The Debt-Free College Act of 2026 creates a federal-state partnership program to eliminate student debt for eligible students attending in-state public colleges, with the federal government providing grants to states that commit to covering unmet financial need through a combination of need-based aid and student success services. The bill also establishes a separate grant program for Historically Black Colleges and Universities, Tribal Colleges, and other minority-serving institutions with high concentrations of low-income students, requiring these schools to use funds primarily for student aid while capping tuition increases to inflation rates. Additionally, the legislation expands federal financial aid eligibility to undocumented students (known as Dreamers) who meet specified education or military service requirements. Participating states and institutions must submit five-year plans, maintain their current funding levels, implement credit transfer policies, and provide evidence-based student support services, with the Department of Education overseeing compliance and progress toward making college debt-free for eligible students.