Washington Update

FY26 Appropriations Update 
APLU continues to track Fiscal Year 2026 (FY26) federal funding developments as Congress works to pass the spending bills needed to avert a government shutdown. Less than two legislative weeks remain before a stopgap measure that was passed last year to temporarily fund the government expires on January 30th.  

The U.S. Department of Agriculture’s full-year FY26 funding was attached to the last stopgap measure and enacted in November. The remaining spending bills were not released until January, leaving less than a month to move them through both chambers. The bills were presented in three separate packages, each combining several bills into one measure. 

APLU produced a detailed analysis of FY26 funding levels for the association’s priority accounts spanning research, student aid, and other federal programs. 
 
Why it matters: The updated analysis incorporates newly released details on funding levels and policy provisions affecting the National Institutes of Health (NIH) as well as the U.S. Departments of Defense and Education. The package largely rejects steep funding cuts and the elimination of programs proposed in the President’s Budget Request, due much in part to the collective advocacy of the APLU community. 

Additionally, APLU worked closely with appropriations leaders to advocate for policy provisions in the measures that include language preventing agencies from using federal funds to modify current indirect costs rates. Explanatory statements accompanying spending bills with research priorities acknowledge the necessity of indirect cost recovery and expressing that the Joint Associations Group (JAG) model merits further consideration.  
 
Go deeper: APLU also maintains a tracker compiling F&A language across all FY26 appropriations bills. 

Overview of Funding Levels and Policy Implications for FY26 Bills Released This Week
U.S. Department of Education 
The bill rejects the outright elimination of APLU priority accounts proposed in the President’s Budget Request (PBR) or slashed in the House measure. Under the minibus agreement: 

• The Pell Grant is flat-funded, retaining a maximum award of $7,395; 
• Student aid accounts poised for elimination in the PBR—including Supplemental Education Opportunity Grants, TRIO Programs, GEAR UP, and Federal Work Study—are also flat-funded; 
• And Graduate Assistance in Areas of National Need (GAANN) is funded at $19.5 million, representing a 17 percent cut rather than elimination.  

Funding for other U.S. Department of Education (ED) programs includes: the Postsecondary Student Success Grant (flat), Child Care Access Means Parents in Schools (flat), Title VI International Education (6 percent cut), and the Institute of Education Sciences (0.6 percent cut). More details and historical funding levels are available in APLU’s analysis. Further historical information is also available on APLU’s website. 

The bill includes language restricting the administration’s authority to transfer programs funded by ED to other federal agencies and expresses concern over the administration’s use of interagency agreements. It also requires the administration to provide biweekly briefings to Congress on the implementation of interagency agreements.  

National Institutes of Health  
The NIH’s base budget is funded at $47.216 billion, representing a 0.9 percent increase in discretionary spending compared to FY25. An additional $1.5 billion was included for ARPA-H. The Senate Appropriations Committee summary highlights increases for several priority research areas including Cancer, Alzheimer’s, Rare Diseases, and Women’s Health.   

Go deeper: The bill contains policy language (Section 240) to limit NIH’s use of multi-year funding for grants to the same level used in FY25. The Office of Management and Budget had proposed funding 50 percent of NIH grants through multi-year funding. According to research cited in STAT News for FY25, around 30 percent of NIH grants used this funding mechanism.   
 
U.S. Department of Defense 
The U.S. Department of Defense is funded at $838.7 billion, an $8.4 billion increase from FY25. Research, Development, Test and Evaluation for the military services is funded at $145.9 billion, representing a three percent increase. The bill contains policy language on F&A and relevant report language in the explanatory statement. 

Commerce-Justice-Science; Energy-Water; Interior-Environment Minibus 
On January 15, the Senate passed a package containing three appropriations measures: the Commerce-Justice-Science, Energy-Water, and Interior-Environment bills. The minibus funds APLU priority accounts across several scientific research agencies, including the National Science Foundation (NSF), National Aeronautics and Space Administration (NASA), Department of Commerce, Department of Energy (DOE), and National Endowment for the Humanities (NEH). At the time of writing, the measure awaits President Trump’s signature, which is expected. 
 
Of note, the Commerce-Justice-Science and Energy and Water Development bills contain policy language that requires the research agencies to maintain the current Facilities & Administrative (F&A) cost system and prohibits funds from being used to change or modify indirect cost rates. 

FY26 Financial Services-State Minibus 
On January 14, the House passed an FY26 minibus containing the Financial Services and General Government Appropriations Act and National Security, Department of State, and Related Programs Appropriations Act with a vote of 341 to 79.  Under the minibus: 

• The Feed the Future Innovation Labs are flat funded; 
• The Higher Education Account for International Development is funded at a 25.09 percent decrease from the FY25 enacted level and; 
• The State Department’s Gilman International Scholarship program is funded at a 5.88 percent decrease. 

