The "One Big Beautiful Bill" has brought about significant changes to federal education policy, affecting students, schools, and colleges across the country. In this article, we will explore the key provisions of the bill and their potential impact on the education system.

K-12 School Vouchers are Going National (Sort of)

One of the most notable aspects of the "One Big Beautiful Bill" is its introduction of a federal school voucher program. This program aims to provide vouchers that students can use to attend private secular or religious schools, as well as for qualifying education expenses. The program uses the federal tax code to offer these vouchers, which will be distributed through Scholarship Granting Organizations (SGOs).

The SGOs will then distribute the donated money in the form of scholarships for students to use on a range of expenses, including tuition, books, and certain homeschooling costs. Unlike some of the country's earliest voucher programs, this federal version won't be limited to lower-income families. Instead, it will be available to households earning at or below 300% of a given area's median gross income.

This means that in an area where the median gross income is $75,000, any child in a household earning less than $225,000 could qualify for a voucher. The cost of this program is hard to measure, especially with the opt-in caveat leaving states to decide if they will participate. However, the nonpartisan Joint Committee on Taxation estimates that the vouchers could cost the federal government almost $26 billion in lost tax revenue over the next decade.

Medicaid Changes and K-12 Schools

The "One Big Beautiful Bill" introduces strict eligibility requirements for Medicaid, including more frequent eligibility verification and a first-ever national work requirement. Parents of children age 13 and younger are exempt from this requirement. However, this has raised concerns among health advocates, who point out that state experiments with work requirements have been plagued by administrative issues.

More than 37 million children are enrolled in either Medicaid or the Children's Health Insurance Program (CHIP), a federal program that provides affordable health insurance to pregnant mothers and children who live just above Medicaid's poverty threshold. The CBO estimates that nearly 12 million people will lose their health coverage as a result of these changes.

Cuts to Food Assistance would Also Impact School Meals

The "One Big Beautiful Bill" shrinks the number of people who are exempt from SNAP's work requirements, which could lead to significant changes in school meals. The program currently provides free lunches to more than 15 million children in the U.S., but this funding is also at risk due to the cuts.

Interviews with experts have highlighted the potential consequences of these changes. Katie Bergh, a senior policy analyst for food assistance at the Center on Budget and Policy Priorities, has stated that research has repeatedly shown that work requirements don't increase people's employment or their earnings. Instead, they just cut people off from SNAP and leave them hungry.

Changes to Federal Student Loans

The "One Big Beautiful Bill" also makes significant changes to federal student loan policy. For graduate students, new loan limits will make it harder for lower- and middle-income borrowers to attend pricier graduate programs. The old grad PLUS program, which allowed students to borrow up to the cost of their graduate school program, will be shuttered on July 1, 2026.

After that, graduate students' borrowing will be capped at $20,500 a year with a lifetime graduate school loan limit of $100,000. Borrowers working toward a professional graduate degree (i.e., medical or law school) will have their borrowing capped at $50,000 a year, and their lifetime cap increased from $138,500 to $200,000.

Changes to Pell Grants for Low-Income College Students

The bill also expands Pell Grants, which help low-income students pay for college. However, the expansion is tied to a new accountability earnings test for colleges. If an undergraduate program fails this test – meaning its students earn less than someone with a high school diploma – it could lose access to federal loans.

This measure follows in the footsteps of a similar regulation known as the gainful employment rule, which was developed by the Obama administration and reissued under Biden. The final version of this new accountability policy doesn't go as far as the House version did – that draft included a risk-sharing plan where colleges would pay a penalty based on the federal loan debt their students fail to repay.

Accountability Earnings Test for Colleges

The "One Big Beautiful Bill" also connects schools' access to federal student loans to how much their graduates earn. If an undergraduate program fails this test – meaning its students earn less than someone with a high school diploma – it could lose access to federal loans.

This measure has been criticized by some as being overly punitive and potentially harming community colleges, which offer a variety of certificate programs that are often more affordable than traditional four-year degrees.

Higher Tax on College Endowments

Finally, the "One Big Beautiful Bill" raises the tax rate on college endowments from 1.4% to as high as 8%, depending on the college's endowment. The endowment of Harvard University, which is currently fighting multiple legal battles against the Trump administration, totals more than $52 billion.

Based on the new law's formula, that puts Harvard in the highest endowment tax bracket, for institutions with an endowment of more than $2 million per domestic student. There is a carveout for small private colleges: Institutions with fewer than 3,000 students are exempted from the tax. The previous exemption was 500 students.

Implications of the "One Big Beautiful Bill"

The "One Big Beautiful Bill" has far-reaching implications for education policy in the United States. By introducing a federal school voucher program and making significant changes to federal student loan policy, the bill aims to promote greater choice and competition in the education market.

However, critics argue that these provisions could harm vulnerable populations, such as low-income students and families who rely on public schools for their education. They also point out that the bill's accountability earnings test for colleges could have unintended consequences, such as driving up costs and reducing access to higher education for marginalized communities.

Ultimately, the impact of the "One Big Beautiful Bill" will depend on how it is implemented and enforced. As with any significant change in education policy, there are likely to be winners and losers, and it will be crucial to monitor the effects of this bill over time to ensure that it serves the needs of all students and families.

Conclusion

The "One Big Beautiful Bill" has brought about a range of changes to federal education policy, from school vouchers to changes in federal student loan policy. While these provisions may aim to promote greater choice and competition in the education market, they also raise important questions about access, equity, and accountability.

As we move forward with implementation of this bill, it will be crucial to consider the potential implications for vulnerable populations and to ensure that its goals are aligned with the needs of all students and families. By monitoring the effects of this bill over time and engaging in ongoing dialogue about education policy, we can work towards creating a more equitable and effective system for all.