WASHINGTON, DC EDUCATION UPDATE SEPTEMBER 2025

Important Deadlines for Institutions

There are a number of deadlines institutions must remember:

• The final deadline for electronically transmitting Pell Grant records for the 2024-2025 award year is September 30, 2025.
• The final deadline for submitting the Fiscal Operations Report for 2024-2025 and the Application to Participate for 2026-2027 (FISAP) with the required signature for the Campus-Based Programs is October 1, 2025.
• The current deadline for reporting the data under the Financial Value Transparency and Gainful Employment (FVT/GE) Rule for the 2022-2023 and 2023-2024 award years is September 30, 2025.
• The current deadline for reporting the data under the FVT/GE Rule for the 2024-2025 award year is October 1, 2025.

House Appropriations Committee Passes the FY 2026 Labor, Health and Human Services, Education, and Related Agencies Appropriations Act

On September 9, 2025, the House Appropriations Committee passed the Labor, Health and Human Services, Education, and Related Agencies Appropriations Act, 2026, by a vote of 35-28. The bill will now move to the House floor for consideration, although no floor action has been scheduled.

On July 31, 2025, the Senate Appropriations Committee passed its version of the education appropriations bill, and set the Pell Grant maximum at $7,395 for the 2026-2027 award year, the same funding as the 2025-2026 award year. The Federal Supplemental Educational Opportunity Grant (FSEOG) program would be allocated $910,000,000, and the Federal Work-Study program would be allocated $1,230,000,000, the same funding amounts allocated for FY 2025.

Congress has until September 30, 2025, to pass legislation that would fund the federal government, or risk a government shutdown.

The text of the House Appropriations Committee report of the bill provides a statement regarding 90/10 calculations and distance education on page 251:

“90/10 Rule.—The 90/10 rule under the HEA requires proprietary IHEs to derive at least 10 percent of their tuition and fee revenue from non-Title IV sources.  Under the prior Administration, the Department issued a rule in October 2022 to include other Federal education assistance funds from other Federal agencies, not just Title IV funds, as required by P.L. 117–2, as well as other changes.  The rule was effective July 1, 2023, for institutional fiscal years that begin on or after January 1, 2023, requiring some institutions to comply as of January 1, 2023.  The Committee is aware that commenters questioned this timing for compliance and sought clarification on what statutory authority the Department used as a basis for that determination.  The Committee also notes strong concerns that the preamble to the rule purported to interpret the rule to penalize institutions for utilizing distance learning.  The Committee understands that the Department issued an interpretive rule, “Classification of Revenue Under Title IV,” published in the Federal Register on July 7, 2025, stating that this preamble language is non-binding, because the Department did not incorporate it through changes to the regulatory text.  The interpretive rule further rescinded that non-binding language in the preamble and made clear that the Department believes ineligible distance education program revenue may be included in the 90/10 revenue calculation.  Additionally, the Committee encourages efforts by the Department to provide clear communication and information on this rule, given its complexities and significant impact on students and proprietary institutions.”

Previously, on September 2, 2025, the House and Senate members returned from August recess, and the House Appropriations Committee Subcommittee released the Labor, Health and Human Services, Education, and Related Agencies (LHHE) Appropriations Act, 2026.  The Subcommittee released a press release which quoted Labor, Health and Human Services, Education, and Related Agencies Subcommittee Chairman Robert Aderholt (R-AL) as saying:

“As you may know, this subcommittee is responsible for the largest non-defense expenditure in the federal government.  Therefore, it presents one of the greatest opportunities for us to reevaluate our spending priorities to ensure taxpayer dollars are being spent responsibly, in order to provide for critical services in healthcare, workforce development, and education – all while eliminating waste and cutting out politically motivated programs being pushed by non-elected bureaucrats.  Even last year, we were dedicated to getting government spending under control.  But now, it’s particularly encouraging to have a partner in the White House that shares this commitment. The Trump Administration, through its Department of Government Efficiency (DOGE), has already begun working with agencies to realign spending where it should be, helping us build on that shared momentum for fiscal responsibility.”

