Let's break down what the One Big Beautiful Bill actually is, why it matters, and how universities can set themselves up for success.
Higher education in the United States is entering a new regulatory era. With the passing of the One Big Beautiful Bill (OBBBA) in July 2025, colleges and universities must now navigate one of the most significant shifts to federal higher-ed policy in more than a decade. From new federal loan limits to accountability measures tied to student outcomes, institutions are facing increased pressure to modernize their systems, strengthen their reporting processes, and ensure full compliance to avoid fines or loss of federal funding.
In this blog, we break down what the One Big Beautiful Bill actually is, why it matters, and how universities can set themselves up for success, including how a student-success platform like QuadC can support academic and operational readiness.
In higher education, compliance refers to an institution’s ability to follow federal, state, and accreditation regulations. This includes laws designed to:
Universities undergo regular audits to verify compliance. Failure to comply can result in fines, lawsuits, reputational damage, or loss of federal funding. Traditionally, compliance focused on areas like data security, student privacy, and financial-aid reporting, but OBBBA expands these expectations.
The One Big Beautiful Bill Act, passed on July 4, 2025, introduces reforms across federal spending, taxation, and education. For higher ed, OBBBA includes several major updates that reshape financial aid, student outcomes reporting, and institutional responsibilities.
Here are the key higher-education changes:
Under the One Big Beautiful Bill Act (OBBBA), effective for loans disbursed on or after July 1, 2026, graduate and professional student borrowing will face new annual and aggregate limits:
This affects enrollment strategies, tuition planning, and financial-aid administration.
The One Big Beautiful Bill introduces a new income-driven repayment option called the Repayment Assistance Plan (RAP), which replaces most existing repayment plans for new borrowers starting July 1, 2026. Under RAP, monthly payments are based on a borrower’s income, ranging from 1% to 10% of adjusted gross income, with a $10 minimum monthly payment and a $50 discount per dependent. RAP also prevents negative amortization and offers forgiveness after 30 years of payments. Institutions will need to help students understand how RAP works, especially as many will transition from legacy plans to this new, simplified structure.
Traditionally, the Federal Pell Grant Program (the U.S. government’s primary need-based grant for undergraduate students) funded only students enrolled in programs of at least 600 clock hours and 15 weeks in length.
Under the One Big Beautiful Bill Act (OBBBA), starting July 1, 2026, the newly established “Workforce Pell” eligibility will include short-term workforce programs of as few as 150 to 599 clock hours (approximately 8 to 15 weeks) at accredited institutions, allowing students in high-demand fields like healthcare, IT or skilled trades to access Pell funding.
Institutions may need to adapt program approval, reporting structures and student-aid documentation to align with these new rules.
The One Big Beautiful Bill introduces a new tiered excise tax on investment income for institutions with exceptionally large endowments. Universities with a “student-adjusted endowment” between $500,000 and $750,000 per student will now pay a 1.4% tax, those between $750,000 and $2 million will pay 4%, and institutions exceeding $2 million per student will be taxed at 8%. The bill also raises the threshold for which colleges qualify, now applying only to schools with at least 3,000 tuition-paying students.
For affected institutions, this will require meaningful shifts in financial strategy. Endowment managers may adjust their investment portfolios to limit taxable gains, while finance leaders will need to account for a reduced pool of investment income available for scholarships, research, and operations. The bill also broadens what counts as “net investment income,” bringing items like student-loan interest income and certain royalty income into the tax calculation.
All of this means stricter reporting, more careful fiscal planning, and potentially new governance considerations as institutions evaluate how student counts (and spending strategies) affect their overall tax burden.
One of the most consequential changes under the One Big Beautiful Bill is the creation of a new earnings-based accountability regime for all degree-granting programs.
The law requires universities to compare the median earnings of graduates (four years after completion) with a relevant peer group, for undergraduates, those without college degrees; for graduate programs, those with a bachelor’s degree.
If a program fails this low-earnings test for two out of three consecutive years, it loses access to federal student loan eligibility.
This shift makes “compliance” much more than a back-office requirement: it ties a program’s federal funding directly to its ability to help graduates earn a meaningful living.
