August 2025

Federal Higher Education Policy

Early Actions for States in Response to Recent Changes

Christine Dickason, Marisa Mission, Mark Baxter, and Nick Lee

Note: This memo reflects federal policy developments through Aug. 4, 2025. Bellwether will continue monitoring federal action that may impact higher education and update this memo as necessary. To access citations used in this analysis, click on the “Sources” section in the navigation bar at left. 

Summary

The first several months of the second Trump administration have brought significant upheaval to the higher education landscape across the country. While some of the administration’s actions have targeted individual institutions of higher education (IHEs), other efforts affect the entire postsecondary system. From layoffs at the U.S. Department of Education to proposed funding cuts that would impact IHEs, these changes introduce instability into the system. 

In addition to executive orders, this memo reflects on two major federal policy milestones: President Trump’s fiscal year (FY) 2026 budget proposal and the 2025 reconciliation bill as signed into law by the president.

The president’s budget request includes recommendations for overall discretionary spending and revenue while laying out the administration’s policy priorities through proposed funding levels for various federal programs in the upcoming fiscal year. The president’s budget, released in May 2025, is only a starting point in that ongoing appropriations process and may be taken into consideration by both chambers of Congress, which then make their own spending decisions.

This year, Congress also engaged in a budget reconciliation process, which is intended to provide an expedited method of finalizing funding and revenue changes not typically subject to the annual appropriations process. The final reconciliation bill was signed into law by the president in July 2025 as the One Big Beautiful Bill Act (OBBBA) and makes permanent changes to a number of higher education program requirements and funding.

This memo outlines the federal government’s historical role in higher education and how that role is expected to be affected by the Trump administration’s actions. It also outlines actions state leaders can take and strategic questions they should consider as they seek to develop, implement, and sustain policies that support the higher education system and the students it serves. Recommendations for state leaders include:

  • Strengthen data infrastructure and build technical capacity.
  • Invest in wraparound support programs for students, especially those from low-income backgrounds or who are first-generation college students, to promote access and completion.
  • Streamline and standardize state financial aid systems to enhance transparency and accessibility.
  • Review and strengthen state higher education funding formulas.
  • Safeguard academic freedom to protect researchers and students.
  • Establish partnerships with foreign colleges and universities to maintain international talent pipelines.
  • Protect higher education affordability and students’ access to grants and loans to offset less generous federal repayment plans and terms.

Federal Role in Higher Education and Changes Under the Trump Administration

Funding

The federal government provides significant funding for higher education, primarily through Title IV of the Higher Education Act (HEA) of 1965. Title IV establishes and maintains the administration of the federal student loan program as well as several student aid programs, including Pell Grants. Additional funding flows directly to IHEs through grant programs.

Historical Federal Role

Changes in Progress Under the Trump Administration

Changes Proposed Under the Trump Administration

Pell Grants

Pell Grants were established in the 1972 reauthorization of HEA to provide federal grant aid to students from low-income families. Eligibility is determined based on the Free Application for Federal Student Aid (FAFSA). For the 2024-25 and 2025-26 award years, the maximum Pell Grant award was $7,395. In the 2023-24 award year, the federal government provided more than $31 billion in Pell Grant aid. Historically, academic programs that are eligible for Pell Grants must be at least 600 clock hours and 15 weeks long.

The reconciliation bill did not dramatically alter traditional Pell Grant eligibility requirements; however, it does allocate an additional $10.5 billion in funding to cover the anticipated shortfall for the program in FY26. There is also a significant expansion of Pell Grants to short-term educational and training programs provided by accredited IHEs. These programs must be between 150 and 599 clock hours and between eight and 15 weeks long. Trump’s FY26 budget request proposes reducing the maximum Pell Grant award by $1,685 to $5,710.

Note: This proposal aimed to address the FY26 Pell Grant shortfall, which has since been addressed in OBBBA.

Federal Work-Study Program

Introduced in 1964 through the Economic Opportunity Act, the Federal Work-Study Program allocates funds to IHEs to support up to 75% of wages for financially needy students. Annually, the federal government spends about $1.2 billion on this program.

Trump’s FY26 budget request proposes a reduction in funding for the Federal Work-Study Program, from over $1 billion to just around $250 million, by reducing federal contributions to the program to 25% of students’ wages and requiring employers to pay the remaining 75% (the reverse of current policy).
Federal Student Loans

The federal government offers three main types of student loans: direct subsidized loans, direct unsubsidized loans, and direct PLUS loans. Students apply using the FAFSA. As of March 2025, the U.S. Department of Education held $1.7 trillion in federal loans for nearly 43 million borrowers.

Significant federal student loan reforms will take effect on July 1, 2026 under OBBBA. A key change includes the elimination of Graduate PLUS loans, which currently allow graduate and professional students to borrow up to the full cost of attendance. Instead, graduate students will only be able to borrow $20,500 per year ($50,000 for professional students like those in law school or medical school), up to an aggregate total of $100,000 ($200,000 for professional students). Lifetime (undergraduate and graduate) student loan limits will be set at $257,500, excluding Parent PLUS loans. OBBBA also caps Parent PLUS borrowing at $20,000 per year, up to $65,000 in total per dependent student.

These changes are likely to push at least some students and families to the private loan market, which offers fewer protections to borrowers.

Student and Institutional Eligibility

HEA establishes both student and institutional eligibility requirements for participation in the federal student aid programs such as Pell Grants and student loans, which the U.S. Department of Education is then responsible for interpreting and implementing.

In May 2025, the U.S. Department of Education announced that it would begin matching data with the Social Security Administration and U.S. Department of Homeland Security to flag ineligible aid applications, as well as resume post-application screening to catch instances of students hitting lifetime Pell Grant limits. In June 2025, the U.S. Department of Education announced that first-time applicants flagged as ”suspicious” will be required to show a valid form of identification via video call.

Advocates worry that the increased monitoring might prevent some students from accessing aid or delay critical funds for others.

