On July 4, President Donald Trump signed the One Big Beautiful Bill Act, a significant piece of legislation that has raised concerns among students and educators regarding its implications for financial aid and social safety net programs.
The act features considerable funding reductions, notably over $1 trillion slashed from Medicaid and the Supplemental Nutrition Assistance Program (SNAP).
According to estimates from the Congressional Budget Office (CBO), the SNAP funding will be cut by $186 billion over the next decade.
Beth Corbett, vice president of government affairs and advocacy for the Central Texas Food Bank, emphasized that these cuts could discourage potential students from pursuing higher education.
She articulated concerns that new eligibility requirements may disproportionately affect rural communities where job access is limited, forcing aspiring students to choose immediate employment over educational advancement.
Corbett noted, “There is a significant possibility that fewer people will choose to pursue an advanced degree, opting instead to satisfy SNAP work requirements through career paths not requiring secondary education.”
The repercussions of SNAP cuts extend to students who work part-time and face additional financial hardships.
Steven Pedigo, director of the Lyndon B. Johnson Urban Lab, highlighted how these funding reductions may compel lower-income students to assume extra responsibilities to meet their basic needs.
He stated, “Lower-income students are always having to, a lot of times, self-finance or self-generate the funds to go to college.”
Furthermore, experts worry that states might respond to reduced federal funding for SNAP by cutting budgets for other programs, including those supporting higher education.
Corbett expressed that the long-term effects of such changes are still uncertain, noting, “Increasing the reliance on the charitable food network is not a sustainable solution to addressing food insecurity.”
In addition to cuts to SNAP, the One Big Beautiful Bill Act will eliminate Direct PLUS loans for graduate students, which have traditionally been a crucial resource for individuals pursuing postgraduate education.
Starting in July 2026, the grad PLUS loan program will no longer exist, although existing borrowers can apply until June 2026 and will receive assistance until the 2028-2029 academic year.
Rachel White, an associate professor in the department of educational leadership and policy, voiced her concern about how these changes would particularly impact middle- and lower-income students who rely on such financial aid to afford their education.
She remarked, “To me, that is counterintuitive to whether or not we want to subscribe to this ‘American Dream.’ We do have systems in place that will help students, regardless of what their background is, to achieve and pursue these types of positions.”
The legislation also sets new loan caps for graduate and parent PLUS loans, which could force students to seek alternative, possibly less favorable, financing options.
Under the new terms, there will be an annual limit of $20,500 for federal loans covering master’s degrees, with a total cap set at $100,000 per student, significantly reduced from the previous $138,500 cap.
White cautioned that these changes could lead students to turn to private loans, often associated with higher interest rates and more stringent approval requirements, making it harder for them to finance their studies.
“Those (loans) come at higher interest rates oftentimes,” she noted. “They also require an application review that potentially could lead to some students not being able to get those loans, particularly at a time when we are in need of medical professionals.”
Additionally, the Parent PLUS program will also see changes, shifting from allowing parents to borrow up to the full cost of their child’s tuition to imposing a cap of $20,000 per year and a total cap of $65,000 per student.
The act consolidates several loan repayment plans into two options: the Standard Repayment Plan, with fixed payments over 10 to 25 years, and the Repayment Assistance Plan, which bases monthly payments on borrowers’ income and offers loan forgiveness after 30 years.
White expressed that these new repayment structures may prompt borrowers to reassess their investment in higher education, particularly concerning the debt they are willing to incur.
She concluded, “Really thinking long term, how much debt are they willing to incur to obtain a degree and how long will it take for them to pay them back.”
As the One Big Beautiful Bill Act unfolds, the full impact on students, particularly those from low-income backgrounds, remains to be seen.
Stakeholders continue to express concern about the potential long-term ramifications of funding cuts to essential education programs.
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