How the Big Beautiful Bill Affects Seniors

Some of the most daunting questions seniors face are: Where are you going to college? Have you started your applications yet? Where are you planning to apply? These questions can feel so overwhelming, as if you’re expected to map out your entire future in one conversation. At a time already filled with uncertainty, the pressure is amplified by recent legislation that are reshaping decisions surrounding higher education. 

On July 4, 2025, Congress passed the One Big Beautiful Bill Act (OBBB) containing the tax, education, and spending policies central to President Donald Trump’s second-term agenda. Signed into law the same day, this bill has sparked controversy, especially for high school seniors planning their next steps. This legislation raises questions of college affordability, financial aid eligibility, and other options for their futures. 

Pell Grant Changes

One of the key provisions that is most relevant to high school seniors are the changes to Federal Student Aid, with the Pell Grant and Workforce Pell. A new Workforce Pell Grant allows Pell Grants to be used for short-term, non-degree vocational programs. This includes short-term certificate and training programs including skilled trades, healthcare, and informational technology. 

New rules have also been implemented for college students receiving full-ride scholarships and their eligibility for Pell Grants. Now, students will be ineligible for Pell Grants if their non-federal grants or scholarships cover the full cost of attendance, even if they would have qualified based on their Student Aid Index (SAI). There is also a higher SAI eligibility, disqualifying students whose SAI is twice the maximum Pell Grant amount. 

Major changes have also been made to Parent PLUS loans for new borrowers after July 1, 2026 with tighter restrictions on loan limits, forgiveness, and repayment plans. 

New Loan Limits 

New loan limits have been established. Under current loan programs, parents can borrow up to 100% of the cost of their child’s undergraduate degree. The OBBB changes this; there is now a $20,000 maximum per student per academic year and a lifetime maximum of $65,000. 

Parents No Longer Qualify for IDR/PSLF

Parents also no longer qualify for income-driven payment programs. Currently, parents can qualify for income-contingent repayment plans if they consolidate their loans with a Direct Consolidation Loan. The OBBB eliminates this option, and the only repayment option available is the standard repayment option with fixed monthly payments for ten years. Those who qualify for Public Student Loan Forgiveness through ICR have also been eliminated through the OBBB.

Expansion of 529 Funds

There has been a wider definition for “qualified expenses” for 529 funds. More types of K-12 education costs, not just tuition, are covered by 529 funds. This is especially relevant to seniors through increased coverage now of standardized tests, including SAT, ACT, and AP. This also includes textbooks, therapies for students with learning disabilities, dual-enrollment courses, and other curriculum materials. 

What Seniors Can Do

Be aware of the new rules that limit your availability to borrow money for tuition. The average cost of in-state public tuition is currently $29,910, and $62,990 for out-of-state students or private schools; many will not be able to use federal loans to cover the entire cost and must look for other options. For future loans after July 1, 2026, the only repayment plan is a 10-year fixed plan, regardless of income, with no options for federal forgiveness. It’s important to only take out loans that you can comfortably afford. 

As seniors, the best ways to move forward are to explore other financial options, such as applying for grants and scholarships issued by private companies and non-profit organizations, applying for Direct Subsidized and Direct Unsubsidized loans under their own name through FAFSA, and applying for private parent loans, where parents can borrow up to 100% the cost of attendance.