State Legislative Update

End of Spring 2025 Session
June 17, 2025

Katharine Gricevich
Director of Government Relations
Illinois Student Assistance Commission

This report is to highlight actions that the Illinois General Assembly took during its spring legislative session that are likely to interest the state's financial aid community. References to a bill's status (e.g., whether a bill that passed both houses has been signed into law yet) are current as of this writing. For the latest updates and the full text of legislation, visit the General Assembly's website at www.ilga.gov. Questions about this report can be directed to [email protected].

For most statehouse observers, the spring 2025 legislative session felt different than it has in recent years. This year was marked from the beginning by concerns about a projected fiscal year 2026 revenue slowdown, and the expected strain on the budget was compounded by other pressures, including an impending financial crisis for public transit systems in northeastern Illinois and looming energy price increases downstate. Further clouding the picture – and even dominating it – there has been considerable uncertainty about how Illinois may be affected by quickly changing federal policies. In some cases, these policies have been described as "returning power to the states," but the combination of rapid staff reductions at federal agencies, spending freezes and rescissions of already-approved funding, grant and contract cancellations, and changes in both long-standing and recent policy and legal precedents have affected programs, data sources, and funding streams on which states and smaller units of government rely. For newer legislators, in particular, lawmaking and budget negotiations were under constraints that were very different this year than they have previously experienced.

The Governor signaled as much in his February budget address, opening the FY26 spending negotiations by cautioning legislators that if they wanted to increase spending on a new or existing program, they would be asked to find someplace else in the budget to cut.

FY 2026 Budget

Ultimately, while cuts were made throughout state government, the budget package that the General Assembly and Governor agreed on will also increase revenue, combining one-time sources of cash with new, on-going ones. One-time funding sources include a tax amnesty program, sweeping dollars from other state funds into the General Revenue Fund (GRF), and maintaining the current split of deposits from motor fuel sales taxes. (Without this extension, a greater proportion of these dollars would have gone to the Road Fund in FY26 rather than to GRF.) The budget package also includes higher taxes on sports betting, on products for smoking and vaping, and on telecommunications services. The existing hotel tax was extended to cover short-term rentals, and changes were made to try to capture more revenue from multi-state and multi-national corporations.

The final spending package contained in Senate Bill 2510 (Sims/Welch – now Public Act 104-0003) is about $55.1 billion, according to legislative sponsors, with higher education making up about $2.6 billion. This is an increase over the FY25 budget of about $53.1 billion in authorized spending.

Overall, the portion of the budget dealing with the Illinois Student Assistance Commission (ISAC) resembles the Governor's original FY26 request for the agency, with a small number of exceptions.

New funding included these highlights:

• an increase of $10 million for the Monetary Award Program (MAP), bringing funding for MAP grants to $721,566,200. Initial projections were that this could increase the number of recipients by about 2,100, although the actual number will depend on the final MAP formula as well as the number and mix of students who apply and claim.
• a new $1.25 million appropriation from the Education Assistance Fund (EAF), one of the state's general funds, for the Human Services Professional Loan Repayment Program. In its initial year, FY25, the program was funded by a one-time transfer to ISAC from the Illinois Department of Healthcare and Family Services. Legislators needed to find an alternative source of funds to ensure that the program could continue, and they did.
• an increase of $600,000, for a total of $8.44 million, in the Agency Operations line, one of two critical lines that support the everyday functions of the Commission and its administration of programs for Illinois students, schools, and communities. (The other major operational line, for Outreach, Research, and Training, was held level at $7,840,000.)

