For generations, higher education has powered New York’s promise of opportunity. Across New York State, public and private, not-for-profit colleges and universities educate more than 1.1 million students each year including the nurses, teachers, engineers, social workers, and entrepreneurs who sustain our workforce and fuel our economy.
But today, that ecosystem is under threat. More than 200,000 students across New York could see their education and opportunities cut short, based on projections from EY-Parthenon’s statewide analysis of federal loan caps.
The One Big Beautiful Bill Act of July 2025 (OBBBA) represents the most significant overhaul of federal student lending since the 2008 Higher Education Opportunity Act, which enhanced borrower protections, created Public Service Loan Forgiveness, and lowered interest rates for millions of students. Unlike those reforms, the new law sharply restricts access to higher education based on wealth.
The OBBBA makes sweeping federal changes that will redefine how students and families afford college. The law ends the federal Grad PLUS program and caps Parent PLUS loans. It also narrows eligibility for professional degrees, reduces support for part-time learners, and shortens repayment and deferment options. Together, these changes could make colleges less accessible and affordable for tens of thousands of students who choose New York, whether they come from across town or across the country.
While intended to control costs for students and families, these restrictions will instead place the greatest burden on middle-class and working-class students and families: those who earn too much to qualify for maximum grant aid but too little to afford college without borrowing. The new limits will reduce access to graduate and professional programs that lead to stable, high-demand careers in teaching, health care, and social work. These are the professions that hold our communities together, yet the new regulations threaten to exacerbate already existing workforce shortages in each field.
It is critical that we understand these challenges as we prepare to confront them. Complementary analyses by experts in the state comptroller’s office and the Commission on Independent Colleges and Universities (CICU) demonstrate that changes to federal loan programming under the OBBBA will have a significant ripple effect on New York’s economy and higher education landscape.
Facing the greatest financial strain will be New York’s students and families, as well as the colleges and universities that anchor towns, employ residents, and educate the next generation of professionals. Loan changes proposed by the OBBBA will also deepen socio-economic divides as private lenders become more selective and middle-income families lose access to affordable financing, based on findings from EY-Parthenon’s statewide analysis.
The consequences go far beyond college campuses. When students can’t afford to attend college, entire communities feel the loss. The state benefits greatly from the current higher education ecosystem, which provides almost 300,000 jobs, $15.7 billion in consumer spending, more than $8 billion in research and development spending, and opportunities for the creation of new products and businesses, according to the state comptroller’s analysis. The financial effects will be immediate: reductions in student and visitor spending, lower revenues for local businesses, and thousands of campus and spillover jobs lost.
These impacts are especially acute in sectors where New York’s competitive advantage depends on advanced education. In high-need professions such as teaching, nursing, mental health counseling, social work, and other licensed fields, new federal loan restrictions threaten to constrict the workforce pipeline, with analyses projecting more than 12,000 fewer graduate-level professionals statewide by the end of the decade. Graduate programs are the primary pathway into these careers, and when students lose access to financing, fewer trained professionals enter classrooms, hospitals, and community-based services across New York.
These same financing barriers will also affect the state’s creative economy. New York is home to one of the largest arts ecosystems in the nation, supported by graduate programs in the visual and performing arts that attract students from across the country. These programs fuel industries that generate tens of billions in economic activity and return far more in tax revenue than the public investment they receive. When access to graduate education is cut off, the loss is not only fewer degrees, but a weakened talent pipeline that undermines regional economies, cultural vitality, and long-term growth across New York State.
The warning signs are clear: fewer students mean fewer graduates, and fewer skilled workers in critical fields. The economic cost to New York will be high, but students stand to lose the most.
DiNapoli is the state comptroller. Brabham is president of the Commission on Independent Colleges and Universities.
