Impact of the One Big Beautiful Bill Act on Religious Americans

The Big Picture 

• The One Big Beautiful Bill Act (OBBBA), an extensive tax and budget policy package, was signed into law by President Donald Trump on July 4, 2025.
• The OBBBA’s policies include considerable policy and budgetary revisions to federal immigration enforcement, distribution of Medicaid funds, and federal educational aid and student loans.
• This expansive legislation’s revisions on federal funding, education, and other programs largely align with religious conservatives’ views, yet these provisions will likely have far-reaching impacts on religious Americans and their institutions.
• By setting additional limitations on who can access American citizenship and federal resources, the OBBBA furthers the Christian nationalist movement and provides greater support for conservative religious groups’ policy objectives.

OBBBA’s Impacts on Religious Americans and Their Institutions

Funding Immigration Enforcement and Defunding Access to Government Resources

Religious Americans and institutions are mixed in their opposition or support of immigration, and particularly, in their views of those who enter or live in the United States illegally. More conservative religious people and organizations tend to strongly oppose illegal immigration, support deportation, and want stricter limits on legal immigration. The OBBBA supports many religious conservatives’ views and policy aims in this regard, while likely being incompatible with religious progressives’ views on immigration.

Of the many policies the new law will enact, the OBBBA has a clear, consistent stance on deterring immigration. For example, the OBBBA appropriates $46.5 billion for border wall construction, $45 billion for detention facilities, and $29.9 billion for Immigration and Customs Enforcement (ICE). Whereas asylum applications have been free, there will now be a $100 minimum fee. Fees will also be expanded to immigration applications, including $550 for work permits for asylum seekers and $500 for Temporary Protected Status (TPS) applications. Both fees have been raised tenfold from the previous fees.

The OBBBA repeals Medicaid eligibility for qualified entrants, such as refugees, asylees, and humanitarian parolees, effective Oct. 1, 2026. This same group of lawfully present immigrants will no longer have Affordable Care Act access, as this will be limited to immigrants with permanent legal status, such as green-card holders. The new law places the same restrictions on immigrants’ access to the Supplemental Nutrition Assistance Program (SNAP).

Taken together, the OBBBA enacts a comprehensive set of policies to deter future immigration and reduce both the presence of and benefits to immigrants in the U.S. Such policies align with the views of most religious conservatives, and this group, especially white Protestants, voted in large numbers for Trump.

Withholding Medicaid Funds From Planned Parenthood

Many conservative, religious groups, particularly white evangelical Protestants, oppose abortion, finding that it directly contradicts their deeply held religious beliefs. Thus, such groups deem the perception that the U.S. government — through Medicaid — covers the costs of abortions as objectionable. Perhaps, under this assumption, the OBBBA eliminates the allocation of Medicaid funds to Planned Parenthood, the largest abortion provider in the U.S.

However, the view that the federal government funds abortion services at any sizable scale is a misconception. Since the Hyde Amendment’s inception in 1977, federal funds cannot be applied to the coverage of abortion services for enrollees of Medicaid and Medicare, except under highly specific circumstances. As a result, states without strict abortion bans are required to use their own Medicaid funds if abortion services are to be covered for low-income individuals.

Also noted in its 2022–23 annual report, Planned Parenthood received $699 million in government grants, contracts, and Medicaid reimbursements. Thus, federal funds comprise a little over a third of the organization’s overall revenue and will no longer be accessible per the OBBBA.

For conservative religious groups hoping this policy will considerably diminish available abortion services throughout the U.S., the OBBBA’s funding cuts to Planned Parenthood and federal Medicaid will only marginally affect abortion services for low-income individuals, especially as the Hyde Amendment and several states’ abortion bans are in effect. However, the law’s provision, along with its other Medicaid restrictions, is expected to significantly reduce low-income individuals’ and households’ access to reproductive care, family planning services, and health screenings.

Increasing the Child Tax Credit and the ‘Baby Bonus’

The OBBBA increases the child tax exemption from $2,000 to $2,200, and this amount will increase in subsequent years by being indexed to inflation. Research has found that statistically, religious Americans have more children on average in comparison to nonreligious Americans. Thus, the increase to the child tax exemption is expected to disproportionately benefit religious Americans.

Two limitations are important to note. First, the child tax credit increase will also benefit only those defined as U.S. citizens, nationals, or resident aliens. Second, to receive the full deduction, the parents’ combined earnings must be less than $400,000 per year, which includes over 95% of American households.

Also, during the tenure of the second Trump administration, the OBBBA includes the creation of a tax-deferred investment account for each eligible newborn. This savings program, called “Trump Accounts,” includes a one-time $1,000 deposit from the federal government, which will be accessible once the individual is age 18 with certain tax restrictions. However, funds used for college tuition, a first-time home purchase, or other related purposes will be tax-exempt. Parents can contribute up to $5,000 per year to the account.

Again, because of the significantly higher number of children that religious Americans tend to have — especially those of the more conservative ends of their faiths — this “baby bonus” is a significant boon to them. The OBBBA’s measures that benefit those with children could signal to conservative religious people — whose faith is often closely connected with having children — that the government tangibly and financially supports their deeply held religious beliefs.

Limiting Federal Student Loans

According to the National Center for Education Statistics, the United States has over 800 religiously affiliated colleges and universities. The OBBBA’s legislation on federal student loans and aid will have potentially detrimental impacts on such institutions of higher learning.

The OBBBA will cut about $350 billion of funding from higher education programs over the next decade through measures, such as limiting federal aid, eliminating some loan programs, reducing graduate loans, and restricting Pell Grant eligibility.

