Tag: budget

  • Four Things to Know About the House Budget Plan

    Four Things to Know About the House Budget Plan

    After much back-and-forth and late-night dealing, House Republicans have passed a sweeping budget plan to cut spending and taxes that is moving on to the Senate—a significant milestone for legislation that seemed dead in the water a week ago amid concerns that the bill didn’t include deeper cuts.

    The plan, called the One Big Beautiful Bill Act, narrowly advanced Thursday morning by a one-vote margin. All Democrats opposed the legislation, arguing that the spending cuts would hurt the working class and vulnerable populations while raising the deficit and giving tax breaks to wealthy individuals.

    Among other changes, the legislation would levy new taxes on colleges, require institutions to pay millions to the federal government, change how students pay for college and limit eligibility for the Pell Grant. In the lead-up to Thursday’s vote, higher education leaders warned that the proposal would make trying to attend and pay for college much more complicated and raise costs for those who do enroll. The bill does include some wins for colleges, institutional lobbyists say, but those don’t outweigh the negatives.

    Republicans, who say the cuts are necessary, are using a legislative procedure known as reconciliation to advance the bill. That process allows lawmakers to fast-track the legislation and pass it with a simple majority of votes in both chambers. (Typically, the Senate requires 60 votes to cut off debate for a bill.)

    “It’s time we stopped asking a factory worker in Michigan or a rancher in Texas to subsidize the student debt of a lawyer in Manhattan so colleges can continue to spike their tuition to whatever they want,” said Rep. Tim Walberg, a Michigan Republican and chair of the House Committee on Education and the Workforce, in a statement. “By capping loan amounts and giving some financial responsibility to schools, this legislation addresses the root cause of high college costs and provides schools an incentive to deliver real value for students and taxpayers.”

    With the measure now in the Senate’s hands and lawmakers eyeing a July 4 deadline, here’s what else you should know about the legislation that could reshape American higher education.

    1. Students Set to Lose Pell Money

    Many House committees had a hand in the legislation, but the proposals that will have the biggest impact on colleges are from the Committee on Education and the Workforce. The 103-page Student Success and Taxpayer Savings Plan, which is part of the broader reconciliation bill, would reduce spending by nearly $350 billion over the next 10 years.

    Most of those savings stem from rolling back a Biden-era student loan repayment plan that never fully took effect and from capping how much students can borrow. But lawmakers are also planning to increase spending on Pell Grants by $2.8 billion as they aim to address a looming shortfall and open up the program to short-term workforce-training classes.

    To make the math work, Republicans are changing who qualifies for a Pell Grant, proposing that students would have to take at least 15 credits a semester in order to receive the full award. They’ll also have to take at least 7.5 credits to get any money. Currently, the Pell Grant is prorated based on how many credits students take, and there’s no floor.

    Changing the full-time-award definition would save $7.1 billion, according to the Congressional Budget Office, which estimated that more than half of students currently enrolled would see their Pell Grant reduced.

    The CBO also estimated that cutting off Pell for part-time students would save about $687 million over the next 10 years. Currently, about 10 percent of Pell Grant recipients enroll less than half-time. Of those students, the CBO predicts that one-third of students who stand to lose their grant under this change would enroll in more classes. Presumably, the other two-thirds would either stop out or pay for their education with loans or their own money. (The CBO report was based on a minimum of six credits, but that threshold has since increased to 7.5, so the number of students affected could be higher.)

    Over all, about 700,000 students would no longer be eligible for the Pell Grant after all the changes take effect. The changes are currently set to take effect in summer 2026.

    2. Colleges on the Hook for Unpaid Student Loans

    In addition to the Pell Grant cuts, college leaders are particularly worried about a provision known as risk-sharing, which would require institutions to pay a financial penalty based on students’ unpaid loans. How much colleges would have to pay is unclear, but the CBO estimates that by 2034, payments would total $1.3 billion and then continue to increase each year. Risk-sharing is expected to save the government $5.3 billion over the next 10 years.

    Because of risk-sharing and other changes in the bill aimed at limiting student borrowing, the CBO predicts that the volume of student loans would drop by about 20 percent.

    College leaders and lobbyists argue that the formula that would determine institutions’ payments is untested, and without more information, they can’t accurately gauge the ramifications. One lobbyist said the proposal represented “an astonishing level of federal overreach.” Critics of the plan also worry that underresourced and minority-serving institutions would be hit the hardest.

    “The risk is not equal among colleges,” Tuskegee University president Mark Brown told senators this week.

    Risk-sharing is just one of several proposed changes that would upend the student loan system. House Republicans also want to end Grad PLUS loans along with subsidized loans, restrict Parent PLUS loans and tie how much students can borrow to the median cost of a program. Some consumer protection advocates argued that these changes would drive students to private lenders, which often charge higher interest rates.

    3. More Taxes and Medicaid Cuts Threaten Colleges’ Bottom Lines

    Other proposals in the bill from the Ways and Means Committee would levy a host of new or expanded taxes against universities.

    First, the committee created new brackets to tax wealthy universities’ endowments. Currently, private universities with endowments that are worth more than $500,000 per student pay a 1.4 percent tax. But under the plan, some could see their endowments taxed at 21 percent.

    Institutions with endowments valued at $750,000 to $1.25 million per student would be hit with a 7 percent tax. That rate would climb to 14 percent for colleges with endowments worth $1.25 million to $2 million per student, while colleges with endowments of $2 million or more per student would pay 21 percent. Colleges also can’t include international students in their tally of students, which could subject more institutions to the tax.

