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On July 4th, 2025, the new budget reconciliation bill, —also referred to as the “One Big Beautiful Bill Act”—became law. This budget reconciliation touches nearly every sector of American life, from nutrition and food access, healthcare, and education, to energy, public lands, transportation, and military spending. While this is the most current and potentially far-reaching change to the federal budget, there have also been many smaller changes to federal funding over the past six months of the new administration, many of which have impacted colleges, universities, and their students.

If you are a current high school senior, a parent or guardian of a high school senior, or a counselor, teacher, or mentor for high schoolers, you may be wondering if and how these changes will impact college admissions, and what shifts might be in store for the . To start with the most pressing question: will these federal budget cuts impact college admissions in 2025-26?

In short, probably. But it will likely impact different students and different institutions in different ways, and it will almost certainly take some time to figure out (and feel) the full impacts of the changes to higher education that have now been approved into law. Below, we’ll break down some of the specific changes implemented in H.R.1 and their likely effects on students, both current and incoming. Outside of H.R.1, the federal government has been exercising additional cuts to federal spending on higher education over the past several months, so we’ll also go over some of the other changes to keep an eye on.

What does H.R.1 change about higher education admissions?

The most direct impacts of federal budget cuts on college admissions are the changes to financial aid. It is unclear to what extent admissions will be impacted, but institutions could react preemptively to the new changes by tightening admissions or making other alterations to financial structures that trickle down into admissions choices. The following provisions go into effect on July 1st, 2026:

Student Loans

Graduate and professional students will no longer be eligible to receive Direct PLUS loans. There are also new caps on Direct Unsubsidized Loans for graduate and professional students, on Parent PLUS loans (loans borrowed on behalf of dependent students), as well as lifetime maximum aggregate amounts for all students.

Potential impacts: These changes will impact the financial aid packages offered to some students with their admissions decisions. This will likely make college more expensive for certain students and their families, or force students to pursue loans with private lenders, which can have higher interest rates and lower protections. Graduate and professional students—as well as institutions that enroll a large number of graduate students—will be particularly affected by these changes.

Student Loan Repayment

The current loan repayment plan options will be eliminated and replaced with two options: a standard repayment plan and an income-based repayment plan. Deferments for economic hardship and unemployment will also be eliminated (beginning July 1st, 2027), and the period a borrower can be in forbearance will be reduced.

Potential impacts: While these changes will not affect current borrowers, they will limit the repayment and deferment options for any new student loans disbursed on or after July 1st, 2026. This will not have any direct effects on college admissions, but it will impact the financial decisions of students and their families.

Pell Grants

There are some new eligibility restrictions on Pell grants based on a student’s Student Aid Index level, as well as whether they are receiving funds that cover the cost of attendance from non-federal sources. There were additional proposed restrictions to the Pell grant program that did not make it into the final version of the bill.

Potential impacts: This change will likely impact some students’ financial aid packages, but this portion of the budget bill is notably less restrictive than was originally proposed. It is possible that these changes will impact some institutions’ finances, but it is unlikely to have a major impact on admissions decisions.

What else does H.R.1 impact?

While the above provisions in H.R.1 directly address college admissions and attendance, there are a number of additional areas of the bill that have the potential to impact colleges and universities in the long term. There are also numerous compounding impacts for certain college students, depending on their backgrounds. While these issues may not directly impact college admissions this year, there are likely to be ripple effects on institutional finances, educational oversight, and college access and enrollment for students across demographics.

Additional institutional impacts:

• Endowment tax: There will be new graduated tiers of the endowment excise tax, between 1.4% and 8%, depending on the size of the institution’s endowment. Religious schools will no longer be exempt from the endowment tax, but institutions with student bodies of fewer than 3,000 will be exempt. Potential impacts: These changes to the endowment tax will have a moderate to significant impact on certain colleges and universities, specifically larger private institutions and religiously-affiliated schools that were previously exempt. It might take longer to see the actual impacts of these kinds of changes to institutional finances, but significant budgetary shifts will always end up impacting students on some level, whether it is in admissions, student resources and services, or the education itself.

