Federal Update - May 7

May 7, 2025

GOVERNMENT RELATIONS HIGHLIGHTS

EdW Reconciliation Markup: $351 billion in higher education proposed 

Collections Resume: Punitive measures for nonpayment begin 

Accreditation EO: White House lays out accreditation plans 

Skilled Trade EO: Federal agencies directed to coordinate on skilled trades 

Student Visa Confusion: Student visas have been restored 

HEA PROGRAM CHANGES ADVANCES IN HOUSE

What You Need to Know  

Last week, the House EdWorkforce Committee approved their part of the budget reconciliation bill, which they have named Student Success and Taxpayer Savings Plan (SSTSP). This legislation includes several positive reforms, such as eliminating gainful employment and significantly reducing the regulatory authority of the Education Secretary. But the SSTSP also includes some concerning elements, such as risk-sharing and caps on program and aggregate borrowing. EdWorkforce Chair Walberg (R-MI) exceeded the Committee’s $330 billion savings target, with $351 billion in savings generated by the legislation. 

Why This Is Important 

The SSTSP is the beginning of what will be a lengthy process. The House still needs to compile all the various committees’ bills into one package and pass a full budget reconciliation bill on the House floor, which may prove challenging due to the narrow Republican majority. Meanwhile, the Senate HELP Committee is working on their component of the reconciliation bill, which is expected to be less aggressive than SSTSP. AACS’s Hill Day was ideally timed to engage on the issues of greatest concern to our community, and we will advocate for our community throughout the budget reconciliation process. 

COLLECTIONS RESUME FOR DEFAULTED LOANS

What You Need to Know 

On May 5, ED resumed collections on defaulted student loans, which had been paused for many years during the pandemic. The same day, the Department published an Electronic Announcement, which emphasized that “institutions play a key role in the Department’s ongoing efforts to improve loan repayment outcomes.” ED is urging institutions to conduct outreach to borrowers no later than June 30. In the same announcement, ED stated it would begin publishing loan non-payment rates by institution later this month.  

Why This Is Important 

Under the HEA, institutions are required to keep their cohort default rates low and will lose eligibility for federal student assistance programs if their CDR exceeds 40% for a single year or 30% for three consecutive years. CDRs published in 2026 will include borrowers who entered repayment in 2023 and defaulted in 2023, 2024, or 2025. Borrowers whose delinquency or default status was reset in September 2024 could be delinquent beginning in June, leading to default this summer. 

EXECUTIVE ORDER & DCL ON ACCREDITATION

What You Need to Know 

On April 23, President Trump signed an Executive Order directing the Education Secretary to take specific steps to reform accreditation. These steps include recognizing new accreditors, simplifying the process to change institutional accreditors, and investigating certain accreditors for “discriminatory practices,” such as promulgating DEI-based standards. The President also directed the Secretary to mandate that accreditors require institutions to focus on program-level student outcomes, to improve the process for review and recognition of accreditors, and to hold accreditors accountable for failing to comply with recognition requirements. The Executive Order expresses concern over graduation rates and programs with “a negative [financial] return on investment” and signals the Trump Administration’s continued focus on student outcomes. 

Why This Is Important 

On May 1, the Department published a Dear Colleague Letter (DCL) outlining a substantially simplified process for a school seeking to change its institutional accreditation agency. The updated procedure requires a school to submit a two-page form, certifying the school’s reasonable cause for changing accreditors. If ED does not make a reasonable cause determination within 30 days of submission, the request to change accreditors will be deemed approved by default. For AACS members seeking to change accreditors, the DCL reduces the timeframe to obtain the Department’s approval to begin the process from more than a year, in some cases, to as little as a month. 

SKILLED TRADE JOBS EXECUTIVE ORDER

What You Need to Know 

On April 23, President Trump signed an Executive Order aimed at “Preparing Americans for High-Paying Skilled Trade Jobs of the Future.” Specifically, the EO directs the Secretaries of Education, Labor, and Commerce to prepare a report on workforce development programs, proposing ways to consolidate and restructure programs; recommending process improvements; and identifying alternative credentials to 4-year degrees to meet workforce demands. The EO also directs the Secretaries to draft a plan to surpass one million new active apprenticeships, including expanding into new industries, especially high-growth and emerging sectors.   

Why This Is Important 

The EO requires the Secretaries’ plan to consider federal financial aid programs and the opportunities those programs may present for connections between education and apprenticeships. AACS will keep our members informed regarding potential implications for our industry. 

CONFUSION OVER STUDENT VISAS

What You Need to Know 

On April 25, the US Department of Justice restored the student visa registrations of thousands of international students studying in the US. Over the last month, the Trump Administration revoked international student visas on a large scale, with some reports suggesting that more than 1,500 student visas across at least 280 institutions of higher education had been revoked. The following week, court filings revealed the Trump Administration’s plans to expand the power of federal officials to terminate students’ legal status, arguing that immigration officials have “inherent authority” to do so “as needed.” The plan suggests terminations will move forward based on “evidence of failure to comply” with nonimmigrant visa terms and visa revocation, which the US Department of State can issue without evidence of violation and is typically not subject to court challenge.  

Why This Is Important 

The vast majority of schools impacted by the revocations were public and private non-profit institutions. It remains to be seen whether the new legal immigrant status termination initiative will continue to focus on these types of institutions or whether the impact will be more broadly felt by all institutions.