On July 4th, beneath a flyover of B‑2 bombers and the thunderous applause of a partisan audience, President Donald Trump signed the “One Big Beautiful Bill Act” into law. In doing so, he delivered not just a pageantry-laden salute to right-wing governance, but also a decisive blow to America’s already fragile higher education ecosystem. Framed as a victory for accountability, simplification, and fiscal discipline, the truth is this 870-page monstrosity is a Trojan horse: one that will raise costs for families, restrict access, and harm low-income and marginalized students for generations to come— or at least until a Democratic president issues a slew of executive orders to overturn it.

Though much of the media attention focused on the nearly $1 trillion in Medicaid cuts and billions in tax windfalls for the rich, education is among the bill’s most devastated casualties. The One Big Beautiful Bill marks the most sweeping overhaul of federal higher education policy in decades—and the impact will be felt far and wide. And fast.

The Myth of Reform, the Reality of Harm

Proponents of the bill claim it will reduce costs and increase efficiency. But for students, particularly those from working-class backgrounds and communities of color, the legislation is a betrayal. Let’s be clear about what’s actually included.

Graduate Loan Caps and Elimination of Grad PLUS

One of the most seismic shifts in the bill is the cap on graduate student loans: $100,000 for most programs, and $200,000 for professional degrees like law or medicine. Worse yet, the Grad PLUS loan program is eliminated entirely. For thousands of low-income students who rely on this program to finance graduate education, the message is clear: your aspirations are too expensive. Universities that depend on graduate tuition to fund research and programs will feel the fiscal strain. Fewer graduate students mean fewer scholars, fewer professionals, and diminished institutional stability.

Parent PLUS Loans: Disproportionate Harm to Black and Latino Families

The bill also caps Parent PLUS loans at $65,000 per student. On its face, this sounds like a reasonable limit. In reality, it’s a racially disparate attack. Black and Latino families are more likely to use Parent PLUS loans to support their children’s college dreams—often in the absence of generational wealth or high household incomes. The cap effectively tells these families: don’t dream too big. Don’t aim too high. And if you do, you’re on your own.

A New Era of Student Debt

At the heart of the bill’s student loan changes is the new Repayment Assistance Plan (RAP). Starting in 2026, new borrowers will only have two repayment options, with RAP stretching payments over 30 years—a lifetime. While monthly payments for low-income borrowers might start at $10 under this plan, many will face much higher burdens:

• A borrower earning $40,000 will pay $167/month under RAP, compared to just $62 under Biden’s SAVE plan.
• A $60,000 salary? $350/month under RAP, instead of $145 under SAVE.
• At $100,000 income, borrowers could pay up to $917/month—more than three times the SAVE plan’s estimate.

These are not modest tweaks. These are life-altering shackles.

By eliminating the $0 monthly repayment option that protected the lowest earners under the SAVE plan, RAP will re-enslave borrowers into cycles of debt, limiting their ability to buy homes, start families, or contribute to the economy. The student debt crisis will not be solved by punishing those already drowning in it.

Holding Colleges “Accountable” by Punishing Students

The bill’s new earnings-based accountability system is designed to sound fair. Colleges and programs whose graduates earn less than high school diploma holders may lose access to federal student loans. But this model fails to consider key factors: the cost of the program, the field of study, and structural barriers in the labor market that impact earnings—especially for Black and Brown graduates.

A rough analysis by American Enterprise Institute shows that fewer than half of two-year degree programs would pass this test. While certificate programs are exempt, community colleges and regional publics—those that serve the majority of low-income and first-generation students—are now under threat.

Even worse, the borrower defense and closed school discharge regulations enacted to protect students from predatory for-profit institutions are delayed until 2035. That leaves defrauded students without recourse, in a sector already rife with exploitation.

Collateral Damage: Institutional Strain

Many universities—especially public institutions in red and purple states—were already reeling from years of disinvestment. Now they face a double-bind:

1. Loan caps reduce enrollment in graduate and professional programs, slashing tuition revenue.
2. Accountability provisions could defund entire departments based on flawed metrics.

Charles Welch, president of the American Association of State Colleges and Universities, warned that this bill could lead to “tightened budgets, strained institutions, and imperiled access.”

It’s not just a policy change. It’s a structural weakening of the American public university model.

Pell Grants and Endowments: Mixed Signals

There are some expansions in the bill—most notably a $10.5 billion Pell Grant shortfall fill, and new eligibility for short-term job training programs, provided they are accredited. But students who receive a full Pell Grant are excluded from these expansions, and unaccredited providers—often the most innovative or community-based—are left out. It’s reform that favors compliance over creativity.

Meanwhile, endowment taxes for private universities were raised sharply:

• 1.4% for schools with $500K–$750K per student,
• 4.0% for $750K–$2M,
• 8.0% for over $2M per student.

While this is less onerous than previous versions, it further pressures institutions that serve high-need students but hold large endowments for long-term viability. Private colleges with fewer than 3,000 students are now exempt, which critics argue is a giveaway to elite liberal arts schools. One likely beneficiary is Hillsdale College—a small, private, well-endowed institution that refuses federal funding to avoid civil rights compliance but still benefits from federal tax policies. With an endowment nearing $1 billion and strong political ties, Hillsdale would be exempt under the new rules. The exemption raises concerns that the bill’s authors may have tailored it to protect favored institutions, even as it imposes stricter standards on large public colleges and universities serving marginalized communities.

Political Theater with Real Consequences

Let’s not forget how this bill was passed: through party-line reconciliation, under pressure from a president desperate for a policy win. Trump lobbied lawmakers behind the scenes, even calling in favors personally and sending autographed swag boxes. While some conservatives balked at the $3.3 trillion increase to the national debt projected by the Congressional Budget Office, the administration pushed forward—prioritizing victory over responsibility, image over impact.

Even some in the Republican Party admit the contradictions. They claim the bill will reduce government spending, but its trillions in deficit impact suggests otherwise. They tout equity, while capping loans disproportionately used by communities of color. They speak of accountability, but delay student protections for a decade. It’s not reform. It’s bait-and-switch politics.

What Happens Now?

The damage is already done—but not yet fully felt. The real consequences begin in 2026, when these loan changes and accountability provisions kick in. Students entering high school today will face a college system far more hostile than the one their siblings and parents knew.

Higher education stakeholders must prepare. But more importantly, they must resist. We must reject the narrative that education is a private good rather than a public necessity. We must fight back against false accountability that penalizes outcomes without addressing causes. And we must center the needs of the students who will bear the heaviest burdens of this law.

A Call to Action

If you are a student, professor, policymaker, or advocate, now is not the time for silence.

• Organize: Join student borrower protection coalitions and equity-focused education advocacy networks.
• Testify: Submit your institutional projections, student stories, and projections during upcoming budget hearings.
• Vote: Make this issue a centerpiece of your civic engagement strategy for 2026 and beyond.
• Educate: Bring this bill into your conversations and community forums. The best defense against injustice is exposure.

The One Big Beautiful Bill Act is a crisis for education. For now, the pain will be widespread. Students will feel it. And soon.