    In addition to the endowment tax, the proposal also taxes a college’s intellectual property by stating that the endowment tax should include all forms of investment income. This means that any royalties from a private university’s intellectual property, including patents and copyrights, would be taxable. Additionally, the legislation removes colleges’ exemption from the unrelated business income tax so that all institutions, public and private, would be taxed for royalties from licensing their name and logo.

    House Republicans in other committees also proposed cuts to the Medicaid and Supplemental Nutrition Assistance programs, which critics say would hurt students and states’ budgets. And if states do take a hit financially, public colleges might see their budgets cut.

    “If federal Medicaid funding is reduced in a new federal tax law, no public college or university will be immune from future state budget reductions and the austerity that will result. Public higher education must be prepared,” two professors wrote in an Inside Higher Ed op-ed earlier this year.

    4. Warnings From Higher Ed Pile Up

    Higher education groups warned before and after the vote of damaging consequences if the legislation becomes law.

    American Federation of Teachers president Randi Weingarten called it a “big, ugly betrayal,” while Kara D. Freeman, president and CEO of the National Association of College and University Business Officers, said in a statement that “the implications for student access, research, and innovation could be far-reaching.”

    Freeman said the endowment tax is especially concerning and cited NACUBO data that shows colleges and universities spent $30 billion from their endowments in fiscal year 2024—nearly half of which funded student financial aid.

    “This scholarship tax takes funds away from students and makes it less possible for colleges to support them,” she said.

    Meanwhile, the American Council on Education took issue with the use of the reconciliation process to advance sweeping changes, along with the provisions in the bill.

    “The totality of the funding cuts, policy changes, and tax increases included in this reconciliation package will have a historic and negative impact on the ability of current and future students to access postsecondary education, as well as on colleges and universities striving to carry out their vital educational and research missions,” ACE wrote in a letter to the House.

    So far, senators have said little about the higher ed provisions in the bill, so it’s not yet clear whether they’ll agree with the House plan. Generally, while the House prefers risk-sharing, the Senate is expected to back a measure that judges programs by their students’ employment rates and income levels after graduation.

    But, with President Donald Trump backing the legislation and a fragile majority in the House, senators have few options if they want to change the legislation.

    “This is arguably the most significant piece of Legislation that will ever be signed in the History of our Country!” Trump wrote on Truth Social. “Now, it’s time for our friends in the United States Senate to get to work, and send this Bill to my desk AS SOON AS POSSIBLE! There is no time to waste.”

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  • How Federal Budget Cuts Threaten Small Colleges—and the Towns That Depend on Them – Edu Alliance Journal

    How Federal Budget Cuts Threaten Small Colleges—and the Towns That Depend on Them – Edu Alliance Journal

    May 19, 2025, by Dean Hoke: In my recent blog series and podcast, Small College America, I’ve highlighted the essential role small colleges play in the fabric of U.S. higher education. These institutions serve as academic homes to students who often desire alternatives to larger universities, and as cultural and economic anchors, especially in rural and small-town America, where, according to IPEDS, 324 private nonprofit colleges operate. Many are deeply embedded in the towns they serve, providing jobs, educational access, cultural life, and long-term economic opportunity.

    Unfortunately, a wave of proposed federal budget cuts may further severely compromise these institutions’ ability to function—and in some cases, survive. Without intervention, the ripple effects could devastate entire communities.

    Understanding the DOE and USDA Budget Cuts

    The proposed reductions to the U.S. Department of Education (DOE) and U.S. Department of Agriculture (USDA) budgets present a two-pronged threat to small colleges, particularly those in rural areas or serving low-income student populations.

    Department of Education (DOE)

    The most significant concerns center on proposed changes to Pell Grants, a vital financial resource for low-income students. One House proposal would redefine full-time enrollment from 12 to 15 credit hours per semester. If enacted, this change would reduce the average Pell Grant by approximately $1,479 for students taking 12 credits. Students enrolled less than half-time could become ineligible entirely.

    Additionally, the Federal Work-Study (FWS) and Supplemental Educational Opportunity Grants (SEOG) programs face serious threats. The House Appropriations Subcommittee has proposed eliminating both programs, which together provide over $2 billion annually in aid to low-income students.

    Programs like TRIO and GEAR UP, which support first-generation, low-income, and underrepresented students, have been targeted in previous proposals; however, current budget drafts maintain level funding. Nonetheless, their future remains uncertain as negotiations continue.

    The Title III Strengthening Institutions Program, which funds academic support services, infrastructure, and student retention efforts at under-resourced colleges, received a proposed funding increase in the FY 2024 President’s Budget, though congressional appropriations may differ.

    Department of Agriculture (USDA)

    The USDA’s impact on small colleges, while less direct, is nonetheless critical. Discretionary funding was reduced by more than $380 million in FY 2024, reflecting a general pullback in rural investment.

    Programs like the Community Facilities Direct Loan & Grant Program, which supports broadband access, healthcare facilities, and community infrastructure, were level-funded at $2.8 billion. These investments often benefit rural colleges directly or indirectly by enhancing the communities in which they operate.

    While some funding has been maintained, the broader trend suggests tighter resources for rural development in the years ahead. For small colleges embedded in these communities, the consequences could be substantial: delayed infrastructure upgrades, reduced student access to services, and weakened town-gown partnerships.

    Why Small Colleges Are Particularly Vulnerable

    Small private nonprofit colleges—typically enrolling fewer than 3,000 students—operate on thin margins. Many are tuition-dependent, with over 80% of their operating revenue derived from tuition and fees. They lack the substantial endowments or large alumni donor bases that buoy more prominent institutions during hard times.

    What exacerbates their vulnerability is the student profile they serve. Small colleges disproportionately enroll Pell-eligible, first-generation, and minority students. Reductions in federal financial aid and student support programs have a direct impact on student enrollment and retention. If students can’t afford to enroll—or stay enrolled—colleges see revenue declines, leading to cuts in academic offerings, faculty, and student services.

