Washington Update

Fiscal Year 2026 Appropriations State of Play 
With funding for the current fiscal year expiring on September 30, Congress must revisit Fiscal Year 2026 appropriations upon its return from the August recess.  

APLU continues to update the association’s appropriations chart  as FY26 bills are released.  
 
Prior to the August recess, the House Appropriations Committee approved nine appropriations bills. Two of those bills — the Defense and Military Construction-Veterans Affairs bills, passed the full House. The chamber largely marked up at levels aligning with the Trump administration’s budget request, with all bills advancing on a party-line basis. The House Appropriations Committee was initially scheduled to consider the Commerce-Justice-Science bill prior to recess, but postponed a markup until later in September. A markup for the Labor-Health and Human Sciences-Education bill, which includes funding for student aid and NIH, is expected in early September.  
 
The Senate Appropriations Committee advanced eight appropriations bills prior to the recess, all with strong bipartisan support. Three of those measures –the Agriculture, Legislative Branch, and Military Construction-Veterans Affairs bill — passed the full Senate. The Senate measures largely include flat funding or offer modest increases to many APLU priority accounts.  

What’s Next
In all likelihood, some form of a continuing resolution (CR) will be needed to extend federal funding in the lead up to the September 30 deadline. How long the CR will extend funding, what policy provisions are added to it is still up in the air as well as whether any actual FY26 appropriations bills can be approved to narrow the scope of the CR. . 

Further, while Congress continues work on Fiscal Year 2026, they also continue to look backward to Fiscal Year 2025. While not confirmed, a second rescissions package that would pull thus unspent Department of Education funding is rumored.  

The Supreme Court of the United States Blocks Restoration of NIH Grants 
On August 21, the U.S. Supreme Court (SCOTUS) in National Institutes of Health v. American Public Health Association, ET AL., granted a stay of the U.S. District Court for the District of Massachusetts’ order requiring restoration of certain NIH grants, such as those linked to race, gender identity, and COVID-19. 

In the complex 5-4 decision, the Court stayed the reinstatement of applicable individual grants but rejected the Trump administration’s request to stay the District Court determinations of the underlying NIH policy directives. In practical terms, NIH will not restart the grants, while the case proceeds on appeal in the First Circuit.    

U.S. Department of Education Publishes Comment Request on IPEDS Race and Admissions Component    
The U.S. Department of Education (ED) published a comment request in the Federal Register seeking feedback on the new IPEDS “Admissions and Consumer Transparency Supplement” survey component. The component follows an earlier presidential memo and a directive to the Acting Commissioner of the National Center for Education Statistics issued by Secretary McMahon, which requires the collection of race in admissions data.  

The directive provides that “in order to increase transparency in college and university admissions, President Trump has determined that the admissions data collected by IPEDS should be enhanced to capture information that could indicate whether institutions of higher education are using race-based preferencing in their admissions processes.”   

What’s next: ED seeks this data for the current academic year as well as the five previous academic years. The request specifically seeks feedback on whether the collection should apply to all four-year institutions, if disproportionate impacts will be felt by open-enrollment institutions, and an estimate of time to complete the survey. Comments are due October 14.  APLU is working with the Commission on Information, Measurement, and Analysis, Council on Governmental Affairs, and partner associations to inform comments to ED. 

NEH Announces Reorganization, Consolidating Programs and Divisions  
The National Endowment for the Humanities (NEH) announced an agency reorganization to merge the functions and staff of seven divisions into four. The organization follows a reduction of force, impacting two thirds of the agency’s workforce. A directory of current staff is live on the agency’s website, although division assignments have not been updated as of the time of publication.  
 
The new divisions are the Division of Federal/State Partnership, Divisions of Collections and Infrastructure, Division of Lifelong Learning, and Division of Research. The Division of Research will be led by Stefanie Walker, who has been with NEH since 2009 and most recently served as Director of Challenge Programs from 2020 to 2025. Carol Peters has been named the agency’s new Director of Special Projects overseeing America 250 activities. 

President Trump Signs Executive Order on Federal Grant Oversight 
On August 7, President Trump signed an executive order (EO) titled, “Improving Oversight of Federal Grantmaking“. The EO requires agencies to create new processes to review funding opportunities and discretionary grants awarded by political appointees to ensure “agency priorities and the national interest.”  The EO notes “peer review recommendations” should not be “ministerially ratified, routinely deferred to, or otherwise treated as de facto binding by senior appointees or their designees.” 

Notably, the EO also;  

• Requires all awards to “demonstrably advance the president’s policy priorities” and prohibits the promotion of “initiatives that compromise public safety or promote anti-American values.”   

• Instructs agencies to codify a process for terminating previously awarded grants at any time “for convenience, including when the award no longer advances agency priorities or the national interest.” 

• Directs OMB to revise its Uniform Guidance to “appropriately limit” the use of grant dollars for indirect costs. The EO also states, “all else being equal, preference for discretionary awards should be given to institutions with lower indirect cost rates.” 

• Directs discretionary grants to “be given to a broad range of recipients rather than to a select group of repeat players.” 

• Requires awardees to provide written justification for each drawdown request and authorization approval from the supporting agency.  

• The EO indicated that agencies have 30 days to report to OMB on their progress toward meeting the directives in the order.    

Duration of Status Proposed Rule Published  
On August 27, the U.S. Department of Homeland Security published its proposed duration of status rule. Comments on the rule are due 30 days after the rule’s publication in the Federal Register, which could be as soon as tomorrow, August 28. 

The big picture: The rule would replace “duration of status” admission for J-1 and F-1 visa holders with a fixed period of stay. Under duration of status admission, a visa remains valid as long as the holder meets the requirements of the visa. With a fixed period of stay, the holder would need to file an extension of stay to continue in their program should they need additional time. This policy change presents complications for both institutions and individuals, including those seeking to participate in Optional Practical Training. 

APLU anticipates submitting written comments on the proposed rule. The first Trump administration proposed a similar rule, for which the higher education community submitted comments. The rule ultimately did not go into effect as President Trump’s first term expired before conclusion of the regulatory process.