The Committee Summary describes the proposals for the Department of Education, which would fund the 2026-2027 award year. The bill would maintain funding for Pell Grants at the discretionary maximum award level of $6,335, which when combined with mandatory funding under current law would continue to support a total maximum award of $7,395, which is the same funding as the 2025-2026 award year. The bill would also eliminate the FSEOG program. The FWS program would be funded at $779 million, which is a $451 million decrease from FY 2025.  Overall, ED would be allocated $67 billion, which is a $12 billion decrease from the FY 2025 enacted level, but is aligned with the White House’s budget request.

The House Committee Appropriations bill proposes that Workplace Pell Grants be renamed “Trump Grants.” Another provision would extend the National Advisory Committee on Institutional Quality and Integrity’s (NACIQI) authority through FY 2026.

The House Committee Democrats released a press release describing the bill cuts.  “The middle class, the working class, and vulnerable Americans are facing a cost-of-living crisis.  They need affordable health care, access to reproductive health, and good public schools, but with the 2026 Labor, Health and Human Services, and Education, and Related Agencies funding bill, Republicans “are abandoning them,” according to the House Appropriations Committee and Labor, Health and Human Services, and Education, and Related Agencies Subcommittee Ranking Member Rosa DeLauro (D-CT).

ED Ends Grant Programs for MSIs Grant Programs

On September 10, 2025, the Department of Education announced in a press release that it will end discretionary funding to several Minority-Serving Institutions (MSI) grant programs that discriminate by conferring government benefits exclusively to institutions that meet racial or ethnic quotas. This action follows the U.S. Solicitor General’s determination in July 2025 that the Hispanic-Serving Institutions (HIS) programs “violate the equal-protection component of the Fifth Amendment’s Due Process Clause” and that the Department of Justice would not defend them in ongoing litigation. ED agrees that the racial quotas in the HIS programs are unconstitutional. Due to similar issues with all MSI programs, ED is using its statutory authority to reprogram discretionary funds to programs that do not present such concerns.

Secretary of Education Linda McMahon said:  “Discrimination based upon race or ethnicity has no place in the United States. To further our commitment to ending discrimination in all forms across federally supported programs, the Department will no longer award Minority-Serving Institution grants that discriminate by restricting eligibility to institutions that meet government-mandated racial-quotas.”

The press release identified the following discretionary grant programs that the Department will cease to fund that include both 2025 new awards and non-competing continuations:

• Strengthening Alaska Native and Native Hawaiian-Serving Institutions (Title III Part A);
• Strengthening Predominantly Black Institutions (Title III Part A);
• Strengthening Asian American and Native American Pacific Islander-Serving Institutions (Title III Part A);
• Strengthening Native American-Serving Nontribal Institutions (Title III Part A);
• Minority Science and Engineering Improvement (Title III Part E);
• Developing Hispanic-Serving Institutions (Title III Part A); and
• Promoting Postbaccalaureate Opportunities for Hispanic Americans (Title V Part B).

These programs had been allocated about $350 million in discretionary funds, which will be reprogrammed into other programs that do not include racial and ethnic quotas. However, the Department will disperse about $132 million in mandatory funds that cannot be reprogrammed:

• Strengthening Alaska Native and Native Hawaiian-Serving Institutions (Title III Part F);
• Strengthening Predominantly Black Institutions (Title III Part F);
• Strengthening Asian American and Native American Pacific Islander-Serving Institutions (Title III Part F); and
• Strengthening Native American-Serving Nontribal Institutions (Title III Part F); and
• Developing HSI Science, Technology, Engineering, or Mathematics and Articulation Programs (Title III Part F).

GAO Study Shows that FAFSA Processing System is Not Functioning as Intended; ED Responds in Advance

On September 9. 2025, the Government Accountability Office (GAO) released a study (GAO-25-107396) titled, “Gaps in Federal Student Aid Contract Oversight and System Testing Need Immediate Attention,” that found that the Office of Federal Student Aid (FSA) is at risk of the FAFSA Processing System (FPS) not functioning as intended in future releases. Last year, GAO reported that the status of FPS was incomplete, with nine of the 25 contractual requirements not yet being deployed as of August 2024. As of May 2025, GAO found that FSA was unable to report the current status of these remaining nine contractual requirements for the FPS. Additionally, FSA established two approaches to monitoring its contractor’s performance, but FSA did not fully implement either approach.

