Report on Legislative Changes to U.S. Higher Education and Implications for Sustainable Development Goals

Introduction

Recent legislative changes to the federal student aid system in the United States present significant challenges to the advancement of several Sustainable Development Goals (SDGs). The new policies, which include stricter borrowing caps, reduced repayment options, and new institutional accountability measures, are projected to impact access to higher education, student welfare, and institutional viability. This report analyzes these changes through the lens of the SDGs, with a particular focus on SDG 4 (Quality Education), SDG 10 (Reduced Inequalities), SDG 8 (Decent Work and Economic Growth), and SDG 1 (No Poverty).

Impact on SDG 4: Quality Education and SDG 10: Reduced Inequalities

The core of the legislative changes directly affects the accessibility and equity of higher education, posing a threat to the principles of SDG 4 and SDG 10.

Student Borrowing Caps and Loan Program Limitations

New restrictions on federal student loans are expected to create significant financial barriers for students, potentially widening the inequality gap.

• Elimination of Grad PLUS Loans: New graduate students will lose access to Grad PLUS loans, which previously offered income-driven repayment plans and public service loan forgiveness opportunities. This change limits financial pathways for advanced degrees, undermining SDG 4’s target for equitable access to tertiary education.
• Parent PLUS Loan Restrictions: These loans are now capped at $20,000 per year with a $65,000 aggregate limit, restricting a key funding source for undergraduate students and potentially increasing inequality (SDG 10).
• Lifetime Borrowing Limits: A universal lifetime borrowing limit of $257,500 has been established for all federal student loans. Specific caps have been implemented for graduate and professional students:
  1. Professional Degree Programs (e.g., medicine, law): Limited to $50,000 per year, with a $200,000 lifetime cap.
  2. Nonprofessional Graduate Programs: Limited to $20,500 per year, with a $100,000 lifetime cap.

These caps are reportedly insufficient to cover the full cost of attendance at many institutions. For example, the cost for UNC School of Law residents exceeds $60,000 annually, and medical school graduates average $240,000 in debt. This discrepancy will likely force students into private loan markets, which lack the protections of federal loans, thereby increasing financial risk and jeopardizing equitable access to quality education (SDG 4).

Reduction of Repayment Plan Options

The consolidation of seven repayment plans into two options further constrains financial flexibility for graduates, impacting their ability to achieve economic stability.

• The bill eliminates several income-driven repayment plans, including the most affordable options, SAVE and PAYE.
• New borrowers will choose between a standard fixed-payment plan and a single income-driven plan, the Repayment Assistance Plan.

This reduction in choice could lead to higher default rates and financial distress, undermining progress toward SDG 1 (No Poverty) and SDG 10 (Reduced Inequalities) by making debt management more difficult for low-income graduates.

Impact on SDG 8: Decent Work and Economic Growth

A new accountability provision links institutional eligibility for federal aid to the economic outcomes of graduates, which could have unintended consequences for both students and the workforce.

Alumni Income Accountability Provision

• Effective July 2026, university degree programs risk losing eligibility for federal student aid if their graduates do not earn more than an adult with only a high school diploma.
• This policy is criticized for promoting a narrow view of higher education as solely a vehicle for financial gain, ignoring its role in fostering critical thinking and civic engagement, which are essential for sustainable development.
• There is concern that this will discourage students from entering lower-paying but socially vital fields such as social work, education, and the arts. This could lead to the elimination of such programs or make them accessible only to wealthy students, reinforcing an “unnatural aristocracy” and hindering the diverse, inclusive economic growth envisioned by SDG 8.

Broader Impacts on Student Welfare and Institutional Stability

The legislation includes provisions that extend beyond direct education funding but have significant indirect effects on students and universities, touching upon SDG 2 (Zero Hunger) and SDG 3 (Good Health and Well-being).

Cuts to Social Safety Nets and Other Changes

• Medicaid and SNAP Cuts: The bill includes $1 trillion in cuts to Medicaid and the Supplemental Nutrition Assistance Program (SNAP). These reductions directly threaten the well-being of the 3.5 million college students who rely on Medicaid, undermining SDG 3. The cuts also impact state budgets, which may lead to decreased funding for public higher education.
• Endowment Taxes: A new tiered system will tax private university endowments, potentially redirecting funds that could have supported financial aid and academic programs.
• Pell Grant Expansion: Eligibility for Pell Grants will be expanded to include students in non-degree, work-based training programs. This aligns with SDG 4’s emphasis on technical and vocational skills and could support SDG 8 by preparing individuals for decent work. However, observers note that Pell Grants may face future threats, creating uncertainty for low-income students.

Conclusion

The legislative changes to higher education financing are poised to create substantial obstacles to achieving key Sustainable Development Goals. By increasing the financial burden on students, limiting access to advanced degrees, and incentivizing a narrow focus on high-earning professions, the new policies risk exacerbating inequality (SDG 10), limiting access to quality education (SDG 4), and negatively impacting student health and well-being (SDG 2 and SDG 3). The long-term effects could hinder the development of a diverse, well-educated workforce essential for sustainable economic growth (SDG 8).

