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Time of India
5 days ago
- Business
- Time of India
The ‘One Big Beautiful Bill' is reshaping student loans at the University of Michigan: Pell Grants, caps, and repayment changes explained
On July 4, President Donald Trump signed into law the One Big Beautiful Bill Act (H.R.1), a wide-ranging federal budget reconciliation package that has already sparked a wave of policy debates across the country. Among its many provisions, including tax reforms and defense spending increases, the bill introduces substantial changes to federal student loan programs. For students, alumni, and faculty at the University of Michigan, these shifts are not just administrative, they may directly alter access to funding, repayment pathways, and career choices. The legislation's education provisions draw heavily from prior proposals, including the Bipartisan Workforce Pell Act , and reflect a renewed push by lawmakers to limit long-term federal loan exposure while expanding short-term job-oriented training options. As reported by The Michigan Daily , members of the U-M community are closely watching how these adjustments may reshape student opportunity and financial planning in both undergraduate and professional education. Pell Grants : Expanded eligibility, limited certainty One of the more widely welcomed changes under H.R.1 is the expansion of Pell Grant eligibility. Originally targeted towards low-income students enrolled in degree-granting programs, Pell Grants can now be used for shorter-term certificate programs, including many offered by trade schools and community colleges. Jeremy Wright-Kim, an assistant professor at the University of Michigan's Center for the Study of Higher and Postsecondary Education, told The Michigan Daily that this extension may benefit working adults and those seeking fast, career-aligned skills. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Treatment That Might Help You Against Knee Pain (Search Here) Kneepain | Search Search Now Undo 'These shorter-term certificate programs are good if your local labor market needs to fill that need,' Wright-Kim said. 'There are also students who are more likely to be attracted to those programs, like working adults who maybe can't attend a full-time, longer-term credential program.' While this change is intended to strengthen workforce pipelines, education policy researchers have cautioned that outcomes for such programs vary widely. Certificate programs can offer a quick return in certain technical fields but may lead to minimal wage gains in others. Students are encouraged to review completion rates and post-program earnings data through the College Scorecard before enrolling. Repayment plans: Fewer options, more questions Beginning July 1, 2026, the number of federal student loan repayment plans for new borrowers will be reduced from seven to two. These will include a standard plan with fixed monthly payments and a new income-based plan requiring a minimum of ten dollars per month. Existing borrowers who took out loans before that date will retain access to current income-based plans until they are phased out by mid-2028. Michigan Law alumnus Ryan Jansen described the decision to consolidate plans as reasonable in theory but frustrating in execution. 'The new repayment plans, compared to some of the changes, aren't as bad as they may seem at first glance,' he said. 'I don't think the idea of trying to consolidate plans is inherently bad.' However, Jansen noted that accessing reliable information about how these changes will be implemented has been a challenge. He expressed concern about communication gaps from the Department of Education and federal loan servicers, especially following recent layoffs within the department. 'I haven't had any information from the Department of Education, from FAFSA or from my third-party loan servicer, explaining these changes and what I may or may not need to do,' Jansen told The Daily . 'There are fewer people working and more people trying to get information.' The University of Michigan's Office of Financial Aid has acknowledged the current lack of detailed guidance. On its official website, the office states it is actively monitoring updates and will inform students once formal directions are issued by the US Department of Education. Borrowing caps: Professional education under pressure Perhaps the most contentious component of the bill for U-M students is the imposition of new borrowing caps. Starting in 2026, a lifetime limit of 257,500 dollars will apply to all federal student loans. Annual caps will also be introduced: 20,500 dollars for graduate students, 50,000 dollars for students pursuing professional degrees such as law or medicine, and 20,000 dollars per year for Parent PLUS loans, with a 65,000-dollar lifetime cap. These caps mark a sharp departure from the previous system, where graduate and professional students could borrow up to the full cost of attendance through Grad PLUS loans. The implications are especially concerning for students at institutions like Michigan Law or Michigan Medicine, where annual costs can exceed 100,000 dollars. Jansen noted that while Michigan Law offers competitive merit scholarships, most students still borrow more than 50,000 dollars annually. 'If you took out money in undergrad, you're going to maybe hit that lifetime cap much sooner,' he said. 'I don't think 50,000 dollars a year makes law school accessible for most people.' Alex Braun, a rising junior in the College of Literature, Science, and the Arts and officer-at-large for the College Democrats at U-M, voiced similar concerns. Speaking with The Michigan Daily , Braun said the new limits may deter students from lower-income backgrounds from entering critical professions, particularly in healthcare and law. 'We already have a shortage of doctors in the US,' Braun said. 'These changes are going to make it worse and create more barriers to those higher educations.' Will tuition costs adjust? Proponents of borrowing limits argue that by capping how much students can borrow, colleges will face pressure to rein in tuition growth. However, higher education experts, including Wright-Kim, remain skeptical. 'It's very hard for institutions to lower their tuition rates because education is an expensive enterprise,' he said. 'We would be more likely to see different groups of students not being able to attend, as opposed to colleges saying, 'We're going to make it cheaper for you.'' Most tuition increases are driven by rising operational costs, such as faculty salaries, technology upgrades, and student services. Without substantial state or federal subsidies, institutions have limited flexibility to lower costs without compromising quality. A moment of reckoning For a university deeply invested in public service, research, and academic excellence, the changes introduced through H.R.1 are being met with a mix of concern and cautious optimism. While expanding access to short-term credentials may align with workforce needs, reduced flexibility in repayment and tighter borrowing limits could create unintended barriers for many students pursuing advanced degrees. Braun summed up the sentiment felt by many on campus. 'I'm so used to being in a community where everyone supports and encourages higher education,' he said. 'To see a divestment in higher education from the federal government is alarming and a little shocking to me.' As students return to campus for the fall semester, many will be looking to university financial aid offices, policymakers, and advocacy groups for clarity and support. Until more guidance is issued by the Department of Education, the impact of the One Big Beautiful Bill will remain a subject of both speculation and serious concern. TOI Education is on WhatsApp now. Follow us here. Ready to navigate global policies? Secure your overseas future. Get expert guidance now!