In July 2025, OBBBA codified an “earnings test” where all undergraduate programs other than certificate programs must show that their students’ median earnings for at least two of the three years after completion are greater than the average earnings of adults aged 25-34 without a college degree in their states. Graduate programs must show typical earnings exceed the earnings of those with only a bachelor’s degree. If a program does not meet this threshold, the IHE may not disburse federal loans to students in the program for at least two years. This test builds on the gainful employment and financial value transparency regulations, finalized during the Biden administration and for which implementation is currently underway. Those rules applied a similar earnings test and also required certain programs to ensure their graduates’ debt was not unaffordable.

Public Service Loan Forgiveness Program (PSLF)

Congress established PSLF to encourage more graduates to go into public service. Challenges have plagued the program due to strict eligibility requirements and administrative obstacles. For example, as of 2019, 99% of all PSLF applicants had been denied. A series of waivers and regulatory changes over the years have attempted to address these barriers. In FY23, $36.3 billion in loans were forgiven under this program.

In March 2025, Trump signed an executive order directing the U.S. Department of Education to revise the PSLF program. As of July 2025, the Department has stated that the PSLF program remains unchanged, and borrowers currently enrolled do not need to take any immediate action. However, in August 2025, the Department published new rules intended to restrict eligibility for the program, opening a 30-day period for public comment.
TRIO Programs

TRIO programs allocate grants to IHEs and other community-based and nonprofit organizations to provide services to students from low-income backgrounds, first-generation college students, and students with disabilities. There are eight programs within TRIO, two of which focus specifically on students already enrolled in IHEs: Student Support Services and the Ronald E. McNair Postbaccalaureate Achievement Program. Student Support Services is the largest of all TRIO programs, receiving around $380 million in FY24.

Trump proposes eliminating all federal support of TRIO programs in his FY26 budget request.
Federal Supplemental Educational Opportunity Grant

This grant provides funding to undergraduate students from low-income backgrounds. The awards range from $100 to $4,000 per year. In FY25, the federal government spent $910 million on this program.

Trump’s FY26 budget request proposes eliminating funding for this program, calling it “duplicative and poorly targeted.”

 

Research and Data 

The U.S. Department of Education plays a central role in producing and funding research and data on higher education. While colleges and universities generate internal data and states maintain their own systems, the Department supports nationwide infrastructure to inform policy and practice. The federal government also funds research centers housed at universities to generate evidence on student success and institutional effectiveness. As part of — and in addition to — these centers, the federal government also plays an outsized role in funding research and development at universities.

Historical Federal Role

Changes in Progress Under Trump Administration

Institute of Education Sciences (IES)

IES was established in 2002 to enhance the rigor and relevance of federal education research. IES serves as the independent, nonpartisan research, evaluation, and statistics arm of the U.S. Department of Education. It consists of four main centers focused on various research questions, including the National Center for Education Statistics (NCES), which supports the Integrated Postsecondary Education Data System (IPEDS).

The Trump administration has enacted major reductions at IES, cutting $900 million in contracts in February 2025 and firing nearly all staffers at NCES in March 2025. These actions threaten the ability of the U.S. Department of Education to carry out some of its core duties of data collection and reporting that inform policymakers and other key higher education stakeholders. The Department has already missed deadlines for publishing data and is behind schedule in its annual sharing of education statistics. There are several pending court cases against the Department for its actions.
Federally Funded Research Centers

IES funds many different education-focused research centers that are housed by IHEs, such as the National Center for Research on Education Access and Choice and the National Center for Rural School Mental Health.

Other federal agencies also fund education-focused research centers, such as the National Science Foundation’s support of the National AI Institute for Student-AI Teaming and the National Institutes of Health’s (NIH’s) support of the Learning Disabilities Research Centers Consortium.

Federal support for research on university campuses extends beyond education-focused centers. For example, NIH funds several centers that conduct research on health, such as the Center for Health Communications Research, and the U.S. Department of Energy funds national laboratories, such as the Ames Laboratory.

The freezing and cancellation of federal funds for research at institutions across the country has led to reductions in staff at IHEs, including those at university-affiliated research centers.

Grants outside of IES also affect these university-affiliated research centers. The withdrawal of federal funding is likely to significantly impact research centers’ abilities to function — or even exist.

Technical Assistance 

The U.S. Department of Education provides loans and grants to IHEs and, as part of administering these programs, department staff offer technical assistance with grant applications and disbursement. Additionally, the Department conducts oversight of those funds and provides guidance (via Dear Colleague letters and training sessions, for example) to help institutions uphold their obligations to education and civil rights laws.

Aside from this routine technical assistance, Congress has also funded technical assistance centers for which the U.S. Department of Education disburses grant funds and oversees. These centers disseminate best practices and information as well as offer professional development, capacity building, data collection and analysis, evaluation, and cross-agency or cross-organization coordination. While the Department houses and/or funds many technical assistance centers that may intersect with higher education, only those that directly serve IHEs or postsecondary students are included in the table below.

Historical Federal Role

Changes in Progress Under the Trump Administration

Changes Proposed Under the Trump Administration

Efforts Under HEA

The U.S. Department of Education provides technical assistance through both concentrated efforts and technical assistance centers including, but not limited to:

  • Federal Student Aid (FSA) Partner Connect
  • FSA Training Center
  • Centers of Excellence
  • Language Resource Centers (LRCs)
  • National Center for College Students with Disabilities (NCCSD)

These centers provide information and support to students and their families, international education programs, and IHEs.

Student Aid-Related Technical Assistance

In March 2025, the U.S. Department of Education reduced its staff by nearly 50%, including many who work in the Office of Federal Student Aid. As a result, regional FSA offices have closed, points of contact have disappeared, and processing timelines have been delayed enough to potentially impact the 2025-26 award cycle and future cycles.

For students, the Department has replaced much of its call center support with an artificial intelligence chatbot, but administrators report that students are receiving confusing or incomplete information. Consequently, aid administrators report intensifying workloads, breakdowns in communication, and burnout.

