Federal Policy Update: July, 2026

Welcome to the Trusteeship Podcast from AGB, the Association of Governing Boards of Universities and Colleges. Congress is juggling Department of Education interagency agreements, the College Transparency Act, and a new framework for college athletics.

Stick around for updates on regulation and the Pell Grant shortfall.

And now over to my colleague, Joe Brenckle, and Alex Nock at Penn Hill Group.

Joe Brenckle (00:26)
Hello, Alex, and welcome to AGB’s Public Policy Podcast. A lot of stuff to talk about. And what I think is the most interesting is Congress is actually working to get something done. They’re running through the tape. So let’s start with that. We know the House and the Senate both have bills on the interagency agreements with the Department of Education, but they’re vastly different. Can you kind of break it down how the House and the Senate are different?

Alex Nock (00:53)
Yeah, hey Joe. Nice to be with you again. Just for our listeners, in case you haven’t followed all the blow-to-blow about what an interagency agreement is, this is part of the current administration’s plan to transfer programs out of the US Department of Education to other agencies. You may have heard of the Department of Labor, the Department of Health and Human Services, or right, Joe, even the Department of State that has some responsibility for Department of Education programs. So, Joe, I think what you’ve hit upon there is like super fascinating in the sense that the House of Representatives, just a few days ago, I should say the Committee on Education and Workforce of the House of Representatives, not the full House, passed 10 bills that essentially would codify these interagency agreements or contractual transfers between ED and these other agencies, codify them in law and have all of the functions of, for instance, the post-secondary education programs, the Department and Ministers, whether that be GEAR UP or TRIO or institutional aid programs, and transfer them over to, in this case, the Department of Labor, for that one specific example. Those bills passed on a party-line basis in the House committee with Republicans supporting it and Democrats opposing it. That contrasts with the Senate HELP Committee, Health, Education, Labor, and Pensions, the brother or sister committee of the House Education and Workforce Committee, that just passed a bill that would actually block the interagency agreements for the post-secondary education office programs and some other offices within the Department of Education. Neither bill has an immediate path to the floor, Joe, and here at Penn Hill, we’re kind of suspect on both of them actually reaching.

The House and Senate floor, but it is a super interesting sign that Republicans and Democrats, different bodies, and taking a completely different tact. I will say the Senate bill had bipartisan support. There were two Republicans that joined all Democrats in supporting, blocking the interagency agreements for certain offices.

Joe Brenckle (02:59)
I agree, super interesting to watch. And then speaking of the Senate HELP Committee, they also reported out the bipartisan College Transparency Act, which is gonna, you know, talk about student-level data outcomes. And I know that’s what people are really focused on lately is outcome-based education. And so can you talk a little bit more about that?

Alex Nock (03:17)
Sure. So that was reported out on a 22-1 bipartisan vote. So very bipartisan, like uber bipartisan, in terms of that passage. And it is the College Transparency Act that we’ve known for many years now that has been in Congress. The idea behind it is to actually collect data at the student level, Joe, so you can actually follow how students progress through their post-secondary careers.

If someone started at a community college, went to a four-year school, then went to another four-year school, then went to graduate school, the existing IPEDS system — It’s not designed to handle that sort of kind of multi-hop, which we see increasingly among students who transfer from institution to institution or start somewhere, right, Joe, and then finish and maybe have a stop out in between.

This would actually enable systems to track those students in a way that we could look at outcomes for post-secondary programs that we really can’t look at right now, both from a research but also from an effectiveness standpoint. Like, how do you capture students, and how can you ensure success if they are taking several stops along the way? Now, that bill also doesn’t have a clear path to the Senate floor. Joe, you mentioned they’re running through the tape; they are doing stuff, but at the same time, running through the tape means the tape is near, right? You know, so there’s not as much time left. And of course, there are opponents to the CTA in the House of Representatives, which might make it challenging to see that bill become law this year.

Joe Brenckle (04:46)
Another interesting one we’ll have to watch. Athletics also seems to be the top of everyone’s agenda lately. And I know the Senate negotiators—I think it’s Senator Ted Cruz, Senator Maria Cantwell on the commerce committee—I know they’re working on a framework for college athletics, and that’s gonna talk about, you know, Name, Image, Likeness, antitrust protections, that type of thing. Can you give us an update on where we think that’s gonna end up?

