State Legislative Update

End of Spring 2026 Session
July 2, 2026

Katharine Gricevich
Director of Government Relations
Illinois Student Assistance Commission

NOTE: Bill statuses are current as of this writing. To review the feel text of a bill or check its current status, please visit the General Assembly website at www.ilga.gov.

The Illinois General Assembly (GA) concluded its spring 2026 legislative session not long before sunrise on June 1st.

The session was marked by an unusually asynchronous spring legislative calendar, with representatives and senators rarely in the statehouse at the same time to strategize, negotiate, or coordinate across the two chambers. Meanwhile, the Chicago Bears were in pursuit of property tax certainty and public infrastructure spending support for a new stadium, stakeholders debated potential regulation of artificial intelligence and data centers, and state legislators attempted to maneuver as best they could in response to federal funding reductions, legal challenges, and regulatory uncertainty.

As the legislative session began in January and budget negotiations got underway for state fiscal year 2027, legislative leaders and the Governor urged rank-and-file members to set modest expectations, rein in new spending, and recognize that the state would not have the capacity in the coming years to backfill in every instance where the federal government has reduced or removed funding.

At least where new scholarships, grants, and loan repayment programs were concerned, legislators seemed to heed those leaders’ words of caution: After a few years of rapid growth in the number of ISAC-administered programs, and despite many proposed initiatives this spring, the General Assembly approved only one new scholarship this year (discussed below), and it will not be funded from the state’s general funds.

FY 2027 Budget

In June, Governor Pritzker approved House Bill (HB) 111 (the state budget bill, which authorizes spending) and HB 2949 (the accompanying budget implementation bill, or BIMP, which makes changes to state law that are needed to enact the budget bill). Together, these two bills are the essential, primary components of the state’s spending plan for state Fiscal Year 2027 (FY27), which began July 1, 2026, and runs through June 30, 2027.

The governor, working in cooperation with lead appropriators in both chambers, did issue several line-item vetoes to correct errors and remove duplicative language from HB 111, but with those changes, the remainder of the budget for FY27 was approved and is now in effect. The bills are now considered law and are officially Public Act 104-0464 (budget) and Public Act 104-0466 (BIMP). (Please note before clicking “print” that each of these acts is hundreds of pages long.)

The enacted FY27 spending package allocates nearly $55.9 billion for the state fiscal year, up from about $55.1 billion in FY26. According to the bill sponsors, state revenues in FY27 are projected to be slightly higher than the budgeted expenditures, creating a modest surplus at the end of the fiscal year.

There were no increases on income or sales tax approved as part of the FY27 spending plan, but the Democratic majority did vote to create new taxes related to prediction markets, cryptocurrency, sports betting, and digital advertising. A projected $200 million in revenue from a new tax on social media companies is reportedly built into the FY27 package. Otherwise, budgeteers generally did not assume that these new revenues would be available to spend in FY27, since they may face legal challenges that could delay or prevent implementation. (Proving the point, prediction market Kalshi filed a lawsuit against the state in late June, challenging the new taxes and accompanying regulations.)

In all, most of the FY27 spending plan looks very similar to what the Governor proposed during his budget address in February. This is particularly true for the portion of the budget affecting programs of the Illinois Student Assistance Commission.

