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Vox
17-07-2025
- Business
- Vox
The crimes Trump doesn't care about
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. When the topic is immigrants or Democratic cities, President Donald Trump loves to talk about crime. But when it comes to Wall Street bankers and C-suite executives, he tends to keep his mouth shut. Within the first 100 days of his second term, Trump pardoned a slew of financial fraudsters. And in February, he signed an executive order announcing that his administration would pause enforcement of the Foreign Corrupt Practices Act, a law passed in 1977 that was designed to prevent American citizens and companies from bribing foreign officials to serve their own business interests. Now, it's becoming clear how Trump's Department of Justice likely intends to handle financial crimes. If these crimes involve drug cartels or political opponents — anything that fits his narratives that immigration is dangerous and that Democrats are corrupt — then they merit the DOJ's attention. Related Trump has set up a perfect avenue for potential corruption This month, for example, Trump accused California Sen. Adam Schiff of committing mortgage fraud. Similarly, the DOJ opened an investigation into New York Attorney General Letitia James's real-estate transactions — the same Letitia James who filed a lawsuit against the Trump Organization that resulted in a judge ordering Trump to pay over $450 million. But if Trump's allies or major corporations engage in some corruption to get ahead, then the DOJ might be inclined to just look the other way. How the DOJ's white-collar crime priorities are shifting On paper, the Trump administration's words have not necessarily indicated a more dramatic shift in priorities than the routine modifications you might see from one administration to the next. 'What I see in the actual policies and the details that are emerging is sort of more of the fine-tuning you would expect with a change in administration, consistent with not only the first Trump administration but also prior Republican administrations,' said Joseph Facciponti, a former federal prosecutor who now serves as the executive director of NYU School of Law's Program on Corporate Compliance and Enforcement. Still, there are signs that the Trump administration might continue to deprioritize enforcing white-collar crimes. Since Trump returned to power, the DOJ has retreated from lawsuits involving money laundering, crypto markets, and foreign corruption. In fact, as of March 31, federal prosecutions of white-collar crime have declined by more than 10 percent compared to last year, when Democrats still controlled the White House. That's made defense lawyers representing clients with ongoing investigations feel more optimistic about their pending cases, according to the Wall Street Journal. It's also left them concerned that they'll have less work and fewer lucrative clients during the Trump years. To say that this approach is business-friendly is an understatement. Trump's February executive order pausing enforcement of the Foreign Corrupt Practices Act states that upholding anti-bribery laws essentially punishes American companies for 'routine business practices in other nations' and 'actively harms American economic competitiveness and, therefore, national security.' The executive order is not merely willing to ignore corporate corruption — the language practically encourages it as a necessary means to stay competitive. This line of thinking was continued in a memo issued by the DOJ in May, which announced new investigative and policy priorities for white-collar crime enforcement. While the memo stated that 'white-collar crime also poses a significant threat to U.S. interests,' it also stated that rigorous enforcement of corporate law is a burden on businesses. 'The vast majority of American businesses are legitimate enterprises working to deliver value for their shareholders and quality products and services for customers. Prosecutors must avoid overreach that punishes risk-taking and hinders innovation,' the memo says, adding that the department has to strike the right balance between investigating criminal wrongdoing and minimizing burdens on businesses. To be sure, effective law enforcement does require prosecutors to be prudent and not take on every single case that comes their way. But the DOJ seems to be implying that prosecutors have been too aggressive in pursuing cases involving financial crime, despite the fact that white-collar prosecutions have been trending down since 2011. The May memo does outline some areas of white-collar crime that it plans to focus on, including health care and elder fraud, Ponzi schemes that defraud investors, and money laundering or tax evasion schemes that compromise US national security interests. But the question is whether the DOJ will have the capacity for robust corporate enforcement in those areas. 'I think the real issue is how [the administration's priorities] all get implemented because we know that there's been a number of resignations within the criminal division, and specifically the fraud section. We know that they have shifted personnel around and reassigned staff to do other things,' Facciponti said. 