FAQs: Checking in on the Department of Education

IAAs are not uncommon in the management of federal programs; both the Biden and Obama administrations used them (e.g., working with the IRS to administer student aid programs). What distinguishes the Trump IAAs from previous agreements is the significantly larger scope—and the inclusion of programs that ED is congressionally mandated to oversee. For example, the Trump administration has sought to move oversight of the $18 billion Title I program.  

According to one analysis, the impacted funding makes up more than 40% of ED’s annual appropriations. Table 1 below provides an overview of the affected programs. 

The legality of these IAAs remains an open question. There is at least one legal challenge arguing that the scope of the IAAs exceeds the Secretary’s authority.

The impact of these moves—and potential future IAAs—is another open question. It will depend on how the changes are implemented and whether affected programs continue to operate as mandated by law. Critics have expressed concern about programs being administered by agencies that do not have sufficient expertise or familiarity with these programs. To some extent, this could be mitigated if ED’s staff move to other agencies along with the programs.

State and local policymakers across the political spectrum have, for years, objected to some ways the federal government engages in education. This includes concerns about burdensome requirementsfor federal programs, “unfunded mandates” (e.g., for IDEA), and regulatory whiplash in the enforcement of civil rights laws. Thus far, the Trump administration has taken some actions in these areas. However, they have done little to address broader concerns about federal overreach—and, in some ways, have exerted significantly more control over education policy and practice than previous administrations, including the first Trump administration.

A January 2025 letter from a dozen state school officers in Republican-led states illustrates how some conservatives might like to see the federal role in education change. The letter asks for deference to state leaders in the use of federal funding, an expanded use of ED’s waiver authority, and changes in how ED approaches “Dear Colleague Letters” (DCLs) and other guidance. It also asks the Secretary to work with Congress to amend the Elementary and Secondary Education Act (ESEA) to consolidate funding programs and provide states more flexibility. However, aside from granting a modest waiver that allows Iowa to consolidate four small funding streams and carry over some Title I funding across years, the Trump administration has done little to address any of these requests.

Meanwhile, ED has arguably exerted considerably more control over matters such as K-12 curriculum and school policies since Trump took office. Much of this comes through its different and aggressive approach to civil rights enforcement. ED issued a DCL and FAQ (to accompany another executive order) that articulate a new interpretation of civil rights laws and regulations. It then sent a letter to states demanding that they certify compliance with the guidance in the DCL, including the elimination of all DEI programs, within 10 days. The administration has delayed or threatened to withhold federal funding over alleged noncompliance. The courts have blocked many of the administration’s attempts to withhold funding—which limits their direct impact—but these actions may still have chilling effects for states, districts, and schools hoping to avoid trouble.

It remains the case that ED’s authority to withhold congressionally appropriated funding is narrow and must follow the procedures established in implementing regulations. Yet, the Trump administration has looked for ways—legal or not—to put financial pressure on states, schools, and colleges. The administration has taken three basic approaches to withhold federal funding:

• Impound previously appropriated funds and awarded grants. The administration has canceled existing federal grants and contracts for conflicting with aspects of the administration’s agenda (e.g., its anti-DEI agenda). For example, it cancelled $1 billion in school mental health grants, claiming that the grant program no longer aligned with the administration’s priorities. It also temporarily impounded large categories of federal funding—most notably, more than $6 billion in funding for an assortment of programs in July 2025 (subsequently released in response to widespread, bipartisan backlash).
• Through DOGE, cancel federal contracts for alleged “waste, fraud, and abuse.” During the height of DOGE activity in early 2025, the federal government canceled many education contracts. The impact was most acutely felt in the Institute of Education Sciences (IES), the Department’s education research arm. There, DOGE terminated about $900 million in research contracts, seemingly overnight. These cuts have decimated some areas of research and interrupted data collection and analysis of U.S. schools and colleges. Universities and colleges that rely on research funding have been affected by these (and other) cuts, as have school districts and other institutions that engage in federally funded research partnerships.
• Cancel federal funding (or threaten to do so) for alleged civil rights violations. The administration has used its authority to withhold federal funding from institutions that it sees as misaligned with this administration’s interpretation of civil rights law (over issues such as transgender rights and antisemitism). Colleges and universities have been the primary targets of this type of enforcement, but some K-12 districts and states have also had funding withheld unexpectedly (e.g., New York City Department of Education, Chicago Public Schools, and Fairfax County Public Schools). Institutions have challenged the administration’s moves in court—with some receiving favorable rulings.

The administration has delayed or withheld funds from institutions to force compliance with their directives related to DEI, LGBTQ+ rights, and antisemitism. Through OCR and the Federal Taskforce to Combat Anti-Semitism, the administration has accused colleges of civil rights violations and withheld federal research funding. Courts have blocked many of these actions, and some universities have entered voluntarysettlements and changed their policies to restore funds. Not all colleges have reached a settlement; Harvardand UCLA have been asked to pay the government over $1 billion, but those conversations are ongoing and the administration’s actions are under legal review.