    Additionally, small colleges are often located in areas experiencing population decline. The so-called “demographic cliff”—a projected 13% drop in the number of high school graduates from 2025 to 2041 will affect 38 states and is expected to hit rural and non-urban regions the hardest. This compounds the enrollment challenges many small colleges are already facing.

    Economic and Social Impact on Rural Towns

    The closure of a small college doesn’t just mean the loss of a school; it signifies a seismic shift in a community’s economic and social structure. Colleges often rank among the top employers in their towns. When a college closes, hundreds of jobs disappear—faculty, staff, groundskeepers, maintenance, food services, IT professionals, and more.

    Consider Mount Pleasant, Iowa, where the closure of Iowa Wesleyan University in 2023 cost the local economy an estimated $55 million annually. Businesses that relied on student and faculty patronage—restaurants, barbershops, bookstores, and even landlords—felt the immediate impact. Community organizations lost vital volunteers. Town officials were left scrambling to figure out what to do with a sprawling, empty campus in the heart of their city.

    Colleges also provide cultural enrichment that is often otherwise absent in small towns. Lectures, concerts, art exhibitions, and sporting events bring together diverse groups and add vibrancy to the local culture. Many offer healthcare clinics, counseling centers, or continuing education for adults—services that disappear with a campus closure.

    USDA investments in these communities are often tied to colleges, whether in the form of shared infrastructure, grant-funded development projects, or broadband expansions to support online learning. As these federal investments diminish, so too does a town’s ability to attract and retain both residents and employers.

    Real-Life Implications and Stories

    The headlines tell one story, but the real impact is felt in the lives of students, faculty, and the surrounding communities.

    Presentation College in Aberdeen, South Dakota, ceased operations on October 31, 2023, after citing unsustainable financial and enrollment challenges. Hundreds of students, many drawn to its affordability, rural location, and nursing programs, were forced to reconsider their futures. The college quickly arranged teach-out agreements with over 30 institutions, including Northern State University and St. Ambrose University, which offered pathways for students to complete their degrees. The Presentation Sisters, the founding order, are now seeking a buyer for the campus aligned with their values, while local officials explore transforming the site into a technical education hub to continue serving the community.

    Birmingham-Southern College in Alabama, a 168-year-old institution, closed its doors on May 31, 2024, after a $30 million state-backed loan request was ultimately rejected despite initial legislative support. The college had a $128 million annual economic impact on Birmingham and maintained partnerships with K–12 schools, correctional institutions, and nonprofits. The closure triggered the transfer of over 150 students to nearby colleges like Samford University, but left faculty, staff, and the broader community facing economic and cultural losses. A proposed sale of the campus to Miles College fell through, leaving the site’s future in limbo.

    Even college leaders who have weathered the past decade worry they’re nearing a breaking point. Rachel Burns of the State Higher Education Executive Officers Association (SHEEO) has tracked dozens of recent closures and warns that many institutions remain at serious risk, despite their best efforts. “They just can’t rebound enrollment,” she says, noting that pandemic aid only temporarily masked deeper structural vulnerabilities.

    Potential Closures and Projections

    College closures are accelerating across the United States. According to the State Higher Education Executive Officers Association (SHEEO), 467 institutions closed between 2004 and 2020—over 20% of them private, nonprofit four-year colleges. Since 2020, at least 75 more nonprofit colleges have shut down, and many experts believe this pace is quickening.

    A 2023 analysis by EY-Parthenon warned that 1 in 10 four-year institutions—roughly 200 to 230 colleges—are currently in financial jeopardy. These schools are often small, private, rural, and tuition-dependent, serving large numbers of first-generation and Pell-eligible students. Even a modest drop of 5–10% in tuition revenue can be catastrophic for colleges already operating on razor-thin margins.

    Compounding the challenge, the Federal Reserve Bank of Philadelphia released a 2024 predictive model forecasting that as many as 80 additional colleges could close by 2034 under sustained enrollment decline driven by demographic shifts. This figure accounts for closures only—not mergers—and spans public, private nonprofit, and for-profit sectors.

    Layered onto these economic and demographic vulnerabilities are the potential impacts of proposed federal education funding cuts. The Trump administration’s FY 2026 budget blueprint once again targets student aid programs, proposing the elimination or severe reduction of subsidized student loans, TRIO, GEAR UP, Federal Work-Study, and the Supplemental Educational Opportunity Grant (SEOG). Although similar proposals from Trump’s first term (FY 2018–2021) were rejected by Congress, the renewed push signals ongoing political pressure to curtail support for low-income and first-generation students.

    To assess the potential impact of these policy shifts, a policy stress test was applied to both the Philadelphia Fed model and the historical closure trend. The analysis suggests that if these cuts were enacted, an additional 50 to 70 closures could occur by 2034.

    • Philadelphia Fed model baseline: 80 projected closures
    • With policy cuts: Up to 130 closures
    • Historical average trend (2020–2024): ~14 closures/year
    • 10-year projection (status quo): ~140 closures
    • With policy cuts: Up to 210 closures

    In short, depending on the scenario, anywhere from 130 to 210 additional college closures may occur by 2034. Institutions most at risk are those that serve the very populations these federal programs are designed to support. Without intervention—through policy, partnerships, or funding—the number of closures could rise sharply in the years ahead.

    These scenario-based projections are summarized in the chart below.

