Navigating the Big Beautiful Bill: What Families and Schools Need to Know
The recently passed Big Beautiful Bill (BBB) is the most significant—andcomplex—shift in U.S. education policy in decades. Nearly every aspect of schooling,from financial aid to accountability, is changing. These new rules will reshape choicesnot only for families of college-bound students, but for every student, regardless ofwhether they are targeting STEM, law, medicine, or liberal arts.
New Federal Loan Limits: End of “Full Cost” Borrowing
Starting July 2026, students in graduate or professional programs (like medicalor law school) will face tight new limits on federal loans. Graduate students can borrowonly up to about $20,500 per year, with a lifetime cap of $100,000. Professionalstudents, like those in medicine or law, can borrow up to $50,000 per year but face a$200,000 lifetime limit.
For example, if Emma wants to attend a private medical school costing $70,000per year, she could now only borrow $50,000 in federal loans annually and must findother ways to cover the remaining balance—such as scholarships, school aid, or riskierprivate loans, which typically have higher interest rates and fewer protections. This is adramatic shift from the previous system, where federal loans could cover the entireofficial “cost of attendance.” Now, families must plan much more carefully: unlimitedfederal loans are no longer a safety net. Parent PLUS Loans for undergraduates are alsocapped at $20,000 per student per year, $65,000 lifetime.
For families hoping to send students to costly out-of-state or private colleges,these restrictions could be a game-changer. The new loan rules reinforce theimportance of considering in-state and lower-cost options. Delayed or reducedrepayment flexibility is also being scaled back, elevating the stakes and making early,careful planning indispensable
Professional School and High-Value Majors are Not Immune
Historically, STEM and professional degrees were considered “safe bets.” TheBBB changes this by demanding more evidence that these pathways deliver economic value, both for federal aid eligibility and student protection. The new loan environmentputs even popular, in-demand degree pathways under pressure to prove their worthunder strict new federal metrics, affecting programs in biology, chemistry, physics,computer science, and popular pre-professional tracks like pre-med and pre-law.
For example, life sciences, physical sciences, and even some engineering fieldsface scrutiny, as the new rules limit how much students can borrow and require schoolsto show that graduates actually out-earn those with “lower” degrees in the yearsfollowing graduation. For families, this underscores the urgency of strategic programchoice, and for institutions, it means adapting rapidly—or losing access to criticalfunding.
Institutional Accountability via the Earnings Metric
Perhaps the biggest change—one that hasn’t been widely discussed in themedia—is the BBB’s introduction of an “earnings premium” metric. Under this rule, if acollege’s bachelor’s graduates are not earning substantially more than high schoolgraduates (or if a master’s program’s graduates don’t out-earn those with only abachelor’s degree), the program could lose federal loan access for future students.
Recent data underscores the high stakes: many majors, including some inscience, social work, and education, struggle to produce early-career salaries that meetthese federal thresholds. Worse, the metric doesn’t account for regional wagedifferences, so graduates who return home to serve in lower-wage rural or underservedareas could inadvertently penalize their alma mater. This risks punishing programswhose graduates make enormous societal impact, even as their starting salaries lagbehind those in finance or tech.
The upshot: families must now weigh long-term satisfaction and societalcontribution against more immediate financial reality when selecting colleges andmajors, as loan eligibility will hinge on this earnings data.
The K–12 Scholarship Voucher and Tax Credit
BBB introduces a federal tax credit of up to $1,700 for taxpayers who donate tononprofits that fund private K–12 school scholarships. While this may sound appealing, the benefit is nuanced: only families already owing that much in federal taxes would fully “break even” on the donation. For most households, it amounts more to a chance tohelp other families, rather than direct tuition relief. Still, the program will likely expandscholarship access for some, while leaving overall costs unchanged for many.
School Funding, Changing Incentives, and Broader Effects
On a broader scale, BBB shifts funding and accountability for both public andprivate schools. New incentives encourage career and technical education. Outcomes-based benchmarks could mean districts lose federal support for poorperformance under the new earnings metric, or gain support by demonstrating highgraduate success.
Why Families and Schools Need to Stay Engaged
Every family and school will experience these changes differently, but one thing isuniversal: the need for careful, informed planning. The new loan environment, theearnings premium metric, and changing funding formulas all demand activeengagement. The Asclepius Advising team is here to help families and schoolsunderstand the fine print and make decisions that maximize opportunity and security.
What’s Next on This Blog
Upcoming posts will break down:
- New strategies for affording high-value majors and professional degrees
- How to use (and interpret) earnings metric data in choosing schools
- Navigating the voucher and tax credit landscape for K–12
- Practical advocacy tips for students, parents, and administrators
Stay tuned and reach out with your questions—BBB is changing education, and smart planning is the best way to ensure your student’s future remains bright