Federal Student Aid Rules Change July 1 for Loans and Grants

Federal student aid programs will change on July 1 as policies approved during President Donald Trump's second term take effect. Borrowers will encounter revised repayment and forgiveness options, and current students will face new limits on how much they can borrow.

Low-income adults will become eligible for Pell Grants to cover short-term training programs that lead to certificates in fields such as nursing assistance, emergency medical services, welding, and HVAC. Programs must last at least eight weeks and show that at least 70 percent of participants complete training and obtain jobs paying enough to cover costs within six months.

States will determine which programs qualify for the new grants, a task they have had less than a year to complete. The U.S. Department of Education projects that several hundred to a few thousand of the nearly 1.9 million existing non-degree programs may meet the criteria.

Survey data indicate fewer than half of potential beneficiaries are aware of the grants. Providers range from community colleges to private schools, and eligibility decisions rest largely with state agencies.

One study of more than 23,000 non-degree credentials found that about 12 percent led to earnings at least 10 percent higher than before enrollment. A separate analysis of Texas community college programs showed average wage gains of roughly 4 percent, with larger increases in transportation and engineering fields.

States continue to develop rules intended to prevent students from enrolling in programs that do not increase earnings enough to justify costs.