Federal Policy Update: June, 2026

Introduction:
Welcome to the Trusteeship Podcast from AGB, the Association of Governing Boards of Universities and Colleges.

In this episode, AGB’s Joe Brenckle speaks with Penn Hill Group’s Alex Nock about proposed changes to federal grant regulations, the latest developments in congressional appropriations, and what the next six months might look like for higher education. Let’s dive in, Joe?

Joe Brenckle:
Hello everyone, and welcome to the AGB Public Policy Podcast.

These past several weeks have produced several developments that directly affect governing boards, presidents, and foundation leaders. We’re excited to be joined by Penn Hill Group’s Alex Nock, who’s going to help us break down the latest in policy impacts for higher ed and why they matter.

Alex, good morning, and thanks for joining us.

Alex Nock:
Hi, Joe. Good morning.

Joe Brenckle:
So obviously, it’s never a boring time in higher ed. We’re seeing some major proposals from the White House that are gonna be a shift for US research. We know the Office of Management and Budget (OMB) recently released a sweeping proposal to revise the federal grant regulations that govern grants. We know this is gonna be a big deal because it’s basically gonna centralize the oversight of discretionary grants. Do you have anything you can fill in on this and give us the latest?

Alex Nock:
Yeah, so it’s a proposed rule, Joe, and comments are eligible to be made through July 13th. So they provide a 45-day comment period. This came out just at the end of May, I believe.

So I would say the Trump administration really centralized a lot of its major grant-making and oversight requirements in one rule here, where they’re looking at everything from political review of grant-making, subjugating peer review results to a lower level in the grant-making process, to obviously doing longtime Trump administration priorities like blocking DEI and things like that.

So, even in addition to requiring prior approval for when individuals want to use federal funds to attend conferences and join membership organizations and things like that, a lot of these have been lurking around, Joe, in different and disparate efforts. Here they bring it all together, and I think they’re pretty serious about it, Joe. So I think people should comment if they have concerns. I think we’re likely to see a final rule that looks a lot like the proposed rule.

And I do think, Joe, this is probably headed to litigation at some point as well, once there’s a final rule in place.

Joe Brenckle:
Now, is this a concern only for major research universities? Who is this going to impact?

Alex Nock:
No, because, and Joe, you said this, this affects everyone who gets federal grants. Everyone from the most open-access community college to the most elite brand-name R1 that you can think of in the country, whoever’s listening—and you can kind of create a picture of that in your mind—all of these individuals in some ways or all these entities are going to be impacted because this really speaks across the entire grant spectrum of the federal government. So it’s not just something that R1s or research institutions will feel the impact of. However, if you’re an institution that gets large research-based grants, this is a pretty important thing that will probably impact the terms and conditions under which you receive those grants.

Joe Brenckle:
We know the House Appropriators recently advanced their FY27 Labor/HHS bill, and it was passed by the full committee. Can you give us a little more on that?

Alex Nock:
It was recently passed. And it does, I think, a couple things in the higher ed space. First and foremost, this was a big question that folks were asking before the markup and before the bill was released is: What about the Pell Grant shortfall? CBO has estimated that there’s a $15 billion Pell Grant shortfall in the award year that the appropriations bill has to deal with. So the appropriators kind of had to say something about it. The appropriators put $15 billion in new Pell funding on top of what they usually provide to remedy the Pell shortfall. Coupled with that, though, they also strike the ability or terminate the ability to issue subsidized undergraduate loans, starting with the ’27-’28 award year. So if someone’s listening, thinking, gosh, what about the award year that starts in a month? It’s not for that award year.

But going forward, ’27-’28, they are proposing, Joe—and I think that’s important to note, that’s a proposal, right—that would terminate subsidized graduate student loans. I think in the end of the day, Joe, it’s really hard for me to see that proposal regarding subsidized undergraduate loans becoming law in this vehicle. So I’m not telling people not to worry about it, but I am saying that politically, I think it’s hard to see 60 votes in the Senate that would eventually send a bill with that provision to President Trump for his signature.

There’s some other notable things in that bill. First, you know, it’s been a year since the administration declared their point of view that Hispanic-serving institutions, predominantly black institutions, and other MSI programs funded by the Department of Education that in part base formula allocations on the racial makeup of the student body of institutions, is unconstitutional. The appropriations bill actually in the committee report does fund those programs. I think the appropriators also, though, recognize that this administration does not favor that approach. So they also include report language that says, hey administration, can you help us figure out a different avenue for helping especially Hispanic serving institutions out in terms of accessing institutional aid?

So we’ll see where that goes. But a bit of a surprise to observers like you and me to see a House Republican bill still fund programs that the administration has said are unconstitutional.