    Why Should Congress Care

    According to the National Association of Independent Colleges and Universities (NAICU), a private, nonprofit college or university is located in 395 of the 435 congressional districts. These institutions are not only centers of learning but also powerful economic engines that generate:

    1. $591.5 billion in national economic impact
    2. $77.6 billion in combined local, state, and federal tax revenue
    3. 3.4 million jobs supported or sustained
    4. 1.1 million people are directly employed in private nonprofit higher education
    5. 1.1 million graduates are entering the workforce each year

    As such, the fate of small private colleges is not just a higher education issue—it is a national economic and workforce development issue that should command bipartisan attention.

    Strategies for Resilience and Policy Recommendations

    There are clear, actionable strategies to reduce the risk of widespread college closures:

    • Consortium and shared governance models: Small colleges can boost efficiency and sustainability by sharing administrative functions, faculty, academic programs, technology infrastructure, and enrollment services. This allows institutions to reduce operational costs while maintaining their distinct missions and brands. In some cases, these arrangements evolve into formal mergers. An emerging example is the Coalition for the Common Good, a new model of mission-aligned institutions that maintain individual identities but operate under shared governance. This structure offers long-term financial stability without sacrificing institutional purpose or community impact.
    • Strategic partnerships: Collaborations with community colleges, online education providers, regional employers, and nonprofit organizations can expand reach, enhance curricular offerings, and improve student outcomes. These partnerships can support 2+2 transfer pipelines, workforce-aligned certificate programs, and hybrid learning models that meet the needs of adult learners and working professionals, often underserved by traditional residential colleges.
    • State action: States should establish stabilization grant programs and offer targeted incentive funding to support mergers, consortium participation, and regional collaboration. Policies that protect institutional access in rural and underserved areas are especially urgent, as closures can leave entire regions without viable higher education options. States can also play a role in convening institutions to plan for shared services and long-term viability.
    • Federal investment: Continued and expanded funding for Pell Grants, TRIO, SEOG, Title III and V, and USDA rural development programs is essential to sustaining the institutions that serve low-income, first-generation, and rural students. These investments should be treated as critical infrastructure, not discretionary spending, given their role in expanding educational equity, enhancing workforce readiness, and promoting rural economic development. Consistent federal support can help stabilize small colleges and enable long-term planning.

    College leaders, local governments, and community groups must advocate in unison. The conversation should move beyond institutional survival to one of community survival. As the saying goes, when a college dies, the town begins to die with it.

    Conclusion

    Small colleges are not expendable. They are vital threads in the educational, economic, and cultural fabric of America, especially in rural and underserved communities. The proposed federal budget cuts across the Departments of Education and Agriculture represent a direct threat not only to these institutions but to the communities that depend on them.

    If policymakers fail to act, the consequences will be widespread and enduring. The domino effect is real: reduced funding leads to fewer students, tighter budgets, staff layoffs, program cuts, and eventually, campus closures. And when those campuses close, entire towns are left to absorb the fallout—economically, socially, and spiritually.

    We have a choice. We can invest in the future of small colleges and the communities they anchor, or we can stand by as they vanish—along with the promise they hold for millions of students and the towns they call home.

    References

    • U.S. Department of Education, FY 2025 Budget Summary and Justifications
    • National Association of Student Financial Aid Administrators (NASFAA), Analysis of Proposed Pell Grant and Campus-Based Aid Reductions
    • State Higher Education Executive Officers Association (SHEEO) and Higher Ed Dive, Data on College Closures and Institutional Viability Trends
    • Fitch Ratings, Reports on Financial Pressures in U.S. Higher Education Institutions
    • Iowa Public Radio and The Hechinger Report, Case Studies on Rural College Closures and Community Impact
    • Council for Opportunity in Education (COE), Statements and Data on TRIO Program Reach and Effectiveness
    • Federal Reserve Bank of Philadelphia, Predictive Modeling of U.S. College Closures (2024)
    • EY-Parthenon, 2023 Report on Financial Vulnerability Among Four-Year Institutions
    • U.S. Department of Agriculture (USDA), Rural Development and Community Facilities Loan & Grant Program Summaries
    • Interviews and commentary from institutional leaders, TRIO program directors, and SHEEO policy staff
    • Integrated Postsecondary Education Data System (IPEDS), Data on Enrollment, Institution Type, and Geographic Distribution

    Dean Hoke is Managing Partner of Edu Alliance Group, a higher education consultancy. He formerly served as President/CEO of the American Association of University Administrators (AAUA). With decades of experience in higher education leadership, consulting, and institutional strategy, he brings a wealth of knowledge on small colleges’ challenges and opportunities. Dean is the Executive Producer and co-host for the podcast series Small College America. 

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  • Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; Borrower Defense to Loan Repayment Universal Forms

    Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; Borrower Defense to Loan Repayment Universal Forms

    A Notice by the Education Department on 05/19/2025

    Department of Education[Docket No.: ED-2025-SCC-0002]

    AGENCY:

    Federal Student Aid (FSA), Department of Education (ED).

    ACTION:

    Notice.

    SUMMARY:

    In accordance with the Paperwork Reduction Act (PRA) of 1995, the Department is proposing a revision of a currently approved information collection request (ICR).

    DATES:

    Interested persons are invited to submit comments on or before June 18, 2025.

    ADDRESSES:

    Written comments and recommendations for proposed information collection requests should be submitted within 30 days of publication of this notice. Click on this link www.reginfo.gov/​public/​do/​PRAMain to access the site. Find this information collection request (ICR) by selecting “Department of Education” under “Currently Under Review,” then check the “Only Show ICR for Public Comment” checkbox. Reginfo.gov provides two links to view documents related to this information collection request. Information collection forms and instructions may be found by clicking on the “View Information Collection (IC) List” link. Supporting statements and other supporting documentation may be found by clicking on the “View Supporting Statement and Other Documents” link.

    FOR FURTHER INFORMATION CONTACT:

    For specific questions related to collection activities, please contact Carolyn Rose, 202-453-5967.

