Updated: 14 Jul 2026
Sweeping policy changes are transforming Higher Education.
WORKFORCE PELL: The 2025 Budget Reconciliation act (OBBBA) established a Workforce Pell grant for shorter workforce training programs beginning on July 1st, 2026.
Impact
Workforce Pell will increase access to affordable workforce programs for students. Since the program counts towards students’ lifetime Pell eligibility, it is important to ensure Illinois’ implementation is effective in the little time provided to plan and vet programs.
Illinois Response
- The Community College Board, Board of Higher Education, Department of Commerce and Economic Opportunity, Department of Employment Security, Illinois Student Assistance Commission, Illinois Workforce Innovation Board, and the Governor's Office have been working diligently to roll out this program in July 2026.
Possible Federal Action:
- Congress could work to address the $17 billion Pell shortfall to ensure students can reap the benefits of Pell. This is especially pressing when new programs like the Workforce Pell will be funded through this line item. This should be done while protecting students’ access to other education programs and aid sources.
Possible State Action:
- To ensure proper implementation, documentation, and public transparency, the state should ensure robust cross-sector data collection and reporting.
- Illinois advocates, agencies, and higher education institutions should monitor implementation of the program to ensure residents are protected from predatory programs and are adequately informed about their options.
HIGHER EDUCATION FUNDING: Over the past year, the federal administration has attempted to abruptly terminate over $3.2 billion in federal grant funding for institutions of higher education. This departure from longstanding federal grantmaking practices has been used to leverage federal funding to push universities to adopt administration priorities, a practice that extends beyond established legal requirements and longstanding understandings of institutional and academic autonomy.
$16.6 mil.
In federal grants terminated at University of Chicago
$49 mil.
In federal grants terminated across the University of Illinois system
$75 mil.
Paid by Northwestern to unfreeze $790 million in federal research funding
Impact
Universities rely heavily on federal funding to operate and to conduct important research, creating significant pressure to adhere to policies that might not otherwise be consistent with their priorities, or that might exceed appropriate federal intervention. In response to this tension, some institutions have preemptively complied with the administration by eliminating DEI-related programs or initiatives.
Possible Federal Action:
- Congress might hold hearings with the Department of Education and Department of Justice to assess their tactics and motives. These conversations would ideally result in a stronger process that protects universities and students as investigations play out.
- Congress might pass legislation limiting the USED's ability to unilaterally cancel grants.
Possible State Action:
- State agencies and advocates should work to ensure universities understand the bounds of new requirements and avoid over-compliance.
- The myriad federal pressures and funding uncertainties underscore the need for the Illinois General Assembly to adopt a reliable funding model, such as the Adequate & Equitable Funding (AEF) formula.
BORROWING LIMITS: The 2025 Budget Reconciliation Act (OBBBA) created new borrowing limits and definitions for “graduate” and “professional” borrowers. Instead of being able to fund the full cost of attendance with loans, students in graduate programs will be capped at $20,500 per year, while students in professional programs will be capped at $50,000 per year. Additionally, “professional” was defined to a limited number of degrees, such as Medicine, Dentistry, and Law, omitting fields such as teaching and nursing. On June 25th, 2026, federal courts halted the nationwide implementation of the new definition for “professional” programs, provisionally expanding the list of qualifying professions to include fields like nursing, while maintaining the loan caps and continuing to exclude education degrees.
Impact
These changes may lead to greater strains in the workforce in high-demand/low-wage careers like teaching, early childhood education and care, and social work. If the court order is lifted and the limited definitions move forward, the changes could impact high-demand/high-cost careers like nursing, counseling, and school psychology.
Illinois Response
- On May 19th, Illinois joined a lawsuit with 24 other states challenging the new professional and graduate categories
Possible Federal Action:
- Advocates should continue relaying to their Congressional representatives how the new borrowing limits will impact their educational opportunities. In turn, members of Congress might consider using their platform to elevate the ongoing impacts their constituents share.
- Congress could consider how these changes will increase affordability challenges for students and act to address the misalignment.
Possible State Action:
- The Illinois General Assembly should prioritize supporting higher education institutions as they work to keep tuition and fees affordable, reducing students’ reliance on loans. This can be done through revamping how the state funds institutions through the adoption of a reliable funding model, such as the Adequate & Equitable Funding formula (AEF).
LOAN REPAYMENT: The 2025 Budget Reconciliation Act (OBBBA) overhauled loan repayment options, eliminating the Income-Contingent Repayment, PAYE, REPAYE, and SAVE plans, and replacing them with a standard plan and a new income-based plan, the Repayment Assistance Plan (RAP).
Impact
The reduction in options for loan repayment, which went into effect on July 1st, 2026, will make it more difficult for students from low-income backgrounds to finance their education. Undergraduate borrowers under the REPAYE plan who were previously paying 5% of their discretionary income towards their loans could see their payments increase to 10% of their discretionary income.
Possible Federal Action:
- Congress and the Department of Education should expand repayment options to better serve borrowers in a variety of financial situations.
Possible State Action:
- The Illinois General Assembly should consider bolstering state financial aid programs, including its Monetary Award Program (MAP), to ensure higher education remains accessible for all students.
- The Illinois General Assembly should revamp its method of funding institutions of higher education through the adoption of a reliable funding model, such as the Adequate & Equitable Funding formula (AEF), that would support higher education institutions so they can work to keep tuition and fees affordable, reducing the reliance on student loans.
INTERNATIONAL STUDENT ENROLLMENT: More restrictive immigration requirements have led to a significant uptick in denials and revocation of visa applications for international students, and lowered student visa caps. As a result, new international student enrollment at U.S. colleges decreased by 7.2% in the 2024-2025 school year.
27+
Illinois universities with declining international student enrollment
62%
Drop in international enrollment at DePaul University
25%
Drop in international enrollment at University of Illinois Springfield
425
Staff laid off by Northwestern in July 2025 due to financial strains such as reduced international enrollment
Impact
International students and faculty have contributed to both short-term and long-term innovation and economic growth. While it is sensible to review applications for basic safety purposes, broader restrictions untethered to legitimate security concerns undermine the richness of university life, institutional stability, and the ability to attract and retain talent in the short and long term.
Possible Federal Action:
- Congress should consider how to balance legitimate security issues with responsible protections for international student visa seekers to ensure students looking to obtain their education in the United States – bringing tuition and talent – are able to do so.
- Members of Congress might send a letter to Secretary Rubio voicing their concerns over the visa changes and requesting that the State Department re-examine its student visa policies.
- Congress might request the Government Accountability Office (GAO) and/or the Office of the Inspector General to investigate the legality of revoking, denying, and capping international student visas and whether the Executive Branch has exceeded its authority.
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