Congress Returns from Recess
On January 5, 2026, Congress returned from recess and needs to pass FY 2026 appropriations bills or a continuing resolution (CR) to avoid a partial government shutdown before the January 30th expiration date of the current CR.
On January 8, 2026, the House passed a funding bill for FY 2026 that would fund the Departments of Energy, Commerce, Interior and Justice through September 30, 2026.
Congress must also complete eight additional funding measures for FY 2026, including Labor, Health and Human Services and Education.
On January 5, 2026, Senator Susan Collins (R-ME) announced that she would like the appropriations bills for the Department of Defense and the Departments of Labor, Health and Human Services, and Education combined into a funding package.
ED Reaches Consensus on New Accountability Framework
On January 9, 2026, the Department of Education announced that it had reached consensus on the final regulatory package from the Accountability in Higher Education and Access Through Demand-driven Workforce Pell (AHEAD) negotiated rulemaking committee.
All negotiators voted in favor of the proposed regulatory text, except for one negotiator who abstained.
Under the proposal, the accountability provisions enacted in the One Big Beautiful Bill Act (OBBBA) harmonized the OBBBA’s “Do Not Harm” standard with the existing Financial Value Transparency and Gainful Employment regulations to “bring accountability to all programs across sectors, using commonsense earnings thresholds.”
The AHEAD Committee’s agreed upon language treats all programs from certificate to graduate programs the same.
Under the agreed-upon proposal, institutions will lose access to the Direct Loan program if they fail to meet the relevant earnings thresholds for two out of the three years.
Further, if at least half of the institution’s Title IV funds come from failing programs, those programs will also lose Pell Grant eligibility.
All undergraduate programs would have to have cohorts of completers earn as much as or more than high school-only graduates, and graduate program cohorts would have to earn as much as or more than bachelor’s degree holders.
The negotiators agree to eliminate the Gainful Employment “debt-to-earnings” measure.
This measure was “unnecessarily duplicative of the new earnings metric in terms of identifying the same failing programs, while also creating significant burdens for both institutions and the Department.”
Since the Committee reached consensus, ED must use the agreed-upon language from the negotiations in its forthcoming NPRM, which is expected to be published in the coming months.
Following the public comment period, the Department will draft final regulations, and the statutory accountability provisions in the OBBBA are scheduled to take effect on July 1, 2026.
The Department has determined that the regulations are not subject to the master calendar rules.
The Department indicated that the earnings test itself would not be applied to programs until July 1, 2027.
Institutions will begin receiving their program-level earnings in early 2027, based on cohorts of students who completed their programs beginning in 2021, using the most recent available IRS earnings data.
By December 2025, all graduates from the 2021 award year will have been out of college for four years and their April 2026 tax information will reflect their 2025 earnings.
The first earnings test calculations will be released in early 2027, but no program will lose Direct Loan eligibility on July 1, 2027.
In early 2028, ED will release the second earnings test calculations.
July 1, 2028, is the first time a program could lose Direct Loan eligibility.
The first Committee, the Reimaging and Improving Student Education (RISE) Committee, addresses loan limits, repayment plans, loan reduction, and loan rehabilitation and deferments.
The NPRM for these provisions is due sometime this month.
Summaries of the RISE and AHEAD Committees agreed upon language is found at:
https://www.ed.gov/laws-and-policy/higher-education-laws-and-policy/higher-education-policy/negotiated-rulemaking-for-higher-education-2025-2026.
Trump Administration Abandons Appeal to Proceed with Department of Education Layoffs
On January 2, 2026, the Ninth Circuit Court of Appeals dismissed an appeal by the Trump Administration to overturn a lower court’s order halting impending federal reductions-in-force (RIFs).
Abandoning its efforts to proceed with the layoffs of more than 400 Department of Education employees initiated during the recent government shutdown, the Trump Administration filed an unopposed motion to voluntarily dismiss its appeal on December 31, 2025.
Previously, after U.S. District Judge Susan Illston had issued a preliminary injunction extending a block on impending federal RIFs issued during the government shutdown on December 17, 2025, the Trump Administration had filed an emergency appeal on December 22, 2025, asking the Ninth Circuit Court of Appeals to stay U.S. District Judge Illston’s order.
Bipartisan Group of Members of Congress Send Letter to Under Secretary Kent Regarding Definition of “Professional Degree” that Excludes Nursing Programs
On December 12, 2025, a bipartisan group of members of Congress sent a letter to Under Secretary Nicholas Kent expressing concerns over the Reimagining and Improving Student Education (RISE) Committee’s decision to omit post-baccalaureate nursing degrees from the regulatory definition of “professional degree.”
The letter states that the RISE Committee’s proposed definition will make it more difficult for nurses to join the health care workforce because post-baccalaureate nursing degrees are excluded from the list of health care degrees in the definition of a “professional degree.”
The members said that classifying these programs as “graduate programs,” which have lower annual and aggregate loan limits, “would result in these students having to take out additional loans to cover the remainder of their tuition, which will limit the ability for students to complete their advanced degree.”
The letter concludes by indicating that “[n]urses and nurse faculty make up the backbone of our health system, and…post-baccalaureate nursing degrees should be treated equally to other accredited post-baccalaureate health profession degrees.”
ED Set to Begin Garnishing Wages of Student Loan Borrowers in Default
A number of higher education newsletters have reported that for the first time in five years, the Department of Education will resume garnishing wages from Federal student loan borrowers in default.
About 1,000 borrowers should expect notices beginning the week of January 5th, with the number of notices increasing each month.
Wage garnishment has been paused since March 2020 due to the COVID-19 pandemic and more than five million borrowers are now in default.
