Policy Watch

President Trump's "One Big Beautiful Bill Act," Explained

The largest cuts to food assistance, health care, education programs, and student loan services in U.S. history — while giving tax breaks to the wealthy.

Source: shutterstock.com

President Trump’s “One Big Beautiful Bill Act” (OBBBA) made the largest-ever cuts to social safety net programs in U.S. history to fund tax cuts for the ultrawealthy and corporations. The OBBBA extends, expands, or implements more than $4.5 trillion in tax breaks — mostly for billionaires — while making more than $1 trillion in cuts to programs that many rely on for health care, adequate nutrition, and student loans.

Black communities will be among the hardest hit by these funding cuts, facing higher costs, fewer resources, and deeper debt. Here’s a look at some of the programs that will be significantly altered.

Nutrition

What is the Supplemental Nutrition Assitance Program (SNAP)?

SNAP is the nation’s first line of defense against hunger in America. As of December 2024, SNAP had more than 42 million participants. Nearly eight in 10 households participating in SNAP include at least one member who is a child, an elderly adult, or a person with a disability. An estimated 25% of Black people in the United States, including adults and children, are SNAP recipients.

How Does the Law Change It?

The OBBBA will cut $187 billion in federal funding (roughly 20%) from SNAP, the largest cut to the program in history. This cut will increase poverty, food insecurity, and hunger for children and adults. Based on projections from the Congressional Budget Office (CBO), a federal agency within the legislative branch of government that provides budget and economic information to Congress, about 4 million people, including 1 million children, will see their food assistance cut substantially or eliminated altogether in an average month under the OBBBA.

By 2034, CBO estimates that the average SNAP benefit will be $14 per month less than it would have been without this cut to funding.

Effective Date: Oct. 1, 2026

Under existing work requirements, most SNAP participants between the ages of 18 and 54 could only receive benefits for three months in a three-year period unless they demonstrated compliance with a standard 80-hour-per-month work requirement. Some households qualified for exemptions to this work requirement for a variety of reasons.

The OBBBA makes several key changes to work requirements and exemptions:

It raises the age limit for work requirements from 54 to 64. The Congressional Budget Office estimates that approximately 800,000 of these older adults, who often have work-limiting health conditions and face age-related employment discrimination, will be cut off from SNAP in a typical month because of this change.

It lowers the exemption age to apply only to households with children under 14. Previously, the exemption extended to households with children under 18. Therefore, households with dependents age 14 or older must now comply with the standard work requirement. The CBO estimates that, in a typical month, this change will cut off benefits for 300,000 parents, grandparents, and other caregivers of these older children.

More than 300,000 veterans, people experiencing homelessness, and young people who recently aged out of foster care will be cut from SNAP because the law removed exemptions for these groups.

The OBBBA substantially limits states’ ability to temporarily waive this work requirement based on local labor market conditions, which the CBO estimates will cut benefits for roughly 1 million adults in a typical month in areas with fewer jobs.

In total, the CBO estimates that the expansion of SNAP’s work requirement will cut off SNAP benefits for 2.4 million people.

Effective Date: The OBBBA does not include an official implementation date for the new SNAP work requirement rules. States are currently awaiting federal guidance. Once there is an official implementation date, states will likely have 120 days to implement the changes.

Under current law, states cover 50% of the costs to administer the SNAP program, and the federal government covers the other 50%. Under the OBBBA, states will now be responsible for 75% of the administrative costs, and the federal government will cover the remaining 25%.

Effective Date: Oct. 1, 2026

Currently, the federal government pays the full cost of SNAP benefits. If a state cannot make up for these federal cuts with tax increases or spending cuts, it will have to limit access to its SNAP program or opt out of the program altogether, effectively terminating food assistance for the state’s residents.

The CBO estimates that, overall, states will collectively eliminate or reduce SNAP benefits for 300,000 people in a typical month in response to these federal cuts, though the impacts could be far greater if more states than estimated cut SNAP or end the program entirely. The CBO also projects that 96,000 children will lose free meals at school when they are cut off of SNAP and no longer directly qualify for free meals.

Effective Date: Oct. 1, 2027, unless a state is eligible for a temporary delayed implementation to Fiscal Year 2029 (Oct. 1, 2028) or Fiscal Year 2030 (Oct. 1, 2029).

As a result of recalculations and limitations on who qualifies for SNAP based on housing and utility costs, the CBO estimates that roughly 600,000 low-income households will lose an average of $100 per month in SNAP benefits because they also receive assistance to pay for home energy.

Effective Date: The OBBBA does not include an official implementation date for the new rules. States are awaiting federal guidance.

The OBBBA will prohibit household internet costs from being used to determine the amount of SNAP benefits households receive, even though internet access is crucial for people to be able to work and succeed in school. On average, Black and low-income families pay more for internet access as a result of digital redlining. The CBO estimates that removing internet costs from the benefits equation will cut SNAP benefits by an average of $10 per month for about 13 million households.