NCCSD

In January 2025, Trump signed the “Ending Radical and Wasteful Government DEI [or Diversity, Equity, and Inclusion] Programs and Preferencing” executive order, which directed all federal agencies to eliminate all “DEI” and “DEIA” (with A standing for Accessibility). As of July 2025, the program still stands, but the executive order signals that it could be eliminated at any time.

LRCs

As of June 2025, there have been no changes to LRCs’ programming or funding. However, Trump’s FY26 budget proposal proposes eliminating all funding for Title VI International Education and Foreign Language Studies programs, including the LRCs.

Fund for the Improvement of Postsecondary Education (FIPSE) Programs

The president’s FY26 budget proposes eliminating all funding for FIPSE programs (Centers of Excellence, NCCSD).

Efforts Under the Individuals with Disabilities Education Act (IDEA)

  • Special Education Technical Assistance and Dissemination Program: This program provides technical assistance to various organizations (including IHEs) on effective practices for meeting the needs of students with disabilities.
  • National Technical Assistance Center for Postsecondary Education and Training for Individuals Who Are Deaf or Hard of Hearing: In FY21, the U.S. Department of Education combined funds from three IDEA programs to establish the now-named National Deaf Center, which offers online professional development, digital resources, live events, and customized support to individuals and organizations (including IHEs).
Similarly to the NCCSD, the president’s “Ending Radical and Wasteful Government DEI Programs and Preferencing” executive order could affect IDEA programs; however, as of July 2025, no changes have been made to these IDEA-authorized technical assistance programs. In the president’s FY26 budget proposal, all IDEA Part D programs are consolidated into a new “Grants to States” formula grant under IDEA Part B. The stand-alone line item for technical assistance drops to $0, with the intent that states can use funds from the formula grants for technical assistance activities.

In March 2025, Trump signed the “Improving Education Outcomes by Empowering Parents, States, and Communities” executive order, which directed U.S. Department of Education Secretary Linda McMahon to facilitate the closure of the Department. In subsequent press appearances, the president has said that special education programs and functions would move to the U.S. Department of Health and Human Services; however, this move has not yet been officially finalized or implemented.

IES

The Education Sciences Reform Act established IES, which not only collects higher education data (see “Research and Data” section, above) but requires it to also share that data for public use, disseminate best practices through the What Works Clearinghouse, and offer technical assistance and training sessions on how to effectively utilize the information shared.

In February 2025, the Department of Government Efficiency announced that the U.S. Department of Education had terminated 89 contracts worth $881 million, many of which were traced to IES. Some contractors claim up to 170 contracts were canceled. Most recently, the Association for Institutional Research announced that its contract to provide training on IPEDS has been canceled. These cuts mean that even programs like SLDS, which has been preserved as of June 2025, will be less effective as the underlying data and infrastructure has been eliminated.

Beyond programming, 80% of IES staff were laid off by the department’s March 2025 reduction in force. These terminations in contracts and talent severely reduce IES’ ability to collect and disseminate accurate information.

 

In the president’s proposed FY26 budget, nearly all IES programming and research has been eliminated, except for the National Assessment of Educational Progress.
State Longitudinal Data Systems (SLDS)

Administered by NCES, the SLDS program primarily disburses multiyear grants to states, but staff also compile best practices, disseminate information, and maintain networks and conferences for data professionals.

 

Oversight, Accountability, and Enforcement

The U.S. Department of Education works with states and accreditors to oversee IHEs. While states authorize school operations and accreditors ensure academic quality, the Department leverages its financial aid programs and civil rights laws to enforce standards. Oversight mechanisms are typically of two types: financial aid compliance and civil rights enforcement.

Financial aid compliance is monitored through accreditor recognition and institutional eligibility for federal aid. If schools are found to violate compliance or financial standards, the secretary of education has the authority to require correction, penalize an institution with a fine, and/or demand repayment of liabilities. In more drastic cases, participation in federal student aid programs can be limited, suspended, or terminated as well. In severe cases, the U.S. Department of Education can also prohibit individuals or IHEs from participating in federal student aid.

Historical Federal Role

Changes in Progress Under Trump Administration

Recognition of Accreditors

To receive federal student aid, institutions must be accredited by a U.S. Department of Education-recognized accrediting agency. While accreditors are private, the Department’s recognition is dependent upon meeting a set of baseline criteria outlined in HEA. Additional criteria for institutions can be added at the accreditors’ discretion. This recognition status is reviewed at least every five years.

In April 2025, the Trump administration issued an executive order on “Reforming Accreditation to Strengthen Higher Education,” which directed the secretary of education to 1) promote the consideration of new accrediting agencies, 2) simplify the process for IHEs to switch accreditors, and 3) mandate accreditors drop diversity, equity, and inclusion (DEI) standards or risk being investigated for potential loss of recognition.
Gainful Employment (GE) Rules

Federal aid eligibility for nondegree (certificate) and for-profit college programs (known as GE programs) is also tied to graduates’ earnings and debt outcomes. The U.S. Department of Education has regulated standards for GE programs, requiring that program graduates have typical earnings that exceed those of someone with only a high school diploma, and that they have affordable levels of debt relative to their earnings. The rules, which were finalized by the Biden administration in 2023, also included a “Financial Value Transparency” framework that required all types of programs (GE and non-GE) to disclose those measures to their students. The rule was challenged in court in 2024.

Despite the first Trump administration’s repeal of an earlier iteration of GE regulations in 2019, the current administration surprised many when it filed a brief in May 2025 that defended the 2023 GE rule, citing the need for responsible stewardship of tax dollars. As of July 2025, litigation is still ongoing, and the rule still stands. Congress adopted a similar earnings standard via OBBBA, expected to take effect next year (see ”Funding” section, above).
FSA Monitoring, Reviews, and Audits

To access federal student aid, institutions must follow HEA and U.S. Department of Education regulations, which require annual compliance and financial audits by either independent or government auditors. Additionally, Department staff conduct program reviews of schools determined to be at risk of improperly administering financial aid programs.

