Prepared by: Lena Heier
n her role as a Higher Education Senior Research Analyst, Lena Heier supports Directors and Managing Directors by identifying and researching federal and foundation funding opportunities for clients. She also assists with various other funding research and coordination needs of the Higher Education Practice.
What Does the One Big Beautiful Bill Mean for Higher Education?
The One Big Beautiful Bill Act (OBBB), also referred to as the Working Families Tax Cuts Act, was signed into law on July 4, 2025 and contains several provisions that represent a sweeping overhaul of federal higher education policy.
The top OBBB changes primarily fall into three categories:
McAllister & Quinn recently hosted a webinar covering these topics, titled "Overview of Higher Education Provisions and Compliance in the One Big Beautiful Bill (OBBB) Taking Effect on July 1st.” You can view the recording of the webinar at this link.
What the May 2026 Education Rule Means for Graduate and Professional Loans
A final rule published by the Department of Education on May 1, 2026 implements several changes to the federal student aid system made by OBBB. This includes the elimination of the Graduate PLUS loan program, along with changes to the loan limit caps for graduate and professional borrowers. The Department of Education recently defined what constitutes a professional degree, making those programs eligible for higher loan limits.
Notably, the rule omits several popular degrees, including post-baccalaureate nursing and physician assistant programs. This controversial exclusion has resulted in legal challenges across the country and several bills introduced in Congress aimed at reversing the Department’s exclusion. On June 24, 2026 a federal judge temporarily blocked the Department of Education’s definition of “professional” that narrowed who was eligible for higher loan limits. Whether any of these challenges will be successful is yet to be determined.
DOE Rule Implements Changes to Student Aid and Loan Programs
A final rule published by the Department of Education on May 1, 2026 implements several changes to the federal student aid system made by OBBB. This includes the elimination of the Graduate PLUS loan program, along with changes to the loan limit caps for graduate and professional borrowers. The Department of Education recently defined what constitutes a professional degree, making those programs eligible for higher loan limits.
Notably, the rule omits several popular degrees, including post-baccalaureate nursing and physician assistant programs. This controversial exclusion has resulted in legal challenges across the country and several bills introduced in Congress aimed at reversing the Department’s exclusion. On June 24, 2026 a federal judge temporarily blocked the Department of Education’s definition of “professional” that narrowed who was eligible for higher loan limits. Whether any of these challenges will be successful is yet to be determined.
Why measuring college ROI remains one of the toughest questions in federal policy.
The OBBB outlines an accountability framework which seeks to evaluate programs’ return on investment. The concept is not new, with general bipartisan agreement on the need to ensure college programs provide value to students. The debate over how to measure value and to which programs it should apply has evolved over the past 15 years of federal policy debate.
Programs that fail these metrics two out of three years will lose Title IV loan eligibility. Programs that fail the metric one year and are at-risk of losing Title IV loan eligibility will be required to make disclosures to students. ED has indicated that it plans to calculate the first earnings premium metrics in early 2027. The framework also includes a new program-level transparency website.
ED has not yet published the final accountability rule but is expected to do so prior to July 1.
Workforce Pell Grant opens new pathways tied to state priorities and job demand.
The OBBB primarily directed two policy changes to the Pell Grant statute:
New regulations limit Pell Grant eligibility when a student’s non-federal aid, including state and private funding, meets or exceeds their cost of attendance (COA). In these cases, institutions must either reduce total aid below the COA threshold or return Pell funds and cancel future disbursements, increasing administrative oversight and coordination across funding sources.
These changes will take effect July 20, 2026.
At the same time, the new Workforce Pell program expands eligibility to short-term training aligned with high-skill, high-wage, or in-demand occupations. Implementation will vary by state, with some states taking a narrower approach to keep accountability with the state. Governors, in consultation with state workforce boards, must approve participation and define eligible industries and credentials. Institutions should closely monitor guidance from state leadership and workforce agencies as eligibility criteria and processes are finalized.
These changes will take effect July 20, 2026.
How Can My Institution Can Get Ready for OBBB
Institutions should take a proactive and strategic approach to preparing for implementation of the OBBB by:
Here’s How to Stay Ahead with Expert Support
Click here to access McAllister & Quinn’s strategic intelligence memo which provides more detail on the OBBA provisions.
The unprecedented pace and volume of federal higher education policy changes can make it difficult for institutions to keep up. McAllister & Quinn’s government relations experts can help your institution anticipate, track, and respond to federal policy changes. With additional policy changes still expected at the federal level, we would welcome the opportunity to discuss how McAllister & Quinn’s government relations team could support your institution. Please contact us here to request a complimentary consultation.
