When I examine the “One Big Beautiful Bill,” naturally the changes to Pell jump out to me. As the Managing Director of Data and Analytics at MARKETview, I work closely with financial aid data on a daily basis, so the larger implications are top of mind. I wanted to break down a few of the major changes that will impact students and institutions alike — and discuss how investing in preparation can help you stay ahead of these disruptions.
Pell Eligibility for Students on a Full Ride
There were several changes to Pell eligibility that were proposed while this bill was being drafted, but only one made the final cut. Students who receive grants or scholarships that cover the full cost of attendance are ineligible for Pell grants, even if they would have qualified otherwise.
It’s unlikely this will make a big difference for most students, as institutions will just augment their packages to ensure Pell grants are applied as “first-in” dollars. This affects small volumes of students who were receiving awards that go above the cost of attendance, such as athletes.
Another group that may see some changes would be Pell recipients who meet full demonstrated need that are also traveling across the country to a school. They are sometimes awarded above the cost of attendance to defray travel expenses. Without this coverage, out-of-state Pell students might not be able to consider enrolling far from home.
Filling the Pell Gap
When the FAFSA was simplified, it became easier for students to become eligible for Pell Grants. I would attribute that expansion as a primary reason why there was a $10.5 billion shortfall in Pell funding last year. A provision of this bill aims to directly fill the gap with a supplementary, one-time payment. While this provides a temporary fix to the shortfall, it doesn’t prevent another one from occurring.
Some of the aforementioned changes to eligibility could reduce Pell spending, but there’s also an expansion of Pell into short-term job training programs that could easily offset those cuts. A lot of good can come from giving more students an opportunity to go to vocational school and learn a trade, but there is still the outstanding question of just how many students will qualify. If the uptake from short-term job training outstrips the estimates, there is a potential of continued underfunding and cuts for college students in the future.
Institutional Accountability Program
The new “institutional accountability” test making headlines in this bill measures the median income of graduates from individual programs at an institution against “working adults” without a bachelor’s degree. If a program fails this test two out of three years, it loses Direct Loan eligibility. This presents a lot of uncertainty for institutions — it’s going to be difficult to control outcomes and predict which programs might lose federal funding.
Everybody wants students to graduate and be gainfully employed. Nobody wants students to leave with a debt burden greater than they can pay, but this program could broadly affect institutions and students alike. There are potential societal consequences as well — many lower-earning jobs, such as social workers, require college degrees.
There would be unequivocal impacts on an institution’s enrollment depending on how many of their programs fail the test. Lost revenue from students dependent on loan funding could quickly add up to millions of dollars — how will institutions make up for that difference?
Pell Grant students are also at an increased risk due to this change. What happens if a student is two years into a degree, and their program suddenly loses eligibility? That would mean credit hours (and Pell eligibility) wasted, and already financially vulnerable populations forced to start over or abandon their degrees altogether.
One Big Beautiful Bill — What It Means for College Revenue & Financial Aid
The passage of the One Big Beautiful Bill Act is set to send financial ripples through higher education — but how those ripples hit your campus depends on how prepared you are. Join us for an interactive Q&A focused on the bill’s direct impact on institutional revenue streams and student financial aid.
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Using Real-Time Data to Overcome Changes in Federal Aid Programs
Students and families affected by these changes are going to continue pursuing college degrees, albeit with more complexity and uncertainty. The best way to prepare your institution for these changes is to gain a greater understanding of how many students will be affected by the various pieces of the bill.
MARKETview’s real-time, comparative data can provide this kind of adaptable insight to keep your aid awarding strategy as ahead of the changes as possible. MARKETview also highlights how future classes are building to ensure you understand the potential compositional challenges while you still have time to react. This data can help you effectively communicate with your key campus stakeholders about the downstream impacts that federal funding changes can have on your incoming class.
If you have any questions about the broader ramifications of this bill on financial aid, I’ll be participating in an upcoming Q&A webinar on Tuesday, July 22 at 3 p.m. ET. Send me your questions and register here, and I’ll do my best to answer them and discuss more ways to use real-time data to prepare your institution for these changes.
If you’d like to learn more about how MARKETview’s financial aid data can help your institution make more informed investments, sign up to chat with our team.