    SUPPLEMENTARY INFORMATION:

    The Department is especially interested in public comment addressing the following issues: (1) is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.

    Title of Collection: Borrower Defense to Loan Repayment Universal Forms.

    OMB Control Number: 1845-0163.

    Type of Review: A revision of a currently approved ICR.

    Respondents/Affected Public: Individuals and Households.

    Total Estimated Number of Annual Responses: 83,750.

    Total Estimated Number of Annual Burden Hours: 217,750.

    Abstract: On April 4, 2024 the U.S. Court of Appeals of the Fifth Circuit granted a preliminary injunction against 34 CFR 685.400 et seq. (“2023 Regulation”) enjoining the rule and postponing the effective date of the regular pending final judgment in the case. The current Borrower Defense to Repayment application and related Request for Reconsideration are drafted to conform to the enjoined provisions of the 2023 Regulation. This request is to revise the currently approved information collection 1845-0163 to comply with the regulatory requirements of the borrower defense regulations that are still in effect, 34 CFR 685.206(e) (“2020 Regulation”), 34 CFR 685.222 (“2016 Regulation”), and 34 CFR 685.206(c) (“1995 Regulation”) (together, the “current regulations”). These regulatory requirements are distinct from the 2023 Regulation’s provisions. The revision is part of contingency planning in case the 2023 Regulation is permanently struck down. The Department of Education (“the Department”) is attaching an updated Borrower Defense Application and application for Request for Reconsideration. The forms will be available in paper and electronic forms on studentaid.gov and will provide borrowers with an easily accessible and clear method to provide the information necessary for the Department to review and process claim applications. Also, under the current regulations, the Department will no longer require a group application nor group reconsideration application.

    Dated: May 13, 2025.

    Brian Fu,

    Program and Management Analyst, Office of Planning, Evaluation and Policy Development.

    [FR Doc. 2025-08857 Filed 5-16-25; 8:45 am]

    BILLING CODE 4000-01-P
    Published Document: 2025-08857 (90 FR 21296)

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  • University of Arizona has balanced budget in sight after massive deficits

    University of Arizona has balanced budget in sight after massive deficits

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    Dive Brief:

    • University of Arizona released a fiscal 2026 plan that would balance its budget by reducing it 3.2% from current levels, though officials noted federal policy changes, state budgeting and enrollment could force adjustments. 
    • The preliminary budget plan would make the deepest cuts to university support and administration, reducing those areas by 7.5% overall. Student support would be cut by 2.8%, and the aggregate budget for the university’s colleges would be reduced by 2.2%. It would also decrease facility and utility spending by 1.1% while increasing community outreach by 0.7%.
    • At the same time, the framework funds employee raises, faculty promotions, investments in the university’s colleges and other spending areas, officials said Thursday in a community message.

    Dive Insight:

    The University of Arizona has been scrambling for more than a year to put its fiscal house in order. 

    In early 2024, the university faced a budget shortfall reaching $177 million. The situation became so severe as to draw an open rebuke from the state’s governor, Katie Hobbs, who in a statement last February derided a “university leadership that was clueless as to their own finances.”

    Since that time, then-President Robert Robbins stepped down and the university has made major cutbacks to its budget. 

    Helping lead that work is John Arnold, who has taken on the chief operating and financial officer roles at University of Arizona after previously serving as executive director of the state board of regents. 

    For fiscal 2025, the university reduced its budget by over $110 million, centralizing its fiscal planning, “rebalancing” undergraduate aid for nonresident students, delaying raises, and reorganizing administrative units including information technology, human resources and marketing. 

    Arnold informed the state regents in November that the university was on track to wipe the remaining $65 million deficit from its budget and end fiscal 2025 with 76 days cash on hand — well above the nine days’ worth of cash that was projected last June. The regents require state universities to have 140 days of cash on hand, a target the University of Arizona hasn’t hit since 2022.

    By the fall, cuts took the university’s employee headcounts and payroll expenses back to early fiscal 2023 levels. 

    While making numerous reductions across the university’s operations, officials also announced salary increases and a raised minimum wage earlier this year. 

    Arnold and Ronald Marx, the university’s interim provost and senior vice president for academic affairs, said in their message Thursday that the new budget framework “prioritizes academic excellence, faculty and staff support, and student success across colleges.”

    They added the caveat that possible changes in federal policy, state budgeting, changing demographics and enrollment could all sway the final fiscal 2026 budget.

    “We are actively monitoring these developments and evaluating the financial implications of the changing external environment,” Arnold and Marx said. 

    Arizona lawmakers last year threw a wrench into budget plans with multimillion dollar funding reductions, which came as University of Arizona sought to reduce its deficit by tens of millions of dollars.

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  • Trump’s FY26 budget plan slashes Education Department programs

    Trump’s FY26 budget plan slashes Education Department programs

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    President Donald Trump on Friday proposed wide-ranging cuts to federal higher education spending in his fiscal 2026 budget request, calling to eliminate some grant programs altogether and for states to take over others like Federal Work-Study. 

    The budget request offers a broad look at Trump’s priorities, which include shaving 15.3% off the U.S. Department of Education’s budget, a move in line with his broader plan to shutter the agency. Across the federal government, Trump’s request would eliminate some $163 billion in nondefense domestic spending, including the dramatic cuts to education programs.

    U.S. Education Secretary Linda McMahon said in a statement Friday that the budget reflects “funding levels for an agency that is responsibly winding down, shifting some responsibilities to the states, and thoughtfully preparing a plan to delegate other critical functions to more appropriate entities.” 

    Presidential budget proposals are akin to executive wishlists and are never enacted as introduced. And Trump’s budget request for the 2026 fiscal year, which begins Oct. 1, faces key obstacles before it could be approved. Even though Republicans control both the House and Senate, at least one GOP lawmaker has already objected to some of Trump’s proposed cuts.

