What’s Happening in Washington — And What It Means for Your Campus

Featuring: Liz Clark, Vice President of Policy and Research, NACUBO

I always look forward to the sessions at our Higher Education Summit, but I have to say — Liz Clark’s presentation is one I genuinely count on. As Vice President for Policy and Research at NACUBO, Liz leads the team that works on government affairs and serves as a liaison between higher education institutions and lawmakers in Washington. She doesn’t just stay current on this material — she lives it. And for those of us who don’t have the bandwidth to track every development coming out of Washington, having Liz in the room means we don’t have to.

I’m grateful for what she shared with our attendees, and I want to capture the highlights here so you can refer back to them and share them with colleagues on your campus.

A Year Ago, There Was a Lot of Anxiety — Here’s What Actually Happened

Liz opened with a helpful reminder of where higher education stood a little over a year ago. Moody’s had downgraded its outlook for the sector, citing a long list of proposed federal policy actions: threats to research funding, DEI enforcement actions, proposals to close the Department of Education, potential Pell Grant cuts, changes to student loans, an increased endowment tax, and reductions in student visas. For those of us working with boards, administrators, and budget models at the time, that uncertainty was real.

Liz made an important distinction: the news of the day is often about proposals, not about what actually became law. And when you look at what actually happened, the picture is meaningfully better than what many feared.

After a record-long government shutdown last fall, Congress reached a bipartisan fiscal year 2026 budget deal at the end of January 2026. Lawmakers rejected some of the most challenging proposals that had been on the table:

• Pell Grants: The maximum award was protected at $7,395 for the 2026–27 academic year — unchanged since 2023–24. Not a cut, but level funding while inflationary pressures continue to mount for students, families, and institutions alike.
• Work Study and SEOG: Both programs were level-funded. The president’s budget had called to eliminate them entirely. Congress stepped in and protected them.
• Federal Research Funding: The picture was mixed. The Department of Energy’s Office of Science received a 2% increase; NIH saw a less-than-1% increase; the National Science Foundation was cut 3.42%. None of the cuts were as steep as originally proposed, though significant new investment was not on the table either.
• Indirect Cost Rate Cap: Congress enacted blocks to prevent the administration from implementing a proposed 15% cap on federal indirect cost rates. This was a significant win for the higher education research community.

Liz was clear about what produced these outcomes: sustained advocacy. From NACUBO and other higher education associations to campus presidents, board members, and student aid directors who made the trip to Capitol Hill and explained what these programs actually mean — to their institutions and to the country. She put a slide up that represented a lot of hard work, and I think it’s worth pausing to appreciate that.

Where Things Stand Today

As of the day of our summit, Congress is working through the president’s fiscal year 2027 budget request. Liz reminded attendees: a president’s budget request is just a request. It is a starting point for negotiation, not law. That said, it matters. Here are the highlights relevant to our institutions:

• Pell Grants: The FY27 proposal is to level-fund the maximum award — an improvement over last year’s proposal to cut it. There is also a proposed fund to address a Pell Grant shortfall driven by increased uptake, FAFSA simplification, and the new Workforce Pell program going into effect this fall.
• Work Study and SEOG: The FY27 proposal would cut Work Study by approximately 90% and fully eliminate SEOG. Liz believes Congress will once again protect these programs, though she does not expect any new investment in them.
• Career and Technical Education (CTE): The administration proposed moving CTE programs from the Department of Education to the Department of Labor — the tenth program to be shifted in this way. If your institution has a strong relationship with these programs, especially community colleges, this is worth watching.

Liz also noted that the administration’s push to pass a reconciliation bill funding border control and immigration priorities has stalled. A $1.8 billion anti-weaponization fund tied to the IRS became a sticking point, pulling attention away from other legislative work — including FY27 budget progress.