In this more constrained budget year, some ISAC-administered programs did undergo cuts and even, in some cases, had their funding eliminated. Cuts included the following:

• The Prepare for Illinois's Future test preparation program was zeroed out after being allocated a little under $10 million in FY25. Under the program, students at eligible institutions have free access to preparation services for graduate and professional school entrance exams (GRE, MCAT, LSAT, etc.) as well as preparation for licensure exams for fields like teaching and nursing. Since the program's launch this spring, students have registered for courses with a total list price that significantly exceeds the amount paid to Kaplan, the primary vendor. Still, budgeteers did not opt to continue funding the program. As of this writing, the current contract with Pearson (to support preparation for teachers) extends through the end of June, while the Kaplan contract extends until December 23, 2025.
• The new iGROW Tech Scholarship for students in information technology and related fields was not funded for FY26 (2025-26) after being allocated $2 million for FY25. The program launched for the 2024-25 academic year, and recipients are obligated to complete a work requirement in the state or repay their scholarship.
• A grant to the N'DIGO Foundation to support a journalism internship program was eliminated after being allocated $550,000 in FY25.
• The lump sum used to fund the Post-Master of Social Work School Social Work Professional Educator License Scholarship and the School and Municipal Social Work Shortage Loan Repayment Program was reduced significantly. This line was allocated $6 million in FY25 but will only receive $2 million in FY26. However, if demand for these programs in FY26 is consistent with past years, then this lower amount will be sufficient to serve eligible applicants for the programs.
• The Nurse Educator Loan Repayment Program will receive $400,000 in FY26, a decrease of $100,000 from the prior year but still more than has been claimed for the program in recent years.

Other ISAC-administered programs are generally funded at their FY25 levels, including the merit-based, means-tested AIM HIGH grant for public university students ($50 million), the Early Childhood Access Consortium for Equity (ECACE) Scholarship ($5 million) and reimbursements for public institutions for the Illinois Veteran Grant and Illinois National Guard Grant (IVG and ING Grant) ($6 million for public universities in the ISAC budget, plus $4,264,200 for the Illinois Community College Board, or ICCB, to reimburse community colleges for their claims). (Additional details on the ISAC portion of the budget are available in Agenda Item 6 of the June 26, 2025 Commission meeting Agenda Book.)

Elsewhere in higher education, public universities and community colleges received a 1% increase in funding for operations. However, that increase could eventually rise to as much as 3% for the year: In an unusual approach reflecting the state's uncertain financial future, the budgeteers gave public institutions authority to use an additional increment of funding only if they receive advance, written approval from the Governor for that further spending. The Administration will review state revenues during the course of the fiscal year and assess if sufficient funds are available for the institutions to spend this conditional appropriation. If the Governor determines that state finances are robust enough to support spending this additional increment, he will approve it at that time.

Legislative Highlights Beyond the Budget

There were several notable measures related to college access and affordability that were approved by both houses and are expected to become law. Others were approved by a single chamber but did not succeed in the second, and still others got significant attention but were not ultimately called for a vote. Additionally, the list below includes a number of proposals that were introduced but made little or no progress. While this last category is meant to be representative of the kinds of bills introduced this spring related to higher education access, it is not comprehensive.

PASSED BOTH HOUSES:

• Both chambers approved House Bill 3522 (Stuart/Belt), an initiative of the Illinois Board of Higher Education (IBHE) and Governor's Office that will create a direct admissions program. Through the program, which is being developed by a team across the state's education agencies, high school students will receive general admissions offers to Illinois public institutions based on grade point average (GPA), reducing some of the uncertainty and costs of the usual application process. An opt-in process and communications campaign are expected to launch this August for students who will be high school juniors during the 2025-26 school year.

• Two ISAC-initiated proposals to improve the system of supports for high school students passed both houses and are expected to become law. House Bill 3096 (Ortiz/Cervantes) will require high schools to designate a point of contact for FAFSA-related communications and to receive training on the FAFSA graduation requirement and the free supports available to students. HB 3097 (Ortiz/Cervantes) will require high schools to make assistance available during the school day for students to complete their portion of the FAFSA. Schools may request support from ISAC to help fulfill this mandate.

• SB 2039 (Villanueva/Syed) requires IBHE, ICCB, and ISAC to collaborate on producing a data dashboard intended for use by policymakers and researchers.

• HB 460 (B. Hernandez/Villanueva) would expand the existing Retention of Illinois Students and Equity Act (the RISE Act) to cover financial aid offered by units of local government. In effect, this means that if a unit of local government offers financial aid, it would need to allow undocumented Illinois students to apply for and receive that aid if the students qualify to receive in-state tuition and to be considered for state-funded financial aid under the RISE Act.