    But other party leaders signaled a willingness to embrace Trump’s proposals. 

    The American people sent Republicans to Washington to lower costs and rein in wasteful government spending,” Tim Walberg, chair of the House Committee on Education and Workforce, said in a Friday statement. “The budget proposal President Trump released today not only gives us a blueprint but shows us it is possible to deliver on this promise.” 

    Student aid takes a blow

    The budget takes aim at Federal Work-Study, which provides part-time jobs to students who need help paying for college. Under the program, the federal government covers up to 75% of students’ wages. 

    Trump’s proposal calls for a $980 million reduction in funding for the program, which was appropriated $1.2 billion in fiscal year 2024. 

    In his budget plan, the president called for Federal Work-Study to be run by the states and the colleges “that financially benefit from it.” 

    Reform of this poorly targeted program should redistribute remaining funding to institutions that serve the most low-income students and provide a wage subsidy to gain career-oriented opportunities to improve long-term employment outcomes of students,” it says. 

    Trump’s proposal would also eliminate funding for Supplemental Educational Opportunity Grants, which assist undergraduate students who have “exceptional financial need.” The program was allocated $910 million in fiscal 2024 — all of which would be cut under Trump’s budget. 

    The budget document accuses the grants of contributing “to rising college costs” that colleges have used to pay for a “radical leftist ideology.” Colleges that receive these grants pass the money onto students, and the institutions must contribute 25% of their own money for those awards. 

    Two other programs are on the chopping block: TRIO, which provides support for middle school through college students from disadvantaged backgrounds, and Gear Up, which helps low-income students prepare for postsecondary education. Trump’s budget called these programs a “relic of the past when financial incentives were needed to motivate” colleges to increase access to low-income students. 

    Today, the pendulum has swung and access to college is not the obstacle it was for students of limited means,” the budget document claims, saying higher education institutions should use their own resources to recruit students. 

    Together, the programs received nearly $1.6 billion in fiscal 2024, all of which would be cut under Trump’s plan. 

    The budget documents released Friday did not address funding for Pell Grants, the largest student aid program.

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  • Trump’s FY26 budget would slash more than $4.5B from K-12

    Trump’s FY26 budget would slash more than $4.5B from K-12

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    President Donald Trump on Friday delivered a federal budget that would slash more than $4.5 billion in K-12 funding for fiscal year 2026. In total, cuts to the Education Department would amount to $12 billion, or 15% of its current funding.

    The deep cuts would hit programs meant to ensure equitable access to education for underserved students and to protect their civil rights. And though maintained at current funding levels,  Title I and special education programs would be reorganized into separate single grants aimed at letting states spend the money as they see fit.

    “The Budget continues the process of shutting down the Department of Education,” the White House’s funding request states. 

    Among the cuts:

    • All $70 million for Teacher Quality Partnerships grant, often used to diversify the teacher workforce.
    • All $7 million for Equity Assistance Centers, established as part of desegregation efforts.
    • All $890 million for English Language Acquisition.
    • A $49 million, or 35%, reduction for the Office for Civil Rights. 

    At the same time, Trump’s budget would boost funding for charter schools by $60 million. 

    Funding for Title I and Individuals with Disabilities Education Act programs — which public school advocates had worried would be cut — was preserved. Head Start, which was widely rumored to be on the chopping block, appears to have survived for now as it is not among the cuts listed in the budget document.

    Cuts reflect administration’s anti-DEI priority

    Many of the proposed cuts reflect Trump’s course reversal from the previous decades-long focus on equity in the education sector. 

    For instance, the budget would zero out Equity Assistance Centers, originally established under the Civil Rights Act of 1964 to level the playing field for students of color, and especially Black students, after decades of segregation and its long-standing impact on their achievement over generations. Friday’s White House budget request characterizes such efforts as “distractions” from focusing on core subjects like math, reading, science and history.

    Another program that would be halted is the Teacher Quality Partnerships grant, which funds teacher pipeline programs and helped establish a master’s program for teachers of color. The budget document argues that the program centers “racism in their pedagogy” by including instruction for aspiring teachers on “social justice activism, ’anti-racism,’ and instruction on white privilege and white supremacy.” Professional development workshops funded by the grants have included topics such as “building cultural competence,” “dismantling racial bias,” and “centering equity in the classroom,” which the administration took issue with.

    Also on the chopping block: The budget would eliminate the $890 million English Language Acquisition program, which the administration says “encourages bilingualism,” and “deemphasizes English primacy.”

    The administration also proposed an end to the U.S. Health and Human Services Department’s Preschool Development Grants. In the budget overview, the White House cited efforts by the Minnesota Department of Education to use the money to implement “intersectionality” and “racial equity” in early childhood education programs and by Oregon to provide “quality care” for the state’s LGBTQIA+ families. 

    One of the few increases included in the proposal to K-12 program funding was an additional $60 million for charter schools, which it says “have a proven track record of improving students’ academic achievement” and will create more local school options while expanding parental choice. 

    Proposed cuts follow recent moves to gut Education Department

    The president’s budget request “reflects funding levels for an agency that is responsibly winding down, shifting some responsibilities to the states, and thoughtfully preparing a plan to delegate other critical functions to more appropriate entities.” said U.S. Secretary of Education Linda McMahon.

    The budget proposal “supports the President’s vision of expanding school choice and ensuring every American has access to an excellent education,” McMahon said in a statement on Friday.

    Many of the proposed cuts reflect moves already made to pare down and eventually close the Education Departmentto the maximum extent appropriate and permitted by law,” as Trump ordered in a March directive.