And then maybe lastly, this wasn’t news until the day of the markup. So a lot of our listeners may not be aware of this. They may have seen summaries of the bill, but in the markup, they adopted a bipartisan amendment that would essentially make graduate nursing degrees eligible for professional borrowing limits under the Title IV provisions. Many of our listeners are probably aware of the professional versus graduate designation by the recent set of regulations from the Trump administration. Nursing was not included in those regulations. In a roundabout sort of way, the appropriators require the department to have nursing be designated as a professional program for borrowing purposes. So that was a pretty big surprise as well to a lot of observers, I think like you and me. But this is the last stop for that bill, Joe. It’s unlikely to come to the House floor. And likely after the election we’ll see Congress try to wrestle with a solution between the House and Senate.

Joe Brenckle:
Well that was gonna be my next question. We’re quickly running out of time before the midterm elections. So yeah, I wanted to get your take on the timeline, what you think they’ll actually be able to get done.

Alex Nock:
So with appropriations, we have the House Committee bill—not likely to see that bill on the House floor. We’re still waiting to see when the Senate Committee will move their appropriations measure. They’re having some trouble agreeing on top-line and subcommittee-by-subcommittee spending numbers in the United States Senate Appropriations Committee. So this may be a little bit delayed. We’d hope to see it in June.

We may not see the Labour HHS Education Appropriations Bill till July, or we may not see it until after August. So, but either way, everyone remembers their Schoolhouse Rock. There’s a House bill, and there’s a Senate bill. We haven’t seen the Senate bill yet, but Joe, it’s an election year. There’ll be a CR at the end of September through the election. Then Congress will come back for the election. And who wins control of the House or Senate if the political leadership of that switches because of the elections will probably dictate when and if Congress can work out an appropriations deal for probably all of the federal appropriations bills before the end of the calendar year. So TBD on that, Joe.

Joe Brenckle:
Well, and in that same vein, I’m gonna ask you to pull out your crystal ball. Do you see a major shift in higher ed policy depending on who controls the Senate and the House?

Alex Nock:
So let’s focus on the body that’s most likely to flip the House, right? So again, we have elections, so we have to see how the people vote to determine whether or not the House does flip.

But under your question, if the House does flip, I certainly think you’ll see Democrats try to, in the House, go back and change some of the priorities in the reconciliation bill that passed last year, the One Big Beautiful Bill Act related to higher education. I don’t know if they’ll change all of them, Joe, to be fair. I actually don’t think the Democrats would bring back Grad PLUS. I think you might see more professional degree programs. You might see different dollar amount limits, you know, whether it would stay at 100 and 200. You might see some changes, which might happen whether the chambers flip or not, to the programmatic accountability, the earnings test that is in there. I think Congress is just beginning to think about the impact on individual programs in their districts around that. So I think you could see some change on there, but I don’t know if we would see a full-scale abandonment. Again, like bringing back Grad PLUS. I don’t think that’s likely to happen.

However, I think a lot of this is impacted by: Does the Senate flip? And even if the Senate flips, President Trump is still President Trump, you know, after the midterms. And, whether he would sign a bill that would change some of those things, I think would probably be a big question mark. So even if Congress is in a position to act, will they be in a position to override a veto? I think unlikely. I think you will see, probably on the higher ed side, though, Joe, more oversight, more questions being asked by the Democrats about how the Trump administration is administering Title IV, repayment programs, and everything like that. So the administration won’t be under more of a microscope. But this administration is going to continue to do, I think, what it’s going to continue to do. If they think they can do it without congressional action, they’re probably going to move ahead. That would also be the same thing that the last administration and the Obama administration would have shared with this administration as well—that if they can do something through the executive powers they have, they’re gonna do it.

Joe Brenckle:
I think it’ll be incredibly interesting. If you could take a giant step back, what do you think we should be watching over the next six months?

Alex Nock:
I think first and foremost is appropriations. Like, where do you see the Senate position itself? Because often the Senate is much closer to the real deal in terms of this.

The other thing I’d be watching is that regulation that we first started this conversation with. When it becomes final, what is it in final form? Is there litigation on this?

I think the other thing to watch is how successful is some of the litigation, especially against the RISE rule that established some of these loan forgiveness limits that are new and professional versus graduate designations? We have, I think, five suits now, if I’m not mistaken, on that rule, and I think there’ll be more litigation coming on the programmatic earnings test as well. So definitely some litigation action to watch, appropriations action as well.

Joe Brenckle:
Thank you, Alex. Is there anything else that you want to share with folks

Alex Nock:
I think it’s great, Joe, that folks should really think about how a lot of these federal issues impact their campuses and the work that they do. It really doesn’t help when you get surprised, or you’re kind of behind the eight ball or something. So I think this is a great service that AGB provides to help people get a snapshot on these things. So listen to these podcasts and really think about, how does this impact the work that we’re doing, so you can get in front of it.

Joe Brenckle:
Alex, as always, we appreciate your insight. And definitely we’re gonna check in with you in a month or two and see where we are, and let’s follow everything closely. Thank you.

Alex Nock:
Thank you, Joe.