The GAO also found that the FSA office did not always demonstrate that key oversight staff had the necessary qualifications to perform their job duties. Finally, GAO found that FSA tested the FPS even though it was missing key information.

GAO concluded that FPS is at risk of not functioning as intended in future releases resulting in students being unable to obtain federal aid.  Aaron Lemon-Strauss, FSA’s executive director of the FAFSA program, responded to the GAO findings by noting that the 2024-2025 FAFSA launch resulted in significant challenges. However, Mr. Lemon-Strauss indicated that there have been many changes to the FAFSA team, which will produce improved outcomes.

The GAO issued seven recommendations to address the oversight gaps, warning that without their implementation, future efforts to improve and modernize federal student aid systems may be jeopardized.

In anticipation of the release of the report, James Bergeron, Deputy Under Secretary and Acting Chief Operating Officer, Federal Student Aid, released a blog response titled, “Getting Government Technology Right:  Our Response to GAO,” outlining recent improvements in the management and technology behind the FAFSA. Mr. Bergeron stated that recent reforms have focused on building internal technical expertise, shifting to a product-based delivery model, and restructuring vendor contracts to support iterative development. He said that these changes align with best practices from the private sector and wrote:  “FSA is heading toward a FAFSA system that’s more responsive, resilient, and centered on students and families.”

Mr. Bergeron also expressed concerns about some of GAO’s expected recommendations, and said:  “We anticipate that GAO’s recommendations will lean on a traditional, linear project-management model – one that assumes FSA can and should write contract requirements years in advance and then execute them without constant adjustment.  This model was at the forefront of government modernization efforts – 15 years ago. But IT systems and software, especially at the scale and complexity of the FAFSA form, don’t work that way anymore.”

ED Requests Information on Developing and Implementing a Common Manual for the Direct Loan Program

On September 8, 2025, the Department of Education issued a Notice, which included its Federal Register publication, announcing plans to create a Common Manual for Direct Loans. The Notice said that over the last 15 years, federal, state, and private stakeholders have raised concerns about “the lack of published standards and inconsistencies in Direct Loan servicing operations that has led to borrower confusion and adversely impacted the ability for some borrowers to repay their federal student loans.” ED is seeking feedback by October 8, 2025. ED’s goal is to “complement the current performance-based contracts and is aimed at establishing a set of clear, concise, consistent, and enforceable federal standards for the operations and oversight of the Direct Loan Program,” using the Common Manual developed for the Federal Family Education Loan (FFEL) as a model.

A November 18, 2015, Government Accountability Office (GAO) report titled, “Key Weaknesses Limit Education’s Management of Contractors,” cited a lack of clarity and consistency in the guidance provided by ED to its servicers.

FSA also announced on September 5, 2025, that the Office of Consumer Education and Ombudsman will develop a centralized Common Manual for servicing and collection practices and policies under the Direct Loan Program (see September 5^th article below).

ED and DOL Take Steps in Implementing Their Workforce Development Partnership

On September 8, 2025, the Department of Education (ED) and the Department of Labor (DOL) announced in a press release they have taken steps to integrate the federal government’s workforce portfolio through its innovative partnership announced on May 21, 2025. The Departments are launching a new, integrated state plan portal that will streamline federal workforce development programs and allow ED and DOL to administer core Workforce Innovation and Opportunity Act (WIOA) programs, including adult education and family literacy programs. ED will transfer program funds and detail staff to DOL to support the programs. DOL will be the centralized hub for federal workforce programs and effectuate the agencies’ joint workforce development agreement.

Secretary of Education Linda McMahon said:  “I am confident that the Department of Labor is well positioned to cooperatively administer, implement and streamline these critical career and adult education programs.” Secretary of Labor Lori Chavez-DeRemer said:  “The Department of Labor has an exciting and important role to play here, and I’m honored to team up with Secretary McMahon and our state partners to better connect workers with the training they need to find in-demand, mortgage-paying jobs.