  • General funds for the Monetary Award Program (MAP) are held flat at the FY26 level, keeping the program just under $721.6 million. For comparison, in FY19, the program’s appropriation stood at about $401.3 million, and the maximum grant was $4,869, compared to today’s maximum of $8,064. While flat funding will not allow the state to serve all eligible students who apply, staff anticipate that the program will serve about 150,000 students at this funding level under the current formula—more than 20,000 recipients above the number who received grants in FY19.
  • Most other ISAC-managed programs will also be funded at the same level in FY27 as they were for FY26, including the following:
    • the Early Childhood Access Consortium for Equity (ECACE) Scholarship
    • AIM HIGH scholarships for public university students
    • the recently launched Teachers of Illinois Scholarship
    • the Exoneree Grant
    • Golden Apple Scholars and Accelerators programs for teachers-in-training
    • grant and loan repayment programs for school and municipal social workers
    • the Nursing Education Scholarship
    • the Nurse Educator Loan Repayment Program
    • the Illinois Teachers Loan Repayment Program
    • the Veterans’ Home Medical Provider Loan Repayment Program
    • programs funded from special state funds, like the Optometric Scholarship
  • The budget incorporates three cuts:
    • ISAC will receive $5 million, down from $6 million, to partially reimburse public universities for waiving tuition and fees under the Illinois Veteran Grant and Illinois National Guard Grant programs. The Illinois Community College Board received funding to reimburse community colleges in full for IVG and ING.
    • Funding for the Grants for Dependents of Police, Fire, and Correctional Officers killed or seriously, permanently disabled in the line of duty will be at $1.1 million, down from $1.3 million in FY26 but still expected to be enough to pay these claims in full.
    • The Human Services Professional Loan Repayment Program is funded at $250,000 from general funds, one-fifth of the $1.25 million in general funds that the program received for FY26. (The budget also gives ISAC permission to spend up to $350,000 from the agency’s own Contracts & Grants Fund for the program. However, little or no funding will actually be available from that fund in FY27 because those dollars were already awarded to eligible human services professionals late in FY26.)
  • Increases in spending authority included the following:
    • After a year without a state appropriation, the FY27 budget includes $7 million to continue the Prepare for Illinois’ Future Program. Under the program, students at all Illinois public universities and at five community colleges have free access to Kaplan’s preparation services for graduate and professional school entrance exams (GRE, MCAT, LSAT, etc.) as well as preparation for licensure exams for fields like nursing and accountancy.
    • The FY27 budget also increases ISAC’s authority to transfer funds from scratch-off lottery ticket proceeds to the United Negro College Fund (UNCF), Inc., and the Illinois DREAM Fund Commission to support scholarship programs for Illinois students. Authority is $5 million for FY27, an increase of $1.5 million over the FY26 level. No transfers have yet been made to the organizations as they prepare to launch programs; the increased authority for FY27 would just allow them to spend more of the funding that has accumulated in the meantime. The actual amount available for these programs is determined by the Department of the Lottery based on the sales of specialty lotto scratch-off tickets. The FY27 budget implementation bill, (HB 2949, now Public Act 104-0466), also includes language that UNCF, Inc., sought to allow a portion of their funding to be used for operational costs.
    • The Illinois Department of Human Services will allocate more mental health funding in FY27 to the Community Behavioral Health Care Professional Loan Repayment Program ($10 million, up from $7.5 million in FY26). The budget bill authorizes ISAC to spend at this new, higher level.
    • The agency will also administer a $250,000 grant for the N’DIGO Foundation, a previous ISAC grantee, “to fund internships to train students and youth in communications.”

Elsewhere in higher education, public universities and community colleges received modestly good news. As part of the FY26 budget, public institutions were provided a 1% increase in funding for operations, with an increase of two additional percentage points held in reserve by the Governor. As FY26 drew to a close, the Governor released those reserved funds, for a total FY26 increae of 3%. The FY27 budget then included a 1% increase on top of that final FY26 funding level: about $13 million additional for public universities and $3m additional for community colleges.

The Illinois Board of Higher Education (IBHE) and Illinois Community College Board (ICCB) are each allocated $250,000 to be distributed to institutions in support of prison education programs. IBHE is allocated $8 million for HOPE Chicago, and, as was the case in FY24 and FY25, $3 million in funding will be distributed to public universities where more than 55% of students qualify for Pell Grants.

