What a Democratic Congress can and cannot change for higher education

Many college and university leaders spent the past two years waiting for the midterms. Now that Democrats have won control of the House and the Senate, the question we hear most often is how much of what they’ve been adjusting to will actually change.

Our answer is that less will change than many college leaders hope. The most consequential higher education policies of the past two years are written into law or into final federal regulations, and President Trump holds a veto until January 2029. In October, he told reporters that he would veto every bill a Democratic Congress sends him, though he has since said he’s open to a deal with Democrats on immigration.

Drawing on our research and our conversations with campus leaders, we’ve identified five things leaders should know as the new Congress takes shape, along with the steps we recommend taking now.

1. OBBBA will stay in place through 2028

Many of the most significant changes of the past two years came through the One Big Beautiful Bill Act (OBBBA), and all of them are written into statute:

• Graduate borrowing: Grad PLUS ended for new borrowers, and most graduate students can now borrow $20,500 a year and $100,000 in total.
• Repayment: A single Repayment Assistance Plan replaced the income-driven plans for new loans.
• Accountability: A new earnings test will end federal loan eligibility for programs whose graduates earn less than workers with the next-lower credential.
• Endowments: The excise tax on the largest private endowments rose to as much as 8%.

Democrats have introduced bills to restore Grad PLUS, reduce the endowment tax, and double the Pell Grant. None have Republican support, and none are likely to survive a veto. We also don’t expect relief on the earnings test, because some Democrats support it: it targets programs that leave students with debt they can’t repay.

2. Courts, more than Congress, will check the administration’s reach

Much of the relief leaders may credit to the election came from judges months ago, and pending cases may matter more than anything Congress can pass before 2029. Federal courts have struck down the 15% cap on indirect-cost payments at four research agencies, vacated the Education Department’s February 2025 letter on diversity programs and a rule that would have narrowed Public Service Loan Forgiveness, and postponed a rule that would have limited how long international students may stay in the country.

In June, a federal judge also stayed the department’s narrow definition of a “professional degree.” Since then, students in graduate nursing, physician assistant, physical therapy, and several other health programs have been able to borrow at the professional limit of $50,000 a year. The order is temporary, and the department has advised colleges to consider holding those students to the lower graduate limit in case it’s reversed.

3. Spending bills will give Democrats their greatest leverage

The new majority’s real power comes from the spending bills Congress must pass to keep the government open. In those bills, we expect Democrats to:

• Fund the Pell Grant by covering a shortfall of $15 billion to $17 billion
• Protect research overhead by renewing and extending limits on changes to negotiated overhead rates
• Keep Education Department offices in place by trying to stop their transfer to other agencies, an effort Senator Lisa Murkowski has backed

The wording will matter. A provision barring the National Institutes of Health from changing negotiated overhead rates held up in court. General language in this year’s spending law, which said the department had no authority to transfer its core duties, didn’t stop the transfers.

Democrats will also lead the congressional committees. After 2023, Republican-led committees used hearings to question college presidents. Democratic chairs are expected to examine the administration instead, including the Education Department’s reorganization, research grant terminations, and the settlements negotiated with individual colleges.

4. The White House will keep its grant, investigation, and immigration powers

Some decisions stay with the executive branch no matter which party controls Congress:

• Terminated grants: After two Supreme Court rulings in 2025, colleges whose grants are terminated can generally seek money damages but can’t get the grant restored.
• Investigations: The Education and Justice Departments decide which colleges to investigate under civil rights law.
• Visas: The State Department controls student visas, and the president can restrict entry to the country by proclamation.

Congress can investigate those decisions and raise their political cost, but it can’t stop them without the president’s signature.

5. New governors can pause, but not reverse, state laws

Democrats flipped at least five governorships, including Georgia and Nevada, and now hold a majority of governors’ offices for the first time in 16 years. For higher education, Texas, Ohio, and Iowa matter most. Their Republican governments passed some of the most sweeping recent state laws on public colleges, covering diversity offices, faculty governance, and required courses. Repealing those laws requires the legislatures, and Republicans still control at least one chamber in each state.

New governors can veto further restrictions, though, and in all three states Republicans now lack the votes to override a veto. New governors will also reshape university boards as members’ terms expire, though Senate confirmation slows that process in states like Texas.

What higher education leaders should do now

Plan around what will stay

OBBBA’s loan limits, earnings test, and endowment tax will shape budgets through at least 2028, so most institutions should treat them as fixed:

• Budget graduate programs around the new loan limits.
• Identify which programs are at risk under the earnings test before the first results arrive in 2027.
• Keep civil rights compliance records current, because investigations will continue.

Prepare for what could change

• Decide whether to hold students in programs covered only by the court stay to the lower graduate loan limit.
• Plan 2027-28 aid offers for the possibility that Congress hasn’t set the Pell Grant maximum when they go out.
• Expect congressional committees to request institutional information.
• Institutions that signed settlements with the administration should assume congressional committees may examine how those agreements were negotiated.

Watch four open issues

Looking ahead

College and university leaders should also be careful not to read the election results as a vote of support for higher education. Voters were driven mainly by the cost of living, and higher education rarely came up in campaigns. Public confidence in the sector fell to 38% in Gallup’s June survey, and confidence among Democrats fell to 50%, a record low for the party that now controls Congress. Candidates in both parties promoted workforce training and tuition limits. The new majority will scrutinize the administration rather than colleges, but it is unlikely to defend the sector against concerns about cost and value that voters in both parties share.

That makes waiting for the next election a poor strategy. The first real chance to revisit OBBBA will come with the next president, who takes office in January 2029, but because these concerns cross party lines, even a new administration may keep much of OBBBA’s accountability framework. Until then, the changes that reach campuses will come mainly from spending bills, court rulings, and state legislatures. The best-positioned institutions will be those that plan around OBBBA now and can demonstrate the value of their degrees to students and families. That’s where EAB is focusing our work with our college and university partners.

Election results are projections as of Nov. 12, 2026. The Alaska Senate race and several House races had not been called.

Ben Court

Senior Director, Research

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