 

In April 2025, Trump signed the “Transparency Regarding Foreign Influence at American Universities” executive order, which instructed the U.S. Department of Education to return foreign gift reporting and accountability functions to the Office of the General Counsel after the prior administration had moved the functions to the Office of Federal Student Aid. Immediately after, the Department launched investigations into Harvard University and the University of California, Berkeley for improper disclosures of foreign gifts.

 

Civil rights enforcement is conducted by the U.S. Department of Education’s Office for Civil Rights (OCR) through both proactive reviews and complaint investigations. If an institution has violated a law, OCR typically works with the school to remediate the issue. If it remains noncompliant, OCR can withdraw eligibility for all federal funding (including student aid as well as research and program grants) or even refer the matter to the U.S. Department of Justice for court proceedings.

 

Historical Federal Role

Changes in Progress Under Trump Administration

Title IX of the Education Amendments of 1972

Title IX prohibits sex-based discrimination in any education program — academic or otherwise — receiving federal funds.

The day he took office, Trump signed the “Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government” executive order nullifying Biden-era policies that had extended Title IX protections to LGBTQ+ students. Shortly after, he issued the “Keeping Men Out of Women’s Sports” executive order barring transgender women from women’s sports and warning that schools in noncompliance would face losing federal funding. The U.S. Department of Education has enforced this stance by investigating the University of Pennsylvania for allowing a transgender athlete to compete on the women’s swimming team. The administration also established a special investigative team jointly staffed by the U.S. Departments of Education and Justice, as well as revoked guidance on how Title IX could be enforced for disparities in Name, Image, Likeness payments.
Title VI Civil Rights Act of 1964

Title VI of the Civil Rights Act of 1964 prohibits discrimination on the basis of race, religion, or national origin in any program that receives federal funding.

In January 2025, Trump signed an executive order condemning DEI programming as “illegal discrimination.” The order revokes all prior orders promoting diversity and directs the U.S. Departments of Education and Justice to issue joint guidance on compliance with Students for Fair Admissions v. Harvard. Accordingly, OCR issued a Dear Colleague letter in February 2025 warning that any consideration of race in “admissions, hiring, promotion, financial aid, scholarships, [or] discipline” would be unlawful, and noncompliance would lead to losing federal funds. The letter also signaled that race-neutral proxies would be scrutinized closely, and OCR was directed to enforce Title VI more strictly.

President Trump’s April 2025 executive order, “Restoring Equality of Opportunity and Meritocracy,” further reshaped civil rights protections. The order revoked federal approval to pursue civil rights enforcement cases based on disparate-impact discrimination;* ordered all federal agencies to repeal or amend any regulations recognizing the disparate-impact framework; and directed all federal agencies to only pursue disparate-treatment discrimination cases. The U.S. Department of Education has already halted existing disparate-impact investigations and opened cases aligned with the administration’s priorities. At the same time, the March 2025 layoffs closed seven of OCR’s 12 regional offices, sharply reducing its capacity. The president’s FY26 proposed budget also cuts funding for OCR by 35% and assumes that its responsibilities would shift to the U.S. Department of Justice.

Federal judges have temporarily blocked the administration’s actions; however, staff are still pursuing change through other avenues, such as using “direct-to-final” rulemaking in the U.S. Department of Energy.

Americans with Disabilities Act (ADA) and Rehabilitation Act of 1973

Section 504 of the Rehabilitation Act of 1973 prohibited discrimination on the basis of ability in any programs that receive federal funding; in 1990, ADA expanded that eligibility to cover even those institutions that do not receive federal funding.

The administration has not revoked civil rights protections regarding special education. In fact, when OCR froze its investigations in spring 2025, disability-based cases were unfrozen first. Nonetheless, the changes made regarding OCR’s capacity, de-prioritization of disparate-impact discrimination cases, and DEI initiative bans will impact OCR’s ability and willingness to enforce disability protections in education. Additionally, if special education programs were to move to the U.S. Department of Health and Human Services, it is not clear whether it or another agency — the U.S. Department of Education or U.S. Department of Justice — would retain jurisdiction over IDEA, Section 504, or education-related ADA cases.

*There are two ways discrimination claims can be proven in a lawsuit. The disparate-treatment framework requires proof of intent to discriminate (e.g., an explicit discriminatory declaration). The disparate-impact framework considers statistical discrepancies among protected classes (i.e., race, sex, religion, national origin, and ability), and plaintiffs can prove discrimination by demonstrating that the protected class was negatively impacted disproportionately more than a comparison class (e.g., Black versus white people, Muslims versus Christians). Discrimination cases typically use the disparate-impact framework, as it can be hard to obtain proof of a defendant’s intent to discriminate.

Additional Federal Actions Affecting Higher Education

Immigration-related actions: The Trump administration has prioritized immigration as a central focus of its second-term agenda, issuing a series of executive orders designed to expand enforcement authority and restrict access for undocumented individuals. These orders — including “Protecting American Communities From Criminal Aliens,” “Ending Taxpayer Subsidization of Open Borders,” “Protecting the Meaning and Value of American Citizenship,” “Protecting the American People Against Invasion,” and “Declaring a National Emergency at the Southern Border of the United States” — aim to increase the reach and capacity of immigration enforcement officials. Such actions could directly affect the more than 400,000 undocumented students currently enrolled in IHEs. These federal actions have also spurred some states to pass further restrictions on undocumented students. For example, Texas, after being sued by the federal government, ended in-state tuition for undocumented students and has now asked universities to identify students who are undocumented.

Additionally, the U.S. Supreme Court ruled in January 2025 that parts of the Deferred Action for Childhood Arrivals (DACA) program are illegal. While it did not order an immediate stoppage of the program, no new DACA applications will be accepted. This legal uncertainty casts a shadow over the educational futures of the roughly 141,000 DACA-eligible students enrolled in higher education (as of 2021). Any further restrictions or the complete dissolution of DACA could significantly disrupt students’ ability to access financial aid, pursue degrees, and plan for long-term stability — with broader consequences for IHEs striving to support diverse and inclusive student populations.