The restart follows ED’s earlier announcement on May 5, 2025, that it intends to resume collections on defaulted student loans, including the withholding of Federal tax refunds and Social Security benefits.
ED Announces Review of Brown University for Potential Clery Act Violations
On December 22, 2025, the Department of Education announced it will conduct a program review of Brown University in response to the December 13, 2025, shooting on its campus, which killed two students.
The Office of Federal Student Aid (FSA) will investigate if Brown University violated the Jeanne Clery Campus Safety Act (“Clery Act”), which requires institutions of higher education to meet certain campus safety and security-related requirements as a condition of receiving Title IV federal student aid.
According to the announcement, public reporting appeared to show that Brown University’s campus surveillance and security system may not have met the appropriate standards.
Further, many students and staff reported that the emergency notifications about the shooter were delayed, raising concerns about the safety alert system.
Secretary of Education Linda McMahon said:
“Students deserve to feel safe at school, and every university across this nation must protect their students and be equipped with adequate resources to aid law enforcement.
The Trump Administration will fight to ensure that recipients of federal funding are vigorously protecting students’ safety and following security procedures as required under federal law.”
Secretary of Education Releases Statement Regarding DOJ’s Memorandum on the Constitutionality of Race-Based Higher Education Programs
On December 19, 2025, Secretary of Education Linda McMahon released a statement regarding the Department of Justice’s (DOJ) Office of Legal Counsel’s (OLC) opinion on the constitutionality of racial quotas and preference in the Department of Education’s Minority-Serving Institution (MSI) programs.
The OLC opinion of December 2, 2025, is included as a link in the Secretary’s statement.
OLC declared several ED programs and grants unconstitutional as “race-based initiatives.”
The opinion argued that the long-standing MSI programs amount to unconstitutional racial quotas and should not be funded.
The Secretary said:
“I agree with the Office of Legal Counsel opinion, which confirms that using race quotas and preferences to determine eligibility for federal education funding programs is unconstitutional.
We cannot, and must not, attach race-based conditions when allocating taxpayer funding.
This is another concrete step from the Trump Administration to put a stop to DEI in government and ensure taxpayer dollars support programs that advance merit and fairness in all aspects of Americans lives.
The Department of Education looks forward to working with Congress to reform these programs.”
ED Announces that More than 5 Million 2026-2027 FAFSA Forms Have Been Successfully Submitted to ED
On December 18, 2025, the Department of Education announced that more than 5 million 2026-2027 FAFSA forms have been successfully submitted by students and families to ED, a nearly 150 percent increase in the number of FAFSA forms submitted at the same time last year.
Secretary of Education Linda McMahon said:
“Completing the FAFSA form is a critical step in many postsecondary education journeys.
And just two short years ago, not a single American student had completed the FAFSA form by December 17th.
Contrast that with today, where 5 million aspiring college students have not only started, but successfully completed and submitted their FAFSA forms.
Our extraordinary talented FAFSA team has redesigned and streamlined the form, all while launching the earliest form in history, a huge win for students and families.”
Kelchen Analyzes Negotiated Rulemaking Data Release as to Which Programs Would Fail the Earnings Threshold Metric and Which Programs Would Face Challenges with Reduced Graduate Student Loan Limits
On December 31, 2025, Professor Robert Kelchen from the University of Tennessee, Knoxville, TN, released a blog post titled “Key Takeaways from the Negotiated Rulemaking Data Release,” where he analyzed the new datasets on program-level outcomes released by the Department of Education in advance of the January 2026 negotiated rulemaking session on implementing accountability provisions established by enactment of the One Big Beautiful Bill Act (OBBBA).
In developing regulations, the Department is trying to reduce burden for both the Department and institutions by amending the existing gainful employment and financial value transparency regulations to align with the accountability framework required by the OBBBA.
Professor Kelchen addressed two questions:
Which programs would fail the earnings threshold metric?
Overall, 2,964 of the 49,860 programs (5.9 percent) with sufficient data on program-level earnings are estimated to be below the earnings threshold.
The failure rate is highest for for-profit institutions (35.1 percent) as compared to nonprofit institutions (3.3 percent) and public institutions (3.8 percent).
While not part of the OBBBA, a large number of the failing programs were at the certificate level with 55.8 percent of the for-profit undergraduate certificate programs failing, 28.5 percent of the nonprofit undergraduate certificate programs failing, and 13.3 percent of the public undergraduate certificate programs failing.
Which programs are facing challenges with reduced graduate student loan limits?
The analysis found that 30 percent of professional programs and 26 percent of graduate programs would be over the new annual loan caps established by the OBBBA.
There were also differences by field of study.
Of the most popular graduate programs, almost half of health and biology programs would be over the $20,500 annual loan limit.
Of the professional programs, half of all health-related and veterinary medicine programs would be over the $50,000 new annual loan cap.
Twenty-five percent of law school borrowers would exceed the new annual loan limit.
Grand Canyon University is Formally Recognized as a Nonprofit Institution of Higher Education
On December 15, 2025, Grand Canyon University (GCU) announced that the Department of Education has formally recognized its status as a nonprofit institution of higher education.
The GCU announcement said that this brings ED’s classification into alignment with every other governmental and accrediting authority that previously affirmed GCU’s nonprofit status.
It is also consistent with two major rulings, one made by the Ninth Circuit Court of Appeals in November 2024 and the other was a four-year IRS audit completed in May 2025, affirming GCU’s nonprofit designation.
Sharon H. Bob, Ph.D.
Higher Education Specialist
Powers Pyles Sutter and Verville, PC
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January 15, 2026
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