What the “Big Beautiful Bill” Means for Your College Future

If you're planning to start college soon, you've probably heard about the new federal law that could shake up how students pay for school. Signed on July 4, 2025, the One Big Beautiful Bill (often called the "Big Beautiful Bill") introduces significant changes to financial aid, student loans, and college access.

Here's what high school students need to know about what's changing, what's staying, and how to protect your plans.

Pell Grants will support job training programs

Pell Grants provide free money for students whose family income is below a threshold amount. Congress added $10.5 billion to keep the program funded through 2035. The maximum award per student remains $7,395, and eligibility still depends on your family's income and how many credits you take each term.

Starting July 2026, students will be able to use Workforce Pell Grants for short-term job training programs in healthcare, IT, skilled trades, and similar fields. These programs must be offered by accredited schools that are already eligible for federal aid.

Heads up: If you receive a scholarship that covers your full cost of attendance, you may not qualify for the Pell Grant during that term. This mostly affects students with significant athletic or private scholarships.

Undergrad federal loans are available

Students can still borrow Direct Loans to help cover the costs of college. Loan limits for dependent freshmen remain at $5,500 per year. Subsidized loans don't charge interest while you're in school; unsubsidized loans do.

Congress hasn't yet changed undergraduate loan programs. However, future budgets may bring proposals, so it's wise to stay informed.

Loan repayment will be stricter

By mid-2026, federal repayment options will be narrowed down to two plans. The government will eliminate most income-driven repayment options (like SAVE and PAYE) and replace them with:

1. A Standard Plan with fixed monthly payments, based on loan size (10–25 years)
2. A Repayment Assistance Plan (RAP) with payments based on income (1–10%, minimum $10/month). Loans will be forgiven after 30 years.

Key changes:

• No more deferment for unemployment
• Interest will capitalize annually, meaning it gets added to your balance

Borrowers using current plans can stay on them, for now.

Parent PLUS Loans will be capped

Beginning July 1, 2026, the federal cap on Parent PLUS Loans will be:

• $20,000 per year, per student
• $65,000 total per student

The limit stays fixed even if your parents repay part of the loan while you're still in school. Borrowing before the July 2026 deadline is permitted under current rules, but only for a limited transition period.

If your family plans to use PLUS Loans to cover high tuition costs, you may need to explore alternatives like scholarships, tuition plans, or more affordable colleges.

Grad PLUS Loans will end

Graduate students won't be able to borrow unlimited federal loans anymore. Starting in July 2026:

• Grad PLUS Loans will disappear
• New federal loan caps will limit borrowing to:
  • $20,500 per year, up to $100,000 total for graduate programs
  • $50,000 per year, up to $200,000 total for professional programs like law and medicine

Students who borrow before the deadline can still follow their original loan terms.

College access programs may lose funding

Programs like TRIO, GEAR UP, and Federal Work-Study aren’t explicitly eliminated in the new law, but they face serious funding threats in the proposed federal budget. These initiatives help students through mentoring, advising, and on-campus jobs—services that could be scaled back or disappear without congressional support.

If you’re enrolled in one of these programs, stay in close contact with your advisor and keep an eye out for updates as the budget process unfolds.

Public college tuition could increase

Cuts to state budgets may lead to higher in-state tuition. The Big Beautiful Bill reduced federal funding for social programs and public services. As states tighten their budgets, some may cut funding to public colleges. That could mean:

• Higher tuition at state universities
• Fewer classes or student services

This increase may never happen. Hopefully it doesn't. However, if you're considering a public college, keep an eye on developments in your state. 

What you can do now to be ready for college

You should take action now to stay ahead of these changes:

• Apply for scholarships early, even in 9th or 10th grade. You can find them here on Appily.
• Submit the FAFSA every year to remain eligible for aid. We have a FAFSA Hub to simplify the process for you.
• Explore short-term or trade programs that could qualify for Workforce Pell Grants in 2026
• Talk to your counselor about your financial aid plan and school options
• Have a backup plan that includes in-state or community college options. You can use our admission calculator to build your backup list.
• Stay informed as new aid rules and budget changes roll out.

Final thoughts on the bill

Federal aid is changing, but your goals don't have to. By staying informed and taking all the necessary steps now, you'll find a path to college that fits your budget.

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