My older sister was in college at the time, supported by scholarships and financial aid, so I knew there was support for students facing financial hardship. I filled out the Free Application for Federal Student Aid (FAFSA) and received a full aid package to Syracuse University in the form of federal loans, some university scholarships and a Pell Grant (a form of federal aid for families with exceptional financial need).
Today, the one Big Beautiful Bill (OBBBA) has changed how rural students like me finance and repay college loans.
By overhauling so many facets of borrowing—including caps on graduate student loans, changes to parent PLUS and limited repayment options—OBBBA doesn’t only eliminate $300 billion in higher education funding over the next decade, it curtails the opportunity for social mobility that young, low-income Americans have long depended on.
According to the Center on Rural Innovation, in 2022, 63% of rural counties had fewer jobs than they did before the Great Recession in August 2007. Meanwhile, nonrural counties had both recovered and exceeded their pre-recession employment. At the same time, economic opportunity has become more closely tied to educational attainment for rural Americans. Data from the Federal Reserve shows that, between 2010 and 2021, the employment rate for those with a high school degree in metropolitan counties increased by 2.5% but declined for those in nonmetropolitan counties, reflective of a decades-long decline in manufacturing and farming jobs in nonmetropolitan counties.
For students and families who are not well-off, paying for education will come with an even more uncertain financial future due to the need to accumulate mountains of debt to pay for school. This not only deprives low-income families in rural America equal opportunity in education, but it will widen the long-standing economic gap between rural and urban America.
New borrowing caps raise concern
The OBBBA imposes new limits on federal unsubsidized loans by setting new classifications for what constitutes a “professional degree.” (An unsubsidized student loan refers to a loan that starts accumulating interest from the date of its first disbursement.)
A professional degree is a program that leads to a career for which someone needs a license to practice. This definition isn’t new, but all types of graduate degrees used to have the same borrowing limit on direct unsubsidized loans of $20,500 in a given academic year and an aggregate limit of $100,000 in total.
However, under the OBBA, whether a degree falls under the category of “professional” now determines how much money a student can borrow. Notably, the Department of Education’s reclassification excluded many advanced degree programs —including those for nursing, physician assistants, physical therapists, business administrators, accountants, architects, educators and social workers. Graduate students pursuing degrees that don’t fall under the professional category will still be able to borrow $20,500 annually and $100,000 in total in the form of unsubsidized loans, while the amount a student can borrow for professional degrees has been increased to $50,000 annually and $200,000 in total.
Professional degrees currently include: Pharmacy (Pharm.D.), Dentistry (D.D.S. or D.M.D.), Veterinary Medicine (D.V.M.), Chiropractic (D.C. or D.C.M.), Law (L.L.B. or J.D.), Medicine (M.D.), Optometry (O.D.), Osteopathic Medicine (D.O.), Podiatry (D.P.M., D.P., or Pod.D.), Clinical Psychology (Psy.D. or Ph.D.), and Theology (M.Div., or M.H.L.).
To understand how these loans limits compare to the actual cost of graduate school, consider one of the top Master of Public Administration (MPA) programs in the country, according to U.S. News and World Report, at Syracuse University. Attending such a school would be an important goal for a low-income student seeking connections, but in-person tuition costs more than $83,000 annually—not including housing, food, books and supplies. Private universities offer merit-based scholarships, fellowships and assistantships, but they rarely cover the full cost of tuition, and demand for a full ride often exceeds supply. After the $20,500 cap on unsubsidized loans is met, a student would still need to come up with $62,500.
Previously, in cases where direct unsubsidized loans didn’t cover the full cost of graduate school, students could finance the rest of their tuition with Grad PLUS loans, a type of federal loan meant to supplement education expenses not covered by a direct unsubsidized or subsidized loan. However, the OBBBA has eliminated Grad PLUS. Research shows that these changes will limit options for students pursuing both professional and nonprofessional graduate degrees, because many students borrow more funds than what the new aggregate caps on direct unsubsidized loans allow.
If fewer rural students pursue graduate degrees such as an MPA—which help people enter real positions of power and influence—could their perspectives go missing in policymaking and other areas where it matters most?
The conundrum of Parent PLUS
Before the OBBBA, parents could borrow up to the full cost of their child’s undergraduate tuition in the form of Parent PLUS loans, but OBBBA has placed a $20,000 annual limit and a $65,000 aggregate, per-child limit on these loans not including loans already forgiven.
Parent PLUS loans were originally created in 1980 to help wealthy families cover extra costs associated with their child’s education. As college and living costs have soared in the decades since, the borrowing demographics of Parent PLUS have changed. Today, low-income families often use these loans to supplement where federal loan and college aid packages fall short. Since Parent PLUS loans have limited repayment options, however, this system increases the risk of default and subsequent devastating financial consequences, says Betsey Mayotte, president and founder of The Institute for Student Loan Advisors, (TISLA).
“Any Parent PLUS borrower who borrows on or after July 1st, 2026, won’t have access to lower payment options. None. They will only be able to get the standard plan,” Mayotte says.
The OBBBA’s changes to Parent PLUS don’t address the program’s biggest issue: Unlike a home or car loan, a person’s ability to pay isn’t taken into consideration before they borrow. Most parents will do whatever it takes to help their children succeed in the short-term regardless of the future financial burden, so capping PLUS loans doesn’t stop parents from borrowing in whatever form possible.
Mayotte predicts that new limits on Parent PLUS loans, combined with the elimination of Grad PLUS loans, will drive more students and parents into borrowing private loans, which have fewer safety nets for repayment and forgiveness.
