On Friday, July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (H.R. 1), Public Law No: 119-21 (The OBBB Act). Several provisions will impact community colleges, including:
- Pell Grants were extended to include Workforce Pell Grants and provided $10.5 billion in total mandatory funding to help mitigate the expected shortfall in the Pell Grant reserve;
- Community colleges must now submit to earning-based accountability measures;
- Substantial reductions were made to SNAP funds; and
- Significant changes were made to the Student Loan Repayment Provisions. See below for more details on each of these provisions.
Pell Grant Terms Adjusted
Community colleges secured a long-fought win in the OBBB Act, as it will finally establish Workforce Pell Grants, enabling students in short-term, accredited workforce programs (8–15 weeks, 150–600 clock hours) to access federal Pell Grant funding starting in July 2026. Although the bill restricts awards to only accredited institutions, the inclusion of the Workforce Pell Grant is a significant win. Additionally, the bill fully funded the Pell Grant reserve with $10.5 billion. The final measure provided that beginning July 1, 2026, students would be ineligible for a Pell Grant if they receive grants totaling the student's cost of attendance or higher from non-federal grants, institutional aid, state aid, or private grants. Fully funding the Pell Grant reserve and including Workforce Pell Grants are great wins for the community college community.
Community College Earnings-Based Accountability Measures Now Required
To ensure that college programs receiving federal student loans provide a reasonable return on investment for their students, the OBBB Act adopts an earnings-based accountability standard. Under this standard, undergraduate and graduate programs may lose eligibility for new federal student loans if their graduates' median earnings fall below those of similarly aged working adults with only a high school diploma or bachelor's degree, depending on the program type. Earnings are assessed using a three-year review window and programs that fail the standard for two of the three years may become ineligible.
Colleges generally prefer this earnings-based accountability plan, which is similar to the Biden administration's gainful-employment rule, rather than the plan initially proposed by House Republicans, which would have required institutions to pay an annual penalty based on students' unpaid loans, potentially costing colleges billions.
Substantial Reductions to SNAP Funds
The OBBB Act makes deep cuts to the Supplemental Nutrition Assistance Program (SNAP), which has long been a vital support for food-insecure students. These changes are expected to exacerbate hunger on campus, particularly at community colleges where food insecurity is already widespread. The bill increases work requirements for able-bodied adults without dependents aged 18–64 (previously 54), now mandating 80 hours per month of work or qualifying activity to maintain eligibility. Additionally, the bill shifts administrative costs to states, with federal contributions capped at 25%, leaving states to cover up to 75% of program costs. Finally, the bill limits future updates to the Thrifty Food Plan, reducing the purchasing power of SNAP benefits over time. These changes are projected to cut $186 billion from SNAP through 2034 and disqualify millions from assistance. In California, where nearly 1 in 7 residents relies on SNAP and more than 70% of community college students report experiencing food insecurity, these cuts could push thousands deeper into hunger.
These federal reductions will also strain the emergency food infrastructure that many community colleges rely on. Campus food pantries, which serve tens of thousands of students, depend heavily on local food banks which are now facing increased demand and shrinking supplies. As a result, students may experience reduced pantry hours, diminished food variety and lower nutritional quality. Combined with rising tuition and housing costs, limited financial aid and pressures of work and caregiving, the erosion of food assistance severely threatens academic success. Research shows food insecurity is linked to lower GPAs, increased absenteeism and higher dropout rates. By weakening this critical safety net, this bill undermines the role of community colleges as affordable, equitable gateways to economic mobility.
Significant Changes to Student Loan Repayment
Under OBBB, all existing federal student loan repayment plans for new borrowers are eliminated and replaced with just two options: a standard fixed payment plan and a new income-driven repayment (IDR) plan called the Repayment Assistance Plan (RAP). The standard plan follows a 10–25 year schedule with fixed payments, while RAP adjusts monthly payments based on income, starting at $10 per month and maxing out at 10% of income over $100,000. Though RAP offers limited interest waivers and small principal reductions for those who make full, on-time payments, it extends the repayment period to 30 years (360 payments) before any remaining balance is forgiven, compared to current plans that offer forgiveness after 10-25 years. The bill updates the law to say that if you're enrolled in the new Repayment Assistance Plan (RAP), your on-time monthly payments under that plan will count toward the 120 payments required for Public Service Loan Forgiveness (PSLF).
The bill also eliminates key borrower protections by sunsetting the Economic Hardship and Unemployment Deferment and limits loan forbearance to no more than 9 months during any 24-month period. Critically, OBBB blocks the executive branch from creating new repayment plans without Congress, effectively ending SAVE and future initiatives like it.
Conclusion
While the OBBB Act includes some long-sought wins for community colleges, it also enacts sweeping cuts and restrictions that pose serious risks to student success. Deep reductions to SNAP and a dismantling of flexible student loan repayment options will disproportionately impact low-income, non-traditional, working and caregiving students – the very populations community colleges are often serving. As institutions work to expand access, support student well-being and drive economic mobility, these federal policy shifts may undercut those goals. Continued engagement, advocacy and implementation support will be critical in mitigating harm and ensuring community colleges remain engines of opportunity.
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