Legislative Highlights Beyond the Budget

Several notable measures related to higher education affordability and access were approved by both houses and are likely to become law:

  • HB 4304 (Stuart/Halpin – Sent to the Governor) would create the Higher Education Student Support and Academic Freedom Act, which is largely a statement of principles about preserving the integrity, independence, and academic freedom of public institutions and supporting students' pursuit of learning, inquiry, and career readiness. The act focuses on the protection of students’ first amendment rights, freedom from undue political influence in curriculum, and the expectation that institutions should be preparing them for careers. Specific to college costs, the act calls for financial transparency (“Public institutions of higher education shall strive to clearly disclose tuition, fees, and applicable, material financial obligations prior to and during enrollment.”) and clear policies on refunds and withdrawals (“Public institutions of higher education shall have the ability to publish transparent policies on tuition refunds, withdrawals, and cancellations.”)
  • HB 4533 (E. Hernandez/Villa – P.A. 104-0495) amends the Uniform Money Transmission Modernization Act to allow licensees to offer every customer who transmits money internationally the option to make a voluntary donation to the Illinois DREAM Fund.
  • HB 4687 (Ford/Faraci – Sent to the Governor) would repeal the Educational Loan Default Act, an act that bars state agencies and postsecondary institutions from employing or contracting with individuals who are in default on student loans and have not entered a satisfactory repayment arrangement. The repeal does not eliminate borrowers’ obligations to repay; it just decouples student loan repayment status from state employment and contracting.
  • HB 4754 (Croke/Halpin – P.A. 104-0504) amends the Know Before You Owe Private Education Loan Act. Under existing law, certain private educational lenders must submit an annual report to the Illinois Department of Financial and Professional Regulation and the Student Loan Ombudsman. Under this bill, the lender would be required to report the total number and dollar amount (instead of “the volume”) of private education loans made annually, by institution; the total number and dollar amount of private education loans made annually with a cosigner; and the default rates for private education loans with and without cosigners.
  • HB 4979 (Stuart/Edly-Allen – Sent to the Governor) is an IBHE initiative that incorporates several changes, many technical. In a section of existing law that requires reporting on specific majors, the bill would require institutions to disclose to a student the average monthly student loan payment over a period of 10 (was 20) years based on the estimated cost of his or her education, as well as “the percentage of graduate jobs in which a graduate who holds a degree in that major or program of study remains continuously employed with the same employer in this State for 3 consecutive fiscal quarters.” (Under current law, the requirement is to report average job placement rate within 12 months after graduation.) The bill also clarifies that IBHE and ICCB, in reporting on programs of Higher Education in Prison, can determine how to report required data to protect student privacy. Finally, it makes minor changes to the contents of a report on campus sexual misconduct and removes the requirement that student Board members begin their terms July 1.
  • HB 5460 (Lilly/Villa – Sent to the Governor) is an ISAC initiative that would amend the existing Post-Master of Social Work School Social Work Professional Educator License Scholarships. The bill would allow the program to be used at private, not-for-profit institutions (in addition to public universities), would allow an applicant to be awarded a scholarship before they have their MSW degree and social work license formally in hand if they are on track to receive these, and would allow the program to be cited as the School Social Work Scholarship. Notably, the existing law that created the program allows up to 250 scholarships, a cap that is unchanged by this bill and is substantially more than public institutions’ programs had capacity to serve.
  • HB 5093 (B. Hernandez/Villanueva – P.A. 104-0511) amends the public universities’ laws and the Public Community College Act to remove references to residency from a section of law that entitles some students to in-state and in-district tuition. This Attorney General initiative is in response to a federal lawsuit that challenges Illinois policies around in-state tuition and financial aid access for undocumented Illinois students who meet certain criteria. Those criteria, including attendance at Illinois high schools and/or community colleges, remain unchanged except that, as of the 2027-28 academic year for which financial aid applications will begin this fall, students would no longer have to show that they have not established residency outside of this State.
  • SB 3070 (Lightford/W. Davis – Sent to the Governor) changes high school graduation requirements for students who begin as freshmen in the 2028-29 school year or later. A recent law would have required students to study a language other than English for at least two years; that was an attempt to ensure that all students were prepared to go on to higher education, where many colleges require or strongly recommend two years of language. Unfortunately, school districts have been challenged to hire enough teachers to meet this requirement. In response to those challenges, SB 3070 loosens the mandate: It would allow a student to take two years of career or technical education as a substitute to two years of a foreign language. Legislators plan to continue discussing these requirements, and additional changes may be forthcoming related to other options such as music and art.
  • SB 3365 (Aquino/Moeller – P.A. 104-0470) is a Medicaid omnibus bill. Potentially of interest to financial aid administrators, the bill directs ISAC to create a new Long-Term Care Nursing Scholarship that will ultimately be funded by fines collected from nursing homes that the state’s Department of Public Health finds have violated minimum staffing requirements. Funds are not expected to be available for the program for FY27, but the agency will be working to design the program and prepare rules.
  • SB 3720 (Edly-Allen/Stuart – Sent to the Governor) makes changes regarding the practice known as reverse transfer. Beginning with the 2026-2027 academic year, each public university will be required to automatically provide, to any transfer student who is accepted to the university with at least 30 hours of academic credit at a community college, notice of the option for the reverse transfer of credit after the transfer student has earned a combined total of 60 hours of academic credit at the community college and the university. The notice shall include the public university's opt-in process for reverse transfer to allow the sharing of the student's transcript information between the community college and university. The community college or university may not charge an application, transfer evaluation, or graduation fee or any other fee associated with conferral of an associate degree through reverse transfer under these provisions.
  • SB 3737 (Porfirio/Stuart – Sent to the Governor) is an Attorney General’s office initiative to create the Servicemember Education Rights Veneration Act, or SERVE Act. The bill is an attempt to ensure that military servicemembers will retain their academic standing and financial aid eligibility (including for ISAC-administered programs) if they are called to active duty while enrolled in an Illinois college or university. The bill will take effect January 1, 2027, in the middle of the upcoming 2026-27 academic year. While the provisions of the bill are largely duplicative of existing state and federal laws, the bill also empowers the Attorney General’s office to play a stronger role in enforcement.

