Article Summary –
The One Big Beautiful Bill Act, signed into law by President Donald Trump in 2025, introduces substantial changes to the federal student loan program, including new borrowing limits, streamlined repayment options, and loan caps, affecting new and current borrowers in Michigan and potentially creating barriers for disadvantaged students and those pursuing postgraduate degrees. Michigan officials and education professionals express concerns that these changes could exacerbate the state’s workforce issues, notably in healthcare, and hinder diversity within high-paying fields, leading to a lawsuit against the Department of Education for allegedly violating the Administrative Procedures Act by narrowing the definition of “professional degree” and changing grandfathering provisions. Individuals like Marlo Tiffany, a student success coach, highlight the financial strain these modifications may impose on families, particularly due to the elimination of economic hardship and unemployment deferments, which could lead to increased loan defaults.
President Donald Trump’s 2025 budget law, the One Big Beautiful Bill Act, is transforming the federal student loan program, potentially impacting new and current borrowers in Michigan.
The law requires the U.S. Department of Education to enforce major changes to the student loan system, such as new borrowing limits, simplified repayment options, and capped loan amounts starting July 1. After months of negotiations and public feedback, the Department finalized these changes in the Federal Register on May 1.
“This rule will ensure students access higher education without excessive debt and compel institutions to lower costs,” stated Undersecretary of Education Nicholas Kent in a press release.
Policy experts in Michigan warn that the changes might hinder access to higher education for disadvantaged students and those seeking postgraduate degrees, potentially affecting the state’s workforce.
With rising education costs, student loan repayments are straining family finances. In June 2025, around 1.4 million Michigan borrowers owed $51.6 billion in student debt, according to Education Data Initiative.
Ryan Fewins-Bliss, of the Michigan College Access Network, raised concerns about the changes in an interview with the Michigan Independent. The new Repayment Assistance Plan, replacing Biden’s income-driven repayment plan, may simplify repayments but could confuse students, as two plans will coexist post-July 1. The Graduate PLUS loan elimination means less funding for those pursuing graduate studies.
Parent PLUS Loans and graduate loans will face caps, limiting borrowing but not reducing college costs. Advanced degrees exceeding these caps will require alternative funding sources.
Fewins-Bliss warned that these factors could reduce diverse hiring in well-paid sectors, as fewer people will afford education.
“More white, affluent individuals will access these programs, while Black, brown, low-income, and first-generation students may opt out, leading to a less diverse workforce,” Fewins-Bliss said. Businesses seek diverse perspectives, but these rules could make the workforce “whiter and richer.”
As Michigan encounters nursing shortages, officials fear the new rules could harm healthcare. Michigan ranks among the top 10 states with projected nursing deficits through 2036, with a 19% shortfall, state data indicates.
On May 19, Michigan Attorney General Dana Nessel and Gov. Gretchen Whitmer announced a lawsuit with 25 states challenging the May 1 rule.
The lawsuit claims the Department of Education’s actions violate the Administrative Procedures Act by narrowing the federal definition of “professional degree” and imposing unauthorized restrictions. These changes could restrict loan access for professional degree programs, like nursing.
The lawsuit also argues the Department violated the Act by altering a grandfathering provision meant to delay loan cap enforcement for current students. Transfers or temporary withdrawals could negate grandfathering, causing financial barriers.
“Without federal loans, many can’t afford professional degrees,” said Attorney General Nessel in a May 19 press release. “Our state’s existing nurse shortage will worsen. This illegal overreach by the Trump administration endangers Michigan students and community well-being.”
Limited education access might hinder Whitmer’s “Sixty by 30” initiative, aiming for 60% of adults to have post-high school credentials by 2030.
Marlo Tiffany, a 53-year-old Greensville resident, graduated with an accounting degree from Montcalm Community College 15 years ago. She has paid off $18,000 in student debt, with $12,000 remaining.
Tiffany, a student success coach at Montcalm, said student loans significantly impact her family’s finances, especially since her husband took Parent PLUS Loans for their daughter’s education.
She expressed disappointment that economic hardship deferments will be unavailable to future borrowers under the new plan, as she relied on them during unemployment.
“Families will face challenges without deferment options,” Tiffany said. “Defaults will increase, creating financial difficulties.”
Tiffany joined AmeriCorps to ease her student loan burden. While in the program, she doesn’t pay her loans, and interest is covered. She hoped for loan forgiveness under Biden’s presidency; her household income is too high for need-based aid but insufficient for college costs. The relief would have greatly helped her family.
“I was sad when that fell apart, and the stricter rules now make it more difficult,” Tiffany said.
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