'And so what kind of resources do they have at this point to do the kinds of investigations that they say that they're interested in doing?' Indeed, changes in the administration's staffing have also slowed investigations or brought them to a halt. In April, the Wall Street Journal reported that Attorney General Pam Bondi is 'swapping out and sidelining career supervisors who were responsible for charging crimes such as corruption, price fixing and securities fraud.' Trump has also signaled to convicted white-collar criminals that they might have an out. Since retaking the White House, he has commuted the 14-year sentence of Jason Galanis, who defrauded investors, including a Native American tribe and a teachers' pension fund, of tens of millions of dollars; he has pardoned Julie and Todd Chrisley, the reality TV stars convicted of bank fraud and tax evasion; and he granted clemency to Lawrence Duran, a health care executive who was convicted of leading a Medicare fraud and money laundering scheme. These are just a few of the fraudsters Trump has granted clemency to, which House Democrats say has cost victims and taxpayers some $1.3 billion in fines and restitution. This has given convicted white-collar criminals some hope that they can get pardoned if they get on Trump's good side. Former Sen. Bob Menendez, a Democrat from New Jersey who was convicted of bribery and corruption under President Joe Biden's DOJ, has been gunning for a presidential pardon by accusing Democrats of weaponizing the Justice Department — a familiar line lifted from Trump's presidential campaign. Sam Bankman-Fried — the cryptocurrency mogul who was convicted of fraud and conspiracy and sentenced to 25 years in prison — and his allies have also been trying to secure a pardon from Trump, according to the New York Times. How Trump thinks about crime The president likes to tout a tough-on-crime persona, having successfully run law-and-order campaigns that relied on racist and anti-immigrant tropes to whip up anger among his base supporters. His administration has also made crime a focus, largely to serve its interest in curbing immigration and its mass deportation agenda — so much so that the White House's official channels have turned arrests of immigrants into memes. But Trump clearly doesn't view some crimes — specifically white-collar crimes — as worthy of scrutiny. That's in part because Trump has long ingratiated himself with the business world, not to mention the fact that he and his businesses have also been found guilty of fraud. More than six months into the second Trump administration, a pattern is emerging in which Trump's political opponents are scrutinized in ways his allies never would be, as is the case with Schiff and James. And people who try to get on Trump's good side, like New York City Mayor Eric Adams, who was indicted on bribery charges during the Biden administration, have seen Trump's DOJ drop its charges against them. By being soft on white-collar crime, the lesson from Trump's Justice Department might be that if you're a businessperson looking to dabble in some light fraud, now might be the best time to do so. And if you want extra insurance, it probably wouldn't hurt to get on Trump's good side.
Vox
09-07-2025
- Business
- Vox
Student loans are about to get worse
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. University tuition in the United States is notoriously expensive — so much so that Americans currently have over $1.6 trillion in student loan debt. But now, the routine process of taking out student loans has been overhauled as a result of the One Big Beautiful Bill, which President Donald Trump signed into law last week. The new law eliminates some student loan programs and adds borrowing caps that could make it harder for people to earn advanced degrees. In some cases, it could make financing college more difficult. 'This bill makes monumental changes to the higher education system,' said Sarah Sattelmeyer, project director for education, opportunity, and mobility in the Higher Education initiative at the liberal think tank New America. 'And a lot of the elements in the bill are going to make college more expensive or harder to access, especially for the lowest-income students, families, and borrowers.' So what, exactly, is in this bill, and how will it impact student loan borrowers? Borrowers will have fewer repayment options On X, Education Secretary Linda McMahon said that the president's spending bill 'simplifies the overly complex student loan repayment system.' In a way, she's right. The law consolidates a variety of student loan repayment options. Before, students could choose from roughly a dozen financing options, including the Biden-era SAVE plan, an income-driven repayment plan that eventually leads to loan forgiveness. Now, they have just two options. The first is the standard repayment plan, which includes a fixed monthly payment over a set period of time based on how much someone borrowed. The second is the Repayment Assistance Plan (or RAP), which is an income-driven repayment plan where borrowers' payments are a certain percentage of their income. The more money someone makes, the more that percentage increases. But while McMahon was right to say that the student loan repayment system is simpler, she left out the fact that dramatically limiting the number of repayment options will make it harder for people to finance their student loans according to their particular needs. 'Streamlining this system is a really important goal,' Sattelmeyer said. 