AASCU Federal Highlights – September 2026

From the week of Sept. 3

House Passes Continuing Resolution, Avoiding Shutdown Ahead of Midterm Elections

This week, the U.S. House of Representatives returned from August recess and passed a continuing resolution (CR) to fund the government through December 11. As a reminder, the House originally passed a clean CR in July, which would have extended government funding through December 4. However, the Senate rejected the bill, instead drafting and passing its own bipartisan version prior to the August recess. Notably, the Senate’s bill included language to pause an OMB rewrite of federal grant recommendations (Uniform Guidance) and added several anomalies. On August 8, the Senate passed its version by a 90-6 vote and sent it to the House for consideration.

This Tuesday, the House voted 370-48 to approve the Senate-passed CR, and President Trump signed it into law the following day. The CR ultimately maintains Fiscal Year (FY) 2026 funding levels through December 11, with limited funding adjustments and exceptions. Of particular importance to colleges and universities, the legislation delays implementation of OMB’s proposed overhaul of Uniform Guidance, which had been scheduled to take effect on October 1. As a result, OMB may not finalize, implement, or enforce the proposal before the CR expires, providing additional time to review the nearly 500,000 public comments submitted in response to the rulemaking. AASCU will continue to monitor and report on the status of Uniform Guidance regulations and broader FY27 funding negotiations.

ED Issues Sweeping Proposed Rule to Amend Grant Rules

Last week, the U.S. Department of Education (ED) released a proposed rule to amend the Education Department General Administrative Regulations (EDGAR), the framework governing the administration and oversight of most federal education grants. The sweeping proposal would make several significant changes to how ED awards, administers, and monitors grants, including expanding the Department’s ability to reduce, suspend, or terminate discretionary grants before their scheduled end date, encouraging lower indirect cost rates, and placing greater emphasis on evidence of effectiveness and workforce outcomes in grant competitions. The proposal would also make clear that future continuation funding is not guaranteed and allow ED to consider additional factors when making continuation award decisions.

For colleges and universities, the changes could affect both the competitiveness and long-term predictability of ED grant funding. Institutions that rely on multi-year discretionary grants may face greater uncertainty surrounding continuation awards, while applicants may need to demonstrate stronger evidence of program outcomes and scalability. Public comments on the proposed rule are due September 23, and ED has indicated it intends to publish a final rule later this year. AASCU will keep you updated on developments surrounding this proposed rule.

ED Issues Proposed Rule to Overhaul Higher Education Accreditation System

In mid-August, ED released a proposed rule that would make significant changes to the federal recognition and oversight of higher education accrediting agencies. The proposal reflects the Administration’s broader effort to increase competition among accreditors, make it easier for institutions to change accrediting agencies, and place greater emphasis on student outcomes, accountability, and institutional compliance with federal and state law. If finalized, the changes could reshape how accreditors evaluate institutions and how colleges interact with the accreditation system.

Among other sweeping changes, the proposed rule would:

• Streamline the process for new accrediting agencies to gain federal recognition and for institutions to change accreditors;
• Strengthen requirements for programmatic accreditors to maintain independence from related membership and professional associations;
• Prohibit standards that encourage or require policies providing preferences based on race;
• Establish new expectations related to academic freedom, intellectual diversity, and viewpoint neutrality; and
• Require institutions to provide written justification when transfer credits are denied and establish a student appeals process.

Public comments on the proposed rule are due September 21.

ED Recommends that the American Bar Association (ABA) Lose Accreditation Recognition

Two weeks ago, ED staff issued a report recommending that the National Advisory Committee on Institutional Quality and Integrity (NACIQI) deny the renewal of federal recognition for the ABA’s accreditation council. In the 86-page report, the Department concluded that the ABA and its council—the Section of Legal Education and Admissions to the Bar—did not comply with more than two dozen federal criteria required for recognition.

Among the Department’s findings, staff questioned the council’s independence, arguing that its relationship with the broader professional organization presents potential conflicts of interest. In another, ED argued that ABA’s accreditation council did not begin revising its diversity standards within the required time frame following the Supreme Court’s 2023 decision banning race-conscious admissions policies.