Effective Date: Oct. 1, 2026

Bottom Line for Black Communities

Cuts to SNAP will increase poverty, food insecurity, and hunger for children and adults, disproportionately affecting Black communities in the United States 25% of whom receive SNAP benefits.

Health Care

What is Medicaid?

Medicaid provides health coverage to an estimated 71.1 million Americans, including eligible low-income adults, children, pregnant women, elderly adults, and people with disabilities. Medicaid is funded jointly by states and the federal government.

How Does the Law Change it?

Currently, there is not a federal work requirement to receive Medicaid.

Effective Jan. 1, 2027, the OBBBA will require states to implement an 80-hour-per-month work requirement for low-income people ages 19 to 64 who receive Under the new requirements, enrollees must engage in employment, education, a work program, or community service to maintain their Medicaid eligibility. The law provides mandatory exemptions for parents and caretakers with children ages 13 and under, individuals who are “medically frail,” and individuals who are pregnant or postpartum, among others. Additionally, states may allow short-term hardship exceptions from work requirements for enrollees experiencing certain extenuating circumstances.

Work requirements effectively impose paperwork requirements on Medicaid enrollees, requiring them to navigate administrative obstacles and demonstrate their employment status or exemption eligibility. As a result, the CBO estimates 5.3 million people will lose coverage.

Effective Date: Dec. 31, 2026

Provider taxes are mandatory payments that all states (except Alaska) impose on health care providers — such as hospitals, nursing homes, and managed care organizations — to generate revenue to fund Medicaid. Under the OBBBA, states can no longer use provider taxes to fund Medicaid. As a result, states will lose an estimated $340 billion in revenue and 1.2 million people will lose Medicaid benefits.

Without new or increased provider taxes as a financing option, states will be forced to raise other taxes and fees to fill the gap, cut other state-funded public services, or reduce their Medicaid programs.

Effective Date: Immediately, with a three-year transition period.

Currently, states are not permitted to re-determine Medicaid eligibility for people who were newly eligible under the Affordable Care Act more than once every 12 months. The OBBBA requires individuals enrolled under Medicaid expansion to undergo redetermination every six months rather than once a year. According to the CBO, this could lead to 700,000 people losing Medicaid coverage by 2034 — not because they are ineligible, but because of administrative hurdles, paperwork delays, and backlogged state systems.

Effective Date: Jan. 1, 2027

Under the OBBBA, people who enrolled in Medicaid because of the program’s expansion under the Affordable Care Act may face higher copayments of up to $35 per service, with certain exemptions for prescription drugs, primary care, and services provided by rural health clinics, which will make it harder for people to afford health care.

Effective Date: Oct. 1, 2028

Bottom Line for Black Communities

Black people make up 14% of the U.S. population but account for 20% of Medicaid enrollees. Medicaid is the single largest health insurer for children in the United States, covering nearly 40% of all children nationwide, including the more than 60% of Black children enrolled in the program.

As 15 million people lose access to health insurance because of cuts to Medicaid and the Affordable Care Act due to the OBBBA, Black people will be disproportionately affected.

Economic Justice

What is the child tax credit?

The child tax credit is a federal tax benefit that provides eligible families with up to $2,000 per qualifying child under the age of 17. It is aimed at reducing their tax liability and supporting child-rearing costs.

How Does the Law Change it?

The OBBBA makes the $2,000-per-child credit permanent beginning in 2026. The new law also increases the to $2,200 per child for tax years 2025 through 2028. Had the current tax credit expired at the end of 2025, the credit would have dropped to $1,000, and eligibility requirements would have excluded many families from taking advantage of the provision.

Effective Date: Jan. 1, 2025

Bottom Line for Black Communities

Low-income Black households will not benefit from increases to the child tax credit because they do not earn enough money to receive it, effectively blocking millions of children in working families from receiving the $2,200 tax credit increase.

Education

What are federal student loans and grants, and how does repayment work?

Federal student loans are funds borrowed from the U.S. government to help eligible students cover the cost of higher education at a four-year college or university, community college, or trade, career, or technical school. These loans are administered through the U.S. Department of Education’s William D. Ford Federal Direct Loan Program, which provides various loan options to eligible students and their parents.

For many students, especially students of color, loans are the only way they can afford to pursue higher education. Over 43 million Americans carry more than $1.6 trillion in federal student debt.

Student loan repayment refers to the process of repaying the federal government money borrowed for educational expenses. Because of racial wealth disparities and systemic inequities, Black borrowers have the highest average student loan balances compared to other races and often struggle more with repayment.

The Pell Grant is a form of need-based federal financial aid awarded by the U.S. Department of Education to help eligible low-income students pay for college, including tuition, fees, room and board, and other educational expenses. Currently, the maximum Pell Grant award is $7,395. Unlike federal student loans, Pell Grants do not need to be repaid.

