The House GOP proposal to impose risk-sharing responsibilities on colleges and universities is the most concerning element of the budget bill that’s now in the hands of the Senate, according to the head of the leading higher education advocacy body.

Ted Mitchell, president of the American Council on Education, said the plan would limit access to higher education for low-income students and sow financial instability across the sector.

In a recent episode of The Key, Inside Higher Ed’s news and analysis podcast, Mitchell also warned that cuts to federal funding would cede the U.S.’s position as a global research superpower.

Risk-sharing is among House Republicans’ plans to cut nearly $350 billion from higher education over the next 10 years and is part of the so-called One Big Beautiful Bill Act, which aims to eliminate $1.5 trillion from the federal budget. If passed, the legislation would require colleges to make annual payments based on how much former students owe in unpaid loans.

“It’s not a very discriminating tool,” Mitchell told The Key. “Ninety percent of institutions would end up on the hook for paying money … but also, year by year the bill is different, and so once again it creates an instability and an insecurity that’s very, very hard to plan on.”

More important, Mitchell said, is how risk-sharing would impact institutions that enroll low-income students.

“We think that it penalizes institutions that do the hard work of admitting people who aren’t born on third base and just have to walk home, but [students who] are born in the dugout and they need a chance to play,” he said. “We want institutions to have an incentive to do the work with the toughest applicants.”

The reconciliation bill also includes proposals to stop Pell Grant funding for students studying less than part-time, end Grad PLUS and limit parent PLUS loans, tax institutions’ endowments, and cut funding for the Medicaid and Supplemental Nutrition Assistance programs.

Taken together, the proposals in the bill will make it harder for students to go to college, Mitchell said.

“It’s interesting that you hear the administration talking about the evils of how elitist American higher education is, and the reconciliation package as a whole will make higher education less accessible for a bunch of students—like a million students—making it much more elite than whatever it is today.”

The bill represents a new approach for how the federal government intends to legislate higher education. To Mitchell, other actions from the administration, including slashing research funding and capping reimbursements for research grants, go much further toward eliminating entirely the alliance it has with the academic enterprise.

“I think that [the relationship between the federal government and higher ed] won’t be the same, and I’m not sure that’s a bad thing,” Mitchell said. “But I want to make sure, on behalf of ACE, that the discussion doesn’t throw the baby out with the bathwater.”

At risk, according to Mitchell, is the country’s leadership in innovation and scientific discovery, born from a commitment after World War II to allocate federal funding to support basic research in universities and an engine of economic development.

“If we lose that, we lose a lot of momentum, we lose a lot of force, tons of innovation, and we become a secondary intellectual, economic, political and military power,” he said. “I don’t think that that’s what this administration wants at all, but they need to know, and we need to remember, that that’s a future that’s possible if we don’t pay attention to this relationship for us.”

If U.S. institutions are no longer the hotbeds of talent and research, industry investment—the third pillar in the innovation economy—will go elsewhere, he warned. “I don’t know where they’ll look, other than China and Russia, because that’s where they will have to go because those are the countries [that are] still developing that intellectual talent.”

Federal judges recently placed injunctions on the government’s efforts to cut reimbursements for indirect costs for grants from the NIH and Department of Energy after ACE, along with the American Association of Universities, the Association of Public and Land-grant Universities, and several individual institutions sued to overturn the caps. Another suit challenging cuts to National Science Foundation indirect costs is awaiting a hearing.

Despite the administration’s threats to funding and its focus on “red-hot campaign rhetoric” instead of “good policy-making to help students succeed,” Mitchell said he remains optimistic there is common ground to be found between institutions and the federal government.

He noted an “inattentiveness” and “disdain” among universities and colleges toward programming that would prepare students for jobs as soon as they graduate.

“That’s a place we haven’t paid enough attention to,” he conceded. “Clearly, that’s where the energy is in the administration, and we want to be partners in that. And that means moving some attention away from our traditional focus on the Department of Education to Labor and Commerce and Energy and other places that similarly are beginning to really focus on workforce.”

In April, President Trump signed an executive order instructing federal officials to create a million new active apprenticeships. The move gave colleges an “unusual bit of leverage” Mitchell said, “which is to say, as we might not say about other executive orders … ‘Look, you said you wanted to do this, we want to do it with you … so let’s take the words off the executive order page and let’s take a look at a new jobs act or something … but let’s work together to really make that a reality.’”