FSA Announces its Expansion of the Office of Ombudsman to Improve Consumer Education

On September 5, 2025, Federal Student Aid (FSA) announced in a press release that it is expanding the mission and work of the Office of the Ombudsman to focus on providing information to students and families on the benefits and risks of federal student loan borrowing. Since the federal student loan debt is almost $1.7 trillion, and loan defaults and delinquencies remain high, the Office of Ombudsman will be refocused as the Office of Consumer Education and Ombudsman. The press release will be taking on a more proactive approach to improve financial literacy among students, parents, and borrowers so they are better able to make borrowing decisions and responsibly manage their federal student loan debt.

In addition, FSA announced that the Office will develop a centralized Common Manual for servicing and collection practices and policies under the Direct Loan program.  The manual will create federal guidelines and guardrails for vendor operations, ensuring consistent borrower communications, customer service, and enforcement actions. Consistent rules will improve accountability for servicers and collectors and will strengthen oversight operations, “while eliminating the punitive and piecemeal regulatory approach established by the Biden-Harris Administration.”

Under Secretary of Education Nicholas Kent said:  “We are expanding the role and mission of the Office of the Ombudsman to go beyond dispute resolution and become a proactive resource for student loan borrowers.” Acting FSA Chief Operating Officer James Bergeron said:  “Creating a best practices manual will not only encourage better customer service and stronger repayment outcomes over time, but it will also improve the performance of the student loan portfolio which is underwritten by the American taxpayer.”

Department of Education’s Rulemaking Agenda Includes Accreditation

On September 4, 2025, the Unified Spring Agenda was published in the Federal Register, which included the Department of Education’s rulemaking agenda. Some of the agenda items, such as amending eligibility criteria for the Public Service Loan Forgiveness program, are already in progress. Other rules that the Department is attempting to amend include some of the following:

• Civil Rights Investigations: The Department wants to streamline “the process by which OCR [Office of Civil Rights] seeks termination of Federal financial assistance to institutions that intentionally violate Federal civil rights laws and refuse to voluntarily come into compliance.”
• Limiting Foreign Influence: The Department wants to codify an executive order that states colleges can lose federal funding if they do not accurately disclose gifts from foreign donors.
• Accreditation: The Departments wants to “clarify institutional flexibility to pursue changes of accreditors without prior Department approval and remove other burdensome requirements that erect barriers to entry for new accrediting agencies.”
• Title IV Eligibility: The Department wants “to address Title IV eligibility issues to remove requirements that unnecessarily target faith-based or for-profit institutions and interfere with efficient and beneficial mergers, sales, and transfers of institutions of higher education.  Such issues to be addressed in the context of institutional eligibility for participation of Federal student financial aid include rules governing change of ownership, cash management, administrative capability standards, and financial responsibility requirements.”

Secretary of Education Certifies On-Time Launch of the 2026-2027 FAFSA Form

On August 26, 2025, U.S. Secretary of Education Linda McMahon sent a letter to Congress certifying that the 2026–2027 Free Application for Federal Student Aid (FAFSA) form will be available this fall for students and families across the country by the October 1^st deadline. In a press release of August 27, 2025, Secretary McMahon said:  “Under President Trump’s leadership, our team has prioritized technical competence and expertise, which has led to the earliest testing launch of the FAFSA form in history. The Biden Administration failed the FAFSA rollout two years ago, leaving millions of American students and families without clear answers or a path forward in their educational journey.”

