlike the original House version of the bill, which capped the total tax credit at about $5 billion per year, the final version does not include an overall limit on the total amount of tax credits that can be claimed.

Eligibility for these scholarships is also targeted. Students whose family income does not exceed 300% of their area’s median gross income can qualify for aid through these scholarship-granting organizations.

States play an important role in how this new program works. First, states may opt-out of the program completely. If a state chooses to participate, it must oversee the scholarship organizations that receive donations and distribute the tuition vouchers to students. This means states would be responsible for vetting these groups to ensure they meet program requirements and deliver scholarships appropriately.

Supporters of the provision argue that it will increase educational options for families, especially for lower- and middle-income households that want alternatives to local public schools but struggle to afford tuition. Critics, meanwhile, raise concerns about public dollars indirectly supporting private and religious education, and how this may affect funding for public schools.

This provision goes into effect starting with the 2027 tax year, and regulations will have to be drafted to determine how the program will operate.

ACTE sent a letter to the Senate Finance Committee on June 12 asking the committee to reject school vouchers in the bill and will be monitoring the implementation closely.

ACTE will continue to post about the various provisions included in the One Big Beautiful Bill Act. If you have any questions or would like to discuss this more in-depth, please contact ACTE’s Government Relations Manager, Jimmy Koch (jkoch@acteonline.org).

ACTE is seeking feedback from CTE educators on how the Administration’s recent actions are impacting you and your students or have the potential to impact you and your students in the future. 

On June 30, the Department of Education (ED) announced that it was withholding approximately $7 billion in fiscal year (FY) 2025 formula grant funding to states that was due to be distributed on July 1, affecting adult education, professional development, afterschool initiatives and other programs under the Every Student Succeeds Act (ESSA).  

In addition, court documents disclosed recently revealed that ED’s Office for Civil Rights (OCR) dismissed more than 3,400 complaints from March 11 to June 27, a significant increase over prior years. This follows OCR layoffs earlier this year at ED and the closure of seven of 12 civil rights enforcement offices nationwide.  

On July 11, ED issued a notice of interpretation on using federal funds to serve undocumented immigrants. The notice interprets many postsecondary education programs, including programs and activities funded by Perkins V, as providing federal public benefits under the Personal Responsibility and Work Opportunity Reconciliation Act and thereby subject to citizenship verification requirements under that law. 

On July 14, the Supreme Court cleared the way for the U.S. Department of Education to proceed with a reduction in force of approximately 1,400 employees. The Court’s decision also enables ED and the Department of Labor to execute a previously signed interagency agreement, which had been held up as part of litigation, that will move the administration of Perkins and WIOA Title II adult education and literacy programs to DOL.

ACTE wants to hear from you about the potential impacts of these actions. If these or other recent federal activities have affected your work, or have the potential to do so, please fill out this short form. We also encourage you to contact ACTE’s Government Relations Manager, Jimmy Koch, with questions or experiences you’d like to share. 

On July 10, the U.S. Department of Education (ED) announced plans to issue a new Notice of Interpretation related to the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA). The new interpretation was published in the Federal Register on July 11, and changes which federal programs are classified as providing “federal public benefits” and are thus subject to citizenship verification requirements under that law.  

The notice is in response to the President’s February 19, 2025, Executive Order (EO) 14218, “Ending Taxpayer Subsidization of Open Borders.” It reiterates existing legal requirements regarding the availability of “public benefits” for U.S. citizens and non-exempted nonresidents and advances a new legal interpretation that many postsecondary education programs, including postsecondary programs or activities funded by the Carl D. Perkins Career and Technical Education Act (Perkins V), fall under the purview of the PRWORA. At this time, it does not appear that K-12 programs are impacted. 

Due to this new interpretation, the Trump Administration issued a formal notice to leaders in the education and workforce communities reiterating grantees’ responsibility to ensure “public benefits” are not provided to undocumented immigrants.

Unlike some federal programs, Perkins V funds are not provided directly to individuals, so the administrative burden of determining whether funding is “used to support programs and services that serve illegal aliens” could be quite complex. We are actively analyzing the notice, and will provide more guidance as it becomes available. In the meantime, we encourage you to review the linked documents carefully and consult with your legal counsel with any questions.

After months of negotiations and revisions, President Trump signed the final reconciliation bill, the One Big Beautiful Bill Act, over the July 4th weekend. The final bill included several significant provisions for education. This series will take a closer look at several of these provisions, starting with the expansion of Pell Grant eligibility for short-term training programs, a long-standing priority for ACTE.

Under the new law, students will be able to use Pell Grants for programs between eight and 15 weeks, covering 150 to 599 clock hours of instruction. This is a major shift aimed at making workforce training more affordable and accessible for students who need to quickly upskill or reskill. The total amount of funding available to students through these “Workforce Pell” grants will be prorated based on the number of clock hours, credits or weeks of instruction.

To be eligible for short-term Pell, a program must align with high-skill, high-wage, or in-demand industry sectors or occupations and must lead to a recognized postsecondary credential, in most cases that is stackable and portable across more than one employer. The program must also provide credit toward a related certificate or degree program, and have been offered for at least one year prior to becoming Pell eligible.

