Federal Update - January 29

January 29, 2025

GOVERNMENT RELATIONS HIGHLIGHTS

Grants & Loans Paused: The White House issued a temporary pause on many federal grants and loans. Hours later, a federal judge blocked the pause.

Budget Reconciliation Begins: House Republicans are currently on a retreat in Florida. They hope to return to Washington with a blueprint for legislating President Trump’s agenda.

FVT/GE Reporting Delay: The Biden Administration delayed some reporting, but it is presently unclear how the Trump Administration will manage the rule going forward.

New ED Officials: ED announced several new senior-level appointees, largely in civil rights roles. 

The Trump Regulatory Freeze: Though the Trump Administration has issued a freeze on all new federal rulemakings, attempts to modify or remove regulations will take time.

FEDERAL GRANTS & LOANS PAUSED

What You Need to Know

The Trump Administration’s Office of Management and Budget issued a temporary pause on the obligation and disbursement of nearly all federal grants and loans, effective at 5:00 pm on Tuesday, January 28. Late Tuesday, a federal judge blocked the pause through February 3.

The memorandum explicitly excludes funds related to Medicare or Social Security benefits, but it otherwise suspends the distribution of other federal financial assistance funds in order to conduct a review that will assess program alignment with President Trump’s policies. Agencies must report their findings by February 10.

Why This Is Important

Officials from the US Department of Education (ED) have already clarified that the freeze will not impact Pell Grants or Direct Loans. It remains unclear how exactly the pause will impact other federal education programs.

BUDGET RECONCILIATION BEGINS

What You Need to Know

House Republicans are currently in Florida for their GOP retreat. Speaker Johnson stated to his colleagues that his top priority is to have a conference-wide blueprint for their reconciliation bill, which they will use to enact key components of President Trump’s agenda. The reconciliation process will allow Republicans to bypass the filibuster and pass legislation with only a simple majority in the Senate.

Why This Is Important

Republicans are considering savings from all corners of the federal government to help pay for what some are calling a Mega MAGA bill. Certain savings could come from higher education programs. Stay tuned for our GR update in two weeks, where we will dive deeper into the budget reconciliation process and how it may be used for a partial reauthorization of the Higher Education Act.

FVT/GE REPORTING DELAY

What You Need to Know

The window for reporting data required by ED’s Fair Value Transparency and Gainful Employment (“FVT/GE”) rule closed on January 15, 2025. After the reporting deadline had passed, and just days before the inauguration, ED issued Electronic Announcement GE-25-01. Debt reporting will now be allowed until February 18, 2025. ED reiterated that the opportunity to review the Completers Lists had ended as scheduled, and the Completers Lists had been finalized and would be transmitted to “another federal agency” for median earnings data. The Trump Administration has made no announcements regarding FVT/GE reporting, and it is unclear at this point whether or how the orders and directives President Trump signed in his first few days in office will impact the ongoing implementation of the FVT/GE rule.

Why This Is Important

In the litigation we brought challenging the FVT/GE rule, the parties have filed cross-motions for summary judgment. Briefing was scheduled to be completed by the end of this week. However, on January 27, the court granted ED’s request for an extension to file a reply brief, pushing the deadline to February 14, 2025. Assuming ED files its reply brief by the new due date, the case will proceed to a decision on the merits. We expect a court ruling sometime in the next several months. In the meantime, the Trump Administration may announce their plans for FVT/GE in the coming months as well.

NEW EDUCATION OFFICIALS

What You Need to Know

ED announced several new senior-level appointees. Many of these appointees were named to civil rights positions that will allow them to begin work on the Trump Administration’s social agenda. The Senate HELP Committee has not yet scheduled a confirmation hearing for Education Secretary-designate Linda McMahon.

Why This Is Important

We still do not yet know who will be placed in the roles at ED that will be most important to our members. The most critical position is Under Secretary of Education, who is responsible for all postsecondary programs at the agency. We expect an announcement on this and other senior roles soon.

DEEPER DIVE: THE TRUMP REGULATORY FREEZE

What You Need to Know

One of President Trump’s first executive orders after the inauguration froze pending regulations. This directive prohibits the federal government from proposing or issuing any new rules, pending review and approval by a Trump official. The order also withdraws any regulations that had been sent to but not yet published in the Federal Register and encourages federal agencies to consider postponing the effective date of any new regulations that have not yet taken effect. This action has no impact on existing regulations, such as FVT/GE or borrower defense to repayment.

Why This Is Important

This executive order immediately sparked confusion and does not rescind regulations that are already on the books. Modification or removal of any existing rules will take time. ED will need to proceed through the cumbersome negotiated rulemaking process. Under the master calendar provisions of the Higher Education Act, the earliest that any Title IV-related regulatory change could be implemented is July 1, 2026, so long as a final rule is published no later than November 1, 2025. It is not clear when ED might initiate such rulemakings. But it did take most of the first Trump term to rewrite or eliminate Obama-era rules.

The Education Secretary does have some discretion regarding the enforcement of current regulations and the implementation or early adoption of new regulations, but any deviations from federal rulemaking requirements could be subject to court challenges. For now, it will be important to comply with any regulations in effect and to monitor regulatory developments closely.