SDGs Addressed in the Article

SDG 4: Quality Education

• The article’s central theme is the accessibility and affordability of tertiary education, which is the core of SDG 4. It discusses changes to federal student loan programs, new borrowing caps, and repayment plans that directly impact students’ ability to pursue and complete higher education. The article highlights how these changes could make graduate and professional degrees less attainable, particularly at institutions like the UNC School of Law where the cost of attendance exceeds the new loan caps.

SDG 10: Reduced Inequalities

• The article addresses the potential for the new policies to widen the gap between students from different economic backgrounds. By capping loans and making repayment less flexible, the changes may force students to rely on private loans or abandon their studies. The provision tying a program’s eligibility for federal aid to its graduates’ income is explicitly criticized for discouraging students from entering lower-paying but socially valuable fields, potentially creating an “unnatural aristocracy, where only the richest and most privileged individuals have access to the liberal arts traditions.” This directly relates to reducing inequalities in access to opportunities.

SDG 1: No Poverty

• The article connects to SDG 1 by discussing cuts to social safety nets that support students. It mentions “$1 trillion in cuts to funding for Medicaid and the Supplemental Nutrition Assistance Program (SNAP).” It explicitly states that these cuts will create hardship for the “3.5 million college students who receive coverage under Medicaid,” potentially pushing them further into poverty and making it harder to afford both their education and basic needs.

SDG 8: Decent Work and Economic Growth

• The article links higher education directly to employment and income outcomes, a key aspect of SDG 8. A new policy provision “requires that degree programs’ eligibility for this money be based on their graduates’ ability to meet certain income thresholds.” This policy explicitly ties education funding to the economic success of graduates. Furthermore, by potentially limiting access to higher education, the policies could indirectly affect the goal of reducing the proportion of youth not in employment, education, or training.

Specific Targets Identified

Target 4.3: Ensure equal access for all women and men to affordable and quality technical, vocational and tertiary education, including university.

• The article details how new legislation makes tertiary education less affordable and accessible. It points to the elimination of Grad PLUS loans, the introduction of strict borrowing caps (e.g., “$50,000 per year” for professional degrees), and the reduction of repayment plans from seven to two. These changes create significant financial barriers that challenge the principle of equal access to affordable higher education.

Target 10.3: Ensure equal opportunity and reduce inequalities of outcome, including by eliminating discriminatory laws, policies and practices.

• The policies described in the article risk increasing inequalities of outcome. The income-accountability provision, which makes federal aid contingent on graduates earning more than a high school graduate, could disproportionately harm programs in the arts, humanities, and public service. As stated in the article, this could lead to these programs being “eliminated entirely by universities or only be accessed by wealthier students,” thereby reducing equal opportunity based on economic status.

Target 1.3: Implement nationally appropriate social protection systems and measures for all.

• The article directly references cuts to social protection systems, stating there are “$1 trillion in cuts to funding for Medicaid and the Supplemental Nutrition Assistance Program.” These programs are crucial for low-income students, and the cuts undermine the social protection floor for a vulnerable segment of the population, as highlighted by the “3.5 million college students who receive coverage under Medicaid.”

Target 8.6: Substantially reduce the proportion of youth not in employment, education or training.

• By making higher education more expensive and harder to finance, the policies discussed could discourage individuals from pursuing or continuing their education. The article notes that the new loan caps “are not nearly high enough to support most students,” which could lead to an increase in the number of young people who are unable to afford education or training, thereby hindering progress on this target.

Indicators for Measuring Progress

Indicators for Target 4.3 (Affordable and Quality Education)

• Loan Caps vs. Cost of Attendance: The article provides specific monetary figures that serve as direct indicators of affordability. For example, the “$50,000 per year” cap for professional students is contrasted with the UNC School of Law’s cost of “over $60,000 per year.” Similarly, the average medical school debt of “$240,000” is compared to the new “$200,000 lifetime borrowing cap.”
• Number of Repayment Options: The article states that the number of loan repayment plans was “reduced from seven options to two.” This is a quantifiable indicator of the reduction in financial flexibility for student borrowers.

Indicators for Target 10.3 (Reduced Inequalities)

• Graduate Income Threshold: The policy that programs could become ineligible for federal aid if their alumni “are not making more than an adult with a high school diploma” is a specific, measurable indicator used to enforce an outcome-based standard that could increase inequality.
• Enrollment Demographics in Specific Disciplines: While not a current number, the article implies a future indicator: the proportion of low-income versus wealthy students enrolled in liberal arts or public service programs. A shift towards wealthier students would indicate an increase in inequality.

Indicators for Target 1.3 (Social Protection)

• Funding for Social Programs: The article mentions “$1 trillion in cuts to funding for Medicaid and the Supplemental Nutrition Assistance Program” as a direct indicator of a reduction in the social protection system.
• Number of Students Affected: The figure of “3.5 million college students who receive coverage under Medicaid” is a direct indicator of the scale of the impact on the student population.

Indicators for Target 8.6 (Youth in Education)

• Student Debt Levels: The article provides figures for borrowing caps and average debt, such as the “$257,500 lifetime borrowing limit.” Rising debt levels relative to income potential can be an indicator of financial stress that discourages participation in education.
• Reliance on Private Loans: The article suggests that students who need more money than the caps allow “will likely have to turn to private loans.” An increase in the proportion of students using private loans would be an indicator of decreasing affordability of federal aid programs.

SDGs, Targets, and Indicators Summary

Source: dailytarheel.com