The One Big Beautiful Bill: What Does It Mean for You?

On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill Act (OBBBA) into law. A lot of hoopla surrounded getting the bill passed through the three-ring circus known as the U.S. Congress. And the signing ceremony at the White House had its own share of spectacle, including a B-2 stealth bomber flyover (hey, it was Independence Day, after all—‘Merica!).

Now that all the dust has settled and the stealth bomber has cleared D.C. air space, what exactly is in this thing? It’s definitely big—almost 900 pages of new rules, changes to old rules, and expanded regulations that cover many parts of American life. But is it as beautiful for you (and your money) as it’s played up to be?

Let’s get into exactly what you need to know about the One Big Beautiful Bill Act. By the way, unless otherwise noted, all the facts we’re going to give you come from the new law itself.¹

Lots of Changes to Your Taxes

The vast majority of this big, beautiful bill has to deal with the wonderful world of taxes (we say that sarcastically). Changes to the tax laws include:

• Making the 2017 Trump tax cuts permanent
• Raising the child tax credit to $2,200
• Adding tax deductions on tips and overtime (up to $25,000 and $12,500 a year, respectively)
• Restores a rule that allows premiums from private mortgage insurance (PMI) to be deducted like mortgage interest
• Ending the $7,500 electric vehicle tax credit as well as the tax credits for energy-efficient home improvements like solar panels

There’s so much tax talk in this new law that we’ve put all the info about how the OBBA’s changes could affect your taxes into a separate article.

Changes to Medicare

Folks on Medicare, the government-run health insurance program for people ages 65 and older, will need to take note of the changes made by OBBBA. This includes:

• Expansion of telehealth services, allowing easier access to remote care
• Limiting Medicare coverage of certain individuals

Changes to Savings Accounts

Saving money is always a plus in our book, and the OBBBA has a few additions and changes to how you can save some cash for your kids’ future, health care and college. But as usual, the government tends to make things more complicated than they need to be.

Trump Accounts

One of the big new provisions of the law is the introduction of a brand-new tax-advantaged saving account. These Trump accounts can be opened by parents of kids under 18. Up to $5,000 can be deposited in the account every year, as well as an additional $2,500 from a parent’s employer. And children born from the start of 2025 until the end of 2028 will receive a bonus $1,000 deposit into their Trump account, courtesy of the government (aka the American taxpayers).

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The idea is that money in the account will grow like a retirement account. Currently, the rules say contributions can be made until the child is 18, then the account is subject to the same rules as a traditional IRA. Any withdrawals will be taxed like normal income and get hit with a 10% early withdrawal penalty (before age 59 1/2) unless the money is being used for specific expenses like certain education costs or for a down payment on a home.

There are details that still have to be sorted out, and the accounts won’t be available until next year. In the meantime, you can look into other options like ESAs and 529 plans to help save for your kids’ future.

529 Accounts

The OBBBA also makes changes to the OG savings account for education—the 529 plan. These state-run investment accounts allow you to set money aside for qualified educational expenses for your kid (or you, if you’re planning on going to college). The money grows tax-free, and you can withdraw tax-free! It’s a great way to save if you’re financially able to do it.

So, what does the OBBBA do to your 529 plan? Well for starters, it has expanded qualifying expenses to include certain pre-college costs like tutoring, books, online resources and educational therapy for disabled students. Post-high school, the money can also now be used for tuition to trade schools, workforce training and certificate programs.

More qualifying expense options sounds great, especially if you or your child aren’t planning on going to a four-year institution. But again, make sure you’re in a good position to start socking away cash in this account (you’re debt-free, have a fully funded emergency fund, and are investing 15% of your income for your retirement).

Health Savings Accounts

Changes are also coming to Health Savings Accounts (HSAs). As the name suggests, these accounts are designed specifically for you to save for health care expenses.

To open an HSA, you also have to have a qualifying high-deductible health plan (HDHP). But with the passage of the OBBBA, more people now qualify for HSAs. The law reclassifies the individual bronze and catastrophic plans found through the Obamacare exchanges as HDHPs, which means those folks can start contributing to their own HSAs starting in January 2026.