ED Proposes Changes to E-App to Reduce Administrative Burden

On August 25, 2025, ED announced a series of proposed revisions to the Application for Approval to Participate in the Federal Student Aid Programs (E-App) in a Federal Register Notice. ED’s proposed changes aim to clarify language and reduce administrative burden on institutions. Comments are due by October 24, 2025, followed by a 30-day review period. Some of the items that are being updated include the following:

• The logic for adding or deleting Federal School Codes (FSCs) would be revised. Instead of a single question, the new form will present situation-specific options depending on whether an institution has an active, inactive, or no FSC.
• New reasons for submitting an E-App have been added; UEI Change, Add Additional Location from Another OPEID, 90-day notice Change in Ownership.
• If the reason for submitting an E-App is for Structure Changes or CIO, the proposed E-App will ask if the institution is requesting an Abbreviated Pre-Acquisition Review or a Comprehensive Pre-Acquisition Review.
• One of the questions added relates to licensure requirements, and asks if the program is offered in a state that requires a student to complete a minimum number of clock or credit hours for licensure or certification for the occupation for which the program prepares the student.
• A question would be added that allows institutions to affirm they have developed procedures to evaluate the validity of a student’s high school diploma if there is a reason to believe that it is not valid or was not obtained from an entity that provides secondary school education. While a “yes” or “no” answer is required, an optional field for an explanation would be provided.
• Another question would be added for schools to self-certify that they have conducted debarment checks on their employees and contractors, shifting the responsibility of ensuring that employees and contractors are not prohibited from participating in the administration of Title IV programs from ED to the institution.
• The proposed E-App would also require fewer college officials to provide their personal details. Contact information, such as home addresses, personal emails, and personal phone numbers, would only be required for the President/Chancellor and emergency contacts at domestic schools. (Home addresses, personal emails and personal phone numbers are still required for person owners, but apparently not for officials of entity owners.)
• ED proposes a new method for selecting Title IV programs to simplify the initial application process. Instead of requiring schools to choose the specific programs they wish to participate in, the proposed E-App will only ask if they want to participate.  FSA will then determine the programs for which the school is eligible.
• New certifications for institutions offering Gainful Employment (GE) or Prison Education Programs (PEP) will be included. A new certification text will be displayed if an institution offers these programs.
• To reduce administrative burden, the proposed E-App will allow schools to self-certify their Title IV policies and procedures have been reviewed and are in compliance with applicable Title IV regulations (i.e., Satisfactory Academic Progress, Return of Title IV Funds Policy, and Admission Policy).

FSA Releases Quarterly Report to FSA Data Center

In an Electronic Announcement (GENERAL-25-39) of August 21, 2025, Federal Student Aid (FSA) released a series of updates about FSA programs on the FSA Data Center.  The data provides a loan portfolio overview, repayment and delinquency trends, Income-Driven Repayment (IDR) insights, FAFSA, and aid disbursement amounts through June 30, 2025. Some of the updates are:

• The outstanding federal student loan portfolio includes 42.3 million recipients totaling $1.67 trillion, which represents a three percent increase from June 2024.
• More than 10.3 million recipients have at least one loan in forbearance status.
• More than three million recipients have at least one loan in deferment.
• About 5.3 million ED-serviced borrowers with nearly $117 billion in outstanding federal student loans are in default.
• More than 65 percent of ED-serviced recipients with loans in active repayment are current (less than 31 days delinquent) on their federal student loan payments.
• More than 12.7 million Direct Loan and ED-serviced borrowers in repayment, deferment, or forbearance statuses are enrolled in an IDR plan.
• More than 13.4 million FAFSA forms were submitted for the 2025-2026 school year, representing a 14 percent increase in applications from those submitted in the 2024-2025 school year.
• Preliminary disbursement data is available for the 2024-2025 award year, which indicates that students received $37.9 billion in Federal Pell Grants and $81.3 billion in Direct Loans.

ED Rescinds Biden-Era Guidance Allowing FWS Programs to Pay Students to Engage in Political Activities

On August 19, 2025, the Department of Education rescinded Biden-era guidance that allowed Federal Work-Study (FWS) students to engage in certain partisan and nonpartisan political activities. ED clarified that institutions should focus FWS funds on jobs that provide real-work experience instead of political activities.  The action follows a letter from sixteen Republican attorneys general that outlined how the Biden-era guidance violated federal law.

