Federal Update - March 12

March 12, 2025

GOVERNMENT RELATIONS HIGHLIGHTS

ED Purge: The Trump Administration announced a massive reduction in force last night

McMahon Confirmed: Education Secretary Linda McMahon is on the job

Loan Repayment Confusion: Student loan repayment options are growing even more muddled

DEI FAQ: ED has provided additional clarity on its recent Dear Colleague Letter

DEI Injunction: A federal judge has left a nationwide preliminary injunction in place

DEEPER DIVE: Government Shutdown: The federal government could shut down on Saturday morning. How did we get here, and what does this mean for your institution?

MASS LAYOFFS AT ED

What You Need to Know

Rumors started circulating on Tuesday afternoon that ED would be closed on Wednesday. Later in the day, Inside Higher Ed reported that ED would be laying of half of its employees on Tuesday evening.

Why This Is Important

For years, ED has increasingly struggled with capacity and resources to fulfill many of its core functions. The most glaring example was the botched rollout of the Better FAFSA during the Biden Administration. With the Trump Administration’s chainsaw approach to federal bureaucracy, most federal agencies are under tremendous strain. ED will now suffer the most serious staff cuts in its 45 year history, and it’s too early to know whether even its most basic operations will be impacted.

THE "SMACKDOWN" BEGINS

What You Need to Know

After the Senate confirmed her last Monday with a 51-46 vote, Linda McMahon was sworn in as the new Secretary of Education. When addressing ED staff, Secretary McMahon pledged to fulfill the Administration’s goal “to restore the rightful role of state oversight in education and to end the overreach from Washington.” She outlined her planned overhaul of ED, which she described as “a momentous final mission.”

Why This Is Important

The White House has still not released their executive orders on the elimination of ED. Statements coming from the Trump Administration have been consistent, however, in conceding that dismantling ED would require legislation. Despite that critical concession, the Secretary has authority to make significant changes to the way the agency operates and what it chooses to fund.

LOAN REPAYMENT CONFUSION GROWS

What You Need to Know

In February, the Trump Administration removed the online applications for all income-driven and income-contingent repayment plans, leaving the income-based repayment plan as the only such option for borrowers. ED subsequently clarified that borrowers can still apply for loan consolidation, but they must use paper applications. Last week, the White House released an executive order directing the Education Secretary to modify the Public Service Loan Forgiveness (PSLF) program.  

Why This Is Important



The executive order said that the Biden Administration abused the PSLF program by forgiving loans prematurely and encouraging students to join “activist” organizations that were improperly considered to be public service entities. Trump Administration clearly intends to narrow the standards that borrowers use to qualify for PSLF. Conducting, finalizing, and implementing a new rulemaking on PSLF will take years.

ED CLARIFIES EXPECTATIONS ON DEI

What You Need to Know

In February, ED released a Dear Colleague Letter on DEI. That subregulatory guidance describes DEI as unacceptable racial discrimination that the Trump Administration intends to eliminate. ED recently issued a set of Frequently Asked Questions to clarify that Dear Colleague.

Why This Is Important

The FAQs take a somewhat moderated tone and provide important insight into the Administration’s approach to DEI compliance and enforcement. As described in the FAQs, Institutions may not treat students differently based on race. But programs and events that celebrate cultures and promote awareness do not violate the law, so long as such events are open to all students regardless of their race or background. Institutions are not required to ignore matters of race and culture in their activities. Instead, institutions may not separate or distinguish one group of students from another based on race.

DEI EXECUTIVE ORDERS REMAIN FROZEN

What You Need to Know

Last week, a federal district court denied the federal government’s request to lift a nationwide preliminary injunction that halted key aspects of President Trump’s two executive orders on DEI (linked here and here). The parties are scheduled to complete their briefings in the case in May. The Trump Administration has indicated that it may seek an interim appeal at the Fourth Circuit.

Why This Is Important



The court’s injunction is preliminary, meaning the executive orders could come back into effect. Institutions should note that the injunction does not apply to ED’s February Dear Colleague on DEI, discussed above, which threatens federal funding for institutions that operate DEI programming or consider race in almost any institutional decision.

DEEPER DIVE: GOVERNMENT SHUTDOWN

What You Need to Know



Congress is supposed to pass twelve separate spending bills by September 30 of each year, the end of the federal fiscal year, to fund the federal government. For nearly three decades, Congress has not followed its own processes and has come to rely on short-term appropriations – called continuing resolutions (CR) – and bills that pack all federal spending into one massive package – called omnibus appropriations. Congress did not complete FY2025 appropriations by October 1, 2024, and they have kept the government operating by passing CRs in September and December. The current CR runs out this Friday at midnight.

Why This Is Important

Last night, the House narrowly passed a continuing resolution extending FY2024 funding until the start of FY2026 on October 1, 2025. By failing to pass FY2025 funding, the Republican House will keep Biden-era spending priorities largely intact. With Senator Paul (R-KY) already opposed to the measure, Senate Republicans will need to find eight Democrats to support the measure. Only one Democrat voted for the CR in the House. If a government shutdown does occur, it could have significant impacts at ED. Roughly 90% of its remaining staff could be furloughed, severely limiting its ability to manage most implementation, oversight, and enforcement actions until Congress strikes a deal to reopen government.