It’s worth noting several other measures that were not approved by both houses, some of which could return in a future legislative session:

  • Legislators discussed but did not vote on a bill to adopt a new funding formula for public universities, intended to provide more new resources to institutions considered to be farthest from an adequacy target. ISAC’s executive director served on a task force that helped develop elements of the proposal, known as the Public University Equitable Funding Formula (HB 1581 - Ammons and SB 13 - Lightford). Although the proposal has enthusiastic supporters and includes a hold harmless provision, not all public universities support it, and some legislators have expressed concern about the significant cost of full implementation.
  • Stakeholders spent many hours last spring negotiating a framework for allowing community colleges to offer a limited number of baccalaureate degree programs in areas of demonstrated workforce need. At that time, the House Executive Committee advanced the proposal (contained in House Amendment #2 to SB 1988 – Katz-Muhl) to the full House after a committee hearing in which legislators expressed support for serving place-bound students but 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 last year, and it was not called for a vote this spring.
  • HB 4229 (Stuart) would have created the Higher Education Enrollment Fraud Act, requiring an IBHE-led working group and extensive reporting from institutions. The bill was an attempt to respond to reports of the “ghost student” phenomenon, in which institutions receive applications from individuals who are not actually pursuing a degree but are instead seeking access to financial aid or to online educational tools for financial gain, and who then withdraw or disappear. The identities of these applicants are sometimes stolen and sometimes completely fabricated. The sponsor set the measure aside following discussion of reporting requirements and how to best balance security and open access, but she has expressed a desire to be helpful to institutions as they attempt to address this issue.
  • HB 4452 (Grasse) would direct ISAC to create the Community Hospice and Palliative Care Professional Loan Repayment Program to support eligible hospice and palliative care professionals practicing in a hospice program that provides services in the State.
  • HB 4453 (Chung) would create a continuing appropriation from the state’s General Revenue Fund (GRF) to reimburse public institutions for the special education teacher scholarship program (which is a waiver, the costs of which are absorbed by the institutions). This would mean that institutions would be automatically assured payment each year; the General Assembly would not need to include the funding in the state budget. Illinois State University, in the sponsor’s district, does bear a disproportionate burden due to this program. Notably, there are also programs that disproportionately affect other institutions (e.g., the Children of Veterans’ Tuition Waiver, which only applies to the University of Illinois system).
  • HB 4538 (Mayfield/Collins) creates the Identity Verification for Consumer Services Act, which would require that “an entity that engages in a high-risk transaction involving a covered service shall use identity verification to verify a person's identity before initiating or modifying an agreement to provide the covered services.” The definition of "covered service" includes "government benefit," which is not defined by the bill. Identity verification would be required to occur in two ways from a specified list of options, and the documents used for identification would have to be held for at least three years. The bill passed the House unanimously despite concerns about the administrative burden created by the proposed process.
  • HB 5502 (Briel) would alter the Illinois Veteran Grant program (IVG) in two key ways: It would replace today’s binary system (i.e., once a veteran has met certain criteria, they are eligible for a full four years of aid) with a sliding scale of eligibility in which the a veteran qualifies for a different number of IVG-paid credits based on the length of service. A grant could also be transferred to a qualified dependent beginning with the 2027-2028 academic year. As written, without a transition period, the bill would also have had the unintended consequence of stripping some currently-eligible veterans of their existing IVG benefits.