“By the time they’re applying for a private loan, their debt-to-income [ratio] is going to be upside down, because they’ve already borrowed all those federal loans. They might get denied, and they might not be able to complete,” Mayotte explains. “We’re going to have all these extra people who have debt, but no degree, and that’s actually the highest indicator of default.”
Instead of making college more affordable for low-income families, OBBBA’s changes offer students and their parents a more precarious financial choice: Either take on less flexible, more financially devastating debt, or forgo college entirely, furthering the socioeconomic divides that already exist within elite and graduate institutions.
The Trump administration took a further step to punish loan borrowers already struggling financially, when the Department of Education announced on January 7 that it would begin garnishing wages of borrowers who are in default. Up to 15% of a borrower’s take-home-pay may now be withheld, further compounding the financial stress on low-income families as they contend with rising costs and a rapidly shrinking safety net programs. On January 16, the week after wage garnishment was set to begin, the Trump administration announced they were pausing this process temporarily to give the Department of Education more time to improve the student loan repayment system.
Limited repayment options
Research shows that students from rural backgrounds already accumulate more debt than their peers from suburban and urban backgrounds. Now, the OBBBA has introduced changes that limit borrowers’ options for paying back that debt. Specifically, three key repayment plans, Pay As You Earn (PAYE), Income Contingent Repayment (ICR) and the Saving on a Valuable Education (SAVE), must be eliminated by July 1, 2028.
Anyone currently enrolled in one of these plans for their undergraduate education must choose from one of three options: the Standard Repayment Plan, Trump’s new Repayment Assistance Plan (RAP) or an Income-Based Repayment (IBR) plan. Advocates on both sides of the aisle have agreed that repayment options needed to be simplified, and SAVE in particular was criticized from the beginning because of its generous payment and forgiveness policies.
However, all of the proposed three options are likely to increase payments compared to the SAVE plan, according to the National Consumer Law Center. Students taking out loans after July 1, 2026, will only be able to choose from the standard repayment plan or the RAP plan.
These changes—when combined with the food assistance cuts outlined in the OBBBA, plus the looming expiration of Affordable Care Act tax credits—will create additional financial hardships for former students already struggling to repay their loans.
Additionally, the OBBBA’s Medicaid cuts could leave states scrambling to find funds for health care, which could result in cuts to funding for community colleges and public universities, writes Peter Granville, fellow at The Century Foundation. “State appropriations are fundamental to degree attainment, so cuts would no doubt lock many students out of a degree and the higher-paying employment that often comes with it.”
Hidden costs and debt burdens curb social mobility
I still remember the day I learned I wasn’t going to get school credit for my publishing internship, which was unpaid. On one of the last days of senior year, an advisor told me that, since I was already taking the maximum number of credits allowed according to my financial aid plan, I’d have to pay thousands of dollars out of pocket to get credit for my internship.
I laughed that the advisor thought my family could pay for the credits, but inside, I was crushed. I thought I’d done everything right by overachieving and taking extra credits to further my future career options.
As it turns out, that kind of experience is common for students from rural backgrounds. Mara Casey Tieken, professor of education at Bates College and author of Educated Out: How Rural Students Navigate Elite Colleges and What it Costs Them, says that extracurriculars offer important networking opportunities; however, involvement requires additional funds that rural students often don’t have, and which financial aid packages don’t account for.
“Those are exactly the kind of hidden costs that, if a student can’t take those on, they’re much more likely to drop out or just not get the full benefit of that college degree,” Tieken says. “On the evening of graduation, they’re like, ‘I’m not gonna be set. I’m not getting that job. I’m not gonna be able to pay off my debt. I’m not living wherever I wanna live, whether that’s urban or rural, because I can’t afford either.’ ”
For me, the stress of poverty combined with the impending reality of adult life had me feeling disillusioned. No matter how hard I worked, it felt like being poor would always prevent me from achieving my full potential.
“Most of the students said that a transition out of college was harder when they went in because of the very real financial realities that we’re setting in,” Tieken says. “That kind of debt can follow you for decades afterwards.”
Research from the Education Data Initiative shows that the average student loan debt hovers around $42,673, increasing 114% in 2025 from 2007. Two decades after borrowing money to attend school, 42% of students still have loans to pay off.
This burden diminishes economic potential for rural and low-income borrowers. 51% of student borrowers who rent say they have not bought a home, 22% have postponed starting a business, and 18% have difficulty buying daily necessities due to student loan debt.
Rural communities feel the repercussions
By making repayment harder and limiting opportunities for low-income students’ career options, the OBBBA’s student loan changes also hurt rural communities. This is true for undergraduate and graduate students.
“One of the biggest, most rural-specific effects is that you feel like you can’t return home or go to another rural area because the salary is lower there,” Tieken says. “You feel that you must pursue the highest-paying jobs … disproportionately located in cities.”
Medical degrees used to be an exception, because the higher salary paid to a rural doctor could balance out the lower cost of living to make graduate loan repayment more feasible, but new changes could make it less likely for rural students to pursue degrees in medicine at all because they can’t borrow the amount of money they’d need to attend.
This could exacerbate the health care worker shortage in rural America, and the same thing could happen with teachers, lawyers and other in-demand positions that keep rural towns alive. When rural-born college graduates are too saddled with debt to live in the places they come from, younger generations are robbed of the chance to see people like them thriving with a college degree. “That’s one less college-educated person that could help mentor you and make the path a little bit easier to get them to college, too,” Tieken says. “That has effects for that individual student, and it has effects for the community in terms of lost human capital, and ideas, and ability to bring money into the area. They feel your absence.”
Michelle Polizzi is an essayist and journalist whose work has appeared in HuffPost, Slate, Insider, Parade, and Healthline, among other publications. Her work explores class, society, healing and the intersections between.
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