Alex Nock (05:11)
Yeah, Joe. So it is July 31 as we’re recording this, and literally we’re waiting to find out if that is gonna be on the Senate floor next week. So Senator Cruz and Senator Cantwell, the two leaders of the Senate Commerce Committee, have been negotiating for several weeks now. They passed a bipartisan bill out of committee 19–9 several weeks ago, many weeks ago, depending on your view of many, I guess.

They have been trying to fine-tune it to make sure that it is something that can pass on the Senate floor. They’re still working at it. There have evidently been drafts exchanged between themselves and some of the interested parties, i.e., the larger and bigger kind of athletic conferences that make up some of the conferences in the NCAA.

And we’ll have to see if they get there. I will say Cruz and Cantwell have been particularly dogged about trying to reach an agreement this week.

But we don’t know yet, Joe. So if you’re listening to this a week from now and they got an agreement or didn’t get an agreement, we’re not sure at this exact moment in time, but they are sure working hard to get there.

Joe Brenckle (06:18)
Well, this is also something that’s on AGB’s agenda. We’re gonna be having a national athletics symposium November 10th and 11th here in Washington, DC. So obviously, I’m sure we’ll be talking about the status of this legislation if they’re able to get it across the finish line before the end of the Congress. So that’s exciting. What are we thinking about disclosure enforcement requirements regarding the foreign gifts? I know that’s been something that’s kind of popping up out there too. Are we seeing anything on that, any repercussions?

Alex Nock (06:46)
So there is definitely a bill in Congress that has not yet made its way all through the process called the Deterrent Act, which would decrease the threshold at which you have to report gifts from foreign sources, i.e., meaning more reporting would have to be done by institutions and colleges. That bill does have some angst by members of Congress that the reporting levels might be too low, i.e., that it might make for lots and lots of reporting, which might be challenging for institutions just from a pure bandwidth perspective. However, the administration continues to push forward with the implementation of their various efforts. Actually, Joe, as you know, one of the interagency agreements that we talked about earlier has the Department of State taking the lead on that. So this sort of effort to continue to make sure that institutions are reporting gifts from foreign sources is gonna continue. But whether or not Congress legislates to lower the threshold and make more reporting happen is still an open question. If I had to bet, Joe, I don’t think that bill will cross the finish line simply because, like you said, we’re so close to the tape and there’s a lot of other priorities.

Joe Brenckle (07:57)
Right. And speaking of that, I know that Congress still has to figure out a way to keep the government operating past September 30th. Any thoughts on that?

Alex Nock (08:06)
Yeah, so actually, Joe, as you look at me and you see with all my robust hair and the full color I have, I’m a very young man. So I have very little experience in Washington. That’s not true. I’ve seen many a continuing resolution (CR), many a year, and actually the House and Senate have been trying to work in this month, in the month of July, to stave off a shutdown. As you know, the federal fiscal year ends at the end of September. Typically, Congress comes back from their August break, and they start running around trying to figure out how to keep the government open in September. This time they started in July. The House actually passed a CR before they left for their August break, just last week, I think. And the Senate has been working on a CR. It’s July 31st. We haven’t seen that CR yet, but there’s talk about it being released today or over the weekend, and the Senate would consider it next week.

Obviously the House of Representatives is out, so if the Senate is successful in passing something, then the House would have to come back. The first week they’re scheduled to be back is that last full week in August when they could pass that. But right now it looks like there is going to be a bipartisan CR developed by the Senate. That happens and the House passes it, and literally in the month of August they avert a shutdown. That is the first time I will have ever seen that, I think, almost in my professional life.

Joe Brenckle (09:24)
With apologies to the Miracle on Ice. Do you believe in miracles? Right. And I guess it’s possible.

Alex Nock (09:28)
It is possible.

Joe Brenckle (09:29)
Why don’t we jump to the executive branch? Obviously, Congress has been very busy on the higher ed front, but so is the executive branch. What are we hearing about earnings accountability and what are the consequences on institutions?

Alex Nock (09:41)
Yeah, so Joe, you’re referring to the final rule that came out just a few weeks ago that essentially regulates on the requirements that were passed last summer as part of the One Big Beautiful Bill Act to measure program-by-program earnings for the purposes of direct loan eligibility for those particular programs. This is not an institutional test, of course, right, Joe, like cohort default rates or something like that. So those rules are final.