The Department’s recommendation is not final. Ultimately, ED will rely on NACIQI’s input before it issues a final decision. NACIQI is scheduled to review the ABA’s recognition application during its September 23-24 meeting and provide its own recommendation. Following NACIQI’s review, the Secretary of Education will make the final decision on whether to renew the council’s federal recognition. Notably, the Department is also not required to follow NACIQI’s recommendation.

The ABA currently stands as the nation’s leading law school accreditor and the only one that is federally recognized. Currently, it accredits nearly 200 law schools.

U.S. Department of Homeland Security (DHS) Proposed Rule Outlines Another $100K H1-B Fee

Last week, DHS published a proposed rule establishing a new $103,265 fee for certain H-1B petitions. The fee would apply only to cap-subject petitions filed under the annual H-1B lottery, meaning colleges and universities, which are generally exempt from the cap, would not be subject to the new charge. While the proposal is unlikely to directly affect most higher education institutions, it underscores the Administration’s continued efforts to reshape employment-based immigration programs and could have implications for employers competing for high-skilled talent. DHS is accepting public comments on the proposed rule through September 24.

Coalition Files Federal Lawsuit Challenging Rule Ending Duration of Status

In mid-August, a coalition of labor unions and higher education organizations filed suit challenging DHS’s new “duration of status” rule for international students. Under current policy, most F-1 students may remain in the United States for the duration of their academic program and any authorized practical training. The new rule, which is scheduled to take effect September 15, would instead admit students for a fixed period tied to their program length, generally not to exceed four years, and require many students to seek a formal extension of stay to complete their studies, enroll in a new program, or participate in post-completion optional practical training (OPT).

Plaintiffs argue the rule will create additional costs, uncertainty, and administrative burdens for international students and the institutions that serve them. Colleges and universities are watching the case closely, as the rule could affect international enrollment, student retention, and campus compliance responsibilities. AASCU will continue to provide updates on the rule.

House Advances Bill Restricting College Boycotts of Israel

Today, the House passed H.R. 4795, the Protect Economic and Academic Freedom Act, by 237-169. The legislation would prohibit institutions of higher education participating in federal student aid programs from engaging in certain non-expressive commercial boycotts of Israel or Israeli-affiliated entities. It would also establish new requirements for institutions that receive Title VI international funding, mandating that they certify annually that they do not impose restrictions on students participating in programs in Israel, or on students from Israel participating in programs on U.S. college and university campuses.

Specifically, Title VI-funded institutions would be required to certify annually that:

• Students and faculty may participate in academic programs located in Israel under the same terms and conditions as programs in other countries; and
• Students and faculty from Israeli institutions may participate in academic programs on campus under the same terms and conditions as individuals from other foreign countries.

While the bill’s introduction was bipartisan, the House vote largely fell along party lines, with 33 Democrats joining Republicans in support and two Republicans voting against the measure. The bill now heads to the Senate, where its future remains uncertain amid a crowded legislative agenda as the end of the 119th Congress nears. As the bill moves to the Senate, lawmakers will continue to grapple with a range of higher education priorities, including support for international academic engagement, protections against discrimination, freedom of speech and expression, and institutional academic autonomy. AASCU will continue monitoring the legislation and provide updates on its status.

Second Federal Workforce Pell Program Is Approved in Indiana

Last month, ED approved the second-ever Workforce Pell Grant program in Indiana. Students enrolled in the 8-week Clinical Medical Assistant program at Ivy Tech Community College can now access Pell Grant funds. As a reminder, established in H.R. 1, Workforce Pell allows students to apply Pell Grant funds toward short-term, accredited programs lasting 8 to 14 weeks. Funds are capped at a minimum duration of 150 clock hours and a maximum duration of 599 clock hours of instruction. To qualify for funding, programs must meet federal benchmarks for student earnings, job placement, and completion and receive approval from both the state and ED. Other programs across the country are currently awaiting federal approval as states and institutions work to identify and submit eligible programs.

AASCU/AACC Issues Joint Statement on ED Call to Action

Last month, AASCU and the American Association of Community Colleges (AACC) issued a joint statement responding to U.S. Secretary of Education Linda McMahon’s August 3 Call to Action. In our response, we highlighted the longstanding commitment of regional public universities and community colleges to the needs of their communities and emphasized that our institutions are already engaged in many of the principles outlined in the Secretary’s letter, including affordability, transparency, workforce preparation, and free expression. We also emphasized the importance of recognizing the distinct missions of our institutions and ensuring that reforms designed for one type of institution do not impose unintended burdens on others.

