President Trump signed a significant policy bill into law that will transform higher education by capping student loans, eliminating Grad PLUS loans, and linking colleges' funding to students' income. While the law avoids cuts to the Pell Grant program, it implements a tax increase on endowments of wealthy private colleges. Critics warn that these changes may predominantly affect low-income families and could hinder access to graduate education. The legislation's Medicaid cuts and tax alterations benefit the wealthy, prompting further concerns among education advocates about exacerbating the student debt crisis.
The legislation, dubbed the One Big Beautiful Bill Act, promises to significantly change how colleges operate, capping student loans and holding colleges accountable based on students' earnings.
Capping Parent PLUS loans at $65,000 could hurt Black and Latino families, who disproportionately rely on these loans, raising concerns about access to higher education.
Eliminating the Grad PLUS program may deter students from attending graduate school, impacting institutions that depend on this revenue and altering the landscape of higher education.
The bill includes nearly $1 trillion in Medicaid cuts and significant tax code changes benefitting the wealthy, raising alarms among higher education advocates and policy experts.
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