'But one outcome of this plan is that payments would be more expensive for those at the bottom of the income ladder, and that's a really important piece in terms of people's ability to repay their loans.' One analysis found that under RAP, monthly payments could be hundreds of dollars more than they are under the SAVE plan, which is currently blocked by the courts and will be officially eliminated under Trump's new law. The Urban Institute also pointed out that the bills passed by the House and Senate don't account for inflation. 'This means as incomes rise over time, borrowers who make the same amount of income in real terms would gradually pay a larger percentage of their income over time,' wrote Kristin Blagg, principal research associate in the Work, Education, and Labor Division at the Urban Institute. The new caps on loans will make it harder to afford advanced degrees As this bill was making its way through Congress, experts were warning that it could worsen America's doctor shortage. That's because the law imposes new limits on how much people can borrow for graduate school and scraps the Grad PLUS loan program, which allows students to take out enough loans to cover the full cost of their programs. For graduate students, the new law puts an annual cap of $20,500 and a lifetime cap of $100,000 on borrowing. Those seeking professional degrees, like medical or law degrees, have an annual limit of $50,000 and a $200,000 limit in a lifetime. As I wrote last month, putting limits on how much money people can borrow is generally a good idea, because high amounts of debt can drag people down and get people in financial trouble. The problem is that the limits this law imposes simply won't be enough to cover the actual costs of these programs. According to the Association of American Medical Colleges, the median cost of attending a four-year medical program at a public school is over $280,000. At private institutions, it's just under $400,000. 'Loan limits are an important tool but I think the challenge here is it can be hard to know where, exactly, to set those limits,' Sattelmeyer said. 'The bill also doesn't address a lot of the other underlying issues with the program: It does not provide additional grant aid or funding to low resource students. And so it is limiting loans and not necessarily providing additional resources.' That means that some students might be pushed to turn to private lenders, who tend to charge higher interest rates. And in some cases, borrowers might not even qualify for those private loans. 'Private student loans often require a cosigner, so some students may not qualify, and they may have no options to fully finance and attend graduate school. So there is a possibility that for some students, this will be a barrier to accessing graduate school,' Sara Partridge, associate director for higher education policy at the Center for American Progress, recently told Business Insider.
Vox
03-07-2025
- Politics
- Vox
Zohran Mamdani's not-so-radical agenda
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. Zohran Mamdani's policy ideas might not always be the answer voters are looking for, but the dignity underlying his whole agenda is. Madison Swart/Hans Luca /AFP via Getty Images Last week, New York State Assembly member Zohran Mamdani sent shockwaves through the political establishment after he clinched the Democratic nomination for New York City mayor. Mamdani, a self-described democratic socialist, defeated a crowded field, which included former Gov. Andrew Cuomo, by double digits. Turnout was higher than usual, especially among younger voters, indicating that Mamdani's campaign energized New York City residents in ways few people expected. Throughout his campaign, and especially since the stunning upset, Mamdani has faced attacks from both Republicans and centrist Democrats that paint him as far too extreme for New York City, let alone America. Part of that caricature is clearly fueled by racism — Mamdani is a Muslim immigrant born to Indian parents in Uganda — with Republicans sharing photos of the Statue of Liberty dressed in a burqa, saying Mamdani is uncivilized for eating with his hands, and calling for the 33-year-old candidate to be denaturalized and subsequently deported. It's also part of the backlash to Mamdani's support for Palestinian rights, as even members of his own party baselessly accuse him of peddling antisemitism. Related The Democratic Party is ripe for a takeover But much of the criticism has also centered on Mamdani's campaign promises, which pledge to make New York City more affordable in small but meaningful ways with rent freezes, city-owned grocery stores, and fare-free buses. Some of that criticism is very heated: Former Treasury Secretary Larry Summers, for example, called Mamdani's rent stabilization proposal 'the second-best way to destroy a city, after bombing.' Many argue that Mamdani is only offering pie-in-the-sky proposals — nice policies in an ideal world, but unachievable in our not-so-ideal reality. But Mamdani's splashy policies aren't exactly foreign ideas, nor is he the first to try to implement them. They've been tried before, often with promising results. Mamdani's policies aren't reckless; they're tested Let's take three of his policies that have gotten some of the most attention: 1. Rent freeze Mamdani has proposed to impose a rent freeze. That