Policy & Advocacy
July 30, 2025

AASCU Federal Highlights – July 2025

A compilation of policy news shared in AASCU’s Weekly Federal Policy Update.

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Weekly Federal Policy Update
July’s Lead Story

‘One Big Beautiful Bill Act’ and Implications for Higher Education

President Donald Trump signed the ‘One Big Beautiful Bill Act’ (H.R. 1) into law on July 4, 2025, following its passage by both the House and Senate. AASCU issued a statement upon congressional action, thanking Senate leadership for making significant improvements to the final legislation, while simultaneously recognizing that portions of the bill will have a negative impact on colleges and universities and millions of their students, as well as on state budgets.

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July Documents & resources
From the week of July 24

Negotiated Rulemaking on Loans, Programmatic Accountability, and Pell Announced by Department

The Department of Education (ED) has announced it will commence two negotiated rulemaking sessions to implement higher education provisions within H.R. 1, also known as the One Big Beautiful Bill Act (OBBB), and other Administration priorities. In anticipation of forthcoming rulemaking sessions, ED will host one virtual public hearing on August 7, 2025, in addition to a 30-day public comment period. The two committees will be:

  • The Reimagining and Improving Student Education (RISE) Committee will hold two five-day sessions in September and November to address federal student loan-related changes, including but not limited to loan limits, the elimination of Grad PLUS, and institutional flexibility.
  • The Accountability in Higher Education and Access through Demand-driven Workforce Pell (AHEAD) Committee will hold two five-day sessions in December and January, focused on Workforce Pell, institutional and programmatic accountability, among other topics.

As these sessions will not meet the Federal Register’s November 1 publishing deadline for implementation by July 1, 2026, the administration may seek a waiver or extensions. AASCU will continue to monitor and report on developments.

House Committees Mark Up College Sports Bill, EO on NIL Released

Last week, AASCU reported that the House Energy and Commerce Subcommittee on Commerce, Manufacturing, and Trade passed H.R. 4312, the Student Compensation and Opportunity through Rights and Endorsements (SCORE) Act. The bill generally seeks to provide the National Collegiate Athletic Association (NCAA) with antitrust protections, pre-emption of state laws that regulate Name, Image, Likeness (NIL) payments, and a ban on making student athletes employees of their schools.

This week, the House Energy and Commerce Committee and the Committee on Education and Workforce both approved the bill with only Republican (no Democratic) support. Members approved an amendment requiring schools that generate at least $20 million in revenue to provide their student-athletes with academic support and access to tax and legal services. With August recess on the horizon, it is likely that the soonest this bill will be considered on the House floor is in September.

Earlier today, President Trump issued an executive order on standards for NIL programs. Broadly focused on efforts to “save college athletics,” a fact sheet sent out by the White House says the order also seeks to preserve and support “expansion of opportunities for scholarships and collegiate athletic competition in women’s and non-revenue sports.” Similarly, it aims to prohibit “third-party, pay-for-play payments” to those athletes. AASCU will continue to keep you updated on this issue.

Update on Tennessee HSI Lawsuit

Today, the LatinoJustice Puerto Rican Legal Defense and Education Fund (PRLDEF) and the Hispanic Association of Colleges and Universities (HACU) announced they have submitted a motion to intervene in Tennessee and Students for Fair Admissions (SFFA) v. U.S. Department of Education, a federal lawsuit in the Eastern District of Tennessee that seeks to dismantle the Hispanic-Serving Institutions (HSIs) Program.

As previously reported, the suit argues that the criteria that appear in the Higher Education Act (HEA) that institutions must use to become designated as an HSI are unconstitutional and discriminatory. It directly challenges the legality of HSIs and related federal funding based on their interpretation of the U.S. Supreme Court’s decision against the use of race in college and university admissions. Even though the case is against HSIs, its outcome will have long-term and wider implications for all HEA Title III and V programs, except for the Title III, Part A program. We do not expect the U.S. Department of Justice to defend the U.S. Department of Education and its HSI program in federal court. AASCU will continue to closely monitor developments in the case as it moves through the court in the State of Tennessee.