Under the Higher Education Act, as amended, institutions of higher education are required to “make a good faith effort to distribute a mail voter registration form to each student enrolled in a degree or certificate program and physically in attendance at the institution, and to make such forms widely available to students at the institution.”  Institutions agree to implement these requirements as part of the Program Participation Agreement (PPA) they sign with the Department of Education. To give institutions maximum flexibility to ensure that they are not aiding and abetting voter fraud, the Department has clarified that it does not interpret this “good faith” requirement to mean that institutions are required to distribute voter registration information to students who the institution has reason to believe are ineligible to vote in federal or state elections, such as foreign students. ED requests institutions notify students that:

• Only citizens of the U.S. may vote in federal elections;
• Voting more than once is prohibited under federal law;
• Knowingly or willfully providing false information for the purpose of establishing eligibility to register or vote is prohibited under federal law; and
• In most states, individuals may only register to vote where they are domiciled in that state, and they may not be domiciled in more than one place.

According to a press release of August 19, 2025, Under Secretary Nicholas Kent said:  “Federal Work Study is meant to provide student opportunities to gain real-world experience that prepares them to succeed in the workforce, not a way to fund political activism on our college and university campuses.”

ED Issues NPRM Regarding the PSLF Program

On August 18, 2025, the Department of Education published a Notice of Proposed Rulemaking (NPRM) regarding the Public Service Loan Forgiveness (PSLF) program, which would “halt PSLF benefits to employees of organizations that are undermining national security and American values through illegal means, and therefore not providing a public service.” Comments are due September 17, 2025.

Under the NPRM, the Secretary would have final authority to determine whether an organization is ineligible based on a “preponderance of the evidence” rather than with “clear and convincing evidence,” which was initially agreed on. Banned activities include human trafficking, providing hormone treatments or puberty blockers to transgender youth, supporting undocumented immigration, or aiding foreign terrorist organizations. If an organization is banned, its employees’ loan payments would no longer count toward forgiveness unless they move to another eligible employer.  The ban would remain in place for 10 years or until the organization completes an approved corrective plan.

Under Secretary of Education Nicholas Kent said in a press release:  “President Trump has given the Department a historic mandate to restore the Public Service Loan Forgiveness program to its original purpose – supporting public servants who strengthen their communities and serve the public good, not benefiting businesses engaged in illegal activity that harm Americans. The federal government has a vital interest in deterring unlawful conduct, and we’re moving quickly to ensure employers don’t benefit while breaking the law.”

ED Issues Notice Expanding Scope of Required IPEDS Reporting to Provide Transparency into Admissions

On August 15, 2025, the Department of Education published a Notice in the Federal Register clarifying that certain institutions will be required to collect and report comprehensive data about their admissions decisions going back five years. The data must be broken down by race and sex, and include students’ high school GPA, test scores, time of application, financial aid status, and other data.  The “Admissions and Consumer Transparency Supplement (ACTS)” will only affect four-year institutions that use “selective college admissions” as they “have an elevated risk of noncompliance with the civil rights laws.” In addition, these same institutions that utilize selective admissions have a higher risk of noncompliance in awarding scholarships because of their selectivity.  “Open-access institutions, such as community colleges and trade schools, have minimal or no risk for civil rights noncompliance in admissions because they admit all (or the vast majority of) students who apply.”

As a result with concerns with the widespread emphasis on diversity, equity, and inclusion (DEI),  President Trump issued a Presidential Memorandum on “Ensuring Transparency in Higher Education Admissions” on August 7, 2025. Within 120 days of the date of the memorandum, the Secretary of Education, in coordination with the National Center for Education Statistics (NCES), is required to expand the scope of required reporting to provide adequate transparency into admissions beginning in the 2025-2026 school year.  “The Secretary of Education, in conjunction with the heads of other executive departments and agencies as necessary, shall revamp the online presentation of the Integrated Postsecondary Education Data System (IPEDS) data, to make it easily accessible to parents and students.

ED has made available a directive sent by Secretary of Education Linda McMahon to NCES on August 7, 2025, to initiate a series of changes to IPEDS during the 2025-2026 school year. She directed NCES to begin collecting data disaggregated by race and sex relating to the applicant pool, admitted cohort, and enrolled cohort at the undergraduate level, and for specific graduate and professional programs. Institutions will also be required to report quantitative measures of applicants and admitted students’ academic achievement such as standardized test scores, GPAs, first-generation-college-student status, and other applicant characteristics, for each race-and-sex pair.