While the Financial Services and General Government bill does not fund APLU priority accounts, the Joint Explanatory Statement (JES) contains policy language directing the White House Office of Management and Budget (OMB) not to take any action that would change the indirect costs model in effect during FY24. Additionally, the JES directs OMB to engage in discussions with the Committees on improvements to the system to identify and recover indirect costs, specifically noting the FAIR model. The full text is available in APLU’s tracker of F&A language in all appropriations bills. 

State Department to Pause Immigrant Visa Processing from 75 Countries  
On January 14, the State Department announced it will pause immigrant visa processing from 75 countries. The pause will begin on January 21, lasting “until the U.S. can ensure that new immigrants will not extract wealth from the American people.” Initial media reports suggested the pause was for all visa classifications, not just immigrant visas, but the limitation was later clarified. While the announcement only applies to immigrant visas, there may be indirect impacts on individuals seeking nonimmigrant visas like F-1s.  

APLU Joins Coalition of Public Orgs on Letter to Congress to Protect and Enhance Tax Exempt Bonds 
The Public Finance Network, a coalition of state, municipal and other public organizations including APLU, sent a letter to House and Senate leadership on January 13. The letter complements many of APLU’s tax priorities and underscores the importance of preserving the tax-exempt status on municipal bonds, which many public institutions rely on to finance large construction projects. It urges Congress to: 

• Preserve the municipal bond tax exemption 
• Restore the tax-exemption for advance refunding municipal bonds 
• Eliminate sequestration for existing direct-pay bonds 
• Support the role of municipal bonds issued as private activity bonds (PABs) 

APLU and AAU Respond to NSF’s TIP Roadmap for Workforce Development 
APLU and AAU partnered on a joint response to a request for information (RFI) by the National Science Foundation’s Directorate for Technology, Innovation and Partnerships (TIP). The response addressed the agency’s recently published workforce development roadmap, Building Pathways and Innovations for the Critical and Emerging Technology Workforce. 

In the response, APLU and AAU emphasized the role of research universities in strengthening the U.S. workforce in critical and emerging technologies. Key recommendations include:  

• Strengthening the evidentiary basis for workforce investments 
• Leveraging NSF’s foundational STEM education and research programs 
• Investing in faculty as a force multiplier for workforce development 
• Scaling proven experiential learning opportunities 

The associations also urge NSF to expand Regional Innovation Engines, continue support for Engineering Research Centers, and invest in data systems that help meet regional workforce needs. 

APLU Responds to DOE Request for Information on AI Model Partnerships 
On January 14, APLU responded to a U.S. Department of Energy (DOE) RFI on Partnerships for Transformational Artificial Intelligence Models. The RFI requests input on the design of a new public-private consortium to curate DOE scientific data to improve AI models.  

APLU’s response speaks broadly to the value of university inclusion and contributions to the proposed consortium. It also places particular emphasis on public research universities’ unique capacities in AI research across a large domain of scientific fields and their critical role in developing the next generation AI workforce. 

Last week, DOE announced another RFI soliciting strategies for meeting the technical challenges of the Genesis Mission. Several of the RFI’s questions are specific to university workforce development and research contributions. The deadline for response to this RFI is March 4^.  

APLU Responds to NSF Tech Labs RFI 
On January 16, APLU submitted a response to an NSF Request for Information on Tech Labs that will provide milestone-based funding to research teams to accelerate breakthroughs in critical technologies.  
 
APLU expressed support for NSF’s commitment to advancing U.S. competitiveness and for the priority technology areas reflected in the Tech Labs initiative, which builds upon foundational knowledge produced by university-based researchers. However, the association expressed concern that universities would be excluded from competing for Tech Labs model which could concentrate, rather than distribute research capacity 

ED, DOL Take Next Steps to Implement Postsecondary Education Partnership 
The U.S. Departments of Education and Labor announced last week additional steps to “integrate the nation’s postsecondary education and workforce development programs.” Beginning this week, Higher Education Programs (HEP) staff within ED’s Office of Postsecondary Education will be detailed to DOL to coordinate programs. 

Under the agreement, HEP grantees will transition to the U.S. Department of Labor Grant Solutions and Payment Management System, replicating a similar move in December with the Workforce Development Partnership.  

Go Deeper: While language in the appropriations bill described earlier in this Washington Update can be interpreted to discourage the arrangement, it is not expected to block such actions.