Additional student impacts:

• Medicaid: The new budget includes substantial reforms and cuts to the federal Medicaid program, including restricting the list of eligible populations, implementing a work/service requirement for receiving benefits, and prohibiting federal Medicaid payments to certain essential community providers (ECPs) who serve predominantly low-income populations. Potential impacts: These changes are certain to impact the finances and health of Medicaid-eligible students in newly restricted populations, as well as those who rely on ECPs for their medical care. Additionally, these Medicaid reforms are likely to place significant pressure on state budgets, which could indirectly impact the higher education sector as well.
• SNAP benefits: The list of previously eligible populations for SNAP has been shortened, now excluding refugees, asylees, and other immigrant populations lawfully present for humanitarian reasons. The work requirement exemptions for SNAP benefits have also been changed—this will mainly affect recipients who are parents of teenagers, between ages 55-65, homeless individuals, veterans, and certain foster care individuals. Potential impacts: A found that an estimated 23% of college students experience food insecurity. Like the Medicaid cuts, these changes to SNAP will be sure to impact the finances (and health) of affected college students and their families.

Which other federal policy shifts might impact college admissions?

In the first half of 2025, prior to the passage of H.R.1, executive orders from the president and directives from the Department of Government Efficiency (DOGE) caused significant shifts in the federal government and its agencies. Cuts to the Department of Education, particularly its research and statistics arm, and training initiatives related to Diversity, Equity, and Inclusion, appear to be just the beginning of the administration’s efforts to dismantle the Department of Education entirely.

Here are some additional changes that have the potential to impact college admissions:

Research Funding Cuts

Since February, the administration has terminated through the National Institute of Health and the National Science Foundation. Many of these grants go to university-based laboratories, where STEM students and postdocs conduct important scientific research.

Potential impacts: Universities are responding to current and potential cuts by instating hiring freezes and cutting graduate student positions. While these changes are already affecting graduate student admissions, the precarity of the research funding landscape does have the potential to impact college admissions more broadly as well.

Individual Institutional Funding Cuts

Over the past several months, the administration has frozen federal grants at a number of individual universities, including Columbia, Harvard, UPenn, and the University of Maine system, as retaliation for not complying with certain aspects of the administration’s agenda.

<strong>Potential impacts: Cuts to federal funding , depending on whether the institutions are public or private, the size of their endowments, as well as the extent of the cuts. These kinds of school-by-school budget cuts will likely have some effect on college admissions, but the unpredictability of the landscape makes any future changes hard to anticipate.</p>

International Students

An executive order issued by the president in June aimed to restrict Harvard University from issuing new international student visas. (Like the individual institutional funding cuts outlined above, this was also a retaliatory move.) While a federal judge has for now, the landscape for international students remains fraught.

<p&gt;Potential impacts: International students may face more difficulty or uncertainty in college admissions and attendance in the coming year, as the administration has moved towards more restrictive visa and immigration policies.&lt;/p>

Where to go from here?

It can be intimidating to plan for a major financial commitment like a college education in such an unstable and rapidly changing political environment. While there are many factors to take into consideration, we do believe that the vast majority of colleges and universities will continue to pursue their mandates of welcoming and educating the next generation of students.&amp;lt;/p&gt;

Our team at ������һ����ӰԺ�ݲ� always recommends that students and families consider as many varied options as possible for their college application lists, including >financial safety schools. This is especially critical in the current climate, where financial aid options and university budgets are in flux.

While we don’t yet have a full understanding of the ramifications of H.R.1 and other federal budget cuts on the higher education landscape, it is highly likely that there will be far-reaching impacts. As we all continue to navigate these challenges, the ������һ����ӰԺ�ݲ� team will be here to provide insight and guidance to help you make sense of this turbulent new reality.</p>