    For example, as part of a massive reduction in force that eliminated half of the department’s employees, the ELA office was already entirely slashed. 

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  • Indiana Budget Bill Contains Sweeping Higher Ed Changes

    Indiana Budget Bill Contains Sweeping Higher Ed Changes

    Indiana state lawmakers have sent their governor a state budget bill that goes beyond setting funding levels. If Republican governor Mike Braun signs it into law, House Enrolled Act 1001 will require faculty at public colleges and universities to post their syllabi online and undergo “productivity” reviews.

    The bill would also—among other things—prohibit faculty emeriti from voting in faculty governance organizations, place low-enrolled degree programs at risk of elimination by the Indiana Commission for Higher Education and end alumni elections for three Indiana University Board of Trustees seats by filling them with gubernatorial appointees. In addition, it has a provision that would let Braun remove the currently elected board members before their terms expire.

    “I think overreach doesn’t begin to describe the actions of the Legislature,” said Russ Skiba, a professor emeritus of education at IU Bloomington. “This is really a sweeping takeover of higher education in Indiana.”

    The Republican-controlled Indiana General Assembly passed the legislation—which runs more than 200 pages—less than two days after revealing it Wednesday, April 23. The state House approved it around 12:45 a.m. Friday, followed by the Senate’s agreement at about 1:20 a.m.

    “I know a lot of legislators … simply didn’t have enough time to fully read it,” Skiba said. “There was no opportunity whatsoever for any sort of public input.”

    Matt Pierce, a Democratic Indiana House member who’s a senior lecturer at IU Bloomington, said the conference committee report revealing the budget bill wasn’t even released until Wednesday evening.

    “As people began to kind of go through it, they discovered all these higher education provisions that had never been discussed anywhere,” Pierce said. To have “provisions of this magnitude” pass in the budget bill “with no hearing or public input, that was pretty shocking,” he said.

    The budget bill’s higher education provisions echo those passed, or at least proposed, in other red states. But Indiana’s General Assembly continues to be in the vanguard among even GOP-controlled legislatures in its fervor for regulating public higher education. Last year, state lawmakers passed, and the former governor signed, a law threatening the jobs of nontenured and tenured faculty who don’t sufficiently foster “intellectual diversity,” as defined by campus boards of trustees.

    These bills follow pro-Palestine protests at IU Bloomington and tensions between faculty and university president Pamela Whitten. And with a further reduction of tenure protections looming in the new bill, a tenured professor at IU Bloomington says he’s under investigation for allegedly violating a policy the university wrote to uphold last year’s intellectual diversity law.

    Ben Robinson, an associate professor of Germanic studies and a prominent pro-Palestine campus protester, told Inside Higher Ed that an anonymous student filed a complaint against him in October. The unnamed student, according to a copy of the complaint Robinson provided, wrote that Robinson “talks negatively about the state of Israel and describes the war in untrue and unfair ways” and has discussed being arrested at a pro-Palestine rally “on numerous occasions.” The student also complained that Robinson had spoken “against Indiana University on several occasions” and used class time to say the university was restricting free speech.

    This complaint was filed in IU’s bias incident reporting system, which wouldn’t have involved potential discipline, Robinson said, but university administrators appeared to refile it as an intellectual diversity–related complaint under the policy passed after the General Assembly’s intellectual diversity law. He said he thinks administrators “want to overcomply on particularly this ideological issue, because that’s what they’re being told they have to enforce” by the federal government.

    “How can a professor know what’s going to be called bias?” Robinson said. He also said IU Bloomington is “a campus in which the witch hunts are alive and well, and I, along with many others, have been an open target of them.”

    IU spokesperson Mark Bode, in response to Inside Higher Ed’s requests for an interview and written questions about Robinson’s situation, wrote in an email simply that “IU does not comment on personnel matters.”

    Accusations of IU Involvement

    Multiple critics have accused IU leaders of backing one or more of the 11th-hour budget bill’s higher education changes. When asked about this, Bode provided a written statement that didn’t say whether IU was specifically involved.

    “Throughout the session, Indiana University engaged with state lawmakers to shape meaningful conversations about the university’s commitments to making higher education accessible to Hoosiers and driving the state’s economy through life-changing research and innovation,” the statement said. IU “will be working over the coming weeks to understand the full impact of state legislation and ensure compliance.”

    Before the bill passed, Pierce said, he texted an IU lobbyist asking the university’s position on it. The lobbyist replied that the institution didn’t have a position because it was still carefully reviewing the legislation, Pierce said.

    “And right then and there I knew that IU was behind it,” Pierce said. He also questioned how lawmakers would have the “pretty esoteric” knowledge that emeritus faculty serve in some faculty governance organizations.

    “You now have a convergence of the Republican attacks on higher education and the actual administration of Indiana University, and that’s a pretty shocking development,” he said.

    The IU Board of Trustees currently has six gubernatorial appointees—including a student with a two-year term—plus three members elected by alumni. If Braun signs the budget bill, he and future governors will be able to appoint all nine members, the student member’s term will drop to one year and there will be no more alumni-elected members.

    Braun has expressed support for this change, according to the Indiana Capital Chronicle.

    “I think it’s being done because the current process [has] not maybe yielded the proper results on the entirety of how you want that important part of our state to be run—from curriculum to cost to the whole way one of our flagship universities has been operating,” Braun said, according to the Capital Chronicle. “I want to get a board there that is going to be a little more rounded, that’s going to produce better results.”

    Vivian Winston, one of the elected board members, who previously announced she’s not seeking re-election, said she voted against IU president Whitten’s contract extension and the university’s post-encampment protest restrictions. But she said she doesn’t know whether her votes were related to the board change part of the legislation—which, like the other higher ed provisions in the bill, caught her “unaware.”