  • SB 2893 (Rezin) would extend MAP grant eligibility for teacher programs and require repayment if recipients do not fulfill a teaching obligation. The changes would establish different rules for students in different programs and transform MAP from a program that never has to be repaid to one that could convert to debt for some students.
  • SB 3154 (Belt) would create the Adult Learner Flexible Education Grant Program, administered by ISAC, to facilitate access to online postsecondary education for adults over the age of 25. This is an initiative of Utah-based Western Governors University. The program would have departed from typical ISAC programming by providing financial aid for attendance at institutions based outside Illinois that have not undergone the standard IBHE approval process.
  • SB 3279 (Porfirio) would change the definition of a "qualified applicant" for the Illinois Veteran Grant (IVG) to include a person who, among other requirements, (i) served at least 12 months of his or her federal active duty in the State, (ii) resided in the State for 2 years after leaving federal active duty, and (iii) now serves in a reserve component of the Armed Forces. Under current law, a veteran generally must have lived in Illinois before enlistment and returned within six months after active duty, or they must be a current resident who has lived in Illinois for at least 15 consecutive years after discharge. While ISAC does not have enough information to determine how many additional students might apply and qualify because of this bill, the Illinois Department of Military Affairs (IDMA) believes that the number would be substantial. Notably, the community colleges and public universities are required to honor IVG by waiving tuition and fees for eligible students, regardless of how much the state reimburses them. Because the state is not obligated to pay the schools for the program, the fiscal impact to state general funds could be zero, but public institutions would then have to offset or absorb those costs.
  • SB 4167 (Feigenholtz) is an initiative of Ascend Learning and would add services to the Prepare for Illinois’ Future test preparation program.
  • House Joint Resolution (HJR) 53 (LaPointe) was adopted only in the House and not yet sent to the Senate. The resolution responds to federal changes that have drawn new distinctions between graduate and professional degree programs and set different loan limits for the two categories, reducing access to federal student loans for those in “non-professional” programs. The resolution expresses the belief that nursing, social work, professional counseling, marriage and family therapy, physical therapy, occupational therapy, speech-language pathology, audiology, physician assistant practice, public health, and education are professional disciplines, urges the United States Department of Education to include all graduate degrees in these areas in its definition of "professional degrees" for federal student loan purposes, and commits to exploring state-level solutions to support graduate education in health and human services professions, including but not limited to scholarships, grants, loan repayment assistance programs, and other workforce development initiatives.

Next Steps and the Fall Veto Session

Since the beginning of June, the General Assembly has been officially sending to the Governor those bills that were approved by both chambers. From the day he receives a bill, the Governor has 60 days in which to sign or veto it; he can also choose not to act within that timeframe but to allow a bill to become law without his endorsement.

If the Governor vetoes a bill, legislators will have an opportunity to override that veto during the annual fall Veto Session, scheduled for November 17-19 and December 1-3, 2026.

An earlier “special session” could be convened if either the Governor or both the Senate President and House Speaker determine that circumstances require it.