Debt-Free College Act of 2026
- Sponsor
- Rep. Pocan, Mark [D-WI-2]
- Committees
- Education and Workforce Committee (primary)
- Last action
- Sep 16, 2026
Bottom line
The bill aims to eliminate tuition and fee debt for eligible students at public and certain minority-serving institutions by significantly increasing federal and state investment in higher education and expanding Pell Grant access to Dreamer students.
What it actually does
This bill establishes State-Federal partnerships to provide debt-free college at in-state public institutions, funded by federal grants that match state operating support. It also creates a separate debt-free grant program for eligible Historically Black Colleges and Universities (HBCUs) and Minority-Serving Institutions (MSIs). Furthermore, the bill expands Federal Pell Grant eligibility to "Dreamer students" who meet specific criteria related to their age of entry into the U.S., educational attainment, or military service.
Proponents argue
Proponents argue that the bill directly addresses the national student debt crisis, makes higher education more accessible and affordable for all, particularly for low-income and underserved students, and will boost economic mobility and workforce development. They contend that increased investment in public education leads to a more educated populace and stronger communities.
Opponents contend
Opponents might argue that the bill is fiscally irresponsible, leading to massive federal spending and potential tax increases without sufficient guarantees of cost control. They may also raise concerns about federal overreach into state education systems, the potential for tuition inflation despite caps, and whether "debt-free" truly addresses all costs of attendance, including living expenses.
The bill is moderately complex with detailed definitions and programmatic requirements, requiring a dedicated read to understand its full scope and implications.
Section 2, adding new Part J, Sec. 499A-1
Establishment of Debt-Free College Partnership Purpose
This section outlines the core goals of the new program: to foster collaboration between states and the federal government to boost funding for public higher education and ensure that eligible students can attend in-state public institutions without incurring debt. It sets the stage for the subsequent operational details of the partnership.
Supporters argue
Supporters argue this clearly states the transformative intent of the bill, focusing on increasing access and affordability for all students.
Critics contend
Critics might argue that while the purpose sounds appealing, the mechanisms to achieve it are flawed or overly costly.
Tradeoffs
Balances federal support with state autonomy in higher education funding.
Section 2, adding new Part J, Sec. 499A-2
Key Definitions for Debt-Free College Partnership
This section provides crucial definitions that govern the entire State-Federal partnership. "Eligible student" is broadly defined to include those enrolled or eligible to enroll in a public institution in their state, demonstrating Pell Grant eligibility or completing FAFSA. "Unmet need" is the difference between cost of attendance and student aid index plus other grant aid. "Net State operating support" is meticulously defined to exclude various types of funds, ensuring federal matching is based on direct state investment in public higher education operations and financial aid.
Section 2, adding new Part J, Sec. 499A-3
State-Federal Partnership Grant Authorization
This section authorizes the Secretary of Education to award grants to states that apply to participate in the debt-free college partnership. The grant amount for each state is designed to match its "net State operating support," effectively doubling the state's investment in public higher education. It also includes provisions for ratable reduction if appropriations are insufficient and for handling unexpended funds.
Section 2, adding new Part J, Sec. 499A-4
Federal and State Partnership Responsibilities
This section outlines the duties of both federal and state partners. Federally, a new Partnership Office will administer grants, monitor compliance, provide technical assistance, and conduct annual evaluations. States, in turn, must distribute funds to achieve debt-free college, maintain access for low-income students, cap tuition increases to CPI, commit to reducing tuition as state support grows, maintain or increase state need-based aid, develop a 5-year plan, and implement reforms for student success. States cannot impose additional eligibility requirements on students.
Section 2, adding new Part J, Sec. 499A-5
Allowable and Prohibited Uses of Partnership Funds
This section dictates how states must use the federal grant funds. The primary use is to cover the unmet financial need for Federal Pell Grant recipients, ensuring they achieve debt-free college. Remaining funds then cover unmet need for other eligible students, prioritizing those with greater financial need and explicitly excluding private aid from consideration. Four percent of funds are earmarked for student success programs, and up to five percent for broader higher education activities like facility construction, faculty hiring, and improving student outcomes. One percent is allowed for administration. Funds cannot be used for endowments or athletic/commercial venues.
Section 2, adding new Part J, Sec. 499A-6
State Maintenance of Effort for Higher Education Funding
This section establishes a "maintenance of effort" requirement for states participating in the partnership. To continue receiving federal grants, a state must ensure its net State operating support for public higher education in a given fiscal year is at least equal to the average of its support per full-time equivalent student over the three preceding fiscal years. This prevents states from reducing their own funding in response to federal aid.
