H.R. 1, also known as the One Big Beautiful Bill Act (OBBBA) or the Working Families Tax Cut Act (WFTCA), was signed into law on July 4, 2025. Since then, the law’s higher education provisions went through the negotiated rulemaking process to determine what implementation of this law entails. From drafting this piece of legislation to the final rules governing implementation, ACCT has advocated to ensure that community colleges – and the students they serve – are not left behind.

Now that many of these provisions will formally come into effect on July 1, 2026, today’s blog summarizes the top effects on community colleges in three key areas: accountability, Workforce Pell Grants, and student loans. For ACCT’s more detailed fact sheet on the OBBBA law, click here.

Key Provisions of OBBBA Implementation

Accountability

One major outcome of OBBBA was codifying into law accountability measures which will bar higher education programs from participating in the federal student loan program if the Department of Education determines that they are low-earning programs.

Therefore, through calculating the earnings premium measure, programs whose graduates’ median earnings are less than their counterparts who only hold a high school diploma or its equivalent for two of three consecutive years will lose access to the student loan program.

On June 29, the Department published the final rules that will govern the implementation of accountability measures. In the final rules, some of the accountability regulations are set to take effect July 1, 2027, a departure from the expected date of July 1, 2026. Specifically, programs which prepare students for employment in fields where they receive tipped wages – such as cosmetology and massage therapy – will have an additional year before being subject to accountability regulations.

The final rule will compare community college program completers’ earnings to the median wage of 25-to-34-year-old high school graduates to determine if a program passes the earnings premium measure. This could put some community college completers at a disadvantage, because 34-year-olds often have earned wage increases due to seniority or promotions that are unrelated to their degrees.

If a program fails the earnings premium measure for three or more consecutive years, the program could be ineligible for all Title IV federal student aid, which includes the Pell Grant program. Moreover, if half of a college's students or half of revenue are in low-earnings programs, the institution could lose access to the Pell Grant for all its low-earnings programs.

During the public comment period, ACCT weighed in with a formal letter, and our members also submitted their own comments.

Workforce Pell Grants

One of the major legislative victories for community colleges enacted in OBBA is Workforce Pell, a policy that advocates have been championing for a decade. The Department of Education released the Workforce Pell final rule on May 18, 2026. These short-term Pell- eligible programs must meet the following requirements.

• The program must be between 8 and 15 weeks and between 150 and 599 clock hours.
• They must be approved by the state governor and the Secretary of Education.
• Programs must meet 70 percent job completion and 70 percent job placement rates
• Have higher Value-Added Earnings than comparable low-wage workers.

In public comments, ACCT urged the Department to exclude from the value-added earnings metric those students who complete a Workforce Pell program and choose to continue their postsecondary education. This would reward – instead of punish – students for continuing in higher education. In the final rule, ED wrote “The Department is persuaded by the commenters.”

However, our ask that programs that meet all requirements and have been in operation for at least 12 months should immediately be Workforce Pell eligible was ignored. Instead, programs must comply with all provisions for 12 months before receiving approval, thus delaying their Workforce Pell eligibility.

As such, the Workforce Pell implementation date of July 1, 2026 signals when programs will start gaining approval, though students will likely start seeing Workforce Pell grants in 2027.

For more, view ACCT’s blog on the Workforce Pell implementation date here.

Student Loans

OBBA made significant changes to the federal student loan program. This includes new lifetime borrowing ceilings of $200,000 for professional programs ($50,000 annually) and $100,000 for graduate programs ($20,500 annually). While community colleges do not confer professional or graduate degrees, to maintain accreditation, they must employ professors with at least a master’s degree. ED’s proposed rule would define some professions like nursing and physician assistants as “graduate,” thus subject to the lower borrowing limits. ACCT urged ED to expand the “professional” degree definition to more fields, so community colleges can have a wider pipeline of instructors to prepare the workforce.  

While the final rule was released on May 1, 2026 to be enacted started July 1, 2026, a U.S. District Court judge issued a preliminary injunction on June 24, 2026 that puts a temporary pause on the implementation of the final rule. The judge ruled that the Department assumed discretionary authority beyond what is permitted in OBBBA when classifying which programs are graduate and which are professional. As a result, as of June 29, 2026, the Department issued an updated list of programs that are to be classified as professional for the duration of the preliminary injunction, including Master of Science in Nursing (MSN), Physician Associate/Assistant (MSPA; PA), Speech-Language Pathology (SLP), and others.

Genesis Santiago is the Senior Government Relations Associate at ACCT.