Washington Update

Federal Judge Issues Preliminary Injunction in U.S. Department of Energy F&A Case
On May 15, U.S. District Judge Allison D. Burroughs issued a nationwide preliminary injunction halting the U.S. Department of Energy (DOE) from “implementing, instituting, maintaining, or giving effect to the Rate Cap Policy in any form with respect to the [institutions of higher education] nationwide until a further order is issued by this Court.”

In issuing the injunction, Judge Burroughs considered the merits of the claims made in the lawsuit and the irreparable harm that would result without an injunction. This nationwide injunction replaces the temporary restraining order in place since April 16, 2025. APLU maintains a webpage with updates on this case in which it is a plaintiff along with the Association of American Universities (AAU), the American Council on Education (ACE), and institutions as well as cases against the NIH and NSF over F&A rates

House Passes One Beautiful Bill Act, sending it to the Senate Where It Will Go Through Reconciliation
On May 22, the House passed its version of the reconciliation bill, the One Beautiful Bill Act, by a vote of 215-214. In the Senate, Republicans are considering substantive changes before bringing it to the Senate floor. The Congressional Budget Office estimates that the House Education and Workforce Committee provisions of the bill would cut a total of $349 billion from higher education over ten years, more than the $330 billion the committee was directed to find in savings.

Ahead of the House vote, APLU President Mark Becker sent the House of Representatives a letter opposing the House Education and Workforce Committee provisions of the bill. Areas of concern noted in the letter include:

• Under the legislation, a majority of Pell recipients would lose some aid, and approximately 700,000 students will lose eligibility entirely. The bill redefines “full-time” attendance as 15 credit hours per semester, up from 12. This cuts the maximum Pell Grant by $1,500 for recipients currently enrolled in 12 credit hours. Students enrolled in less than 7.5 credit hours per semester would lose all Pell eligibility.
  
• The elimination of Graduate PLUS loans for more than 400,000 students and Subsidized undergraduate loans for more than 4 million students.
  
• Risk sharing provisions that financially penalize colleges and universities via a convoluted formula based on earnings, tuition, completion rates, and loan repayment rates. The Department would then redistribute funding to select winners via another formula.

Key Resource: APLU compiled an updated summary document of the provisions most directly impacting public universities, including agriculture, education, and tax provisions.

What’s Next: Senate Republicans are developing their legislation with the ultimate goal of getting a bill to President Trump’s desk prior to July 4. The Senate GOP bill is expected to include substantial changes from the House GOP approach, setting up a negotiation to reconcile differences between bills. APLU expects differences in the higher education provisions, but substantial challenges to student aid remain.

Department of Defense Memo Announces Intention to Cap F&A at 15 Percent
On May 14, the U.S. Department of Defense (DOD) released a memo indicating the Department’s intention to implement a 15 percent indirect cost rate cap on all new awards to universities and a renegotiation of existing awards. The memo states the policy will go into effect 21 days from the date of the memo, which would be June 4th. APLU and our partner organizations are monitoring the situation and evaluating options.

Commerce Secretary Suspends Funding for U.S. Economic Development Administration Tech Hubs
Secretary of Commerce Howard Lutnik announced plans to suspend funding for the six previously selected Tech Hubs and to instead recompete the awards with a focus on proposals that, “prioritize national security, project quality, benefit to the taxpayer, and a fair process.”

What to Watch: The U.S. Economic Development Administration (EDA) will release an update this summer with the goal of announcing new selections in early 2026. The new program requirements will remove references to policies that contradict the administration’s executive orders, including DEI and energy requirements as well as those prioritizing unions. The Department of Commerce states the six Tech Hubs selected for awards under the Biden administration may recompete and will be given heightened consideration.

U.S. Department of Justice Announces “Civil Rights Fraud Initiative”
On May 19, the U.S. Department of Justice’s (DOJ) Office of the Deputy Attorney General announced a new Civil Rights Fraud Initiative, leveraging the False Claims Act to hold recipients of federal funding accountable for violating civil rights laws, including but not limited to Title IV, Title VI, and Title IX, of the Civil Rights Act of 1964.

According to the memo, the initiative is designed to ensure the federal government does not subsidize unlawful discrimination. It outlines how universities that accept federal funding could violate the False Claims Act “when it encourages antisemitism, refuses to protect Jewish students, allows men to intrude into women’s bathrooms, or requires women to compete against men in athletic competitions.” 

The memo asserts, “Colleges and universities cannot accept federal funds while discriminating against their students.”

Federal Judges Pause Firings and Reorganizations at the U.S. Department of Education, 22 Other Agencies
On May 22, a federal judge in the U.S. District Court in Massachusetts issued a preliminary injunction temporarily blocking President Trump’s executive order to dismantle the U.S. Department of Education (ED). The judge ordered the agency to reinstate the roughly 1,300 employees fired under the March Reduction in Force (RIF). The administration is appealing the ruling.

Separately, on May 22 a federal judge in the U.S. District Court for the Northern District of California issued a preliminary injunction to further extend a May 9 reprieve on 22 federal agencies laying off employees and reorganizing. The injunction applies to the Office of Management and Budget; the U.S. Departments of Agriculture, Commerce, Energy, Health and Human Services, Housing and Urban Development, Interior, Labor, State, Treasury, Transportation, and Veterans Affairs; the National Science Foundation; and others.

Senate HELP Committee Confirms Under Secretary of Education Nicholas Kent, Other Education and Labor Nominees
On May 22, the Senate HELP Committee voted along party lines to advance President Trump’s nominees for education and labor positions, including Nicholas Kent as Under Secretary of Education. The committee also advanced Kevin O’Farrell to serve as Assistant Secretary for Career, Technical, and Adult Education, and Henry Mack III to serve as Assistant Secretary of Labor for the Employment and Training Administration, Department of Labor.

APLU, AAU Letter to Congressional Appropriators on the National Science Foundation
In a May 28 letter to Appropriations Chairs Collins and Cole and Ranking Members Murray and DeLauro, APLU President Mark Becker and AAU President Barbara Snyder express concerns about recent NSF management decisions and the President’s FY26 budget proposal for the agency. The letter notes that significant staffing changes paired with a lack of robust funding for NSF could hinder U.S. science and technology leadership and jeopardize economic security and prosperity of the nation.

Go Deeper: The letter asks the Appropriations Committee to provide congressional oversight to finalize the agency spend plan for NSF in FY25, convene a hearing to review the NSF budget request and changes at the agency, and to support robust funding for NSF in the FY26 appropriations bills.