means that landlords would be unable to raise the rents on roughly 1 million rent-stabilized apartments across the city. This mostly falls within the mayor's jurisdiction: Rent hikes (or freezes) are decided by the Rent Guidelines Board, whose nine members are appointed by the mayor. And if elected mayor in November, Mamdani can appoint members to the board who pledge to freeze the rent. As dramatic as the negative response has been, this isn't exactly a novel idea. In just the past decade — during Bill de Blasio's tenure as the city's mayor — the board froze the rent on three occasions: in 2015, 2016, and in 2020. (Those freezes, it should be noted, are hardly, if ever, blamed for worsening the city's housing problems.) Mamdani's proposal also doesn't mean that a rent freeze will be permanent. The idea is to hold rents where they are to give tenants a chance to catch up to the rising cost of living. (In Mayor Eric Adams's first three years in office, for example, the board raised the rents by a combined 9 percent.) Opponents to this plan often point to the piles of literature that show the pitfalls of rent control in the long run — that it disincentivizes landlords to provide services and ultimately leaves apartments in disrepair. But those arguments conveniently leave out some key parts of this debate. Under New York's rent stabilization laws, landlords who invest in meaningfully improving their apartments are allowed to increase rents beyond the guidelines set by the board, meaning that landlords can't really use a rent freeze as an excuse to leave their apartments in bad conditions. More than that, Mamdani's plan for a rent freeze doesn't exist in a vacuum; it's part of a broader plan to spur investment in housing and improve renters' lives, which include changing zoning laws, cutting red tape to get more housing built more quickly across the city, and cracking down on crooked landlords by more strictly and efficiently enforcing New York's housing codes. Put another way, Mamdani's rent freeze is not presented as the solution to New York's housing crisis. It's just one part of a bigger toolkit that can help tenants in the near term while the other tools finally put housing costs under control in the long run. 2. City-owned grocery stores Mamdani's suggestion of city-owned grocery stores has irked some entrepreneurs to the point that one supermarket mogul threatened to close down all of his stores if Mamdani becomes mayor. The rationale behind this proposal is that a publicly owned grocery store would make food more affordable. The store wouldn't have to worry about making a profit or paying rent, and those savings would be passed onto consumers by lowering the price of goods. Some of Mamdani's critics have seized on this plan to call him a communist who would put private businesses and consumer choice at risk. The government, they argue, shouldn't be operating businesses because governments are an inefficient alternative to the private market. The reality is that public-owned stores aren't exactly new, let alone a threat. Several states, from Alabama to Virginia, have publicly owned liquor stores — a product of the post-prohibition period where states took more control over the sale and distribution of alcohol — and boast of their success. (Virginia's government website, for example, notes its state-owned liquor stores' 'history of giving back to Virginians' and highlights that it has generated more than $1 billion in revenue for six consecutive years.) Other cities across the country are also trying their hand at publicly owned grocery stores. In St. Paul, Kansas, for example, the municipality-owned grocery store helped end the city's nearly two-decade run without a grocery store. In Madison, Wisconsin, a municipally owned grocery store is set to open later this summer, and other cities, including Chicago and Atlanta, are planning to dabble in this experiment as well. Mamdani's proposal for publicly owned grocery stores is also far more rational and modest than the state-monopoly model of liquor stores: He's merely proposing a pilot program of just five city-owned grocery stores — one in each borough — in a sea of some 15,000 privately owned grocery stores. If the pilot program succeeds and satisfies New Yorkers' needs, then it could be expanded. 3. Fare-free buses One of Mamdani's signature wins as a New York State Assembly member was his push for a fare-free bus pilot on five lines in New York City. As mayor, he promises to expand fare-free buses across the city to make public transit more accessible. It's also good environmental policy that helps alleviate traffic because it encourages people to ditch their cars and ride the bus instead. Fare-free transit experiments in various cities have already shown promising results. In Boston, a fare-free bus pilot after the pandemic found that bus lines without fares recovered ridership much faster than the rest of the transit system. A year-and-a-half after the initial Covid lockdowns — when transit ridership cratered across the country — one fare-free bus line in Boston saw ridership bounce back to 92 percent of pre-pandemic levels, while the rest of the city's transit system was stuck near 50 percent. According to an article by Mamdani and his colleague in the state legislature, in New York City, the lines included in the fare-free bus pilot showed an increase in ridership