AASCU is currently gathering additional information regarding the Secretary’s request and will provide guidance, as appropriate, to inform members’ response or action.

Common App Releases Report Providing Insight on College Applicants

Last month, Common App released its annual report for the 2025-26 first-year application cycle. Notably, the report found that 1.5 million students submitted more than 10.7 million applications, reflecting a 6% overall increase from the previous year. Demographic breakdowns conclude that applications increased among students from low-income households and first-generation students, rising 8% and 6%, respectively. However, international applications decreased by 10%, breaking from a previous upward trajectory. Read the full report.

From the week of Sept. 24

Senate Committee Holds Markup on Student Aid Fraud Prevention Bill

Today, the Senate Health, Education, Labor, and Pensions (HELP) Committee marked up S. 4428, the No Aid for Ghost Students Act of 2026. The bill, which passed the House in June by a vote of 249-172, would require the U.S. Department of Education (ED) to use identity fraud detection tools to screen all FAFSA applications submitted after October 1, 2026.

The legislation aims to prevent “ghost students” from using stolen or fabricated identities to obtain federal student aid. If an application is flagged, the Department would notify both the applicant and the institutions listed on the FAFSA. Before disbursing aid, institutions would be required to verify the student’s identity, maintain documentation, and report the verification to the Department. The proposal would codify and expand anti-fraud measures already being implemented by the Department, including enhanced identity verification for FAFSA applicants.

In 2025, ED reported that these efforts prevented more than $1 billion in attempted federal aid fraud. Although the bill has attracted some bipartisan support, many Democrats have argued that Congress should evaluate the effectiveness of the Department’s new fraud detection system before making it a statutory requirement.

The Senate bill, introduced jointly by Sen. Ashley Moody (R-FL) and cosponsored by Sens. Maggie Hassan (D-NH) and Tommy Tuberville (R-AL), was slated to be voted on earlier in Committee. However, during markup, the Committee adopted an amendment by Sen. Sanders (I-VT), passing 12-11, that would prohibit the federal government from garnishing Social Security benefits from borrowers who default on student loans. Following the amendment’s adoption, Chairman Bill Cassidy (R-LA) pulled the bill from consideration pending further budgetary analysis. No additional committee action has been announced.

ED Redirects MSI Funding to HBCUs and Tribal Colleges

On Tuesday, ED announced a “one-time” investment of more than $174 million for Historically Black Colleges and Universities (HBCUs) and more than $61 million for Tribally Controlled Colleges and Universities (TCUs). According to the Department and subsequent reporting, the funding was reallocated from several programs that traditionally supported Minority-Serving Institutions (MSIs), including a STEM-focused grant program for Hispanic-Serving Institutions (HSIs), programs supporting Alaska Native- and Native Hawaiian-Serving Institutions (ANNHIs), Asian American and Native American Pacific Islander-Serving Institutions (AANAPISIs), and Native American-Serving Nontribal Institutions (NASNTIs).

The reallocation follows ED’s previous cancellation of most MSI grants last September. Funding for several discretionary MSI grant programs was terminated after the Administration argued that eligibility requirements based on racial or ethnic enrollment thresholds were unconstitutionally discriminatory. At this time, ED subsequently reprogrammed approximately $495 million in discretionary funding to HBCUs and TCUs, as well as other education initiatives. In December, the Department of Justice reinforced ED’s interpretation.

The key difference between last September’s actions and this year’s announcement is the funding source, with this year’s reallocation involving mandatory rather than discretionary spending. Department officials recently indicated that ED has urged Congress to address what it views as constitutional concerns surrounding certain MSI programs and, in the meantime, is working with the Office of Management and Budget (OMB) to identify legally permissible uses of the funding. Congress previously blocked the ED from eliminating the MSI programs outright but permitted the agency to reallocate some funding to the Strengthening Institutions Program (SIP), which remains competitive. The Department has not indicated that the reprogrammed funds will establish a recurring source of funding for HBCUs or TCUs beyond FY26.

