Federal Update - December 17

December 17, 2025

GOVERNMENT RELATIONS HIGHLIGHTS

Holiday Recess: Healthcare subsidies and funding still in limbo 

Rulemaking Progress: Consensus on Workforce Pell  

ED Streamlines E-App: Reporting Burdens Reduced for Institutions  

FAFSA Update: New low earnings indicator from ED 

CONGRESS OUT LIKE A LAMB?

What You Need to Know 

Despite promises to restore normal governance following the longest shutdown in US history just a month ago, Congress remains mired in disputes over federal funding and healthcare. The House is expected to adjourn for the year later this week, as is the Senate, though senators are still trying to come to agreement on a minibus spending package that could include the Defense and Labor-HHS-Education bills. 

Why This Is Important 

Congress continues to struggle to find its footing after the shutdown. Though the Senate should be able to get the National Defense Authorization Act to the President’s desk later this week, both Speaker Johnson and Leader Thune cannot seem to find consensus on other legislative items – often within their own conferences. The extension of Affordable Care Act subsidies seems to have failed, meaning that millions of Americans will face skyrocketing healthcare premiums for 2026. When they return, Congress must finalize the remaining appropriations bills before January 30 or risk a partial government shutdown.

AHEAD COMMITTEE REACHES CONSENSUS

What You Need to Know  

Week one of the Accountability in Higher Education and Access through Demand-driven Workforce Pell (AHEAD) negotiated rulemaking concluded December 12. During the first week, the Committee’s negotiations focused on draft regulatory language to implement the Workforce Pell Grant provisions created under OB3. 

Why This Is Important  

Because the committee reached consensus on Workforce Pell, the proposed rule is expected to reflect the draft language. The AHEAD Committee will reconvene on January 5 for the second week of negotiations, addressing the future of FVT/GE and the new Do No Harm accountability framework created under OB3. AACS is staying actively involved engaged in the neg reg at every step of the process. 

E-APP REPORTING SIMPLIFIED

What You Need to Know 

On December 7, the Department implemented changes to the Electronic Application (E-App). This is the online system Title IV-eligible institutions use to submit applications for school eligibility, recertifications of school eligibility, and other program participation changes. The changes simplify the range of data that institutions are required report as part of their E-App submissions. Notably, institutions are now no longer obligated to provide personal information for the executive officers of their owner entities or for more than two school officials. Additionally, rather than uploading evidentiary documentation, the E-App now allows institutions to self-certify compliance with certain ED requirements, including those related to gainful employment, satisfactory academic progress, admissions, and R2T4.  

Why This is Important 

ED released an Electronic Announcement that details each of the E-App updates. These changes follow the December 2023 E-App migration to Partner Connect. As part of that migration, the Department significantly expanded the information that institutions are required to disclose as part of an E-App submission. The December 7 simplifications walk back some of these disclosure requirements. 

NEW FAFSA "LOWER EARNINGS" INDICATOR

What You Need to Know 

As of December 7, the FAFSA form now flags institutions whose graduates earn less than high school graduates in the same state. ED determines “lower earnings” status by comparing an institution’s median earnings for undergraduate completers—four years post-graduation—to the median earnings of high school graduates ages 25–34. For institutions with multi-state locations or predominantly out-of-state students, the comparison is made against national high school earnings data. A Department spreadsheet lists all institutions identified under this metric. 

Why This is Important 

The indicator appears only to first-year undergraduate students after FAFSA submission and does not affect Title IV eligibility. However, it may influence enrollment decisions for flagged institutions. Nearly all Title IV schools fall within the scope of this measure, except those in certain US territories, institutions offering only graduate-level programs, or those lacking sufficient earnings data. AACS is closely tracking and staying in touch with ED about its rollout of these unexpected changes.