Columbia Reaches Settlement with Trump Administration

On Wednesday, Columbia University announced that it has reached a settlement with the Administration regarding its actions related to pro-Palestinian protests and campus antisemitism. The settlement would require the university to pay $221 million over three years and codify changes Columbia announced in March regarding its disciplinary processes. The settlement reportedly involves restoring university research funding that has been withheld by the Administration

Potential Education Rescissions Package at the White House

Late last week, Congress approved President Trump’s $9 billion rescissions package, impacting the Corporation for Public Broadcasting (CPB) and foreign aid. This week, White House officials have shared that another rescissions package is coming soon. Though specifics on the package have not been shared, it does appear that education funding is likely to be included among the rescission requests coming from the White House. No specific date has been offered by Administration officials as to when this request would be sent to Congress. AASCU will continue to provide updates on this matter as they arise.

White House Shares AI Action Plan

On Wednesday, the White House released its AI Action Plan, outlining over 90 federal actions to strengthen U.S. leadership in artificial intelligence through expanded infrastructure, deregulation, and global technology influence. A central education focus of the plan is preparing American workers for an AI-driven economy by advancing skill development and workforce readiness. This includes prioritizing AI literacy through Career and Technical Education (CTE), apprenticeships, and workforce training programs. The Administration also calls for using federal funding streams to integrate AI into CTE and related programs, helping students and workers gain the skills needed for high-paying jobs of the future.

ED Releases Funds for 21st Century Community Learning Centers

This week, the U.S. Department of Education (ED) released 21st Century Community Learning Center funds that it had been withholding, amounting to approximately $1 billion. Previously, AASCU reported that ED was withholding FY25 funding for this program, along with FY25 funding for five other programs: Education of Migratory Children (Title I-C); Supporting Effective Instruction State Grants (Title II-A); English Language Acquisition (Title III-A); Student Support and Academic Enrichment Grants (Title IV-A); and Adult Education basic grants, totaling nearly $7 billion. AASCU will continue to monitor whether the nearly $6 billion in funding for these remaining programs is released.

From the week of July 17

Update on LHHS Appropriations Markup Timing

According to POLITICO, this week, House Appropriations Labor, Health and Human Services, Education, and Related Services (LHHS) Subcommittee Chair Robert Aderholt (R-AL) shared that although the Subcommittee initially aimed to mark up its fiscal year 2026 (FY26) appropriations bill by next week, this timeline has been pushed back to the first week of September. Relatedly, on Tuesday, House Appropriations Committee Chair Tom Cole (R-OK) released updated subcommittee toplines for discretionary spending in FY26, which include a total of $705.6 billion for non-defense spending and $184.491 billion for LHHS discretionary spending.

On the Senate side, Senate Appropriations Committee staff has told AASCU that they are still attempting to markup its LHHS bill prior to the August recess. AASCU will continue to provide updates on this matter as they emerge.

Supreme Court Allows ED to Proceed with Mass RIFs

On Monday, the U.S. Supreme Court decided, in a 6-3 ruling, to lift a lower-court injunction blocking the Trump Administration’s mass reduction in force (RIF) at the U.S. Department of Education (ED).

Shortly after the ruling, the Secretary of Education Linda McMahon, put out the following statement: “Today, the Supreme Court again confirmed the obvious: the President of the United States, as the head of the Executive Branch, has the ultimate authority to make decisions about staffing levels, administrative organization, and day-to-day operations of federal agencies…We will carry out the reduction in force to promote efficiency and accountability and to ensure resources are directed where they matter most – to students, parents, and teachers.”

POLITICO reported that some ED employees have already started to face impacts from this court decision, receiving email notifications that they will be terminated on August 1. It is worth noting that last week, the Supreme Court made a similar ruling, impacting agencies such as the U.S. Departments of Labor (DOL) and Health and Human Services (HHS).

ED and DOL Announce New Workforce Development Partnership

On Tuesday, ED and DOL announced a new workforce development partnership. This partnership entails DOL taking on a “greater role in administering the adult education and family literacy programs funded under Title II of the Workforce Innovation and Opportunity Act (WIOA) and career and technical education (CTE) programs funded by the Carl D. Perkins Career and Technical Education Act.”

In its announcement, ED notes that the programs will be managed “alongside ED staff with continued leadership and oversight by ED.” As a reminder, ED signed an interagency agreement with DOL previously regarding this workforce development partnership; however, implementation had to be put on hold due to a district court injunction. That injunction has now been lifted in the Supreme Court case cited above (New York v. McMahon), allowing both the mass RIF at ED and the implementation of the interagency agreement to resume.

