Last May, the U.S. House of Representatives passed H.R. 1, also known as the One Big Beautiful Bill Act (OBBBA). According to the White House, the bill was officially signed into law on July 4, 2025, by President Donald Trump to, among other things, avoid a nearly $4 trillion tax hike from the expiration of the 2017 Tax Cuts and Jobs Act. With the bill’s passage, questions remain about what this year’s financial aid season may look like for students applying for the Free Application for Federal Student Aid (FAFSA) and other government grants.
To better understand what the OBBBA could mean for students’ loans and financial aid, economics professor Alexander Craig shared some insights as to what changes can be expected.
“The OBBBA’s significant changes to federal student loans are caps on how much certain people may borrow and changes to borrowers’ repayment plans,” he said. “Borrowers with mid-level incomes (about $40,000 to $80,000 per year) won't see much change, while others will face higher required payments.”
Craig elaborated on the alterations to repayment plans, explaining that these effects may not even be felt due to the continual shifts in government policy.
“The Congressional Budget Office estimates the repayment plan changes could save the federal government something near $270 billion over the next 10 years, but federal student loan policy changes somewhat frequently. The impact of the OBBBA may be smaller because student loan policy may change before many of its potential effects are felt,” he said.
These savings figures have been increasing throughout the implementation of the OBBBA over the past eight months since the bill’s initial signing. Craig added that the effect of these changes would depend on the specific situations of individual families and universities.
“The OBBBA’s changes to FAFSA initiatives and Pell Grants are mixed, and their effects depend on different families’ circumstances,” he said. “Some will find they can get more aid, others less. The effects on the government’s budget are much smaller than the changes to the loan repayment plans. Those probably save the federal government something like $11 billion. Some families and some colleges and universities may have to make some significant adjustments, but on the whole, these do not strike me as dramatic changes.”
Sharing this sentiment was the Saint Mary’s Financial Aid Office, which only expects mild changes for student aid programs.
“For most students, there will be no immediate changes to direct federal student loans or need-based aid such as the Federal Pell Grant. These programs remain unchanged for now and are reviewed separately from the One Big Beautiful Bill Act (OBBBA),” the office wrote in a statement to The Observer when asked who would be affected. “We understand that areas to be impacted are Parent PLUS Loans and Graduate PLUS Loans, as well as loan repayment options. Students should not expect major changes to the FAFSA process, aside from minor system updates by the Department of Education.”
Although the actual impact of these changes on undergraduate students is unlikely to be noticeable, the Financial Aid Office still encouraged students to reach out with any potential concerns.
“We encourage students with questions to consult with our office directly,” the office wrote. “Student Financial Services is prioritizing clear and consistent communication with students while continuing to monitor updates. While the bill passed last year, guidance continues to evolve, and we will update students as new information becomes available.”
As for the federal government, a statement posted to the official Federal Student Aid website read as follows: “This page provides information about changes affecting recipients of federal student aid, including borrowers. We will continue to update this page when new information becomes available.”
This final statement was last updated on Dec. 22, 2025. Additionally, students can find more information in the Federal Student Aid change chart, which outlines the changes and effective dates to the Pell Grant, Federal Direct Loan and other student loan repayment programs.