You will have institutions report on their programs like they normally would through fair value transparency existing regs on that in the fall. But come January and February of this coming year, you will have the department report to institutions on their program-by-program earnings. That will be the first sign about whether or not, for instance, an undergraduate program—you know, their graduates make at least as much as the average high school graduate. For graduate degree programs, are they making at least as much as a bachelor’s degree holder in their field? Obviously, you know, schools have seen the department scorecard data and things like that for years. It isn’t complete; it doesn’t have every program on it, but that’ll be the first time those things come out. Institutions can appeal them, but on July 1, 2027, that will be the first time the department names programs as passing or failing.

Joe, and as you know, if you fail twice in a three-year period—so two times in a row—you will lose access to direct loans for that particular program. This is again not an institution-wide test. So literally this time next year, we will have some programs at some schools lose direct loan eligibility so long as the reg actually gets implemented on the timeline that’s set out. Right now, I don’t see anything that would keep it from doing that—other than a lawsuit, which I have not seen one file.

Joe Brenckle (11:34)
We’ll keep our eye on that. A brand new workforce Pell Grant started on July 1. But it sounds like states are kind of slow implementing it. What are you hearing on that side?

Alex Nock (11:45)
I would say it’s a state-by-state perspective on that, Joe. Some states have worked diligently because they feel it’s important for their constituents to get this up and running and have this program available. The department has reportedly had a couple of states submit a couple of programs. When I say couple, like literally a handful of programs, for approval. And this program is pretty unique in the sense that states have to approve the programs.

Then the Department of Education has to approve the program before any workforce Pell grant money flows. Very different than your traditional Pell Grant that most institutions are used to. Some states are on it, and that’s their choice. Other states are getting on it, and other states are saying, let’s see how other folks do. So it really does depend where you are in terms of whether or not there’ll be somebody in the fall or early spring in your state that is actually getting a workforce Pell Grant to attend an institution and their short-term program.

Joe Brenckle (12:40)
And if we could stay on Pell for a second, Congress is addressing the shortfall, but what’s the status on that? Is that gonna be part of the CR, do we think?

Alex Nock (12:48)
Sure. So there is—for our listeners that haven’t followed this closely, and if you’re in higher ed, you probably have—there is a $15 billion anticipated shortfall in the Pell Grant program, which is about a little less than half of its annual cost, which is pretty serious. If one of your programs at your schools had a 50% deficit, you’d be like, “Right. So it’s a serious issue.”

We did see a House of Representatives appropriations bill that did put $15 billion extra to cover the shortfall into the Pell Grant program earlier this year. The Senate has not released their version of that bill yet, but Joe, all signs point to the Senate also investing that money in the program. Then we just need Congress to marry the House and Senate bills together and actually send something to the president. The administration also, in their budget this year, called for a closure of the Pell Grant shortfall. So everyone is on the same page. We just have to kind of execute and get it done.

Joe Brenckle (13:50)
That sounds good. Yeah, moving from “if” to a “when.” So that’s good. If you could pull out your Alex Nock crystal ball, what do you think we should be on the lookout for over the next two months?

Alex Nock (14:03)
So probably in the next few weeks, Joe, maybe two to three weeks, we will see a proposed rule from the administration that essentially is their accreditation regulations. Our listeners may remember the department went through a negotiated rulemaking session earlier this year, actually just a few months ago, to actually produce regulations that made some pretty significant changes to the accreditation requirements, the requirements that are on accreditors that are recognized by the department for those purposes. That rule will come out as proposed, not final, so it’ll be open for public comment, but think around the middle of this month or so, you’ll probably see that. That’s a very significant thing.

The other thing is obviously watching this Pell Grant shortfall, Joe. When does Congress act on it?

And if I could add one third thing: it might be a little bit outside of your timeline, but right now, the case that is being litigated on the professional versus graduate school definitions is right now scheduled—scheduled—based on its timeline to probably produce a decision in the December timeframe. So a little at the end of the year, but that may be our first indication from a district court judge about a final decision. Obviously, we know the judge enjoined part of the department’s regulation.

Joe Brenckle (15:23)
Thank you, Alex. Lots to keep our eyes on. As always, we truly appreciate your valuable insight and prognostication skills. And let’s plan on a touch base again once Congress gets back, and maybe before or after the election; we’ll see how it goes.

Alex Nock (15:39)
Thanks, Joe. Thanks for your time.

Joe Brenckle (15:40)
Thank you, Alex.