across the board, and of the new riders those lines lured, the highest share was among people making less than $28,000 a year. Of course, fare-free transit should be a secondary goal. After all, what good is a free fare if the buses won't get you to where you need to go, let alone get you there in time? But Mamdani's plan makes clear that he's not just interested in making transit free, but fast and reliable as well. His fare-free proposal is packaged with a commitment to invest in improving infrastructure — like building more dedicated lanes — to make bus trips more efficient. There are plenty of avenues to raise revenue for that kind of investment, from imposing a new tax to introducing schemes like congestion pricing, as New York already has. Plus, if making buses free makes people more likely to get out of cars and ride public transit instead, then that is a worthwhile investment. What Mamdani's policies could mean for the future of Democratic politics Ultimately, Mamdani's policies also proved to be good politics, at least good enough for a Democratic primary. Part of the reason Mamdani's policies might have resonated with so many voters is that they are, in many ways, a promise to reshape government — not into a communist haven on the Hudson, but into a government that owns up to its responsibility to provide all of its people with a dignified life. That's why ideas like fare-free transit aren't solely about saving $2.90 on a bus ride. It's true that there are plenty of reasonable arguments against fare-free transit: Eliminating fares would get rid of a reliable source of revenue for transit agencies. Solely relying on taxes to fund public transportation potentially makes transit systems more volatile and susceptible to politics, where they can be used as a bargaining chip in the legislature's tax bills. And there are other ways to make transit affordable to those in need, including existing subsidies that reduce fares for low-income commuters. But these arguments miss the broader appeal of agendas like Mamdani's, which are a commitment to expand the government's role in our daily lives in positive ways. Despite the depiction of Mamdani as a radical socialist, his agenda, at its core, actually promises something much more ideologically modest: making government more likable by making it work well. So his overarching goal as mayor, it seems, would be to make people believe that effective governance is possible — that local government can tangibly improve the quality of life in a city by being more present and, not to mention, pleasant to deal with. This is not to say that Mamdani's primary win will reshape American politics — or even Democratic primaries in other cities. But Mamdani is onto something, and Democrats might be well-served by looking at his not-so-radical agenda and understanding that people want more from their own governments. Mamdani's ideas, like publicly owned grocery stores, might not always be the answer voters are looking for, but the dignity underlying his whole agenda is.
Vox
09-06-2025
- Politics
- Vox
Trump deploying the National Guard is part of a bigger plan
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. After protests erupted in response to federal agents raiding businesses around Los Angeles to arrest immigrants, President Donald Trump quickly decided to dump fuel on the fire: On Saturday night, the president declared that he would deploy 2,000 National Guard troops to the city. Given that presidents usually only activate the National Guard upon a governor's request, it's an extraordinary step that bypasses California Gov. Gavin Newsom's authority, since Newsom made no such appeal. This isn't the first time Trump has considered sending in the military to squash local protests. In 2020, when nationwide protests broke out after a police officer murdered George Floyd, Trump also wanted to display an overwhelming show of force to respond to the demonstrations — so much so that he even inquired about shooting protesters. But a standoff between Trump and the Pentagon eventually pushed the president to decide against deploying troops across the country. This time, Trump has a more subservient Pentagon. On Saturday, Secretary of Defense Pete Hegseth wrote on X that 'if violence continues, active duty Marines at Camp Pendleton will also be mobilized,' adding that 'they are on high alert.' The chaos unfolding in Los Angeles underscores that Americans are living under an administration that is far too eager to use the power of the state to suppress dissent and a president who is far too keen on siccing the military on American citizens. Trump's latest effort might make 2020 look like a trial run and shows just how unrestrained the president has become. Can Trump deploy the National Guard without governors' consent? It is generally illegal to use federal troops for law enforcement within the United States. But there are exceptions. The Insurrection Act — one of the president's emergency powers — allows the president to use the military against American citizens on domestic soil, including in nonconsenting states, to quell an armed rebellion or extreme civil unrest. That's why President Lyndon B. Johnson was able to deploy the National Guard to Alabama without its governor's consent in 1965 — the last time a president activated a state's National Guard troops against that state's wishes, as Elizabeth