Washington Update

Reconciliation Update

Republicans on Capitol Hill continue work toward passing a broad legislative package under budget reconciliation, which allows legislation to pass with a simple majority in the Senate. The ultimate goal is to extend expiring provisions of the Tax Cuts and Jobs Act, but the legislative package will include much more, some of which is intended to offset the expense of the tax cut extensions. The legislation would have significant impacts on public universities and students. 

The final three House committee markups take place this week. Speaker Mike Johnson’s (R-LA) plan was to advance a bill out of the House by Memorial Day, indicating the House would vote on their reconciliation package next week if that timeline is met.

Ways and Means Releases Portion of Reconciliation Bill
Ahead of Tuesday’s markup, the House Ways and Means Committee released the text of its reconciliation bill. The bill primarily extends expiring tax credits and includes a number of provisions impacting public research universities, including new institutional taxes, changes to student-facing policies, and the elimination of clean energy credits from the Inflation Reduction Act. The bill expands the executive compensation excise tax to include all publics and treats name and logo licensing revenue as unrelated business income tax. The bill limits the American Opportunity Tax Credit and Lifetime Learning Credit to filers with a Social Security Number and expands Section 127 employer-provided student loan repayment. Further, while the bill increases the excise tax on endowments, it does not apply to public institutions.

Energy and Commerce Releases Reconciliation Bill
The House Energy and Commerce Committee released text of its portion of the reconciliation bill Sunday night with a markup Tuesday afternoon. The largest portion of funding reductions are achieved through Medicaid and health care reforms. The cuts to Medicaid could both impact students who may qualify for that program as well as create new pressures on state budgets with downstream impacts to public institutions. The package also rescinds unobligated funding from the Infrastructure Reduction Act for climate and clean energy programs at U.S. Department of Energy and Environmental Protection Agency. The package also rescinds unobligated funding for climate and clean energy programs at Department of Energy and Environmental Protection Agency that were part of the Infrastructure Reduction Act.

Agriculture Committee Releases Reconciliation Bill
The House Agriculture Committee released its section of the reconciliation bill text, with markup beginning Tuesday night and will likely continue into Thursday. The bill proposes funding for the Research Facilities Act. It also notably proposes cuts to nutrition spending by $290 billion over the next ten years, eliminates SNAP-Ed, and increases program cost-sharing with the states. The bill also provides mandatory funding for some programs typically supported through the Farm Bill, including conservation funding from the Inflation Reduction Act, albeit without climate provisions. Farm Bill orphan programs are also included, such as the Urban, Indoor, and Other Emerging Agriculture Production, Research, Education, and Extension Initiative; the Foundation for Food and Agriculture Research; Scholarships for Students at 1890 Institutions; and the Specialty Crop Research Initiative.

APLU Analysis of the FY2026 President’s Skinny Budget Request
Earlier this month, the White House released its Fiscal Year 2026 Interim Summary President’s Budget Request (PBR) to Congress. The budget decreases non-defense discretionary spending by $163 billion or 23% compared to FY25 levels. The request increases defense discretionary spending by 13%. APLU staff compiled a summary of accounts of most interest to public research universities.

Upon release of the budget request, APLU President Mark Becker released a statement, noting “the administration is proposing cuts to higher education and scientific research of an astonishing magnitude that would decimate U.S. innovation, productivity, and national security.”

The White House is expected to release a full budget request with more detailed program-level spending information in the coming weeks. APLU will update its analysis with additional information at that time.

Executive Order on Gain-of-Function Research
On May 5, President Trump released an Executive Order (EO) and related Fact Sheet on gain-of function research, titled “Improving the Safety and Security of Biological Research.” The EO sets a 120-day moratorium on gain-of-function research and directs the White House Office of Science and Technology Policy (OSTP), in coordination with the Office of Management and Budget (OMB), the Department of Health and Human Services (HHS) and other relevant agencies to establish guidance to immediately end the federal funding of gain-of-function research conducted by foreign entities in countries of concern.

APLU maintains a tracker of President Trump’s Executive Orders of most relevance to public universities, which has been updated to include the new EO on gain-of-function research.

White House EO Affecting In-State Tuition
Earlier this month, President Trump signed an executive order “Protecting American Communities from Criminal Aliens,” which directs the attorney general and secretary of homeland security to identify sanctuary jurisdictions and ensure federal benefits are not bestowed to undocumented individuals in these jurisdictions. Of note to higher education, the order identifies providing in-state tuition to aliens, but not out-of-state Americans, as an example of a policy that favors aliens over American citizens. Per Inside Higher Ed, 24 states, plus D.C., provide in-state tuition to undocumented students, although in recent years some state legislatures have acted to repeal in-state tuition eligibility.