The administration asked nine colleges to sign onto a Compact for Academic Excellence in Higher Educationthat threatened the future of “federal benefits” (including student loans, student visa approvals, and tax benefits) for institutions that do not adopt the administration’s “models and values.” The prescribed actions include freezing tuition, limiting international undergraduate enrollment, banning the consideration of most student characteristics in admissions (including race, sex, gender, and nationality), and advancing institutional neutrality. While most colleges declined to sign on, Secretary McMahon indicated the administration is revising the compact and expects to release a second version.

Widespread grant and contract cancelations by DOGE also affected university operations and financial stability. In response, ongoing research was suspended, positions were cut, and PhD admissions were paused. While Congress rejected most of the administration’s proposed cuts to research funding in the FY2026 budget, NSF and NIH each awarded about 25% fewer grants in 2025 than they had over the past decade.

Finally, it remains to be seen what impact the administration’s broadly antagonistic approach to higher education will have on public confidence in the sector, college enrollment, and institutions’ financial stability.

OCR was hit hard by the reduction-in-force (RIF) announcements in March 2025, losing more than half of its staff and closing 7 of its 12 regional offices. Nearly all its usual work to investigate and resolve civil rights complaints—e.g., for students with disabilities—was deprioritized or ignored for months on end. In December 2025, ED called back some OCR staff who had received RIF notices; in January 2026, it rescinded the RIF for all OCR staff members. Still, it remains unclear how many staff returned to work, whether OCR is equipped to work through the accumulated backlog of complaints, and to what extent this administration will prioritize that work.

What has been clear is the administration’s willingness to leverage the agency’s authority to withhold federal funding from institutions. It has repeatedly withheld funds from institutions—an unusual move from OCR—without conducting a substantive investigation or following the required procedures for withholding funds. And it has adopted narrow, and legally questionable, views of what constitutes a civil rights violation. For example, institutions—and even entire states—are being accused of Title IX violations for having programs and policies that create opportunities for transgender students (as opposed to more traditional Title IX cases of sexual harassment and assault). To enforce Title VI of the Civil Rights Act, it has focused on alleged cases of “reverse discrimination” against White students.

On the appropriations side, Congress rejected funding cuts proposed by the Trump administration, funding most programs at flat levels relative to FY2025. For example, while the administration wanted to cut the federal Pell grant for low-income students by 23%, the FY26 budget maintained last year’s grant levels. Congress also allocated $790 million to IES (the administration requested $261 million), $140 million to OCR (the administration requested $91 million), and $1.588 billion for Federal TRIO and GEAR UP college success programs (the administration asked to eliminate these programs entirely). Further, Republican lawmakers have expressed concern over the administration withholding or delaying the release of appropriated funds for education programs.

The largest legislative effort in 2025 was the passage of OBBBA, which included a controversial new tax-credit scholarship program and significant changes to higher education policy. Congress clearly envisioned a well-staffed Department of Education to implement changes to student loan borrowing and repayment, as well as the new Workforce Pell funding stream that requires significant oversight on eligible programs. ED has convened several negotiated rulemaking committees to advance regulations needed to implement these policies. Beyond OBBBA, there has not been major legislation related to education.

During the Biden administration, ED used the regulatory process to introduce a more generous income-driven repayment (IDR) plan known as SAVE. The plan was challenged in court after nearly 8 million borrowers had already enrolled. Those borrowers have been placed into forbearance while the case is litigated. In the meantime, many Public Service Loan Forgiveness (PSLF) eligible borrowers currently on SAVE cannot make qualifying payments. This August, ED started charging interest on those loans, urging borrowers to enroll in other repayment plans and resume payments. In a lawsuit, the American Federation of Teachers objected to the administration’s handling of IDR and PSLF. In a settlement, ED agreed to open additional IDR plans to new enrollment, resume processing IDR forgiveness applications, and process PSLF waiver applications. However, progress has been slow. A proposed legal settlement would end SAVE, but the settlement is not final, and borrowers continue to face confusing and unclear options for repayment.

Transitioning borrowers to new plans once SAVE is eliminated will take time and staff support. Federal Student Aid (FSA), the agency that manages the student loan program, has long been considered understaffed to handle the loan program. Its recent cuts raise questions about ED’s ability to execute the transition effectively. Indeed, there is reason for concern about FSA’s capacity. The Department recently missed a court-imposed deadline requiring the adjudication of about 200,000 Borrower Defense to Repayment forgiveness applications and requested an 18-month extension because FSA has “seen staffing dwindle at the time when resources for postclass adjudication are most needed.”  In addition, the backlog of IDR applications remains large and the number of unprocessed PSLF waiver applications has grown.

The Department has twice announced plans to restart involuntary collections on defaulted loans but subsequently backed off. Most recently, ED indicated they wanted to give borrowers in default more time to rehabilitate their loans or enroll in new options that will become available as a result of OBBBA before withholding tax refunds. Work is underway on the implementing regulations that will overhaul the student loan program, but many borrowers remain in limbo until those regulations are finalized.

In October, the Department adopted a rule amending the definition of “qualifying employer” for PSLF to exclude organizations that, according to the Secretary, are engaged in “substantial illegal activities.” These provisions appear targeted at governments’ and non-profit organizations’ actions related to immigration, abortion care, gender-affirming care, or DEI programs.¹ The rule, which is not scheduled to go into effect until July 2026, is the subject of multiple lawsuits, so it remains to be seen if any borrowers will be denied PSLF credit under this policy.