TLDR: The new law slashes essential supports like SNAP, Medicaid, and clean energy investments—making it harder for workers to train, work, and thrive. One bright spot: it expands Pell Grants to short-term, high-quality training programs – something NSC and our networks have been pushing for a decade.
Over the weekend, a sweeping reconciliation mega-bill passed, advanced through a process that allowed for a simple Republican majority in the Senate and no bipartisan support. The law delivers harmful cuts that will have both immediate and lasting consequences for workers, students, and local businesses. While it includes one meaningful step forward, expanding Pell Grants to short-term, high-quality training programs, that progress is paired with damaging provisions that undermine the very support workers and local businesses need to succeed.
The law eliminates incentives for job-creating clean energy investments, imposes harmful restrictions on Medicaid and SNAP, reduces access to student loan programs, and introduces harsh new immigration enforcement measures. It imposes penalties, restrictions, and reduced access to education, training, and supports that make it possible for workers to train and for local businesses to grow. These cuts will make it harder for workers to train for new careers, for small businesses to grow, and for families to meet basic needs like food, health care, and housing.
In short: the law tells working people they should train for in-demand jobs — but strips away the very supports they need to succeed.
Overall, the law:
NSC sent a letter to Congressional leaders with 150 signatures from national, state, and local organizations calling for a reconciliation bill that protects energy investments, preserves access to essential supports, and expands tax and education policies that connect workers and businesses to skills training. The letter was backed by NSC public polling which shows strong bipartisan support for skills training and new research by NSC and the Blue Green Alliance that finds that energy and infrastructure investments could support 3 million jobs annually across construction, manufacturing, and energy sectors – many of which pay above the national average and are accessible to workers without college degrees.
Instead, the new law would cost states billions in economic impact and falls short of what workers, students, and local businesses need.
It’s encouraging to see Congress include a major policy priority for skills advocates in the law: expanding Pell Grants to short-term, high-quality training programs, following the lead of many states that have already pioneered efforts to fund short-term programs.
Implementation will be the key – especially given the other provisions in the law that could affect access for immigrant students and allow participation by for-profit schools. Ensuring students can enroll and succeed, and that local businesses have a skilled talent pipeline will require strong oversight and support.
Still, the law’s Pell provisions fall short of the bipartisan JOBS Act, which treats short-term Pell as part of a coordinated, equity-focused workforce strategy. By contrast, the reconciliation law includes more restrictions and lacks alignment with employers, data systems, and services that make workforce policy work.
The differences below highlight key policy choices that will shape their impact.
| Feature | JOBS Act | Reconciliation Law |
| Bipartisan Support | ✅ Yes | ❌ No |
| Excludes For-Profit Institutions | ✅ Yes | ❌ No |
| Excludes Unaccredited Institutions | ✅ Yes | ✅ Yes |
| Data Requirements | ✔️ Targeted & Aligned with workforce programs | ✔️ 70% placement, 70% completion, high wages |
| Interagency Data Sharing | ✅ Yes | ❌ No |
| Industry Sector Partnerships | ✅ Yes | ❌ No |
Both proposals endeavor to expand access. The passed version leaves more still to be determined by the U.S. Department of Education and need for state support to reach the workers and students who need the access to these programs the most.
Even so, this is a meaningful step forward. It will help more students and workers access good-paying career pathways in fields facing worker shortages such as construction, manufacturing, and health care. But successful implementation will require continued advocacy from the NSC network, technical assistance to educational institutions from the federal government, and strong partnerships – backed by federal investments- between industry and education. Examples of successful implementation across states, that center worker, student, and business success, are outlined in NSC’s State Financial Aid report.
The bill the House passed originally included some extremely harmful Pell provisions that would have sharply restricted access to education for low-income and working learners. The final law walks back some of these most harmful proposals – important changes for students balancing work, family, and school – and they reinforce, at least in part, the principle that basic needs are workforce needs. Still, the final package introduces serious concerns for workers, small businesses, and communities, and falls short of what’s needed. The final package rejected House-proposed changes to Pell Grant programs that would have been punitive toward education institutions like community and technical colleges that enroll students with barriers to employment and education. It also rejected narrowed eligibility for historically underserved communities. Specifically:
Student eligibility: The House proposed changes that would have altered access to Pell grants by increasing the number of credit hours required to be considered a full-time student. It also proposed eliminating grants for students enrolled less than half time. Fortunately, the Senate did not include these changes. This is good news for students who often enroll part time while balancing work and family obligations – they would still be able to finance their education through Pell Grants under the Senate version.