Goitein, senior director of the Liberty and National Security Program at the Brennan Center for Justice, told the New York Times. The Insurrection Act itself was last invoked in 1992, when President George H. W. Bush used it to send troops to Los Angeles in response to the Rodney King riots. However, that action was taken upon then-Gov. Pete Wilson's request. So far, Trump has not invoked the Insurrection Act. Instead, he has cited Section 12406 of the US Code, which gives the president the authority to call members of the National Guard of any state into federal service when 'there is a rebellion or danger of a rebellion against the authority of the Government of the United States.' The president can use as many troops as he considers necessary to 'repel the invasion' or 'suppress the rebellion.' That statute, however, is more limited than the Insurrection Act since it applies only to the National Guard and not the US Armed Forces more broadly. It also states that the order to call in National Guard troops should be issued by governors. Since California did not issue that order, Newsom has said Trump's move to federalize California's National Guard is 'unlawful' and requested that the federal government rescind the deployment. Newsom indicated that his office intends to sue the Trump administration over this matter. Trump is escalating his assault on Americans' fundamental rights — just like he said he would Trump has long made clear his disdain for dissent and protests against him, and now he's taking it to the next level. His move to deploy National Guard troops in California is already an escalation from how he responded to the George Floyd protests in 2020. At the time, Trump focused his efforts on Washington, DC, where — perhaps in a prelude to how he is handling the protests in Los Angeles today — he sent National Guard troops from 11 states into the nation's capital. DC's mayor objected to the deployment, but because DC is not a state, Trump had more leeway to exercise military muscle. He ultimately decided against deploying the military in other states. Trump's reliance on federal officers to squash protests made DC a testing ground for a strategy he could eventually try elsewhere. What he's now doing in California is the natural next step. Indeed, after Trump left the White House in 2021, he lamented over his administration's supposed restraint during the George Floyd protests and said that should he return to power, he wouldn't wait for governors to make requests for federal assistance. 'You're supposed to not be involved in that, you just have to be asked by the governor or the mayor to come in,' he said in a 2023 campaign rally. 'The next time, I'm not waiting.' During the campaign trail, he and his allies mapped out plans to invoke the Insurrection Act on his first day back in office to quell protests with military force. That is precisely why so many feared a second Trump term. Where Trump may have shown more restraint in his first administration — because he feared political consequences or because some officials stood in the way — critics feared he would be more unleashed in his second, both because he has nothing to lose and because his Cabinet would be staffed with even more loyalists. And that seems to be what's happening now, with the Pentagon seeming just as eager as Trump to unleash the US military on US soil and against American citizens. This is all part of Trump's broader assault on democracy — and his attack on the First Amendment in particular. Since coming back to the White House, Trump hasn't hesitated to punish people for exercising their right to free speech and their right to protest, going after students for participating in protests against Israel. His administration has detained and tried to deport protesters for merely expressing pro-Palestinian views, sending unidentified plainclothes immigration officers to abduct dissidents. Trump is now trying to use the might of the US military to further suppress people's free speech rights, dramatically expanding his crackdown on people's rights. And while Trump cited 'violence and disorder' as the reason he deployed National Guard troops, local law enforcement had not indicated that they were in need of federal assistance to restore order. What likely pushed Trump to deploy the National Guard (and get other members of the Armed Forces ready) is that he simply saw an opportunity to do so and he seized it. He is clearly more emboldened and even more averse to norms than ever before. Since Trump got himself involved in the protests, tensions have only escalated. But if anything, that might be what Trump wants: a dramatic standoff between protesters and federal troops. Ultimately, this strategy is less about 'law and order' and more about sending a message to Americans across the country: speak out against Trump and there will be consequences.
Vox
09-06-2025
- Business
- Vox
The big, beautiful bill is bad news for student loans
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. Within Our Means A newsletter about ending poverty in America, from correspondent Abdallah Fayyad. Email (required) Sign Up By submitting your email, you agree to our Terms and Privacy Notice . This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. 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. This story was featured in the Within Our Means newsletter. Sign up here.
