The Department of Education (ED) and National Science Foundation (NSF) are moving ahead with changes to their grant policies that reflect key elements of the Trump administration’s proposed overhaul of federal grantmaking, even though the broader governmentwide proposal has yet to be finalized.The developments are the latest turn in the administration’s effort to reshape how federal grants are awarded, administered, and terminated. In July, ACE and more than 60 other higher education associations called on the White House Office of Management and Budget (OMB) to withdraw its proposed rewrite of the government’s Uniform Guidance. The groups warned that the proposal would shift grant decisions away from merit-based review, expand agencies’ ability to suspend and terminate awards, and create significant instability for colleges and universities.
Education Department Proposes Expanded Grant Authority
On Aug. 24, ED proposed revisions to the Education Department General Administrative Regulations (EDGAR) that govern federal education grants.
The changes would give the department significantly more discretion over federal grants. It could terminate discretionary awards “for convenience” or temporarily suspend them, in addition to terminating grants for noncompliance and other specified reasons.
The education secretary also would have greater discretion over continued funding for multiyear grants, including whether to extend a continuation award and how much to provide. Decisions to reduce or deny that funding would not be considered a withholding under the General Education Provisions Act, so the hearing procedures associated with a withholding would not apply.
Grant competitions could change as well. The department could give preference to applicants that voluntarily agree to charge less than their federally negotiated indirect cost rate, or no indirect costs at all. Institutions choosing a lower rate would have to maintain it for the life of the grant.
Other provisions would require hiring, admissions, promotion, and compensation practices carried out under a grant to be based on what the department calls “merit and high standards,” subject to specified nondiscrimination requirements. States and subgrantees also would be required to comply with executive orders when using federal funds.
The Education Department is accepting public comments on the proposal through Sept. 23.
ACE Raises Concerns about NSF Proposal
Meanwhile, NSF has proposed revisions to its Guidance on Financial Assistance that explicitly seek to align the agency’s policies with OMB’s proposed changes to the Uniform Guidance.
ACE President Ted Mitchell, writing on behalf of ACE and 24 other higher education associations, urged NSF in an Aug. 24 letter not to move forward with provisions drawn from the OMB proposal while that rulemaking remains unfinished.
The letter highlights several areas of concern, including provisions that align NSF policies with OMB’s proposed rules on grant suspension and termination, broaden restrictions on certain foreign collaborations, and restrict the use of federal funding for publication costs.
ACE and the other associations also argued that the changes would give political appointees greater control over grant decisions and weaken longstanding protections for recipients, as they did in their July comments to OMB.
Sarah Spreitzer, ACE’s vice president and chief of staff for government relations, told Inside Higher Ed that the agency actions fit a broader pattern in the administration’s approach to federal grants.
“They’ve been taking these actions for the past year and a half,” Spreitzer said, adding that the administration’s moves have “caused a lot of chaos, and I think this is retroactively going back to provide the structure for those decisions and to allow for those decisions to continue.”
The comment period on NSF’s proposed guidance closed Aug. 24. The department says it intends to finalize the regulations in late 2026.