Each year, around 7 million students from low-income families benefit from Pell Grants. Annually, nearly 60% of Black students rely on Pell Grants, including around 73% of students at Historically Black Colleges and Universities.

How Does the Law Change it?

The OBBBA places new limits on parents’ ability to borrow money to send their children to college. Beginning on July 1, 2026, parent borrowers will be limited to borrowing $20,000/year, $65,000/lifetime per child. These loan caps fall short of tuition levels for many academic institutions where Black students  are often underrepresented.

Beyond the loan caps, the OBBBA eliminates affordable repayment options and loan forgiveness (including Public Service Loan Forgiveness) for parent borrowers who take out loans after July 1, 2026, or who do not consolidate by July 1, 2026.

Effective Date: July 1, 2026

The OBBBA makes dramatic changes to options that students have for taking out federal loans to pay for graduate programs. The elimination of a program and new caps on federal loans will mean that many Black students will have to resort to expensive private loans to pay for graduate school or forgo graduate education altogether. 

The Graduate PLUS Loan allowed graduate and professional students to borrow up to the full cost of attendance. The OBBBA eliminated the Graduate PLUS loan program. The law also puts new federal loan caps in place for loans for graduate students who do not need to demonstrate financial need:

Master's Degrees: $20,500/year, $100,000/lifetime

Law/Medical Degrees: $50,000/year, $200,000/lifetime

Total federal student borrowing (including undergraduate): capped at $257,000

Effective Date: July 1, 2026

Currently, borrowers have at least eight types of repayment plans to choose from to help manage their repayment. Each plan has its own eligibility requirements and terms.

Under the OBBBA, future borrowers will have just two repayment plan options:

"New" Standard Repayment Plan: Fixed monthly payments over 10-to-25 years, depending on loan balance.

Repayment Assistance Plan: An income-driven repayment plan requiring 1% to 10% of income for up to 30 years, with a minimum of $10 in monthly payment.

For many borrowers, the Repayment Assistance Plan will result in higher monthly and total repayment costs. This is particularly true for low-income borrowers, disproportionately impacting Black borrowers. Meanwhile, the OBBBA also limits critical deferment and forbearance options for struggling borrowers, and many borrowers will likely default due to the lack of affordable repayment options.

Current borrowers enrolled in the soon-to-be-discontinued repayment plans must switch by July 1, 2028, though existing participants may remain in their current plans until then. After July 1, 2028, current student borrowers (those who only have loans disbursed before July 1, 2026) will have access to the original and the new standard repayment plan, the repayment assistance plan, the income-based repayment plan, and graduated and extended repayment plans.

Additionally, the OBBBA ends deferment for economic hardship or unemployment for loans issued after July 1, 2027.

Effective Date: July 1, 2026, for new borrowers and July 1, 2028, for current borrowers.

The OBBBA creates a Workforce Pell Grant program, which extends Pell Grants to low-income students enrolled in eligible short-term programs between eight and 15 weeks long.

Effective Date: July 1, 2026

Bottom Line for Black Communities

Caps on student loans put graduate school and post-graduate degrees, such as medical and law degrees, out of reach for anyone but the wealthy or those willing to risk taking out private loans, which can be predatory and do not typically offer income-based repayment options like some federal government options. This means that educational opportunities for Black people will become more limited, affecting potential earning power.

Black borrowers already struggle more with repayment than other borrowers because of limited repayment options, higher payments, and longer terms. As a result of these changes, managing repayment will be even more difficult for many Black borrowers.

The challenge is especially pronounced for Black Parent PLUS borrowers, who will have access to just one repayment option after July 1, 2026. Limiting loan access while failing to increase grant aid may ultimately lead to fewer Black professionals in the workforce and have a ripple effect on access to quality health care and legal services for Black communities.

Education

What are school vouchers?

School vouchers were originally used to escape desegregation in the wake of the unanimous Supreme Court decision in Brown v. Board of Education. They redirect public money that should be used to fund public schools to private schools. In states that have enacted universal voucher programs, such as Arizona and Florida, school vouchers are overwhelmingly used by students who were already enrolled in private schools. This means that school vouchers are not expanding access to private schools for the vast majority of students. Instead, school vouchers tend to deepen racial segregation

How Does the Law Change them?

Congress enacted the first national school voucher plan as part of President Trump’s OBBBA. This voucher program permits individuals to funnel $1,700 to scholarship-granting organizations to fund private school expenses and receive a dollar-for-dollar tax credit. Eligible private school expenses can include tuition, uniforms, books, tutoring, technology, and more. States can choose to opt into the program, but many states, influenced by , are already positioned to implement this program.

Effective Date: Jan. 1, 2027

Bottom Line for Black Communities

By definition, private schools are not open to all students. They also primarily benefit wealthy and white families. The overwhelming majority of Black students attend public schools. As a result, a loss of funding for public schools will disparately impact Black students and the schools that serve them.

(Photo by Amid FARAHI / AFP via Getty Images)

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