Federal student aid is undergoing major changes. With the signing of the One Big Beautiful Bill Act on July 4, 2025, higher education is entering a new era. These reforms will reshape how students access, afford, and manage student loan repayment, with new policies set to take effect in July 2026. The University of Arizona Global Campus (UAGC) is committed to helping students and families understand what is changing, how it affects them, and what to expect next.
Read on to learn how the bill could affect you, from student loans to how it could impact military students.
The One Big Beautiful Bill and Student Loans
For graduate students, one of the most significant changes as a result of the One Big Beautiful Bill is the elimination of Grad PLUS loans. These loans have helped thousands of graduate students close the financial gap left after unsubsidized federal loans were exhausted. Without this option, students pursuing master’s and doctoral degrees may need to explore new funding pathways. The loss of Grad PLUS loans could impact access to graduate education and increase reliance on private lenders, who typically offer fewer protections and higher interest rates. At UAGC, many graduate students are adult learners balancing school with full-time work, parenting, or military service. This shift will require new planning and proactive support.
In addition, the bill introduces a $65,000 lifetime cap on Parent PLUS loans per dependent student. While this policy aims to reduce overborrowing, it may disproportionately affect low-income families who are more likely to depend on these loans to cover the full cost of attending college. UAGC is preparing to help families understand these changes and consider alternative resources that keep college within reach.
The new law also simplifies federal loan repayment. Instead of several income-driven repayment options, borrowers will choose from two plans: one based on income and family size, and another with fixed payments over a set number of years. This effort to streamline repayment is intended to reduce confusion and make it easier for borrowers to manage their debt. However, some students may still struggle if loan caps reduce access to federal funding, making them more reliant on private loans without the flexibility of income-based repayment.
The Value of a Degree
Another major change from the One Big Beautiful Bill is the introduction of an earnings-based accountability rule. Colleges must now demonstrate that graduates earn more than a typical high school graduate, or they risk losing access to federal student loan funding. This is a broad expansion of the Biden-era gainful employment regulation, and now applies to all institutions, including public and non-profit colleges. While the policy is designed to protect students from low-value programs, it may unintentionally penalize schools whose graduates choose meaningful, lower-paying careers in fields like education, non-profit work, or public service. At UAGC, we believe in both accountability and access. We support efforts to ensure students get value from their education, but we also recognize that value isn’t just about income. Degrees can open doors to leadership, service, and lifelong learning — especially for adult learners who bring unique goals and experiences to their education.
New Pell Grant Opportunities for Career Training
There are some promising developments in the One Big Beautiful Bill, including the expansion of Pell Grants to short-term job training programs. This allows more students to pursue recognized credentials from accredited institutions that lead to workforce opportunities without excessive debt.
What Military-Affiliated Students Should Know
Military students, veterans, and their families will feel the effects of these reforms as well. Many rely on a combination of GI Bill benefits, tuition assistance, and federal loans. The cap on Parent PLUS loans and the removal of Grad PLUS loans could limit options for military-connected students and their dependents. UAGC continues to prioritize military learners by offering dedicated support services, flexible online programs, and strong advocacy for policies that promote access, fairness, and affordability.
UAGC and the One Big Beautiful Bill
Although the most significant changes will not take effect until July 2026, UAGC is acting now. The institution is reviewing tuition structures, strengthening financial aid counseling, and working to ensure staff and students understand what lies ahead. UAGC is experiencing a wave of positive developments this year, including advancing academic restructuring, removing legacy brand affiliations, and making continued investments in student success. These milestones showcase the University’s growing momentum and dedication to delivering stronger outcomes for students.
For current and prospective students navigating this changing landscape, UAGC Financial Aid and Military Support teams are ready to help. The 2025 federal student aid changes may bring challenges, but with clear guidance and student-first solutions, the institution remains focused on supporting learners and expanding opportunity.
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By Stephanie Cowsert, Associate Vice President, Compliance and Regulatory Affairs, The University of Arizona Global Campus