    “I found out through the media,” Winston said of the changes in the bill.

    Rodric Bray, a Republican and Indiana’s Senate president pro tem, provided Inside Higher Ed a rationale for the part of the bill ending alumni elections.

    “A very small fraction of the IU alumni have been participating in the election for the alumni seats on the IU Board of Trustees,” Bray said in an emailed statement. “Of the approximately 790,000 alumni around the world, only about 2.5% of alumni voted in the most recent election for trustee. Because the number is so small, it is not a fair representation.”

    But some opponents of the provision don’t see it that way. Skiba, the IU Bloomington emeritus faculty member, said, “This is clearly payback for opposition of policies favored by the president of the university and the Legislature.” He said the change would “take those voices of opposition off the Board of Trustees and essentially give complete control of the Board of Trustees over to the governor.”

    Over all, Skiba said, “this Legislature is following the Trump lead—wishing to put an airtight lid on free expression. And if you’re wishing to do that, universities are an obvious place to start.”

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  • Head Start zeroed out in Trump’s preliminary budget plan

    Head Start zeroed out in Trump’s preliminary budget plan

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    Dive Brief:

    • Head Start would be eliminated under a draft fiscal 2026 budget that the Trump administration is preparing to send to Congress, according to a preliminary budget planning document acquired by K-12 Dive’s sister publication Healthcare Dive.
    • The program is among other initiatives targeted for termination that support low-income families and children — including the Low Income Home Energy Assistance Program and the Community Services Block Grant — under the preliminary budget document for the U.S. Department of Health and Human Services.
    • Even if sent to Congress as currently drafted, however, the proposals have a long road to travel before gaining congressional approval and being finalized. Still, advocates and policymakers are raising alarms, with one advocacy group — The Child Care for Every Family Network — calling the potential elimination of Head Start an “absolute disaster for families and [the] economy.”

    Dive Insight:

    The budget cuts would be in line with the Trump administration’s efforts to dramatically reduce the size of the federal government. For FY 2024, Congress funded Head Start at about $12.2 billion, the Community Services Block Grant at around $758 million, and LIHEAP at $4 billion.  

    HHS did not respond to a request for comment Thursday.

    Some Republicans in Congress and conservative organizations have criticized Head Start in the past as unsafe and ineffective at increasing children’s academic performances. Project 2025 — a blueprint for the current Republican administration issued during the presidential campaign by the Heritage Foundation, a conservative think tank — recommended zeroing out the program.

    But the National Head Start Association, an advocacy organization that represents program leaders, families and children, points to research showing positive academic, social and economic returns on investment from Head Start.

    The program, which celebrates its 60th anniversary next month, serves nearly 800,000 infants, toddlers and preschool children from families with low incomes. More than 17,000 Head Start centers operate nationwide. A companion Early Head Start program provides prenatal services.

    The proposal to terminate Head Start “reflects a disinvestment in our future,” said Yasmina Vinci, executive director of NHSA, said in a Thursday statement. “Eliminating funding for Head Start would be catastrophic. It would be a direct attack on our nation’s most at-risk children, their well-being, and their families.”

    The Head Start system is already under fiscal strain, advocates say. Mass layoffs at HHS on April 1 led to the closing of five Office of Head Start regional offices: Boston, New York, Chicago, San Francisco and Seattle. Those offices are to be consolidated into the five remaining offices in Philadelphia, Atlanta, Dallas, Kansas City and Denver. The regional offices provide guidance on federal policy, training and technical assistance to Head Start providers.

    However, in an April 3 announcement to Head Start grant recipients, Laurie Todd-Smith, HHS deputy assistant secretary for early childhood development, said the closures would not impact “critical services.” 

    Sen. Patty Murray, D-Wash., vice chair of the Senate Appropriations Committee, said in a Wednesday statement that data shows the Trump administration issued nearly $1 billion less in federal grants to Head Start centers nationwide to date this year compared to the same period last year — a 37% decrease. 

    “So far this year, Trump has slow-walked $1 billion in funding from going out the door to Head Start programs, and we are beginning to see the devastating consequences: centers closing, kids kicked out of the classroom, teachers losing their jobs, and entire communities losing out,” Murray said.

    President Donald Trump is expected to release his proposed FY 2026 budget later this month or early next month, according to news reports. Congress will then debate the recommended allocations before sending appropriations bills to the president for signature. The federal fiscal year starts Oct. 1.

    Sydney Halleman, editor for Healthcare Dive, contributed to this story.

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  • Proposed Budget Cuts Could End Fulbright Program

    Proposed Budget Cuts Could End Fulbright Program

    The Trump administration is looking to cut the State Department’s budget by almost half, and educational and cultural exchange programs, like the Fulbright scholarship, could be fully eliminated as a result, The Washington Post reported Monday.

    An internal memo, obtained by the Post, suggested that the department may only have $28.4 billion to spend next fiscal year to cover all of its staffing and operations and to share with the U.S. Agency for International Development, an independent agency that Trump has already tried to eliminate. That’s $27 billion, or 48 percent, less funding than the two groups received in fiscal year 2025.

    The proposed budget cuts would terminate the Fulbright scholarship, a highly selective cultural exchange program established by Congress in 1946, along with the State Department’s other educational and cultural programs. The president has yet to propose his budget for fiscal year 2026 to Congress, though he’s expected to do so later this month, the Post reported. Congress, by law, has the final say about which programs get funding.

    Fulbright funding and operations have already been in flux during the early days of the Trump administration as some participants have struggled to obtain their visas for next academic year and others are waiting on stipend funds that had been promised to get them through the current term, Inside Higher Ed has reported.

    The State Department did not respond to the Post’s request for comment.

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