Increase in the endowment tax: OBBBA raises the endowment tax to a maximum of 8%, with lower rates for some IHEs depending on the size of the school’s endowment, and represents a meaningful financial hit to some institutions. This change is expected to reduce the resources available for student aid, faculty hiring, research, and capital investments, particularly at IHEs that rely heavily on endowment returns to support their operations.

Changes to student loan repayment: Under OBBBA, as of July 1, 2026, new borrowers of student loans will have two options for repayment: a standard plan, which is spread across 10-25 years based on the amount of loans, and an income-based plan (i.e., the Repayment Assistance Plan) where borrowers repay a percentage of their annual gross income, for up to 30 years. Advocates suggest that these new plans will lead to borrowers needing to pay higher portions of their income toward student loans, potentially resulting in higher default rates.

Cuts to Medicaid: OBBBA makes several changes to Medicaid that could reduce federal Medicaid and Children’s Health Insurance Program spending by more than $1 trillion over the next 10 years. These reductions threaten not only the health care access of the approximately 3.5 million college students covered by Medicaid, but also the financial and operational stability of many IHEs.

Medicaid plays a quiet yet vital role in supporting student success — by covering mental and physical health services, funding campus-based clinics, and enabling institutions, particularly community colleges and public universities, to serve students with disabilities and complex health needs. In fact, students with access to Medicaid are more likely to complete college than those without access to health care. The federal cuts are anticipated to reduce student access to critical support services, increase out-of-pocket costs, and force some students to choose between continuing their education and addressing their health needs. Moreover, IHEs that rely on Medicaid reimbursements to fund health infrastructure and personnel may face new budgetary pressures, potentially leading to service reductions, staffing cuts, or increased tuition to offset losses. Collectively, these impacts could exacerbate inequities in college access and completion.

Cuts to the Supplemental Nutrition Assistance Program (SNAP): Cuts to SNAP included in OBBBA threaten to significantly worsen food insecurity among college students. Research estimates that nearly one-quarter of college students experience food insecurity, yet many face structural and bureaucratic barriers to accessing SNAP benefits due to restrictive eligibility rules and complex application processes. Instead of addressing these barriers, the federal cuts further limit access to critical food assistance, undermining students’ ability to meet basic needs while pursuing postsecondary education. Without adequate support, students may be forced to choose between food, tuition, and other essential expenses — jeopardizing their academic persistence and long-term economic mobility.

Actions State Leaders Can Take Now to Support Higher Education Through Federal Disruption

Recent and ongoing federal actions reinforce the need for states to rethink the status quo and look at ways to reinforce and strengthen supports and opportunities for young people. Below are seven recommendations that state leaders can act on now to address gaps in capacity and resources caused by federal budget and staffing cuts. In the longer term, it will also be important for states to address the silos among early childhood, K-12, higher education, and workforce that cause inefficiencies and gaps in information sharing.

1. Strengthen data infrastructure and build technical capacity.

Given the waning capacity and role of IES, state leaders must ensure that crucial student, financial, and institutional information is not lost. State leaders should focus on cleaning and de-identifying current data for public access; releasing existing datasets on student outcomes, degree costs, and institutional performance to maintain transparency during potential federal data disruptions; creating user-friendly dashboards for stakeholders; or establishing technical assistance programs to help institutions improve their data collection and reporting capabilities. Robust data systems also serve as a mechanism for program improvement, ensuring that limited resources go toward the best programs. Accurate, longitudinal data are critical to the long-term sustainability, accessibility, and quality of higher education, especially given the introduction of Workforce Pell and new accountability standards.

2. Invest in wraparound support programs for students, especially those from low-income backgrounds or who are first-generation college students, to promote access and completion. 

Wraparound support services are essential to ensuring that vulnerable students can complete their higher education programs, especially as federal aid such as Medicaid and SNAP faces cuts and/or restructuring. Ensuring on-time completion will be especially important for graduate students, who are now facing much tighter constraints on their annual and total borrowing and so may struggle to finance additional semesters in school. Part-time students will also see their access to loans for living costs prorated under OBBBA, potentially making it more difficult for them to afford to stay in school. State leaders should increase financial support for programs such as academic and career counseling for students from low-income backgrounds and first-generation college students, particularly as new financial aid options, such as Workforce Pell, are implemented. Institutions should also build intentional partnerships with area K-12 school districts to ensure smooth transitions for students entering their institutions and increase the opportunities for early college credit attainment. And establishing “last dollar” scholarships or targeted state aid can help offset potential reductions in federal aid or loan eligibility. These steps could preserve and improve higher education access and degree attainment while showcasing the state’s dedication to social mobility and economic competitiveness.

3. Streamline and standardize state financial aid systems to enhance transparency and accessibility.

Given the major changes implemented and coming to federal student aid, it is likely that a complex financial aid process will become even more confusing for students; administrators are already seeing this play out. Unclear eligibility and verification guidelines, varying award notification formats, and restrictions on aid stacking create barriers to higher education. Thus, state leaders should simplify and standardize financial aid delivery wherever possible to maximize student access. Immediate steps might include implementing uniform financial aid notification formats that allow students to easily compare packages across state institutions; eliminating restrictions that prevent students from combining multiple scholarships and aid offers; or investing in centralized application systems (e.g., FAFSA) that reduce administrative burden. Additional measures could involve establishing clear timelines for aid disbursement, developing better online calculators that show total aid eligibility across programs, or mandating standardized cost-of-attendance reporting that includes true net prices after all aid.