FSA Announces 2026-2027 FAFSA Form and Pell Grant Updates

On August 15, 2025, Federal Student Aid (FSA) released an Electronic Announcement (APP-25-23) announcing the 2026-2027 FAFSA Form and Pell Grant updates as required by changes made in P.L. 119-21, the One Big Beautiful Bill Act (OBBBA), signed into law by President Trump on July 4, 2025.  All changes will be implemented with the official launch of the 2026-2027 FAFSA form by October 1, 2025.

FAFSA Form Excludes:

• The net worth of a family-owned business with 100 or fewer full-time (or equivalent) employees;
• The net worth of a farm on which the family resides; and
• The net worth of a commercial fishing business and related expenses, owned and controlled by a family.

Pell Grant Eligibility Changes:

• The foreign earned income exclusion amount reported on the FAFSA form will be added to the Adjusted Gross Income (AGI) when determining Pell Grant eligibility; and
• An applicant with an SAI equal to or greater than twice the maximum Pell Grant award amount for the award year is ineligible for a Pell Grant.
• For the 2026-2027 award year, this threshold is $14,790.
• This limit does not apply to students who qualify for a Pell Grant under the Special Rule (dependents of certain deceased servicemembers and Public Safety Officers).

Trump Administration Proposes 4-Year Cap on International Student Visas at Four Years Regardless of Program Length

On August 28, 2025, the Department of Homeland Security (DHS) and Immigration and Customs Enforcement (ICE) published a Notice of Proposed Rulemaking (NPRM) in the Federal Register capping international student visas (F and J categories) at four years, regardless of academic program length. Currently, international student visas generally stay in the United States for as long as it takes to complete either a bachelor’s, master’s, or Ph.D. degree program. The rule would require students to apply for extensions and undergo periodic assessments to remain in the country beyond the initial term. The proposal would also prohibit graduate students on F-1 visas from transferring to other institutions or changing educational objectives along with adding similar restrictions for first-year students. The NPRM indicates that the lack of a fixed end day for F and J visas incentivizes fraud and abuse.  Groups, like NAFSA, expressed concern about increased administrative burdens, reduced international enrollment, and Federal overreach into academic governance.

NPR Announces that Colleges See a Significant Drop in International Students

On August 27, 2025, NPR announced that there are fewer international students on campuses across the country this fall. NPR noted that last year more than a million international students studied in the U.S. contributing about $43 billion in the U.S. economy. But the Association of International Educators (NAFSA) predicted a drop of about 150,000 new international students this fall, leading to a decline of about 15 percent overall, and local economies could lose up to $7 billion in spending and more than 60,000 jobs.

Over the last six months, the Trump Administration has clamped down on international student visas, temporarily pausing and then revamping the student visa interview process, and brining more scrutiny to the vetting system. This led to long delays and resulted in many accepted students not having appointments at embassies or consulates in time for the start of the fall semester. The Trump Administration has said they want to make sure that foreign students are not taking spots that could go to American citizens.

ACE Releases Talking Points on OBBBA Implementation

The American Council on Education (ACE) released the talking points made by ACE’s Emmanual Guillory at the August 7, 2025 virtual hearing on the implementation of the One Big Beautiful Bill Act (OBBBA). The talking points include the following:

• Clear and direct communication is critical for students, borrowers, and families to understand the new annual and aggregate loan limits and the new student loan repayment plans;
• The Department should create and disseminate an exhaustive list of professional degree programs;
• Proper staffing should be in place to implement the full scope of the OBBB;
• The data used to determine the median earnings for each program should be made publicly available in a clear and concise manner;
• Further guidance is needed on the requirement for institutions to package non-federal grant aid before the Pell Grant and on institutional accountability reporting; and
• The negotiated rulemaking committee should add additional constituency groups.