Section 3, adding new Sec. 372
Debt-Free College Grant Program for HBCUs and MSIs
This section creates a dedicated grant program for private, nonprofit Historically Black Colleges and Universities (HBCUs) and Minority-Serving Institutions (MSIs) that serve at least 35% Pell Grant-eligible students. These 5-year grants aim to enable these institutions to provide debt-free college by covering students' unmet financial need. The grant amount for an institution is equal to its expenditures on undergraduate instruction and academic support, subject to annual review and approval by the Partnership Office.
Section 3, adding new Sec. 372(g)
Grantee Commitments and Oversight for HBCU/MSI Program
This subsection details the commitments required from HBCUs and MSIs receiving grants. They must cap tuition and fees (with CPI-based increases allowed), maintain their expenditures on instruction and academic support, maintain enrollment levels of low-income students, and maintain institutional aid at historical levels. Institutions must also clearly communicate the debt-free opportunity to students. The section includes provisions for addressing breaches of these terms, including probation (with potential fines) and revocation of eligibility (requiring escrow of unexpended student aid funds and return of other funds).
Section 4, amending Section 484 of the HEA
Federal Pell Grant Eligibility for Dreamer Students
This section significantly expands eligibility for Federal Pell Grants and other Title IV student aid programs to "Dreamer students." A "Dreamer student" is defined as an individual who entered the U.S. under age 16, attended U.S. secondary schools, and meets certain educational or military service criteria (e.g., high school diploma, 2 years of college, DACA/DAPA eligibility, or 4 years of honorable military service). The Secretary is authorized to waive certain requirements for individuals demonstrating compelling circumstances.
This subsection provides a detailed list of specific exclusions from the calculation of "Net State operating support," such as funds for merit-based aid, hospitals, athletics, research, and non-accredited institutions. These exclusions are critical for determining the federal matching amount.
Section 2, adding new Part J, Sec. 499A-2(5)(B)
Why it matters:This is standard legislative practice for defining complex financial terms, but the specificity of exclusions can be easily overlooked by a casual reader focusing on the broader purpose.
Case for: Proponents argue that these exclusions ensure federal matching funds are directed specifically to core public higher education operating expenses and need-based aid, preventing states from leveraging federal funds for unrelated or less critical expenditures.
Case against: Critics might argue that some exclusions, like research or certain student aid programs, could be legitimate state investments in higher education that should be eligible for federal matching, and their exclusion limits state flexibility.
Estimated impact: These exclusions directly impact the base amount on which federal matching grants are calculated, potentially reducing the federal contribution if states have significant spending in these categories.
This provision allows states to apply for a waiver from the 5-year deadline to achieve all debt-free college goals, provided they have a credible plan for progress and will, at a minimum, provide debt-free college within 5 years to eligible students who are Federal Pell Grant recipients.
Section 2, adding new Part J, Sec. 499A-4(b)(2)(D)
Why it matters:This is a flexibility clause, common in complex programs, but its placement might obscure the fact that full debt-free college for all eligible students might not be achieved within the stated 5-year timeframe in all participating states.
Case for: Proponents argue that this waiver provides necessary flexibility for states facing unique challenges, ensuring that even if full implementation takes longer, the most vulnerable students (Pell recipients) still benefit within the initial timeframe.
Case against: Critics might contend that this waiver could weaken the overall commitment to debt-free college, allowing states to delay full implementation and potentially creating an uneven playing field for students in different states.
Estimated impact: Could extend the timeline for full debt-free college implementation in some states, impacting the broader student population beyond Pell recipients.
When disbursing remaining funds to non-Pell eligible students, states shall not take into account any private sources of aid or loans available to an eligible student.
Section 2, adding new Part J, Sec. 499A-5(a)(2)(B)
Why it matters:This is a technical detail about financial aid calculation, often placed in specific disbursement rules, but it has a significant impact on how much aid students receive.
Case for: Proponents argue this ensures that private scholarships and other non-federal aid directly benefit students without reducing their eligibility for federal partnership funds, maximizing the total aid received and further reducing debt.
Case against: Critics might argue that not considering private aid could lead to some students receiving more aid than their actual cost of attendance, potentially creating inefficiencies in resource allocation.
Estimated impact: Increases the total financial aid package for students who receive private scholarships, potentially reducing their out-of-pocket costs to zero or even creating a surplus.