• HB 1149 (Swanson/Anderson) would require postsecondary institutions to establish policies for awarding academic credit for students who have training and experience as firefighters (assuming the institution has a program for which this credit would be applicable).

• HB 1430 (Delgado/Aquino) would allow the State Treasurer to establish a program for student loan refinancing. It would also remove the Treasurer's authority to establish or fund income share agreements.

• Advocates for high schools and community colleges negotiated a bill regarding dual credit regulations: Among other changes, HB 2967 (Costa Howard/Castro) would require high schools to contact their local community colleges first when seeking to establish a dual credit program, bar high schools from partnerships with out-of-state institutions, and establish a standing Dual Credit Committee to ensure continued collaboration among stakeholders working with ICCB and the Illinois State Board of Education (ISBE).

• HB 3385 (N. Hernandez/Villa) would require each public university and community college to make at least three mental health professionals available for students. (Smaller institutions could employ fewer professionals based on benchmarks set by an existing advisory group.)

• SB 1376 (Rose/Hirschauer) creates the Historical Cost of Attendance Disclosure Act. It would require each public or private college or university in the state that offers baccalaureate degrees to post its cost of attendance on its website for each of the 10 academic years immediately preceding the effective date of the Act and for every academic year thereafter. In posting the cost of attendance, the institution must delineate which expenses are included in the Internal Revenue Service's Form 1098-T and which are not.

• SB 1537 (Sims/West) establishes a framework for the state to regulate income-share agreements (ISAs) under the aegis of the Illinois Department of Financial and Professional Regulation (IDFPR) and the Office of the Attorney General. It's ISAC's understanding that the bill was an initiative of Better Future Forward, which provides ISA products, although it was negotiated with IDFPR and consumer advocates.

• SB 1958 (Castro/Costa Howard) would amend the existing Student Transfer Achievement Reform (STAR) Act to require public universities to enter articulation agreements with community colleges at their request. The bill lays out the elements that should be included in an agreement, allows the institutions to request facilitation from the IBHE and ICCB if they fail to reach an agreement, and makes other changes intended to strengthen the state's higher education transfer system.

APPROVED BY ONLY ONE CHAMBER (DID NOT COMPLETE THE PROCESS):

• A bill to replace the existing Minority Teachers of Illinois Scholarship with a new Teachers of Illinois Scholarship passed the House but was not called for a final Senate vote before adjournment. The current MTI program is facing a legal challenge, and this proposal (Senate Bill 1331, House Amendment #1 – Peters/Buckner) would revise the program to remove race-based criteria and focus the program primarily on teacher vacancies.
  • The underlying bill that passed the Senate, SB 1331 (D. Turner/Avelar), would have required ISAC to build and maintain a comprehensive scholarship database and mandated that all 7^th graders create accounts in which they would register a portfolio of interests, along with information on any criminal charges to which the student has been subject. (Some of the proposed functions, including the ability to create a profile and a robust scholarship search tool, are already available today through the CiS360 program maintained by the Illinois Department of Employment Security).

• The House approved language to allow incarcerated students to receive MAP grants (HB 2466 – Ammons/Johnson), but the measure was not called for a vote in the Senate. Advocates estimate that this change could add up to $3.2 million in demand for the program initially. MAP grants help students to pay tuition and mandatory fees, which incarcerated students currently in postsecondary programs in Illinois are typically not being charged. However, advocates believe that allowing MAP to be used for programs for incarcerated students would help to ensure the financial sustainability of those programs and, they hope, allow institutions to expand their academic offerings for students in prison.

• The House passed, but the Senate did not approve, a bill to establish stipends for student teachers and their cooperating teachers (HB 1375 – B. Hernandez/Koehler). (Lawmakers did approve HB 3528 (Crawford/Johnson), which bars institutions from requiring that student teachers in their educator preparation programs be unpaid.)

• The House voted to expand the existing School and Municipal Social Work Shortage Loan Repayment Program in several ways. HB 3511 (LaPointe/Villa), which was not called for a Senate vote, would add county-employed social workers, increase the maximum grant, and allow social workers to qualify while working with/for police. (The bill also would have created a program through the state's Department of Human Services to support supervisors for licensed social workers to gain the experience needed to become licensed clinical social workers.)