House Commerce Subcommittee Passes College Athletics Bill

On Tuesday, in a 12-11 party-line vote, the House Energy and Commerce Subcommittee on Commerce, Manufacturing, and Trade passed H.R. 4312, the Student Compensation and Opportunity through Rights and Endorsements (SCORE) Act. The bill generally seeks to provide the National Collegiate Athletic Association (NCAA) with antitrust protections, pre-emption of state laws that regulate Name, Image, Likeness (NIL) payments, and a ban on making student athletes employees of their schools. Now that the bill has passed the Subcommittee, it will proceed to the Full Committee for consideration. AASCU will continue to monitor any major developments regarding this legislation.

From the week of July 10

ED Issues Interpretive Rule Applying PRA Ban on Public Benefits to Postsecondary Education Programs

Today, ED issued, in prepublication form, a new interpretive rule that applies the Personal Responsibility Act’s (PRA’s) ban on public benefits for individuals without legal status to be in the United States to postsecondary education programs and “other similar benefit” programs. PRA generally limits “Federal public benefits” to U.S. citizens, U.S. non-citizen nationals, and certain categories of what is legally referred to as “qualified aliens.” Providers of these public benefits are required to verify eligibility in order to meet this requirement.

The new rule establishes that ED’s interpretation of the PRA’s ban applies to benefits that individuals, households, or families receive through public and nonprofit agencies. Specifically, the rule states that this ban applies to benefits provided through postsecondary education programs, adult education programs under Title II of the Workforce Innovation and Opportunity Act (WIOA), and postsecondary Career and Technical Education (CTE) programs under the Carl D. Perkins Career and Technical Education Act of 2006.

It is worth noting that this ban does not apply to benefits that are a part of public education benefits under the Supreme Court ruling in Plyler v. Doe from 1982 (i.e., benefits provided to children in public education settings).

The rule is scheduled to be officially published in the Federal Register on Friday, July 11, 2025.

Bipartisan NIL Legislation Introduced in House

The leadership of three important committees in the House of Representatives, Education, Energy and Commerce, and the Judiciary, is introducing new bipartisan legislation to stabilize the Name, Image, and Likeness (NIL) marketplace. Under the Student Compensation and Opportunity Through Rights and Endorsements Act (SCORE Act), student-athletes gain new legal and privacy protections and are shielded from predatory compensation schemes while defending Olympic sports. The bill would establish a uniform national NIL standard for institutions and governing bodies and affirm the classification status of student-athletes.

If enacted, it would supersede any current or future state bill on the employment status of student-athletes. The bill’s text is already available. There is no Senate companion bill yet, but we expect the bill to move in the House with noticeable support from both sides of the political aisle. AASCU will monitor the bill’s progress and report any significant actions.

OCR Dismisses 3,424 Civil Rights Complaints Over Span of 3 Months

Last week, the U.S. Department of Education’s (ED’s) Office for Civil Rights revealed in a court filing that it has dismissed 3,424 complaints between March 11 and June 27.

Though ED has asserted that its actions are “consistent with OCR’s Case Processing Manual,” civil rights advocates have expressed concern that this volume of dismissals, along with staffing cuts and a shift in priorities under the Trump administration, undermines protections for students, particularly those related to gender identity, race, and disability.

During the March to June period, the Trump Administration opened 309 complaints for investigation and resolved 290 complaints with voluntary agreements, OCR-mediated settlements, and technical assistance. For reference, under the last three months of the Biden Administration, OCR opened 674 investigations and resolved 595 through mediation or voluntary resolution alone.

NIH Announces Cap on Publisher Charges

On Tuesday, the National Institutes of Health (NIH) announced that it will cap the amount that publishers can charge government-funded researchers to make their work open-access starting in fiscal year 2026. According to the NIH, “Some major publishers charge as much as $13,000 per article for immediate open access, while also collecting substantial subscription fees from government agencies. For example, one publishing group reportedly receives more than $2 million annually in subscription fees from NIH, in addition to tens of millions more through exclusive article processing charges (APCs).” NIH Director Jay Bhattacharya said the decision aims to ease the burden on taxpayers who already fund the research and to help rebuild trust in the nation’s public health system.