4. Review and strengthen state higher education funding formulas.

Budgets at institutions of all levels and sizes are seeing federal disruptions in HEA funding, research funding, and/or student aid. To help stabilize IHEs in the short term, state leaders could create emergency reserve funds for institutions serving high percentages of Pell-eligible students or develop contingency protocols for rapid formula adjustments. Staying in close contact with institutional leaders will also be key to understanding how immediate federal changes may impact enrollment trends, long-term institutional sustainability, and regional economic consequences. In the longer term, state policymakers could consider this an opportunity to reexamine current funding formulas, to identify vulnerabilities, and ensure adequate baseline support especially for IHEs serving large proportions of high-need students. Revisions may include boosting state support of research and data infrastructure, revising or creating outcome metrics tied to state priorities, or even establishing multiyear funding cycles to increase financial predictability.

5. Safeguard academic freedom to protect researchers and students.

Federal restrictions on research funding and academic policies threaten institutional independence and scientific progress that drive innovation and economic growth. Given cuts to research funding and increased political interference in curricular topics, state leaders should consider protective barriers for academic institutions. Immediate actions might include codifying protections for faculty research and curriculum decisions through state university system policies, creating constitutional amendments that guarantee academic freedom, or establishing state-funded research programs to replace threatened federal support. In 2004, California did this via the highly debated Proposition 71, which created a $3 billion state-funded stem cell research program when federal restrictions limited similar research. Additional measures could involve partnering with industry leaders to develop alternative funding streams for critical research areas or implementing legal protections against external pressure on academic hiring and tenure decisions. These protections would preserve institutional autonomy while maintaining the research capacity essential for state economic competitiveness and technological advancement.

6. Establish partnerships with foreign colleges and universities to maintain international talent pipelines.

As federal immigration policies restrict international student recruitment pathways such as the F-1 visa program, state leaders should support institutions in developing alternative mechanisms to attract global talent through partnerships. This could look like allowing or creating dual-degree programs with foreign universities, establishing research exchange agreements that do not require long-term visas, or developing virtual collaboration platforms for international research partnerships. Institutions might also negotiate faculty exchanges, sponsor short-term visiting scholar programs, or establish international campus partnerships that allow students abroad to participate in stateside university programs without needing to travel. These partnerships would preserve states’ access to global talent pools necessary for cutting-edge research and innovation, while reducing dependence on federal immigration policies.

7. Protect higher education affordability and students’ access to grants and loans to offset less generous federal repayment plans and terms.

With cuts to both federal aid grants and loans, enrolled and prospective students — especially in graduate programs — will struggle to access funding for their programs or will likely need to turn to the private lending market. There are two ways to address this affordability barrier. One option is for state leaders to minimize up-front costs by preventing tuition increases at public institutions or considering state-funded grants, scholarships, or tuition waivers for low-income, incoming students in high-need fields (e.g., nursing, teaching, medical school). Another option is to reduce borrowers’ debt burdens, potentially by expanding or improving upon targeted loan forgiveness initiatives that support critical state needs. For example, New York provides loan forgiveness for teachers (up to $5,000 annually for four years), nursing faculty (up to $8,000 per year), licensed social workers ($6,500 annually), and physicians working in underserved communities ($10,000 per year). Targeting affordability programs would help retain graduates in essential public service roles while also promoting educational accessibility, workforce development, and long-term economic sustainability.

Ongoing Considerations for State Policymakers and Advocates

Stakeholder Engagement

  • How are state leaders engaging students, families, IHEs, workforce representatives, and community-based organizations in shaping postsecondary policy priorities?
  • Are historically marginalized communities (e.g., low-income, rural, first-generation, Black, Latino, Indigenous, and immigrant populations) meaningfully included in state postsecondary planning and feedback mechanisms?
  • What mechanisms exist for regular input from IHEs on proposed state-level policy changes?
  • Are employers engaged in aligning postsecondary offerings with workforce needs?
  • How are cross-sector leaders — including those in K-12 education, the higher education system, the workforce, and more — collaborating and jointly problem-solving around state responses?

Political Support

  • Who are the key state-level legislative, executive, and agency champions equipped to respond to federal headwinds for postsecondary access and success?
  • Are there state-level coalitions or advocacy networks actively promoting college access, affordability, and completion, especially for underserved populations?
  • What political risks or opposition could arise from proposed changes to funding models, institutional accountability, academic freedom, or access programs (e.g., need-based aid)?

Policy and Budget

  • Which key protections for college students may be left vulnerable if federal funding, oversight, and assistance are withdrawn?
  • Are there federal laws or protections that may benefit from codification in state law, code, or statute?
  • Does the state have a strategic plan for higher education that addresses affordability and attainment?
  • Are there statewide postsecondary attainment goals that could be at risk with federal changes?
  • Does the state have the necessary data infrastructure to accurately identify gaps in access, services, or outcomes for college students?
  • How is the state defining high-skill, high-wage, or in-demand industry sectors or occupations?
  • Are state leaders convening with peer states or national networks to understand how others are responding to federal changes?

Budget Implementation and Technical Assistance

  • How can the state prepare to fill gaps as the federal government’s role changes?
  • Do IHEs, especially under-resourced ones, have the guidance and technical support needed to comply with new federal policies?
  • How is the state currently assessing postsecondary program quality?
  • How is the state monitoring and evaluating the impact of new investments or programs on student success metrics across different subgroups?
  • How can the state build its own data infrastructure to help supplement federal resources?

Sources

Summary

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See for example: “Civil Rights Policy Guidance,” U.S. Department of Education, https://www.ed.gov/laws-and-policy/civil-rights-policy-guidance.

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Donald J. Trump, “Ending Radical and Wasteful Government DEI Programs and Preferencing,” The White House, January 20, 2025, https://www.whitehouse.gov/presidential-actions/2025/01/ending-radical-and-wasteful-government-dei-programs-and-preferencing/.

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Donald J. Trump, “Transparency Regarding Foreign Influence at American Universities,” executive order, The White House, April 23, 2025, https://www.whitehouse.gov/presidential-actions/2025/04/transparency-regarding-foreign-influence-at-american-universities/.