ADDITIONAL NOTEWORTHY INITIATIVES THAT WERE NOT APPROVED:

• Legislators discussed but did not vote on a bill to adopt what was described as a Public University Equitable Funding Formula (HB 1581 – Ammons and SB 13 – Lightford). This funding formula for public universities, based on the work of a task force and subsequent extensive negotiations, would have directed a greater proportion of any new resources to institutions that are farthest from being able to ensure adequate support for their students and mission.

• The Governor's office, community college representatives, and representatives of four-year institutions spent many hours negotiating a framework for allowing community colleges to offer a limited number of baccalaureate degree programs in areas of demonstrated workforce need. The House Executive Committee advanced the proposal (contained in House Amendment #2 to SB 1988 – Katz-Muhl) to the full House after a heated committee hearing in which legislators expressed some support for the goal of better serving place-bound students, but they also voiced concerns about how to avoid property tax increases and competition with struggling four-year institutions. The proposal was not called for a vote of the full chamber before adjournment.

• HB 2791 (Gonzalez), an ISAC initiative, would have directed ISAC to release from their repayment obligations any recipient of a scholarship, grant, or waiver that has been or may be converted to a student loan under a state program for which the Commission is responsible for collections. The bill was assigned to the House Higher Education Appropriations Committee but not called for a vote. The agency will continue to explore this concept as well as other options for providing relief or flexibility to those with outstanding debts who may have difficulty in repaying.

• HB 3551 (Crawford) was assigned to the House Higher Education Committee but never called for a vote. The bill would have established a scholarship program explicitly for adult students in online college programs, and it was intended to benefit students of Western Governors University, a not-for-profit institution based in Utah. The program would have departed from general state practice by funding postsecondary attendance at institutions based outside Illinois that have not undergone the standard IBHE approval process and are not subject to IBHE oversight.

• The Illinois Veteran Grant would have been expanded under SB 1345 (Halpin) to a person who, among other requirements, served less than one year of federal active duty and received an uncharacterized discharge as a result of a service-connected disability. Currently, at least one year of service is required unless the applicant (1) received an honorable discharge for medical reasons directly connected with such service, (2) was discharged prior to August 1967, or (3) served their federal active duty in a foreign country during a time of hostilities in that foreign country.

• The Illinois Veteran Grant program would have been restructured under SB 1353 (Porfirio – Hastings). The two primary components of this proposal were (1) to establish a sliding scale of eligibility for the Illinois Veteran Grant based on the length of the veteran's active-duty service and (2) to provide that a grant could be transferred to a qualified dependent. Notably, as written, the change to a sliding scale would have immediately cut benefits for any veteran who had served less than three full years.

• The Illinois National Guard Grant would have been expanded to members of the Army Reserves under HB 3234 (Fritts), which was assigned to committee but never considered for a vote.

• Under SB 2000 (Fine), which was assigned to committee but never called for a vote, institutions would have been responsible for detailed reporting about the outcomes of the existing Student Debt Assistance Act. The Act limits the circumstances under which an institution can withhold a transcript or diploma because of amounts a student or graduate owes to the college.

• Additional measures that were filed but not approved would have created a Mental Health Professionals Scholarship (SB 1322), a scholarship intended to support women in STEM (HB 2806), a scholarship for students in the trades (HB 3807), and new scholarship and loan repayment programs for school support personnel including nurses, psychologists, and counselors (HB 2848). Other proposals would have expanded an existing loan repayment program to include occupational therapists (HB 3283), repealed the Educational Loan Default Act (which restricts hiring and contracting with individuals who have defaulted on student loans) (HB 3461), and added a work obligation to MAP for some recipients (SB 293).

Next Scheduled Session Days

The 104^th General Assembly concluded its first spring legislative session in the early hours of June 1, 2025, and members are scheduled to return to Springfield on October 14, 2025 for the annual legislative Veto Session. However, many observers have noted during this uncertain year that a summer "special session" could be convened if either the Governor or both the Senate President and the House Speaker determine that circumstances require it.