Unpacking the Ugly Implications of President Trump's "One Big Beautiful Bill Act" for Black Student Loan Borrowers
IN BRIEF: On July 4, President Trump signed the “One Big Beautiful Bill Act” into law, imposing sweeping budgetary changes to key federal programs, including access to higher education. The law eliminates subsidized undergraduate Direct Loans, ends the Graduate PLUS loan program and replaces it with new federal loan caps based on the type of degree sought, caps Parent PLUS loans, restricts Pell Grant eligibility, and replaces existing income-driven repayment (IDR) plans with less generous options. Collectively, these changes would make higher education less accessible and loan repayment more burdensome — particularly for Black borrowers, who are disproportionately impacted by student debt.
WHY IT MATTERS: Black borrowers carry more student loan debt on average than any other racial group. Due to the long-standing racial wealth gap, Black students are more likely to have to take out loans rather than rely on other sources of wealth. They are more likely to borrow for both undergraduate and graduate education, more likely to receive Pell Grants — for which nearly 60% of Black undergraduates qualify — and are more likely to enroll in IDR plans due to persistent wage inequality.
By capping or eliminating student loan programs like subsidized Direct Loans, Graduate PLUS loans, and Parent PLUS loans, the law threatens access to graduate degrees, further exacerbating existing disparities in access to professions that require advanced degrees, like law and medicine. It also reduces options for families already locked out of wealth-building opportunities. The proposed changes to IDR would force many borrowers, especially those with limited incomes, to pay more over a longer period, delaying financial milestones such as homeownership. Meanwhile, narrowing Pell Grant eligibility will shut out undergraduate students who rely on this aid to pay for college, career school, or trade school.
Rather than addressing the root causes of the student debt crisis, the law doubles down on a system that already fails Black borrowers, turning financial aid into a lifelong barrier, not a pathway to the middle class.
LDF AT WORK: LDF continues to advocate for equitable access to higher education opportunities and a student loan system that reflects the economic realities faced by Black student loan borrowers. LDF, along with its civil rights partners, is monitoring legislative developments around the law, sharing impact analyses with policymakers and the public, and urging reforms that will reduce racial disparities in student debt. In light of these developments, LDF remains committed to advancing a public education system that ensures every student can access equal opportunities, succeed, and thrive.
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