Why this matters
Federal aid, including Pell Grants, loans, health care and food assistance, helps millions of Americans who are in financial need, including students working to improve their socioeconomic status through higher education.
San Diego State senior Karen Sawouq has dreamt since she was a teenager of becoming a lawyer, a profession she hopes will allow her to help others and overcome years of financial hardship.
The average annual cost of attending SDSU, including tuition and more, can range from $24,000 to as high as $34,000. But a job on campus and federal assistance is the bulk of what has made higher education possible for Sawouq — and allowed her to financially contribute to her family, who at times has struggled to make ends meet while she navigates college as a first-generation American.
“I just want to get to that stage and also help out my family,” she said. “I’ve just been really worried, especially with the federal bill getting passed, about how I’m going to pay this.”
Students like Sawouq may now find it harder to afford college following President Donald Trump’s massive multitrillion-dollar tax breaks and spending cuts bill that impacts Pell Grants, loans, health care, food assistance and more.
Proponents for the One Big Beautiful Bill Act argue that the changes are partly aimed at reducing the cost of college, eliminating waste and encouraging work and responsibility. But some education leaders told inewsource the bill may actually have the opposite effect — making college less affordable and hindering access and completion, especially among low-income students.
“I think that there will be a return to the past where only those who were wealthy or middle class had access to colleges and universities,” said Lynn Pasquerella, president of the American Association of Colleges and Universities.
Fewer students will be able to access Pell Grants, free need-based assistance for undergraduate students from low-income households. While the grant will now be available for job-training programs, the bill adjusts eligibility requirements.
Nearly half of the more than 400,000 undergraduate students in the California State University system receive the Pell Grant. About 14,000 of them, including Sawouq, attend SDSU.
Starting next year, a student is no longer eligible if their financial resources determined by a formula known as the Student Aid Index meets or exceeds twice the amount of the Pell Grant’s roughly $7,400 maximum award, or if they receive grants from nonfederal sources that fully cover their cost of attendance.
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It’s not yet clear if students who remain eligible will see the size of their Pell Grants impacted, said Daniel Reed, director of financial aid at Point Loma Nazarene University. Close to one-third of the private university’s students receive Pell Grants.
The bill also tightened federal loan access, removing options that help pay for graduate programs. It also set a $257,000 lifetime cap on borrowing, excluding what are known as PLUS Loans.
But PLUS Loans, meant for graduate and professional students, also are undergoing changes and will no longer be an option for new applicants. Direct unsubsidized loans will continue to be available but have an aggregate limit of $100,000 for graduate students and $200,000 for professional students studying fields such as law, medicine or pharmacy — on top of money they borrowed during their undergraduate years.
Parents can also continue to take out PLUS Loans, but will now be limited to borrowing $20,000 per year and a maximum of $65,000 over a lifetime. Under the new bill, universities can set lower borrowing amounts — a change that supporters of the bill argue will encourage colleges to lower costs to make up the difference for families.
Most changes under the bill are set to go into effect starting mid-2026. Students who are already enrolled and have a loan for the program they’re in have an exclusion of up to three academic years.
At SDSU, a fourth of students used federal loans to fund their college education during the 2024-25 school year, according to the college.
The bill is a major hit to students looking to further their education, especially parents and those considering graduate and professional studies who will no longer have the same access to loans once meant for them, Reed, director of financial aid at Point Loma Nazarene University, told inewsource.
“We are concerned with limiting resources for students and families,” Reed said. “This will push them into private loans that are likely at a higher cost to the student.”
Not only are private loans typically more expensive than federal ones, they often require applicants to have established credit or a cosigner who does, according to the U.S. Department of Education.
Low-income students could be further impacted as Trump moves forward with mass layoffs at the Education Department, which manages federal aid and loans for college students are among other things.
The changes to the availability of federal money is especially concerning for Sawouq, who will need to pull out more loans to get through law school. Having access to federal loans makes it easier to focus on her education instead of finding other ways to avoid pulling private loans that could have varying interest rates, she said.
“Private loans — that’s actually my worst nightmare,” she said. “I just don’t want that at all.”
For some students, the inability to afford college will cause a shift in priorities: from putting education first to solely working in order to survive, said Robert Moreno, a board member at Southwestern College in Chula Vista. Although community colleges remain an affordable option for those interested in higher education, changes under this bill will make transferring to a four-year university financially difficult for some students, he said.
Roughly half of the 23,000 high school students in San Diego County who have graduated and enrolled in college have been considered socioeconomically disadvantaged every year since 2014, according to the latest state data available.
“You’re kind of putting the hands behind the student’s back and making them forced to choose to feed their family more than improving their educational life,” Moreno said.
Moreno said he thinks the changes could drop enrollment across college campuses.
Pasquerella said cuts to Medicaid — which benefits roughly 3.5 million students nationwide and is known in California as Medi-Cal — will also have a great impact on education. When states are forced to make up the cost by taking away funding from other programs, she said, they could target higher education.
And without access to health care, particularly mental health services, students are more likely to drop out, she said. Over the last few years, emotional stress and mental health have surpassed the cost of attendance as the main reasons why some students stop attending college, according to Gallup polls.
“All of these factors — the stress that students will feel as a result of increased financial burdens, the toll that it takes on cognitive bandwidth, the capacity of students to learn inside and outside of the classroom — will mean that we have a radically different portrait of colleges and universities,” Pasquerella said.
While the bill also requires some private universities to pay higher taxes on their endowments — which education experts say could lead schools to either cut programs or pass the additional costs down to students — it’s unclear whether local campuses will be affected. A spokesperson for Point Loma Nazarene said the university’s endowment is not large enough to be subject to the higher taxes. Other major private universities in San Diego did not respond to inewsource inquiries.
Type of Content
News: Based on facts, either observed and verified directly by the reporter, or reported and verified from knowledgeable sources.
