When you attend a university that can cost upwards of $27,000 for in-state students in their first year alone, you tend to worry about money — specifically financial aid.
New fears for the future of FAFSA come following the One Big Beautiful Bill Act, which was signed into law by President Donald Trump in July 2025. This act not only has the power to completely reshape the financial aid system as we know it, but may also harm the students who depend on it.
The changes implemented by this act were not able to take effect in the 2025-26 academic year, but are now going to be instituted for the 2026-27 academic cycle. Most notable of these changes are alterations to federal student loans, the amounts that can be taken out and the type of loan available to certain students.
These include the loans that can be taken out by graduate students, who are now only allowed $20,500 a year with a $100,000 lifetime borrowing limit, or students pursuing careers in medicine or law, who now may receive only $50,000 a year with a $200,000 lifetime borrowing limit. These courses of education come at a very high financial cost, and new legislation is forcing students to turn to private loans and, in general, making it harder for them to not only enter into such a vital workforce, but to remain financially stable afterwards.
Loans are only one way students are able to finance themselves, but at the moment, much more could be at risk.
Along with the act came a budget for spending in 2026, which included a plan to lower the nation’s non-defense discretionary spending by $163 billion. One of these possible changes described was lowering the maximum Pell Grant from $7,395 to $5,710. While the decrease in maximum amount was not supported by Congress, and remains at the higher sum, the Federal Student Aid office has explained that this could change at any moment following actions from Congress.
This leaves students in limbo. They are attempting to not only navigate their current financial situation, but are now being forced to come up with alternate plans in the case that their current financing approach falls through. The culmination of these circumstances brings to light the dilemma of financial anxiety.
While financial anxiety is not a new concept to college students, it is actively being heightened in this time of unpredictability. For many, financial aid is a vital instrument, ensuring they can make it through higher education without debilitating debt. As of 2025, only 5% of undergraduate students are able to finance their schooling themselves, with 34% taking out student loans, the terms of which could now potentially be under review.
When students are stressed out by their financial situation, it can affect many more aspects of their lives. Surveys have found that heightened financial anxiety leads to poorer academic performance, negative effects on mental health and can force students to choose between financing their education or their basic necessities.
A potential student even deciding whether or not to pursue higher education is not a choice that is taken lightly. The school in which they select poses to be an even greater and at times riskier decision to make, one in which finances play a very large role.
When something like the amount of money you can take out for a loan changes or the possibility of receiving less Pell Grant money looms, students may feel greater stress and even think about leaving school. In a survey conducted with over 1,500 U.S. college students, 59% cited financial stress as the primary reason they considered dropping out.
To be clear, none of this is the result of a lack of trying. Trellis Strategies observed the impact of work on college success and found that 67% of undergraduates had a paying job. The study also discovered that students working over 20 hours per week had a lower academic performance.
In short, it seems as if there is no winning for students. Personal attempts to compensate for the financial cost potentially posed by new FAFSA policies could create an academic cost that is far too great.
Participating in higher education is already a stressful endeavor; there is no need for it to be worsened by government interference. In fact, it’s quite worrisome that these blockades to education are still being enacted. It is imperative that government officials support affordability for post-secondary education. Higher education is a right that current and proposed legislation should not be infringing upon.