Federal Judge Vacates ED Directive Terminating TQP and SEED Grants

Last week, a federal judge struck down a February 2025 ED directive that led to the termination of grants awarded through the Teacher Quality Partnership (TQP) and Supporting Effective Educator Development (SEED) programs. Ultimately, the court found the directive to be arbitrary and capricious and therefore unlawful under the Administrative Procedure Act, vacating the policy in its entirety.

The affected programs provide federal funding for educator development. Specifically, TQP supports teacher-preparation programs, teaching residencies, and leadership programs, while SEED grants support the evaluation of evidence-based practices for developing educators. In 2025, ED terminated 104 out of 109 existing TQP and SEED grants, eliminating approximately $600 million in federal funding and impacting more than 100 educator preparation programs nationwide. The ruling does not automatically restore funding for previously terminated grants. However, the court noted that parties seeking monetary relief for canceled awards may pursue those claims through the U.S. Court of Federal Claims.

The decision could also have implications for institutions seeking new FY26 funding. Earlier this year, ED opened new competitions for both programs, making roughly $70 million available through TQP and approximately $90 million through SEED. To date, the Department has not indicated whether the ruling will affect the administration of those competitions or whether it intends to appeal the decision.

DHS Proposes to End H-1B Visa Grace Period

Earlier this month, the Department of Homeland Security (DHS) proposed ending the discretionary 60-day grace period available to certain nonimmigrant workers, including H-1B visa holders. Currently, eligible individuals who separate from employment before the expiration of their authorized period of stay may remain in the United States for up to 60 days while seeking new employment, pursuing a change of status, or taking other steps to preserve lawful immigration status.

DHS stated that eliminating the two-month grace period, codified in 2017, would reduce administrative burdens and better align the regulations with the statutory framework governing nonimmigrant classifications. If finalized, the proposal could significantly shorten the timeframe available for affected employees to secure a new sponsoring employer or alternative immigration status, potentially increasing disruption for both workers and their employers.

The proposal is part of the Administration’s broader efforts to modify immigration and visa policies, including a recent Executive Order that imposes new restrictions on H-1B visa holders. The proposal is particularly relevant for higher education institutions, which are exempt from the annual H-1B visa cap and frequently employ international faculty, researchers, and other specialized personnel through the H-1B program. If finalized, the change would eliminate the current 60-day window that allows eligible workers to remain in the United States while seeking new employment or another means of maintaining lawful status following a separation from employment. DHS is accepting public comments on the proposed rule through Nov. 10.

President Xi Jinping Announces 100,000 Student Visa Opportunities for American Students in China

Today, at the White House, Chinese President Xi Jinping announced that 100,000 American students would be invited to China for academic opportunities over the next five years. He described the move as a signal of strengthening the relationship between the U.S. and China, explaining that the future of their partnership lies with young people. The statement comes during the second day of President Xi’s state visit to Washington DC.

The announcement expands on a 2023 initiative in which China pledged to invite 50,000 American students to study for up to five years, a target Chinese officials say was reached ahead of schedule. The new commitment would double that goal, at a time when the number of Americans studying in China has declined significantly. The Council on Foreign Relations reported this month that approximately 2,000 Americans were studying in China, compared with about 15,000 a decade earlier. For higher education institutions, the initiative could provide additional opportunities for American students to study at and participate in exchange programs with Chinese institutions.

Scott to Face Challengers in Election for Education and Workforce Committee Leadership

Earlier this month, Rep. Bobby Scott (D-VA), the current Ranking Member of the House Education and Workforce Committee, announced his candidacy to continue as the Committee’s top Democrat in the next Congress. Rep. Scott has served as his party’s leadership in the Committee since 2015 and previously chaired the Committee from 2019 – 2023. In a letter to Democratic colleagues, Scott outlined his record, making the case for continuing his leadership.

Notably, Rep. Jahana Hayes (D-CT) recently and publicly announced her intention to challenge Scott for the position. In a Dear Colleague letter, Rep. Hayes highlighted the role that workforce development programs, Pell Grants, student loans, community colleges, and state universities played in her own education and career. Hayes has served on the Committee since entering Congress in 2019 and previously served as Vice Ranking Member during the 118th Congress. Before her election to Congress, Rep. Hayes spent 15 years as a high school history teacher and was named National Teacher of the Year in 2016.