APLU Submits Feedback on White House Deregulation Efforts, Working with Higher Ed Community
This week, APLU offered ideas for federal deregulation, culminating in two letters to the White House Office of Management and Budget (OMB) following a request for information from the office.

The first letter, signed jointly by ACE, APLU, and other peer associations, acknowledges the valuable role of regulations in promoting accountability, transparency, and student success, while encouraging OMB to focus deregulation efforts on duplicative, redundant or poorly-targeted regulations that increase burden and cost to colleges and universities. The letter revisits guiding principles for deregulation offered by the higher education community in 2015 and provides specific recommendations of regulations to consider:

• A Department of Justice final rule on website ADA compliance.
• The Department of Education’s 2023 final rules on Financial Value Transparency and Gainful Employment.

The associations also request that the Trump administration work with the stakeholder community and our institutions in the implementation or any new regulations, while providing clarity and transparency on regulations that are being rescinded or amended.

APLU and AAU also sent a letter with recommendations specific to research to increase efficiency of the U.S. scientific enterprise, requesting that OMB:

• Constitute the Research Policy Board
• Eliminate Inconsistencies Across Research Funding Federal Agencies
• Stop Duplicative Reporting Requirements
• Rightsize Research Security for the Appropriate Threat, and Do So Consistently,
• Ensure Technology Commercialization and Protect the Competitive American Market by Reducing Agency Intrusions in the Bayh-Dole Act

NIH Updates Policy on Foreign Subawards
Last week, the National Institutes of Health announced an updated policy prohibiting foreign subawards from being nested under the parent grant, with the new policy being implemented no later than September 30, 2025. NIH notes the new policy “will include a prime with independent awards that are linked to the prime that will allow NIH to track the project’s funds individually, while scientific progress will be reported collectively by the primary institution.”  The policy applies to prospective grants and does not require ongoing awards to be retroactively revised. NIH plans to expand this policy to domestic subawards in the future as well.

EPA Reorganization and Grant Cancellations
Environmental Protection Agency (EPA) Administrator Lee Zeldin announced reorganization plans, which include closing the Office of Research and Development. The agency also plans to reduce staffing to levels last seen during the Reagan administration, leading to a loss of 600 to 4,000 staff.

Additionally, a federal judge recently ruled EPA may terminate around 800 grants funded by the Inflation Reduction Act and Bipartisan Infrastructure Law.

U.S. Department of Education Cancels Fulbright-Hays Applications
The U.S. Department of Education (ED) filed a notice to withdraw applications and cancel competitions for the FY2025 Fulbright-Hays Group Projects Abroad (GPA) Program, Doctoral Dissertation Research Abroad (DDRA) Program, and the Faculty Research Abroad (FRA) Fellowship Program.
The programs were impacted by the Department’s review of previously published notices inviting applications to “to ensure all priorities and requirements for the Department’s FY 2025 competitions align with the objectives established by the Trump Administration, foster consistency across all grant programs, and enhance the economic effectiveness of federal education funding.”

U.S. Department of Education Reminds Universities of Obligations to Help Borrowers
ED issued a press release and dear colleague letter urging institutions to contact all former students by June to remind them to repay their student loans.

According to the release, on May 5, “approximately 195,000 defaulted student loan borrowers will begin receiving an official 30-day notice from the U.S. Department of Treasury notifying them that their federal benefits will be subjected to the Treasury Offset Program. The first monthly benefit checks subject to offset are those scheduled for early June. Later this summer, all 5.3 million defaulted borrowers will receive a notice from Treasury that their earnings will be subject to administrative wage garnishment.”

ED to Convene Negotiated Rulemaking on Public Service Loan Forgiveness, Student Loan Repayment
ED announced it will convene a Student Loans and Affordability Negotiated Regulation Committee (Neg Reg Committee) June 30-July 2. This Neg Reg Committee will cover two topics:

1. Redefining qualifying employer for Public Service Loan Forgiveness, based on the Executive Order to exclude organizations with a “substantial illegal purpose, including [violating] immigration laws … supporting terrorism … child abuse, including the chemical and surgical castration of children or the trafficking of children to so-called transgender sanctuary States … illegal discrimination; or … trespassing, disorderly conduct, public nuisance, vandalism, and obstruction of highways.”
2. Revising income-based and income-contingent repayment plans (see 2023 rule).