So, more people can now take advantage of a great program. But keep in mind that this doesn’t change the overall rules about what qualifies as an HDHP.

Changes to College Loans and Grants

Taxes may take up a majority of the focus of the OBBBA, but student loans and college grants are a close second.

We're not a fan of any kind of debt, but student loans get us really fired up because of the way they saddle people with years and years of debt payments just as they're trying to get started in life. The OBBBA takes some steps to crack down on student loans, but not nearly enough to satisfy us!

Student Loans

The big news from the One Big Beautiful Bill Act is that the way that borrowers have been making student loan payments is going away. Anyone borrowing after July 1, 2025, will have just two repayment options:

• A standard repayment plan with fixed monthly payments that stretch from 10 to 25 years, depending on how much you owe.

• A new income-driven plan called the Repayment Assistance Plan, which ties your monthly payment to your income level—somewhere between 1–10%—and forgives whatever’s left after 30 years.

So current loan holders are still on the hook for their debt. Future students will have fewer options for how they’ll pay their loans back. And the Trump administration has made it very clear that the days of possible student loan forgiveness are dead and gone.

But we’re not done. The OBBBA also makes changes to Direct PLUS Loans—one of the most flexible (read: dangerous) ways to borrow gigantic amounts of money for college or grad school.

• Parent PLUS: Parents used to be able to borrow the whole amount of their kid’s college costs in a Parent PLUS loan. But starting July 1, 2026, there will be a $65,000 lifetime cap per student and an annual $20,000 limit.

• Grad PLUS: No new student borrowers will be accepted into the Grad PLUS program starting July 1, 2026, and all other loans will come with new borrowing caps.

These loans will make lots of trouble down the road for not just you but your folks too. It is possible to go to college without a student loan! First, take student loans off the table—they’re no longer an option. Then pour all your effort into finding ways to cash flow college with scholarships, grants, part-time work and your own savings.

Grants

As we mentioned, a much better way to pay for college is to look into scholarships or grants, which is free money you don’t have to pay back (if you qualify). The OBBBA makes a few tweaks to the federal grant process—and they look like good tweaks.

• FAFSA: In 2024, students started filling out a new Free Application for Federal Student Aid (FAFSA) form that made you list things like family farms and small businesses as assets to weigh against your eligibility for the grant. Well, as of July 1, 2026, you won’t have to tell Uncle Sam about your dad’s sorghum field anymore.

• Pell Grants: Money from Pell Grants will be eligible to pay for nondegree programs like job training, trade school, etc., beginning July 1, 2026. And Pell Grants won’t be given to students who already have financial aid or scholarships that completely cover the cost of tuition.

Other Things to Know

Like we said before, the One Big Beautiful Bill Act covers a lot of changes in a lot of areas. We’ve just highlighted the major points that are certain to affect your personal finances. But there are lots of other changes that could impact you, someone you know, and the whole country.

• Proof of work will now be required for people to receive Medicaid and SNAP benefits (exceptions apply).
• There are more rules to qualify for Obamacare coverage.
• America’s debt ceiling is being raised by $5 trillion.
• According to the Congressional Budget Office (CBO), the OBBBA adds $3 trillion to the national debt over the next ten years.²

Get Your House in Order

So, here’s the deal: Like a lot of things the government does, the One Big Beautiful Bill Act is a mixed bag at best. At the end of the day, what really matters is personal responsibility.

If your finances are a mess, no politician (not even the president) can dig you out of that hole—but you always have the power to do it yourself. You have to get your house in order, not D.C. So don’t worry about what’s going on at the White House.

The quickest way to get your house humming financially is to get on a budget—and EveryDollar can help. Ramsey created EveryDollar to make it easy for you to plan your spending, track your expenses, and pay off debt. And that’s way more than any politician has done for anyone!

Best part: You can try EveryDollar for free! Download it today.