CounterCurrent: Week of 05/26/2025
As the spring semester is winding down and students and faculty alike are gearing up to take their summer break, things are heating up when it comes to new controversy surrounding higher education.
At the forefront of many people's minds is the “One Big Beautiful Bill Act” or H.R.1, which just passed the House by a narrow margin. Now it’s up to the Senate to modify and pass their own bill. The bill passed by the House would reshape higher education, slashing nearly $350 billion through risk-sharing, stable student loan repayment plans, and funding cuts over the next ten years. This reconciliation bill comes as the Trump administration is also cutting research funding and capping research grant reimbursements, while simultaneously expanding apprenticeship programs.
What exactly will this Big Beautiful Bill mean for higher education?
First off, future Pell Grant funding will be cut for students taking less than 15 credits per semester—effectively setting a minimum requirement of maintaining a “full time” status, when there was not a minimum previously, to receive the grant funding. This would turn around the six year degree track, incentivizing students to graduate within four years or less, lowering costs for schools and government funded programs alike. According to the Congressional Budget Office (CBO), this change is estimated to save $7.1 billion over the next ten years, and cutting Pell funding to part time students will save nearly $690 million over the same period. This will affect more than half of students currently enrolled in the program as they would receive smaller grants. Because of this, “CBO estimates that about one-fifth of expected grant recipients would enroll in additional credits to increase their award amounts.”
Second, colleges and universities will be on the hook for unpaid student loans—known as risk-sharing—which the National Association of Scholars (NAS) has argued for instituting. Institutions would pay a penalty on unpaid student loans, saving the government an estimated $5.3 billion over the next decade, according to the CBO. The proposed risk-sharing aspect of the bill is just one of the overhauls to the current student loan system, as the bill would also “end Grad PLUS loans along with subsidized loans, restrict Parent PLUS loans and tie how much students can borrow to the median cost of a program.”
Finally, college and university endowments will be taxed at a higher rate and endowment tax will be expanded to cover all forms of investment income. Endowments of private institutions will fall into new tax brackets proposed by the bill. As one example, universities with endowments worth more than $500,000 per student pay a mere 1.4 percent tax currently—under the new plan, some institutions could see that percentage increase to 21 percent. Also, colleges and universities would not be able to include international students in their student body tally, effectively making more institutions beholden to the new endowment tax brackets. This move could force schools to actually use more of their hoarded endowments for good purposes—as many currently sit on millions or billions of dollars while complaining about government funding cuts. Interestingly, Harvard University and Hillsdale College, which typically fall on opposing sides of major issues, have both voiced concerns regarding the endowment tax—Hillsdale even arguing that the tax punishes self-sufficiency and encourages reliance on federal programs.
The second portion of the proposed endowment tax increase—i.e., the expansion of the endowment tax to cover investment income—is explained well by an Inside Higher Ed article, which states,
This means that any royalties from a private university’s intellectual property, including patents and copyrights, would be taxable. Additionally, the legislation removes colleges’ exemption from the unrelated business income tax so that all institutions, public and private, would be taxed for royalties from licensing their name and logo.
Additionally, the bill proposes cuts to Medicaid and Supplemental Nutrition Assistance programs.
Opponents complain that the bill will “make it harder for students to go to college.” One problem, barriers to entry already abound thanks to these protectors of the status quo. Nearly every college in the nation comes with a rolling list of side effects. “Such side effects may include but are not limited to: decades of debt due to skyrocketing tuition costs, racially and ideologically motivated admissions and hiring quotas, a drought of intellectual diversity, a cozy relationship with anti-American agitators and foreign powers, and so much more.”
While placing colleges and universities on the hook for student loans—an NAS recommendation for nearly a decade—is no panacea to combat bloat and corruption plaguing higher education, it along with these other important measures are a good way to begin rebuilding our institutions of higher education.
Should it pass the Senate and make its way to the President’s desk, the One Big Beautiful Bill Act seems to be a promising way to level the playing field—shaking up current higher education practices which serve institutional greed and ideological capture, and forcing institutions to realign their missions to ensure students receive an education instead of indoctrination.
Until next week.
CounterCurrent is the National Association of Scholars’ weekly newsletter, written by the NAS Staff. To subscribe, update your email preferences here.
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