Reconciliation Bill Impacts on Montana Higher Education

Changes to Pell grants

Montana currently ranks 50th in the nation for state-appropriated financial aid per student[1]. As a result, college access and affordability for low-income Montanans is particularly sensitive to changes in the Pell grant.

The reconciliation bill proposes to:  

  • Define a full-time student (eligible for a full Pell award) as taking at least 15 credits. Under current law, students are considered full-time if they take 12 or more credits.
  • Eliminate eligibility for “less than half-time students”. Currently, less than half-time students are Pell eligible.

For the Montana University System and Montana’s three community colleges, these cuts could lower aid to students by as much as $5.3m per year, impacting more than 7,000 students’ annually and diminishing their ability to attend and pay for college.

In practice, students will likely shift their enrollment patterns, lessening the impact. However, MUS two-year colleges would experience an outsized impact because they tend to serve working adults, who may struggle to increase their credit load.

Campus

Pell Students <8 Credits

Pell Students 8-14 Credits

Est. Loss in Pell Award

Share of Total Pell $

City College

162

296

$434,338

23%

Dawson CC

14

35

$35,287

6%

Gallatin College

60

112

$159,086

21%

Great Falls College

291

434

$706,779

25%

Helena College

102

149

$191,024

24%

Highlands College

10

95

$53,241

7%

MSU-Billings

157

569

$550,075

14%

MSU-Bozeman

323

1372

$1,101,554

7%

MSU-Northern

54

190

$183,069

9%

MT Tech

41

255

$161,770

7%

Miles CC

60

113

$154,700

16%

Missoula College

130

327

$397,996

18%

UM-Missoula

247

1272

$1,002,969

9%

UM-Western

56

223

$162,518

6%

TOTAL

5442

1707

$5,294,405

11%

*Source: MUS Student data warehouse. Estimate based on actual 2024-25 Pell awards.


New risk sharing requirement

The House bill creates a new risk-sharing requirement, which imposes payments on colleges based on the share of federal loan volume not repaid by borrowers attending the college for loans disbursed after July 1 2027. The bill also creates “PROMISE Grants” that reward institutions for graduate low-income students at low-cost and within usual time and also agree to a maximum price guarantee.

Estimates provided by the House Committee on Education and the Workforce[2] suggest that risk sharing and promise grants would be very costly to public higher education in Montana. On net, these new rules would cost Montana public universities nearly $7.5m annually, or $220 per student. The table below summarizes the estimated impact by institution.

CAMPUS

Net Impact (Per Student)

PROMISE Grant

Risk-Sharing Payment

Net Impact

Dawson Community College

($107)

$0

$34,779

($34,779)

Flathead Valley Community College

($101)

$0

$143,232

($143,232)

Miles Community College

$72

$57,878

$23,443

$34,435

Montana State University

($166)

$0

$2,529,638

($2,529,638)

Montana State University Billings

($166)

$833,559

$1,368,411

($534,852)

Montana State University-Northern

$137

$235,801

$101,574

$134,227

Montana Technological University

$414

$809,895

$154,067

$655,828

The University of Montana

($550)

$0

$4,735,188

($4,735,188)

The University of Montana-Western

($189)

$0

$248,654

($248,654)

Helena College

($77)

$202,126

$259,957

($57,831)

TOTAL

($220)

$2,139,259

$9,598,943

($7,459,685)

*No estimate available for Great Falls College - MSU

 Changes to student loan eligibility

The legislation proposes major changes to the student loan program.

  • Subsidized student loans would be eliminated, meaning that loans would accrue interest while students remain enrolled.
  • Unsubsidized loans would have new loan caps, $50k for undergraduates, $100k for graduate students, and $150k for students in professional programs.
  • GradPLUS loans would be eliminated and ParentPLUS loans substantially altered, reducing the amount able to be borrowed.
  • Colleges would be required to prorate loans for part-time students.

Changes to Medicaid

The Kaiser Family Foundation[3] estimates that changes to Medicaid in the House bill would:

  • Lower Montana Medicaid enrollment by 21%, or 46,000 enrollees
  • Lower federal Medicaid funding for Montana by $276M
  • Require a 6% increase in state taxes (or similar reallocation of state budget), should the state decide to maintain health coverage for those dropped from Medicaid.

These effects are mostly due to the addition of work requirements for the “Medicaid Expansion” population.  Medicaid expansion legislation in Montana, first in 2019 and reauthorized in 2025, sought federal approval for Medicaid work requirements, which, to date, has been denied.

[1] Figure 3.3, State Higher Education Finance Report 2024, SHEEO. Accessed from: https://shef.sheeo.org/report-2/?report_page=net-tuition-and-total-education-revenue#student-enrollment

[2] House Committee on Education and the Workforce. Accountability under the CCRA: An Analysis. May 2, 2024. Accessed at: https://edworkforce.house.gov/news/documentsingle.aspx?DocumentID=410507

[3]https://www.kff.org/medicaid/issue-brief/state-level-context-for-federal-medicaid-cuts-of-625-billion-and-enrollment-declines-of-10-3-million/

 

Updated: June 9, 2025