Rep. Suzanne Bonamici (D-OR) is also reportedly considering challenging Rep. Scott. Bonamici, who has served on the Committee since 2013, currently serves as Ranking Member of the Early Childhood, Elementary, and Secondary Education Subcommittee. Last week, Rep. Bonamici stated she was having internal conversations about Committee leadership and “exploring all the options,” but has not yet announced a formal bid.

Scott Urges ED to Withdraw Proposed EDGAR Revisions

Yesterday, Rep. Bobby Scott (D-VA), ranking member of the House Education and Workforce Committee, sent letters to Secretary Linda McMahon and OMB Director Russell Vought, calling on ED to withdraw its proposed revisions to the Education Department General Administrative Regulations (EDGAR), which govern how the Department administers and awards federal education grants. In the letters, Scott argues that the proposal would inject uncertainty and politicization into the federal grant-making process by expanding agency discretion, introducing undefined standards, and creating new opportunities for political considerations to influence funding decisions.

Scott also contends that several provisions mirror a separate and controversial OMB proposal to revise government-wide grant regulations known as Uniform Guidance, the framework that establishes common requirements for the administration of federal grants across agencies. Earlier this month, Congress moved to temporarily delay implementation of portions of that proposal. Scott warned that the proposed EDGAR changes could make it more difficult for institutions and other grant recipients to predict funding priorities, compete for federal grants, and comply with changing administrative requirements.

As a reminder, the proposed EDGAR rule was published by the Department on August 24 and would make a range of changes to grant administration, selection criteria, and funding priorities. Because EDGAR governs many federal grant-serving institutions of higher education, the changes could affect how institutions apply for, manage, and maintain eligibility for federal education grants. The Department has indicated it intends to finalize the regulations later this year. AASCU will continue to monitor developments.

ABA Accreditation Council Testifies Before NACIQI

On Wednesday, the ABA Accreditation Council testified before the National Advisory Committee on Institutional Quality and Integrity (NACIQI) as the Committee considered whether to recommend renewing the council’s federal accreditation recognition. The hearing follows an August report by ED staff recommending that the Department deny the council’s renewal application. As a reminder, among other concerns, the report argued that the council failed to revise its diversity standard within the required timeframe following the Supreme Court’s 2023 decision banning race-conscious admissions policies. ED staff also raised concerns about the council’s independence from the broader professional organization and identified more than two dozen other areas of noncompliance with federal recognition requirements. The ABA disputed the findings and argued that the Council has complied with federal requirements.

The hearing also follows the ABA council’s September 8 vote to repeal its diversity and inclusion accreditation standard. The council voted 10-6 to eliminate the requirement that law schools demonstrate a commitment to diversity and inclusion as part of the accreditation process, with the change taking effect immediately. The standard had been suspended since February 2025, but ED staff cited the Council’s handling of the standard as one of the issues underlying its recommendation against renewed recognition.

After deadlocking on Wednesday, NACIQI offered no official recommendation for ED today. As such, a senior official in the Department will decide on the ABA’s accreditation status, which can ultimately be appealed to the Secretary. The ABA is currently the only federally recognized law school accreditor, accrediting nearly 200 law schools.

FAFSA Opens for 2027-28 Academic Year

On Wednesday, ED launched the Free Application for Federal Student Aid (FAFSA) for the 2027-28 award year, marking the earliest FAFSA launch in program history for the second consecutive year. The release follows two rounds of beta testing that began in August and involved students, institutions, and community-based organizations. ED stated that the testing process helped identify and address technical issues before the form became broadly available.

The 2027-28 FAFSA includes several changes intended to streamline the application process, including:

• Pre-populated information for returning applicants
• The ability for parents with multiple student applicants to reuse information across applications
• Contributor invitations by text message in addition to email
• Indicators comparing college graduates’ earnings with those of high school graduates
• Immediate results indicating Pell Grant eligibility and estimated federal aid awards

The Department also highlighted enhanced fraud-detection tools and said that many applicants can now complete the form in as little as 15 minutes. The FAFSA is required by statute to be available by Oct. 1 and is now accessible to all students and families for the upcoming award year.