[1] “U.S. Department of Education Returns Section 117 Foreign Funding Enforcement to Office of General Counsel, Announces Investigation into UC Berkeley,” U.S. Department of Education, April 25, 2025, https://www.ed.gov/about/news/press-release/us-department-of-education-returns-section-117-foreign-funding-enforcement-office-of-general-counsel-announces-investigation-uc-berkeley.

Office for Civil Rights, Case Processing Manual (Washington, D.C.: U.S. Department of Education, February 19, 2025), 21,  https://www.ed.gov/sites/ed/files/about/offices/list/ocr/docs/ocrcpm.pdf.

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Office for Civil Rights, Case Processing Manual, 23.

Donald J. Trump, “Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government,” The White House, January 20, 2025, https://www.whitehouse.gov/presidential-actions/2025/01/defending-women-from-gender-ideology-extremism-and-restoring-biological-truth-to-the-federal-government/.

Donald J. Trump, “Keeping Men Out of Women’s Sports,” The White House, February 5, 2025, https://www.whitehouse.gov/presidential-actions/2025/02/keeping-men-out-of-womens-sports/.

“U.S. Department of Education’s Office for Civil Rights Finds the University of Pennsylvania Has Violated Title IX,” U.S. Department of Education, April 28, 2025, https://www.ed.gov/about/news/press-release/us-department-of-educations-office-civil-rights-finds-university-of-pennsylvania-has-violated-title-ix; Alan Blinder, “Penn Agrees to Limit Participation of Transgender Athletes,” The New York Times, July 1, 2025, https://www.nytimes.com/2025/07/01/us/penn-title-ix-transgender-swimmer-trump.html.

“U.S. Department of Education and U.S. Department of Justice Announce Title IX Special Investigations Team,” U.S. Department of Education, April 4, 2025, https://www.ed.gov/about/news/press-release/us-department-of-education-and-us-department-of-justice-announce-title-ix-special-investigations-team.

Bethany S. Wagner and Zachary V. Zagger, “Trump Administration Says Title IX Does Not Apply to NIL Pay, Rescinds Recent Guidance” (blog), Ogletree Deakins, February 12, 2025, https://ogletree.com/insights-resources/blog-posts/trump-administration-says-title-ix-does-not-apply-to-nil-pay-rescinds-recent-guidance/.

Trump, “Ending Radical and Wasteful Government DEI Programs and Preferencing.”

Dear Colleague Letter: Title VI of the Civil Rights Act in Light of Students for Fair Admissions v. Harvard, U.S. Department of Education, February 14, 2025, https://www.ed.gov/media/document/dear-colleague-letter-sffa-v-harvard-109506.pdf; Office for Civil Rights, “Frequently Asked Questions About Racial Preferences and Stereotypes under Title VI of the Civil Rights Act,” U.S. Department of Education, https://www.ed.gov/media/document/frequently-asked-questions-about-racial-preferences-and-stereotypes-under-title-vi-of-civil-rights-act-109530.pdf.

Doreen S. Martin, Sarah B. Donovan, Jillian E. Sprong, “This is Not a Drill: Trump Administration ‘Dear Colleague’ Letter Virtually Eliminates Consideration of Race in Higher Education,” Venable LLP, February 20, 2025, https://www.venable.com/insights/publications/2025/02/this-is-not-a-drill-trump-administration-dear.

Donald J. Trump, “Restoring Equality of Opportunity and Meritocracy,” executive order, The White House, April 23, 2025, https://www.whitehouse.gov/presidential-actions/2025/04/restoring-equality-of-opportunity-and-meritocracy/.

“Office for Civil Rights Initiates Title VI Investigations into Institutions of Higher Education,” U.S. Department of Education, March 14, 2025, https://www.ed.gov/about/news/press-release/office-civil-rights-initiates-title-vi-investigations-institutions-of-higher-education-0; “U.S. Department of Education Probes Cases of Antisemitism at Five Universities,” U.S. Department of Education, February 3, 2025, https://www.ed.gov/about/news/press-release/us-department-of-education-probes-cases-of-antisemitism-five-universities.

Nikki S. Carter, A.W., and Council of Parent Attorneys and Advocates v. U.S. Department of Education, Linda McMahon, and Craig Trainor, 1:25-cv-744 (U.S. District Court, D.C., 2025), https://www.documentcloud.org/documents/25561754-class-action-lawsuit-against-the-us-department-of-education-and-education-secretary-linda-mcmahon/.

“Fiscal Year 2026 Budget Summary,” U.S. Department of Education, 50 and 58.

“EducationCounsel Alert,” EducationCounsel, April 25, 2025, https://docs.google.com/document/d/1mQ064rTW69_e3qMYwUT2lWIOaTn87EuEdI_A0p5wEqA/edit?tab=t.0.

Johanna Alonso, “Trump Administration Attempts to Rush Changes to Civil Rights Regs,” Inside Higher Ed, June 16, 2025, https://www.insidehighered.com/news/students/diversity/2025/06/16/trump-admin-attempts-rush-changes-civil-rights-regs.

Comparison of the IDEA, Section 504, and the ADA, University of Kansas, July 7, 2021, https://access.ku.edu/sites/access/files/2021-07/Comparison%20of%20the%20IDEA%2C%20Section%20504%2C%20ADA%20%281%29%20Updated%2007-07-21.pdf; “Disability Discrimination,” U.S. Department of Education, last reviewed January 3, 2025, https://www.ed.gov/laws-and-policy/civil-rights-laws/disability-discrimination.

Nikki S. Carter, A.W., and Council of Parent Attorneys and Advocates v. U.S. Department of Education, Linda McMahon, and Craig Trainor, 4.