Additionally, the OBBBA will increase the risk for colleges and universities to award government funding to students. This law establishes a “risk-sharing” model that will require institutions to pay the federal government for a portion of their students’ unpaid federal loan debt. Currently, the government is responsible for collecting such defaults.

Perhaps affecting religiously based colleges and universities more than other institutions of higher learning, the OBBBA will tie federal aid to alumni earnings. If the alumni of a college’s specific undergraduate program earn less than the median salary of a high school graduate in their state, less federal loans will be available for the college and its students.

Such a provision could produce unintended consequences. Many students attend religiously based universities to enter religious and social service fields, which are not usually considered high-paying occupations. However, these roles benefit society significantly. Under the OBBBA, colleges will now be potentially penalized for having too many students enter such fields based on their expected earnings. To receive full government funding and access to student loans, such colleges will likely be tempted to encourage students to focus on high-paying jobs rather than on occupations related to social services.

Receiving funding for graduate study will also be more difficult and will disproportionately affect low- and middle-income students. Beginning July 1, 2026, students will no longer be able to use Direct PLUS Loans, more commonly known as a grad PLUS loan, to borrow the full cost of their graduate program. Instead, caps will be enacted at $20,500 per year and no more than $100,000 in total. Previously, this loan was capped at $138,500 in total.

Such changes could have a substantial impact on the viability of many religious and socially based graduate programs at religious institutions, as fewer students will be able to afford the costs. Thus, many such institutions that are already operating on razor-thin margins could be pressured to lower graduate tuition in an effort to attract students. Yet, in turn, such a change would likely place greater stress on the entire system.

Offering Federal Funds for School Vouchers

Recent data shows that religious Americans hold mixed views on the use of tax-funded vouchers to support their children’s private or religious school attendance. Importantly, Christians and Protestants are more likely to support this view than nonreligious Americans.

In a policy change that some religious people and institutions may approve, the OBBBA includes a national private school voucher program to begin in January 2027. States can choose whether to participate in the program. The new law enables taxpayer money to be sent to private schools, which no previous federal budgets have ever permitted.

To fund this program, the federal government will allow taxpayers to donate up to $1,700 per individual to scholarship-granting organizations (SGOs), such as religious schools and homeschooling programs. These donations will also be treated as a “dollar-for-dollar” federal tax credit. From these contributions, vouchers will then be provided for students’ attendance to private or religious schools.

According to Section 70411 of the OBBBA, to qualify, SGOs are required to spend 90% or more of their donation income on scholarships for K-12 students from households whose income is not greater than three times the specific area’s median income.

Christian Nationalism’s Policy Influence 

Due to the OBBBA’s breadth and the complicated political negotiation process preceding its passing, religious Americans and leaders of religious organizations will find both policies they support and oppose. Most clearly, conservative religious groups are expected to favor not only many OBBBA provisions but also other policies now put in place by the Trump administration.

The mingling of conservative religious messaging with issues around immigration and federal resources — particularly who belongs in the U.S. and who is deserving of government aid — has often been called Christian nationalism. Christian nationalism is an ideology centered on the belief that the U.S. is a fundamentally Christian nation and that Christian values should guide the government’s policies. Its mixing of Christian imagery and ideas with American civic life and its defining of the nation’s values and heritage have clear political implications.

The OBBBA contains several policies — many of which are outlined above — that can be seen, at least, in part as the result of Christian nationalist movements and lobbying. Given the significant support of Trump’s agenda by conservative religious voters and the majority of white evangelical Protestants approving of his presidency thus far, a mandate was, in a very real sense, given for many of the new law’s specific policies. This particularly applies to the OBBBA’s policies designed to substantially sharpen the definition of both who is an American and who is a deserving American.

The Bottom Line

The OBBBA is an expansive legislation package that will alter many existing and long-standing U.S. policies. It has clear implications for religious persons and their institutions. Many of the new law’s policies support the stated views of conservative religious Americans and help further the policy objectives of Christian nationalism.

For example, the OBBBA’s policies largely aim to deter future immigration and restrict access to federal resources that were previously available to lawfully present immigrants. Ultimately, the new law gives greater clarity and limits on who should be considered an American and who should receive government aid.

In the education field, the new law has mixed outcomes. The OBBBA provides a federally funded path for K-12 private and religious schools by creating a tax credit for donating to SGOs, and these funds can then be used for vouchers and scholarships. Yet, a selection of the OBBBA’s new policies are expected to pose challenges for religious institutions of higher education, especially through its restrictions on federal loans and aid. In turn, this will likely make these institutions less affordable, potentially alter the majors students select, and place new constraints on educational institutions themselves, which could put them at more financial risk.

Overall, conservative Christians in particular will likely find much in the OBBBA that they support, while other religious groups are expected to view the OBBBA’s collective policies as opposing their beliefs and values.

For more insights on the impacts of the One Big Beautiful Bill Act, listen to a discussion with Michael O. Emerson and David M. Satterfield on the “Baker Briefing” podcast.

This publication was produced on behalf of Rice University’s Baker Institute for Public Policy. Wherever feasible, the material was reviewed by external experts prior to its release. Any errors are the responsibility of the author(s) alone.

This material may be quoted or reproduced without prior permission, provided appropriate credit is given to the author(s) and Rice University’s Baker Institute for Public Policy. The views expressed herein are those of the individual author(s) and do not necessarily represent the views of Rice University’s Baker Institute for Public Policy.