Big Beautiful Bill Summary: How Will it Affect Student Loans, Tax Cuts, Child Support and More

President Donald Trump on 4 July signed the 'One Big Beautiful Bill Act', a sweeping tax and spending package legistation reshaping America's economic landscape.

Passed by the Senate with Vice-President JD Vance's tie-breaking vote, this legislation extends Trump's 2017 tax cuts, funds border security, and slashes social safety nets, impacting students, families, seniors, and low-income households.

With a Congressional Budget Office estimate of a £2.4 trillion ($3.3 trillion) deficit increase over a decade, the bill's implications are vast and divisive.

Reshape Student Loan Options

The bill significantly alters student loan programs, sparking concern among borrowers.

It terminates the SAVE Plan and other income-driven repayment options like PAYE and REPAYE for new loans after 1 July 2026, replacing them with a standard 10-year repayment plan or an Income-Contingent Repayment (ICR) plan.

Graduate PLUS loans are eliminated, with graduate loans capped at £80,000 ($108,916) and Parent PLUS loans at £52,000 ($70,000).

X user @PCYintheCLE lamented: 'GOP/Trump "big beautiful bill" eliminates lots of student loan debt repayment options, puts in place lifetime total $$ caps, shortens repayment periods, and ends deferment options'.

These changes could burden future professionals, with @lati21cela noting the bill 'hurts working families and future professionals'.

While these posts are inconclusive, they reflect fears of increased debt for students.

Deliver Uneven Tax Cuts

The bill extends Trump's 2017 tax cuts, offering an average household tax reduction of £2,320 ($3,158), per a Tax Policy Center analysis.

Middle-income households, earning around £48,000 ($65,349), gain about £1,440 ($1,960), or 2.3% of after-tax income, while low-income households, earning £28,000 ($38,120) or less, see only £120 ($163).

Wealthy households earning over £530,400 ($722,114) benefit most, with significant tax savings.

Seniors receive a £4,800 ($6,534) boost to their standard deduction through 2028, phasing out for individuals above £60,000 ($81,687) or couples at £120,000 ($163,374), instead of eliminating Social Security taxes as promised.

However, cuts to Medicaid could offset gains for low-income seniors, potentially stripping coverage for premiums and long-term care.

Expand Child Support Benefits

Families see mixed outcomes. The child tax credit increases to £1,760 ($2,396) per child from £1,600 ($2,178), available to single parents earning up to £160,000 ($217,832) or couples up to £320,000 ($435,664).

A novel pilot program grants every baby born between 2025 and 2028 a £800 ($1,089) nest egg for investment in an index fund, aiming to foster future financial security.

However, cuts to Medicaid and SNAP (food stamps) impose work requirements for parents with children aged 14 and older, risking loss of benefits for low-income families.

Weigh Broader Impacts

Beyond these provisions, the bill funds Trump's border wall, ends electric vehicle tax credits worth up to £6,000 ($8,168), and allows deductions of up to £8,000 ($10,891) for interest on American-made car loans.

It tightens eligibility for federal benefits, excluding many noncitizens from food stamps and Medicaid, and increases immigration fees.

The bill's passage, despite opposition from Senators Susan Collins, Thom Tillis, and Rand Paul, underscores GOP unity but faces House resistance due to its £2.64 trillion ($3.5 trillion) deficit impact.

Shape an Uncertain Future

The One Big Beautiful Bill delivers tax relief and child support boosts but at a cost to students and low-income families.

Its student loan caps and safety net reductions could exacerbate inequality, while tax benefits primarily favour the wealthy.

With Trump's 4th July deadline met, the bill's legacy depends on its real-world implementation and impact.