Several quantitative requirements are also included for eligibility, including that the program must have a completion rate of at least 70% within 150% of the normal time to completion,  have a job placement rate of at east 70% measured 180 days after completion, and have costs that do not exceed the median value-added earnings of graduates (determined by comparing median wages after three years and 150% of the federal poverty line). Both the Governor of a state and the Department of Education will play a role in approving programs for short-term Pell.

The final version of Short-Term Pell is narrower than earlier drafts. The original proposal would have extended eligibility to unaccredited programs, but the Senate parliamentarian ruled that this provision violated reconciliation rules. Lawmakers ultimately removed that language to ensure the bill’s compliance.  Non-credit programs are not specifically excluded from the bill, but  the Department of Education will have to decide whether they can demonstrate the necessary equivalency to qualify for funding.

Implementation of Workforce Pell is slated for July 1, 2026, aligning with the 2026–2027 academic year. ACTE will provide more guidance in the coming months to ensure a smooth rollout for our members as the implementation begins.

ACTE will continue to post about the various provisions included in the One Big Beautiful Bill Act. If you have any questions or would like to discuss this more in-depth, please contact ACTE’s Government Relations Manager, Jimmy Koch (jkoch@acteonline.org).

Bridging the Middle-skills Gap: A report from the Georgetown University Center on Education and the Workforce (CEW) examines the gaps between high-paying jobs that require postsecondary credentials such as certificates and associate degrees, categorized in the literature as high-paying middle-skills jobs, and the projected size of the middle-skills workforce. CEW further defines high-paying middle-skills jobs as ones where early-career workers have annual earnings above $55,000 and mid-career workers have median annual earnings of $83,300.

The researchers analyzed national education and workforce data and made several findings: 

• Annually, the nation faces a shortage of nearly 712,000 certificates and associate degrees aligned with high-paying middle-skills jobs in four occupational groups: skilled trades, management, STEM and protective services. These shortages are expected to persist until at least 2032. 
• Health care is the only occupational group not projected to face shortages of certificates and associate degrees aligned with high-paying middle-skills jobs. 
• Men, Asian and white individuals are more likely to earn high-paying middle-skills credentials compared to women, Black and Hispanic individuals. In addition, white men hold more high-paying middle-skills jobs in the skilled trades, management, STEM and protective services occupational groups, while white women hold more of these jobs in the health care group. 

Examining the NAF Academy: An article by Edward C. Fletcher Jr., In Heok Lee, Tong Xing Tan and Gen Li in Innovative Higher Education studied the college matriculation rates of students who attended a National Academy Foundation (NAF) career academy.  

The researchers analyzed data from the 2019 graduates of over 400 NAF academies nationwide and found that NAF academy students who engaged in some combination of NAF course completion, internships and/or dual enrollment were significantly more likely to matriculate into college compared to NAF academy students who did not participate in those activities. Male, white and Asian NAF students were more likely to matriculate into college than other racial/ethnic groups, and students enrolled in engineering or finance-focused academies were more likely to matriculate into college than students in hospitality-focused academies.  

The researchers also examined the levels of stress in communities surrounding the academies (stress related to economic, education, health, housing and crime-related issues) and found that students who matriculated into college attended academies in communities with lower stress levels than students who did not matriculate into college. 

Making Career Readiness Count: A report from Advance CTE and the College in High School Alliance examines how states have developed and implemented career-focused indicators in their state and federal accountability systems.  

The analysis found that, as of 2024, 43 states include at least one career-focused indicator in their state or federal accountability system. This represents a slight increase from 2019 and a substantial increase from 2014. Indicators that states utilize the most are dual enrollment success (32), industry-recognized credential attainment (26), achievement on an academic career readiness assessment (21), CTE completion (21) and experiential/work-based learning (16). Of the 43 states that use a career-focused indicator, 35 publicly report college and career readiness data but only 13 disaggregate that data for each indicator in their accountability systems.  

Postsecondary Persistence and Retention: The National Student Clearinghouse Research Center released new data on the rates of persistence (i.e., remaining enrolled at any institution) and retention (i.e., remaining enrolled at their starting institution) for beginning postsecondary students, tracking persistence and retention in the students’ first spring and second fall in college. Major takeaways from the data include: 

• Among students who entered postsecondary education in fall 2023, the national persistence rate for fall 2024 was 77.6% and the national retention rate was 69.5%. These represent slight increases compared to the fall 2022 cohort. 
• While public and private four-year institutions saw increased persistence and retention rates for both first spring and second fall, community colleges held steady for first spring but saw small declines in second fall. 
• Trades-related certificate programs, such as precision production and construction, made up four of the top five certificate programs with the highest second fall persistence rates.  
• Part-time students fell far behind full-time students for both persistence and retention. 
• Younger students (aged 20 or below) were more likely to persist and be retained than older students.  
• Hispanic, Black and Native American students have retention rates lower than the national average and have mixed persistence rates.