Additional Federal Actions Affecting Higher Education

Donald J. Trump, “Securing Our Borders,” The White House, January 20, 2025, https://www.whitehouse.gov/presidential-actions/2025/01/securing-our-borders/; Donald J. Trump, “Protecting the American People Against Invasion,” The White House, January 20, 2025, https://www.whitehouse.gov/presidential-actions/2025/01/protecting-the-american-people-against-invasion/; Donald J. Trump, “Protecting the United States from Foreign Terrorists and Other National Security and Public Safety Threats,” The White House, January 20, 2025, https://www.whitehouse.gov/presidential-actions/2025/01/protecting-the-united-states-from-foreign-terrorists-and-othernational-security-and-public-safety-threats/; Donald J. Trump, “Protecting the Meaning and Value of American Citizenship,” The White House, January 20, 2025, https://www.whitehouse.gov/presidential-actions/2025/01/protecting-the-meaning-and-value-of-american-citizenship/.

“Undocumented College Students,” fact sheet, American Immigration Council, August 1, 2023, https://www.americanimmigrationcouncil.org/fact-sheet/undocumented-college-students-2023/.

Eleanor Klibanoff, Jessica Priest, and María Méndez, “What to Know About Texas Ending In-State Tuition for Undocumented Students,” The Texas Tribune, June 14, 2025, https://www.texastribune.org/2025/06/14/texas-undocumented-students-tuition-explainer/; Sneha Dey, “Texas Directs Public Universities to Identify Undocumented Students,” The Texas Tribune, June 23, 2025, https://www.texastribune.org/2025/06/23/texas-undocumented-students-in-state-tuition/.

“Undocumented Students in U.S. Higher Education,” Presidents’ Alliance on Higher Education and Immigration, accessed June 24, 2025, https://www.presidentsalliance.org/undocumented-students-in-us-higher-education/.

“Five Big Predictions on the Impact of the ‘One Big Beautiful Bill’ Act,” Jobs for the Future.

“Health Provisions in the 2025 Federal Budget Reconciliation Bill,” KFF, updated July 8, 2025, https://www.kff.org/tracking-the-medicaid-provisions-in-the-2025-budget-bill/.

Edwin Park, “Congressional Budget Office Confirms Senate Republican Reconciliation Bill’s Medicaid Cuts are More Draconian Than the House-Passed Bill,” Georgetown University McCourt School of Public Policy, June 29, 2025, https://ccf.georgetown.edu/2025/06/29/congressional-budget-office-confirms-senate-republican-reconciliation-bills-medicaid-cuts-are-more-draconian-than-the-house-passed-bill/.

Peter Granville, “Beyond Health: Medicaid Cuts Could Put College Dreams on Life Support,” The Century Foundation, March 26, 2025, https://tcf.org/content/commentary/beyond-health-medicaid-cuts-could-put-college-dreams-on-life-support/.

“AAU, Associations Raise Concerns on Proposed Medicaid Cuts,” Association of American Universities, May 14, 2025, https://www.aau.edu/key-issues/aau-associations-raise-concerns-proposed-medicaid-cuts.

“How Medicaid Supports Student Success,” Georgetown University Center for Children and Families, January 9, 2025, https://ccf.georgetown.edu/2025/01/09/how-medicaid-supports-student-success/.

Avery Lotz, “Where SNAP Cuts in Trump’s ‘Big Beautiful Bill’ Could Hit Americans Hardest,” Axios, July 3, 2025, https://www.axios.com/2025/07/03/trump-big-beautiful-bill-snap.

Supplemental Nutrition Assistance Program: Federal Actions Needed to Help Connect College Students with Benefits, GAO-25-106000 (Washington, DC: U.S. Government Accountability Office, March 11, 2025), https://www.gao.gov/products/gao-25-106000.

Actions State Leaders Can Take Now to Support Higher Education Through Federal Disruption

“Powering Potential,” Data Quality Campaign, March 2025, https://dataqualitycampaign.org/wp-content/uploads/2025/03/DQC-Powering-Potential.pdf.

“Impact of Workforce Reductions and Potential Closure of the Department of Education on Financial Aid Offices,” National Association of Student Financial Aid Administrators, May 2025, https://www.nasfaa.org/uploads/documents/Survey_Results_Impact_ED_FSA_Cuts.pdf.

Ceara O’Brien, “California Proposition 71 (2004),” Embryo Project Encyclopedia, April 3, 2014, https://embryo.asu.edu/pages/california-proposition-71-2004.

“New York State Loan Forgiveness Programs,” New York State Higher Education Services Corporation, accessed June 29, 2025, https://www.hesc.ny.gov/find-aid-you-need/new-york-state-loan-forgiveness-programs.

Acknowledgments, About the Authors, About Bellwether

Acknowledgments

We would like to thank Erica Cuevas from Jobs for the Future and Clare McCann from the Postsecondary Education & Economics Research Center at American University for their input. Thank you to Amy Ribock, Kate Stein, Andy Jacob, McKenzie Maxson, Zoe Cuddy, Julie Nguyen, Mandy Berman, and Amber Walker for shepherding and disseminating this work, and to Super Copy Editors.

The contributions of these individuals and entities significantly enhanced our work; however, any errors in fact or analysis remain the responsibility of the authors.

About the Authors

Linea Koehler

Christine Dickason

Christine Dickason is a senior analyst at Bellwether in the Policy and Evaluation practice area. She can be reached at christine.dickason@bellwether.org.
Linea Koehler

Marisa Mission

Marisa Mission is a senior analyst at Bellwether in the Policy and Evaluation practice area. She can be reached at marisa.mission@bellwether.org.
Linea Koehler

Mark Baxter

Mark Baxter is a partner at Bellwether in the Policy and Evaluation practice area. He can be reached at mark.baxter@bellwether.org.
Linea Koehler

Nick Lee

Nick Lee is a partner at Bellwether in the Policy and Evaluation practice area. He can be reached at nick.lee@bellwether.org.
Bellwether is a national nonprofit that exists to transform education to ensure systemically marginalized young people achieve outcomes that lead to fulfilling lives and flourishing communities. Founded in 2010, we work hand in hand with education leaders and organizations to accelerate their impact, inform and influence policy and program design, and share what we learn along the way. For more, visit bellwether.org.
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