The Senate also rejected an effort to narrow Pell Grant eligibility so that certain immigrants with humanitarian status would not be able to access federal financial aid. This proposal would have made it much more difficult for domestic violence survivors, crime victims, and people in several other visa categories to pursue higher education.
Instead of harmful cuts to eligibility seen in the House version, the final bill included a significant $10.5 billion in mandatory Pell funding, a move that offsets any projected increased costs. This reflects a broad recognition of the importance of non-traditional career pathways.
Penalties on Institutions of Higher Education: The Senate rejected the House proposal to require institutions to pay penalties for students that fail to repay student loans. Instead, the Senate version includes a provision that would prohibit institutions from offering federal loans for programs where the median earnings of graduates are lower than those of individuals with less education (for example, comparing bachelor’s degree holders to high school graduates).
While the House proposal would have placed a significant burden on institutions – especially those institutions that enroll more low-income students – and potentially limited students’ access to the education and training needed to advance in their careers, the Senate approach is less punitive with a stronger emphasis on student outcomes. Still, the language still raises important concerns.
While these changes from the House-proposed version are a welcome fix to House language, it’s important not to view them in isolation. Ultimately, the law will make it harder for small businesses to grow, and for workers to achieve economic mobility.
The law’s approach to energy and infrastructure investments chips away at the foundations of a strong workforce. On their face, these are climate and budget issues. But they’re directly tied to job creation, workforce training, and the talent pipeline. Cutting or scaling back these investments and tax credits that incentivize skill building limits opportunities for workers, businesses, and communities.
Although the Senate softened some of the more extreme provisions that the House proposed, it still rolls back energy investments and tax credits that are driving job creation and expanding access to energy careers.
The new law reduces long-term energy and infrastructure investments that had been estimated to create 2.65 million jobs annually in construction, manufacturing, and clean energy. While some clean energy tax credits remain in place, new restrictions and phase-outs will lead to fewer projects moving forward. For example, the law accelerates the end of the Clean Electricity Production Tax Credit (PTC) which supports clean energy generation. Wind and Solar projects that do not begin construction in the next year or are placed in service after 2027 will no longer qualify for the credit.
Other projects eligible for the PTC have until 2033. Although this change is less abrupt than earlier proposals to rollback clean energy investments, the reduction of tax credits and other funds are already eliminating or downsizing many initiatives, limiting job growth and shrinking opportunities for workers and small businesses that are ready to meet clean energy demands.
Recent analysis of Michigan and Louisiana, two states that benefit significantly from federal investments in infrastructure, broadband, and energy programs show that proposed cuts could result in the loss of nearly 5,000 jobs and $1 billion in economic output in Michigan, and over 3,600 jobs and $687 million in lost output in Louisiana.
Proposals to rescind or prematurely phase out tax credits, grants, and loan programs threaten job creation and access to good jobs creating uncertainty, stalling training initiatives, and jeopardizing the pipeline of skilled workers that employers need to grow. Small and mid-sized businesses are eager to expand their talent pipeline to historically underserved populations to meet demand, but shrinking projects by disqualifying projects or rolling back incentives will make this much harder to achieve.
Programs like SNAP and Medicaid, along with refundable tax credits, are essential to helping people meet basic needs while they pursue training and transition to employment. The new law will increase state and participant costs, restrict eligibility, and expand ineffective work requirements.
SNAP changes in the new law will make it harder—not easier—for people to access nutrition assistance while they train for a better job. SNAP work requirements are rules that limit food assistance for adults without disabilities or dependents unless they are working or participating in a training program. These requirements are often rigid, hard to document, and disconnected from the realities of people’s lives.
The new law includes some exemptions—for example, it waives work requirements for people with dependent children over the age of 14 and for certain Native Americans. However, states would not be eligible for waivers for veterans, people experiencing homelessness, and foster youth under 24. That means modest improvements for some, but harmful new exclusions for others.
None of these changes help workers access training or lead to better outcomes in unsubsidized employment. Instead, they will result in more people losing access to essential nutrition assistance. While the final law retains state flexibility to exempt some “able-bodied adults without dependents” (ABAWDs), it still increases state costs—likely leading to reduced benefits, added administrative hurdles, or even the possibility that some states could run out of SNAP funds altogether.
