On July 3, the House passed the One Big, Beautiful Bill Act in a 218-214 vote, following a narrow approval by the Senate on July 1. President Trump signed the bill into law on July 4th.
The Big, Beautiful Bill contains sweeping funding cuts and restrictions to Medicaid and the Supplemental Nutrition Assistance Program (SNAP). The bill also includes an increase in funding to Homeland Security and ICE, terminations of numerous tax incentives from green energy policies, defunding of Planned Parenthood clinics, and more.
Education is taking a hard hit as well. The newly signed bill limits the amount students can borrow for grad-PLUS loans, changes Pell grant eligibility, and puts institutions at fault for post-grad employment. As overwhelming as this bill is, let’s break it down for students.
Elimination of Grad PLUS loans and other changes to student loans
Grad PLUS loans will phase out by July 2026. Many students use the Grad PLUS program to fund their graduate or doctorate degrees after other loans are exhausted. Current students will not be affected. Those looking to further their education after July 2026 should begin to look at outside loans for funding.
According to the National Association of Independent Colleges and Universities (NAICU), 425,824 Grad PLUS loans were awarded to students nationwide for the 2024-2025 academic year. Without this resource, students seeking higher education will have a harder time covering the cost.
The bill redefines the amount of federal loans students are able to borrow with annual and lifetime caps.
- Parents can borrow $20,000 annually, with a total limit $65,000 per student.
- Graduate students: $20,500 annually, $100,000 lifetime limit.
- Professional students (e.g., medicine, law): $50,000 annually, $200,000 lifetime limit.
Students will have to look at outside loans and funding once they’ve reached the cap for federal loans.
Repayment Plans
The Big Beautiful Bill phases out numerous federal student loan repayment plans, including President Biden’s SAVE plan, IBR, PAYE and ICR.
Biden’s SAVE plan aimed to stop charging monthly interest on loans as long as borrowers kept up with their required payments. The 7.7 million borrowers currently enrolled in the plan now have until August 1, 2025, before interest is collected again, the Department of Education announced.
Borrowers currently using these plans have until July 1, 2028, to find a new plan. Starting July 1, 2026, a standard repayment plan or an income-driven repayment plan (IDR), called the Repayment Assistance Plan (RAP), will be the only two options for loan repayment.
In an interview with CBS MoneyWatch, Aissa Canchola Bañez, a policy director at advocacy group Student Borrower Protection Center, says that the new IDR “will allow borrowers to pay 1% to 10% of their income on a monthly basis, for up to 30 years.” This is longer than the current timeline of 20 to 25 years.
Pell Grant eligibility
Pell Grant eligibility underwent minor changes as the Big Beautiful Bill advanced toward the executive office.
The Pell Grant is a federal grant that mainly supports undergraduate students from low-income households. Over six million students received Pell Grant awards for the 2023-2024 academic year.
Beginning July 2026, the final bill removes Pell eligibility for students who have or receive a full-ride scholarship. The bill also expands the Pell program to shorter-term but accredited programs (like community colleges) to include job training programs. This is a new “Workforce Pell.”
Party division over Big Beautiful Bill
Overall, the future for education in America looks bleak. For an administration that claims to care about its nation’s education, its actions are questionable. The government continues to reallocate money from our youth and students to fund the military and controversial immigration policies.
Responses to this bill divide along party lines. U.S Senator Bill Cassidy, M.D. (R-LA) says that “Republicans are taking on the root causes of the student debt crisis to lower the cost of tuition and improve Americans’ access to opportunities that set them up for success.”
Rep. Thomas Massie of Kentucky and Rep. Brian Fitzpatrick of Pennsylvania were the only two republicans to vote against the Big Beautiful Bill. Massie wrote on X that he did not vote for the bill due to the large impact it would have on the national debt.
All House Democrats voted against the Big Beautiful Bill. Rep. Jasmine Crockett of Texas, an avid fighter for education, said every single one of the democratic amendment suggestions was rejected. In her statement on the bill, she says that Republicans wanted to push the bill through, no matter the cost.
What the future holds
Student loan debt is already crippling, totaling nationwide at $1.6 trillion. With less access to federal loans, repayment becomes harder. Under this new bill, students will be forced to seek out private loans. Many private loans often come with higher interest rates.
Students across the nation are experiencing a struggle in job hunting post-graduation. There’s always been a conversation about how employers seek applicants with years of experience, even for entry-level jobs. Some students are using graduate school as a way to extend their job search or even give themselves more room for experience for a job after graduation.
In a recent study by Oxford Economics, unemployment has risen 85% since mid-2023. Recent college graduates aged 22-27 make up 12% of that percentage. The Federal Reserve Bank of St. Louis reported an unemployment rate of 7.3% for members of Gen Z with a Bachelor’s degree in June 2025.
Republicans voice concern around student debt and national debt, yet their actions contradict their concern. There is an idea amongst older generations that ‘Gen Z doesn’t want to work,’ when that’s never been the case. For most jobs, you need a bachelor’s degree or higher with years of experience. Explain that to a recent graduate after lowering student loan access, or to someone looking to further their education after limiting Grad PLUS loans.
Resources and federal funding for higher education grant students access to all kinds of jobs. The sweeping cuts in the Big Beautiful Bill make education less affordable for current and future students, which will eventually affect our workforce.