Yahoo
22-04-2025
- Politics
- Yahoo
Opinion: Career Pathways Programs Have Huge Bipartisan Support. D.C. Should Get on Board
What's one thing Education Secretary Linda McMahon and former Democratic vice presidential nominee Sen. Tim Kaine agree on? They both see career pathways programs, which help students develop workforce skills during and after high school, as essential in today's rapidly changing labor market. McMahon has publicly endorsed the Bipartisan Workforce Pell Act — co-sponsored by Kaine and by both Democrats and Republicans in the House — which would extend students' Pell Grant eligibility beyond traditional colleges to educational programs in specific industries. The broad political support for career pathways isn't a fluke: It was one of the few areas of common ground between Kamala Harris and Donald Trump during the 2024 presidential campaign. With the law supporting these programs due to be reauthorized this year and the federal funding about to expire, career pathways will be on a short list of issues that could move quickly in this divided Congress. Get stories like this delivered straight to your inbox. Sign up for The 74 Newsletter Given this bipartisan momentum, how can leaders in Washington create programs that truly prepare students for jobs and fulfillment in the real world? They can start by learning from successful career pathways programs that are already flourishing in red, blue and purple states across the country. For example, Colorado demonstrates that successful career pathways programs can't be one-size-fits-all: They must meet the needs of students in communities with very different economies and job markets. That means policymakers designing pathways programs should speak to local government leaders, school leaders, educators and students to understand potential barriers to student participation and success. Leaders of the Colorado Succeeds career pathways initiative conduct a local needs assessment that covers every region of the state every two years — and adjust policies, funding or programming based on what they hear. Through this assessment, leaders learned that high school students participating in dual enrollment were limited to attending their local community college, regardless of whether it was affordable or offered the program they wanted. Colorado Succeeds leaders shared this information with the state Department of Higher Education, which then changed the policy to enable high school students to enroll regionally and virtually at community colleges across the state. By regularly gathering and acting on feedback from communities, Colorado Succeeds has not only strengthened its statewide programs, but built trust among business leaders, educators and students. Knowing that flexibility and innovation are essential to building effective pathways programs that meet changing student and economic needs, leaders in Indiana embrace creative, outside-the-box ideas and refine them as they go. Recently, the state's Department of Education redesigned its high school diploma credentialing in an innovative way — a process that required many rounds of refining that ultimately offered graduates three pathways: college, career or military. The state also created the Indiana Career Scholarship Account program to provide funding to high school students for work-based learning opportunities like internships and apprenticeships. And they expanded course options by allowing more people with relevant industry experience but no traditional teaching license to head up classes that require highly technical knowledge. In Delaware, new approaches show that while bold new ideas are important for innovation in career pathways, so are adaptability and resilience. Leaders shouldn't expect to get everything right on the first try, but they should expect that regular adjustments will bring them closer to creating programs that effectively serve more students. That requires a well-designed data system and using it to decide whether specific programs should continue, shift or end. Delaware regularly reviews its career pathways programming and uses data to make necessary changes. Committees of educators, students and employers review all career and technical education programs in the state every five years. By regularly working with a wide range of partners, state leaders ensure that this programming remains up-to-date and relevant for students. Delaware's data also inform ongoing adjustments to program offerings and funding. For example, when data revealed that high school students with disabilities participated in pathways programs in lower numbers than students without disabilities, Delaware officials made policy changes that improved access for all students. Building successful career pathways programs is hard work, but Colorado, Indiana, Delaware and many other states show what's possible by listening to local leaders, thinking creatively and using data to guide improvement. Leaders in Washington have a rare opportunity to embrace common ground on this issue, give students a leg up in high-demand careers and help maintain America's competitive edge in the global economy. They must not squander it.
