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, but were restricted to students enrolled less than half-time;
- 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 specifically excluded unaccredited providers. The inclusion of the Workforce Pell Grant is a significant win, however the bill will also significantly decrease the number of eligible Pell Grant recipients landing a substantial blow to community colleges. The bill eliminates Pell Grants for students enrolled in fewer than half-time courses (< 6 credits) and requires 30 credits per year (15 credits per semester) to qualify for the full Pell award. Inevitably, low-income, part-time learners will be disproportionately impacted by these limitations.
Community College Earnings-Based Accountability Measures Now Required
To ensure that college programs receiving federal student loans provide a positive return on investment for their students, the OBBB Act adopts a "do-no-harm" earnings-based accountability requirement. Under this standard, undergraduate programs could be prohibited from receiving new federal student loans if the majority of their graduates earn less than the median income of high school graduates in the same state. Graduate programs would face a similar standard, comparing graduates' incomes to those with bachelor's degrees in the same field and state.
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 were made 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 freezes inflation adjustments 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 the 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 were made to the Student Loan Repayment
The OBBB Act overhauls federal student loan repayment by eliminating all existing Income-Driven Repayment (IDR) plans and replacing them the standard repayment plan and the Repayment Assistance Plan (RAP). While RAP caps monthly payments at 10% of discretionary income, 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 also eliminates key borrower protections, such as economic hardship deferment and interest subsidies for low-income borrowers. H.R. 1 rolls back key provisions of the Biden administration’s SAVE Plan protections by reinstating annual interest capitalization, though RAP offers limited interest waivers and small principal reductions for those who make full, on-time payments.
The bill also phases out the Public Service Loan Forgiveness (PSLF) program for new borrowers starting in 2026 — a significant loss for students pursuing lower-paying public service careers, including many community college graduates. In addition, this bill reinstates aggressive collection tools for delinquent loans, including wage garnishment, tax refund offsets and the seizure of Social Security benefits. Collectively, these changes reduce flexibility and forgiveness options for low- and middle-income borrowers, potentially increasing long-term financial strain.
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. The elimination of part-time Pell eligibility, 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.