FTC Dismisses Complaints Against Grand Canyon University

On August 15, 2025, the Federal Trade Commission (FTC) issued a statement dismissing its complaint against Grand Canyon Education, Inc., and its CEO, Brian Mueller.  The statement indicated that the Trump Administration inherited the case from the Biden Administration that was filed nearly two years ago and has suffered losses in two motions to dismiss.  “These losses are compounded by recent events:  Grand Canyon secured a victory over the Department of Education in a related matter before the Ninth Circuit; the Department of Education rescinded a massive fine levied on related grounds; and the Internal Revenue Service confirmed that Grand Canyon University is properly claiming 501(c)(3) non-profit corporation designation.” The statement indicated that the FTC concluded that there was very little upside relative to the cost of pursuing the case, and therefore, the FTC dismissed the case.

Federal Appeals Court Ruling Allows DOGE Access to Department of Education Data

On August 12, 2025, the U.S. Court of Appeals for the Fourth Circuit in Richmond, VA ruled 2-1 to vacate an injunction issued in February by a federal district judge in Maryland.  The order barred the Department of Government Efficiency (DOGE) access of data at the Department of Education, the Treasury Department, and the Office of Personnel Management.  The lawsuit, which was filed by the American Federation of Teachers (AFT), along with other unions, had argued the DOGE was “steamrolling into sensitive government records systems” in ways that put data at risk and violated the Privacy Act of 1974. The majority also cited a Supreme Court ordered in June that granted DOGE employees access to Social Security Administration files.

Generative AI Accelerates “Scale and Sophistication” of Fake Colleges

On August 29, 2025, the Washington Times reported on generative AI’s ability to establish fake colleges and degrees. The article titled, “AI-powered campaigns dupe students with fake colleges,” describes how AI has accelerated the “scale and sophistication” of fake colleges and degrees. The article referenced the publication Inside Higher Education, which tallied 40 fake university websites with AI glitches, such as “repetitive language, blurry image backgrounds and chatbot-driven exaggerations.”  As examples, “[f]ake sites include ‘Baltimore Metropolitan University,’ ‘California Lake University’ and ‘Western University of Miami.’”

The article points out that AI’s fast-evolving nature has made it harder to identify fake colleges. Before AI, scam websites were easy to identify because of grammar and low-quality imaging, but now the fake websites appear to be perfect.  The Washington Times article concluded by identifying ways to make sure the website of a college is not fake. Scammers cannot fake the “edu” domain. Two other suggestions for verifying a college include searching the Department of Education’s public database of accredited institutions and conducting a web search for the listed faculty members.  Finally, experts advise people who encounter fake colleges to report them to the Federal Trade Commission (FTC).

Colleges are Now Worrying About Ghost Students

On August 23, 2025, Fortune Magazine reported that the new worry for colleges is the “ghost-student,” that has been an issue for the California community college system, and for the colleges in Arizona, Indiana, Oregon, New Jersey, and Michigan. The fraudsters are weaponizing AI to swarm the systems of colleges. Ghost students refer to masses of falsified or stolen identities scammers use to flood college applications and enrollment portals with thousands of submissions in minutes, usually during holidays or weekends. If the scammers are successful, the fraud rings will attempt to register the fake students for classes and apply for financial aid. The scammers also resort to submitting homework through the use of AI. The Department of Education launched a national program in June to eliminate identity theft at colleges and universities and has required new identity verification steps for the Fall 2025 start of the school year.  See Electronic Announcement of June 6, 2025 (APP-25-16).  The Department found that $90 million had been disbursed to ineligible students, including $30 million that went to stolen identities of deceased individuals.

University of Phoenix Parent Company Files for IPO

On August 29, 2025, AP VIII Queso Holdings, doing business as Phoenix Education Partners, Inc., filed for an initial public offering, according to Inside Higher Education of September 3, 2025. The University of Phoenix was acquired by private-equity firm Apollo Global Management and others in 2017 as part of a $1.1 billion deal, taking it private.  According to its filing, the goal was to make the University of Phoenix smaller and more focused. In 2024, the company had revenue of $950 million and enrollment was 78,900.