Treasury Inspector General Identifies 7.2 Million FAFSA Forms with Inaccurate Tax Info

Last week, the Treasury Inspector General for Tax Administration released a report titled “The IRS Transferred Incorrect Federal Tax Information to the Department of Education for Federal Student Aid.” The report revealed that nearly 7.2 million Free Application for Federal Student Aid (FAFSA) forms submitted between December 2023 and April 2024 contained inaccurate tax data due to the IRS’s failure to follow proper procedures, including the failure to develop and apply a required data dictionary. This oversight led to data transfer errors, potentially resulting in inaccurate Student Aid Index calculations and delayed or disrupted financial aid offers. The Treasury Inspector General concluded by announcing their plan to continue performing reviews in these areas “since they could have potentially profound consequences.”

From the week of July 3

Congress Passes Budget Reconciliation Bill

On Tuesday, the Senate passed H.R. 1, the budget reconciliation bill by a 51-50 vote. This was followed by the House passing this legislation this afternoon by a 218-214 margin. The legislation is now on its way to the White House for President Trump’s signature. Highlights pertaining to higher education include the following:

  • Provides $10.5 billion in additional mandatory appropriations for the Pell program, offsetting a part of the expected Pell grant shortfall.
  • Establishes a new Workforce Pell Grant authority beginning in the 2026–27 award year, allowing eligible students to receive prorated grants for short-term, training programs at Title IV institutions of higher education.
  • Prohibits new Direct Plus student loans to graduate students.
  • It limits graduate students (who are not professional students) to borrowing up to $20,500 annually and $100,000 in the aggregate.
  • Limits professional students to borrowing up to $50,000 annually and $200,000 in the aggregate.
  • Introduces new eligibility requirements for institutions based on the earnings of former students, specifying that:
    • Undergraduate programs will lose federal student loan eligibility if their graduates earn less than the median high school graduate in that state;
    • Graduate programs will lose eligibility if their former students earn less than the median bachelor’s degree recipient in the same field and state;
    • Programs failing to meet these earnings thresholds for two out of three years will lose eligibility.

ED Holds Negotiated Rulemaking Sessions on PSLF; Fails to Reach Consensus

This past Monday through Wednesday, the U.S. Department of Education (ED) held negotiated rulemaking sessions on its proposed Public Service Loan Forgiveness (PSLF) regulations. According to ED, “in order to prevent taxpayer-funded PSLF benefits from being improperly paid to individuals who are employed by organizations that are not providing public service and are in fact, engaged in activities that are a threat to the public, the Secretary is proposing regulations that would exclude from the group of PSLF qualifying employers, any organizations that engage in activities that have a substantial illegal purpose.”

Topics discussed during these sessions include foreign terrorist organizations, illegal discrimination, chemical castration or mutilation, and violence for the purpose of obstructing Federal policy. In response to suggestions from the committee, ED made several changes to the regulatory language, yet consensus was not achieved by the Committee. Due to the absence of consensus, ED is not bound by any negotiations that occurred during the sessions and can propose regulations as they see fit. AASCU expects a proposed rule on this topic from ED in the next two months.

ED Withholds Funding for Federal Education Programs Pending Review

On Monday, ED sent a notice to grantees, stating that the agency is reviewing fiscal year 2025 (FY25) grant funding for the following programs and will not be issuing grant awards obligating funds pending this review:

  1. Education of Migratory Children (Title I-C);
  2. Supporting Effective Instruction State Grants (Title II-A)
  3. English Language Acquisition (Title III-A)
  4. Student Support and Academic Enrichment Grants (Title IV-A); and
  5. 21st Century Community Learning Centers (Title IV-B).

A similar notice was sent to states regarding funding for the Adult Education State Grants and the Integrated English Language and Civics Education (IELCE) programs authorized under the Workforce Innovation and Opportunity Act (WIOA). According to Education Week, this funding totals approximately $6.8 billion. It is worth noting that last month, the President’s budget request proposed to eliminate several of these education funding streams in FY26 though congressional action has not taken place yet.

Court Action Pertaining to HHS Restructuring

On Tuesday, a federal judge in Rhode Island blocked the Trump Administration from carrying out mass layoffs and a sweeping reorganization of the U.S. Department of Health and Human Services (HHS), citing a lack of legal authority and evidence to justify the changes. The decision came in response to a lawsuit filed by 19 Democratic state attorneys general and the District of Columbia, who argued the plan would paralyze essential public health services. The ruling halts layoffs affecting roughly 10,000 employees and suspends major structural changes to HHS agencies.