More students are choosing community college and short-term credentials over four-year degrees as costs rise and job prospects soften. New federal student loan caps and expanded Pell eligibility starting in mid-2026 could speed up the “un-college” shift.
Major changes to federal student loans take effect July 1, 2026, cutting repayment options and changing terms for many borrowers. The overhaul also sets new limits on graduate and Parent PLUS loans, while some current borrowers may keep existing plans.
A new analysis found FAFSA changes made 1.7 million more students eligible for maximum Pell Grants in 2025-26, including more than 215,000 recent high school graduates. Advocates said the simplified process is working, but warned flat Pell funding could erode its impact.
