The big, beautiful bill is bad news for student loans

Vox

09-06-2025

is a correspondent at Vox, where he covers the impacts of social and economic policies. He is the author of 'Within Our Means,' a biweekly newsletter on ending poverty in America.
If the 'big, beautiful bill,' President Donald Trump's signature legislative priority, eventually becomes law, it would gut some social programs that many people rely on. As my colleague Dylan Scott wrote in a thorough explainer, the package, which House Republicans passed last month, could result in millions of people losing their health care because of proposed work requirements on Medicaid.
There's also another part of the bill that really stands out when it comes to how Trump's domestic policy package will hurt low-income families: its overhaul of student loan programs. From changing eligibility requirements for Pell Grants, which help low-income students pay for college, to capping how much money students can borrow to cover the cost of tuition, the legislation would put a college education further out of reach for many Americans.
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These cuts aren't inevitable. The bill still has to pass through the Senate through an expedited process called reconciliation before Trump can sign it into law, and the unfolding (and very public) drama between the president and Elon Musk over the bill makes it unclear how congressional Republicans will proceed. But in the meantime, here's what's at stake:
Pell Grant recipients are in trouble
According to the liberal think tank New America, the lack of publicly available data makes it difficult (or impossible) to analyze the full projected impact of the bill, but numbers from the nonpartisan Congressional Budget Office (CBO) show that more than half of Pell Grant recipients would see a reduction in aid, and at least 10 percent would lose their grants altogether.
That's mainly because of how the bill changes eligibility requirements for Pell Grant recipients. The biggest change would be the number of course credits students have to take in order to remain eligible for the amount of aid they currently get. To receive the maximum Pell Grant of $7,395, students would have to take 30 credit hours each year, up from 24. The number of credits for part-time students would go up from 12 to 15. The bill also eliminates eligibility for students who are considered less than half-time students.
These grants are crucial in helping students from low-income families attend college. In the 2023–2024 academic year, around 6.5 million students received a Pell grant. According to the Washington Post, the vast majority of Pell Grant recipients come from families making less than $60,000 a year, with about two-thirds coming from families earning less than $30,000. Because Pell Grants aren't loans and don't need to be paid back, they make college more affordable to students who otherwise might not be able to access an education beyond their high school diploma. Undermining these grants would ultimately make college — and a future with higher earning potential — out of reach for too many people living in poverty.
While proponents of the bill might argue that the eligibility changes would simply require students to focus more of their time on school, the reality is that many students — especially part-timers — have other responsibilities, including jobs and family, and are unlikely to be able to take on more course work. As a result, the cuts to Pell Grants will likely hurt students who need it most.
The proposed changes are especially worrisome for community colleges, where many part-time students who stand to see their grants reduced are enrolled. According to the American Association of Community Colleges, some 400,000 Pell Grant recipients who attend community colleges might see their aid entirely eliminated.
Other changes in the bill
It's not just Pell Grants that Republicans are targeting with the big, beautiful bill. If the legislation becomes law, students from low- and middle-income families might also see the cost of college actually increase. The bill proposes to eliminate subsidized loans, which don't accrue interest while students are in school.
The bill also imposes a lifetime cap on how much students can borrow, including a limit based on the median cost of a given program. And while capping how much money people can borrow is generally a good idea because higher amounts of debt can drag people down, the proposed limits don't account for varying costs by state or university. Professional programs, including medical school, would be especially difficult to finance, which is why some have been warning that the bill could worsen America's doctor shortage.
Another way these cuts might make college more expensive is that students might turn to private lenders with higher interest rates. As Julie Margetta Morgan, the president of the Century Foundation, recently told me, 'It's not only cutting Pell Grants and the affordability of student loan programs in order to fund tax cuts to the wealthy, but it's also creating a gap where [private lenders] are all too happy to come in.'
So while Musk and Trump argue (at least in part) over whether this bill is cutting enough spending, the reality is the legislation as proposed would already be devastating for many families. And just like the proposed Medicaid cuts, the provisions involving student loans make it clear that the bill's burden will fall on some of the country's most vulnerable people.
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