In other words: Compliance is no longer just an operational concern, it's now tied directly to student success, financial planning, and program performance.
Together, these reforms reshape how institutions track data, measure impact, manage risk, and demonstrate value, creating new operational, financial, and accountability pressures across campus.
Universities must track and report more detailed student and financial data. Errors or incomplete records increase the risk of compliance issues.
Financial aid, student success, academic departments, and finance teams will need to share information more effectively than ever before.
Institutions will need better visibility into tutoring, advising, academic support, and post-graduation data to meet new standards.
Audits will become more frequent and more complex. Institutions that rely on outdated systems or fragmented workflows will face greater risks.
Federal agencies, students, and accreditors will expect clearer proof of program value and institutional effectiveness.
To succeed under the new regulations, institutions should begin preparing now. Here are the most important steps:
Evaluate how OBBBA impacts:
Having a clear gap analysis is the first step.
Fragmented systems are the biggest barrier to compliance. Universities should:
Because student outcomes now play a bigger role in compliance, institutions must:
This is where QuadC strengthens institutional compliance readiness, by centralizing tutoring, mentoring, early alerts, and student-support data in one place. This gives administrators the visibility they need to meet OBBBA’s new outcome-based expectations.
Financial aid officers, academic support teams, and compliance staff must understand:
The Department of Education is still clarifying OBBBA implementation details. Institutions should follow:
To meet the OBBBA’s heightened expectations around student outcomes, institutions need student-support systems that are coordinated, data-driven, and audit-ready. QuadC helps institutions modernize their tutoring, mentoring, and early-alert ecosystems, all of which directly influence the new outcome-based compliance standards.
QuadC consolidates all academic support workflows into one integrated hub. Tutors, mentors, advisors, and peer leaders can log notes, track progress, schedule sessions, record attendance, and share structured updates in a consistent, standardized format.
This gives administrators a clearer picture of how students are being supported and ensures no important information is lost in emails, spreadsheets, or siloed systems.
QuadC’s Early Alert product enables faculty, staff, peer mentors, and even students to flag academic or engagement concerns quickly. Alerts are routed to the right support teams, who can then follow up using a documented, auditable workflow.
This helps institutions intervene earlier, a critical component of meeting OBBBA’s new accountability metrics tied to student performance and post-graduation outcomes.
QuadC’s AI Tutor gives students 24/7 academic support that supplements classrooms, tutoring centers, and advising services. Because the AI bots can be trained withinstitution-approved content, institutions can maintain control over accuracy and quality of the student interactions.
All interactions generate engagement insights, giving administrators a deeper understanding of how students study, what they struggle with, and where additional support may be needed, data that directly informs compliance reporting tied to student outcomes.
Beyond enhancing student success operations, QuadC’s platform supports compliance readiness through strong data governance and transparent reporting without ever positioning itself as a compliance system.
QuadC’s dashboards and reports consolidate tutoring sessions, mentoring interactions, early alerts, attendance, learning behaviors, and AI-engagement data in one place.
This provides accurate, audit-ready documentation that institutions can use to demonstrate support efforts, track student outcomes, and meet OBBBA’s new expectations for transparency and accountability.
Role-based permissions ensure that student information is only accessible to the appropriate staff members, a foundational requirement for FERPA compliance and for meeting the privacy expectations embedded in the OBBBA.
Administrators maintain full control over what data each role can view or edit, helping institutions protect student privacy across departments.
OBBBA is reshaping how universities operate. Compliance is no longer just about maintaining records, it’s about proving value, outcomes, and student support quality.
By strengthening academic-support infrastructure and improving data accuracy, institutions can better navigate new regulations and protect their federal funding.
Platforms like QuadC support institutions by strengthening the very student-success systems that OBBBA now places at the center of compliance. By improving tutoring and mentoring workflows, enabling earlier identification of at-risk students, enhancing engagement through AI-powered support, and providing transparent, audit-ready data, QuadC helps universities build the coordinated, evidence-based support ecosystem needed for this new compliance landscape.
Book a demo with our team! we’ll walk you through how QuadC strengthens reporting, student outcomes, and data integrity.
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