SNAP State Cost Sharing: The new law shifts SNAP costs onto states by requiring partial cost sharing based on payment error rates. While states with low error rates will maintain full federal funding, others will face rising cost obligations (up to 15%) which will force them to either pull funds from other priorities (potentially workforce programs) or reduce SNAP benefits. One key improvement secured during Senate negotiations was the preservation of the existing $57 error tolerance rule – which prevents more states from being penalized for minor mistakes. And a last-minute change delays penalties for states with extremely high error rates. This could create a perverse incentive for states with error rates above 6% to maintain or even increase rates temporarily to avoid penalties. This late change reflected a clear acknowledgement that shifting new costs onto states could harm both state budgets and SNAP recipients.
Medicaid Work Requirements: The law imposes new work requirements for Medicaid coverage for adults without dependents and, for the first time, for parents of children over the age of 14. These requirements create barriers to care for low-income families, adding administrative complexity without improving employment outcomes—and jeopardizing the health and stability people need to train for and sustain work. As discussed earlier in the reconciliation process, these cuts will harm both people who need access to health care and workers and businesses in the health care industry serving Medicaid patients.
Immigration Restrictions: The law’s approach to immigration reinforces the same troubling pattern: it strips access to SNAP and Medicaid from many lawfully present immigrants, including refugees, asylum seekers, survivors of trafficking or domestic violence, and others with humanitarian protections. These provisions target people who are already working, studying, and contributing to their communities and who already face significant barriers to health care and economic stability —undermining the very workforce our economy depends on. Denying health care and nutrition assistance makes it harder for individuals to meet basic needs, let alone succeed in education or employment.
People without healthcare do not simply disappear — they go without the care they need. And when individuals cannot meet their basic needs, their ability to pursue training or work opportunities is severely limited.
Child Tax Credit: The law raises the maximum Child Tax Credit from $2,000 to $2,200 and ties it to inflation. It also caps the refundable portion of the credit at $1,400, meaning that low-income families who would benefit most from the expanded credit will not receive the full value of the credit. While it slightly improves inclusivity over earlier proposals by requiring a Social Security number for only one parent and one child, the credit remains out of reach for some mixed-status households.
The final law protects states’ ability to regulate artificial intelligence—rejecting a problematic provision that could have derailed broadband expansion and undermined state authority.
One especially concerning proposal — which would have prevented states from regulating artificial intelligence for the next decade and potentially jeopardized Broadband Equity Access and Deployment (BEAD) funding — was soundly defeated in the Senate, 99–1. NSC applauds this outcome as an important win for states, workers, and communities preparing for the digital economy.
The now-removed provision offered states a $500 million incentive for AI deployment through BEAD but came with a catch: if a state accepted the funds and later enacted any AI regulations, the Department of Commerce could revoke its original BEAD allocation. Given the scale of the BEAD program — more than $42 billion nationwide — this provision could have derailed broadband expansion, harming communities, and local economies. The AI proposal in the reconciliation bill would have put states in an impossible position, threatening to derail shovel-ready broadband projects that have already faced numerous delays.
As working with AI becomes a reality for many, voters overwhelmingly support a proactive approach to managing AI’s impact on the workforce: 85% favor policies that make it easier for employers to help workers adapt to technological change, and another 85% support providing no-cost retraining to any worker who loses their job due to automation or AI. That kind of workforce readiness requires strong partnerships with states—not restrictions on their ability to act.
Byrded Out: The final law excludes several harmful provisions that were stripped during the budget reconciliation process because they violated Senate rules. Under “Byrd Rule” requirements, the Senate parliamentarian reviews the bill to ensure that the legislation does not include extraneous provisions that would require a 60-vote threshold to pass instead of a simple majority. Some of the provisions removed or changed because of the “Byrd Bath” include:
The Bottom Line: Disinvestment Undermines Workforce Progress. ST Pell offers one path to mitigating a small bit of harm.
The law’s expansion of short-term Pell is a meaningful step forward. However, that progress is overshadowed by harmful cuts, penalties, restrictions and reduced across the very systems workers and students rely on – from SNAP and Medicaid to student loans and job-creating investments and incentives in infrastructure and clean energy. These are more than policy choices and numbers on a spreadsheet – they are decisions that will make it harder for people to get ahead, harder for small businesses to grow, and harder for families to meet their basic needs.
While technological change is rapidly reshaping the workforce, and businesses and communities are clamoring for a strong pipeline of skilled workers – this law moves in the opposite direction, delivering disinvestment and new barriers to opportunity. NSC and our coalition will be tracking implementation, and eventually documenting the harm it causes to workers, students, and small businesses.
We’ll also be supporting our networks in responding to its impact, advocating for effective implementation at the federal level, and supporting states and partners in their implementation. Stay connected with us for further updates.