The Department of Education: What’s True and What Isn’t

I want to highlight what I thought was one of Liz’s most useful points of the session. There’s a lot of noise on social media about the Department of Education being closed or closing. Liz offered a clear reality check: the department is not closed. Closing it would require an act of Congress, and no such legislation is moving on Capitol Hill.

She used the image of a coin with two sides to explain the dynamic. Both things can be true at once: the administration has a goal to close the department, and the department is actively hiring, writing regulations, and serving as the vehicle through which the White House pursues its education-related regulatory agenda. Programs are being transferred to other agencies to signal progress toward that goal. But the department is very much open for business.

In fact, Liz noted that as of last week, a negotiated rulemaking committee came to agreement on new guidelines related to accreditation. The department is busy.

Major Changes Going Into Effect July 1

As a result of the One Big Beautiful Bill Act passed last year, several significant changes are going into effect on or around July 1, 2026. This is live, not proposed:

• Graduate Loan Limitations: Graduate programs now carry a $100,000 aggregate loan limit, with certain professional degree programs eligible for up to $200,000. Financial aid offices are working hard to ensure students understand what this means for them. Institutions with significant graduate enrollment are understandably most focused on this.
• Workforce Pell Grants: Pell Grants had not previously been available for short-term training programs. That changes this fall. Community colleges will feel this most, but institutions with qualifying short-term programs should be preparing for new packaging requirements and new student populations.
• New Accountability Program: Final rules are still pending, but this program is expected to go into effect in July as well.

Liz’s guidance on the loan limitations was direct: implement based on the current law. With ongoing litigation and possible congressional action, the landscape could shift. But planning around what might change introduces risk. Stay focused on what the law says right now.

Indirect Costs: An Ongoing Fight Worth Following

The administration’s four separate attempts to cap indirect cost rates at 15% — at NIH, the Department of Defense, the Department of Energy, and the National Science Foundation — were all rejected by the courts. The administration ultimately abandoned those fights. But Liz offered a caution I thought was well-put: bad ideas never die in Washington. They get picked up and tried through other mechanisms.

New updated uniform guidance was proposed in the Federal Register just last week. It did not include a 15% cap, but it did include language encouraging federal agencies to give priority preference to institutions with lower indirect cost rates when awarding grants and contracts. NACUBO and partner associations continue to work to educate lawmakers and administration officials about why indirect costs matter and why limiting them would undermine the very research enterprise the federal government depends on.

Other Issues to Keep on Your Radar

Liz touched on several additional issues that are worth keeping an eye on:

• Immigration: New H-1B visa processing costs are creating real burdens, and enforcement actions are affecting foreign student enrollment. The federal government is also increasing scrutiny of foreign relationships on campuses — gifts, research partnerships, and hiring.
• Nonprofit Status Scrutiny: Lawmakers are paying more attention here, with an initial focus on hospitals and healthcare. Private colleges and universities should be watching this conversation.
• College Athletics: There is significant noise but limited action. Two executive orders and various pieces of legislation have been introduced, but Liz does not expect final action anytime soon given the lack of unified support.

There Is Good News Out There — Don’t Miss It

Liz closed by making a point I appreciated: the negative headlines get the clicks, but they don’t tell the whole story. Here’s some of what she shared that I think our community should be talking about more:

• College enrollment was up in 2025–26, not down.
• As of April 10, 2026, 52% of the high school class of 2026 had completed a FAFSA — and studies show more than 90% of those students go on to pursue some form of higher education.
• Giving to colleges and universities was up 4% in FY25.
• Endowment returns were also up last year.

She also mentioned that NACUBO released its annual tuition discounting study the morning of our summit — results are available on the NACUBO website and in Inside Higher Ed.

What I took away from Liz’s session, and what I hope our attendees took away too, is that the situation is genuinely complex — but it is not hopeless. There is real advocacy happening, real wins have been achieved, and the institutions that are navigating this well are doing so through strong leadership, clear strategy, and a willingness to tell the story of what higher education actually contributes to this country. I’m grateful to Liz for helping us see that picture clearly.