Jon Fansmith: Hello everyone and welcome to this May 15th episode of dotEDU Live. Always a pleasure to have you join us. If you noticed me pausing, it’s because I had to confirm what day it was. Things are just flying by here and hard to keep track of everything that’s going on, but luckily we have a special guest joining us today, Steven Bloom, ACE’s associate vice president for government relations?
Steven Bloom: Not unless I’ve been demoted. Assistant vice president. But that’s fine.
Jon Fansmith: Assistant vice president. Apologies. But lots happening, as I mentioned, lots to catch you up on. Steven’s joining us is not just because he’s delightful company but because there’s been a lot of things happening in the areas he supervises here for ACE. But also, of course, great as it is to have Steven, it is also equally wonderful to have my globetrotting colleague, Mushtaq Gunja, and my, I don’t know, deskbound colleague, Sarah Spreitzer.
Sarah Spreitzer: Yes. Deskbound is a good word for it. Hello.
Jon Fansmith: Hello. How are you all doing?
Mushtaq Gunja: Doing great, Jon. Thanks for bringing us together. I know that we have an exciting agenda for the day. So Steven, thank you for joining. I think today we are hoping to cover four broad topics. So first, a recap of all of the broad Trump attacks that are coming on higher education from the White House. Second, I want to do a good deep dive into funding and budget, including especially what’s in the skinny budget and what’s the prognosis for reconciliation. Third, there’s some stuff happening in Congress that I know I want to ask you about, including DEI hearings and, Sarah, what’s the latest on all things visa and immigration. And then fourth, would love to talk a little bit about the state of research, any new lawsuits that are occurring.
So if that works for all of you, for our audience, please as always throw questions in the Q&A. I’ll be monitoring the chat as well, but the Q&A is a little bit of a cleaner way, and we’ll try to leave some time at the end for questions, and I’ll try to incorporate as many questions as we can in this conversation as well.
So maybe we can just start with what’s happening from the Trump administration. And maybe we can start actually with our response because Jon, I know you’ve been spending a lot of time organizing a response to the last few months from what has been coming from this administration. You want to talk a little bit about our joint statement?
Jon Fansmith: Yeah, thanks, Mushtaq. I welcome the opportunity to talk about this because this is one that I know in our dotEDU Lives, it’s come up in the chats, and certainly we’ve seen coverage of this about how and where higher ed speaks up in opposition to the administration’s actions. It’s worth noting our colleagues at AAC&U had circulated a letter that has at this point been joined by a number of institutional presidents and some other associations as well. But one of the things we saw, really not just building on those efforts but representing really hopefully a new voice in the discussion, was to have a unified voice among the national associations that represent all sectors of higher education. And we have been working with our colleague associations through the Washington Higher Education Secretariat and some other avenues to put together a statement that really I think speaks to what has been a very unique moment. The administration’s actions, we use this word a lot, but really have been very unprecedented in terms of how they’ve approached higher education. The tactics they’ve taken, the way they’ve spoken about not just our campuses but our students and other things.
So we have a statement. It was released Wednesday afternoon. 53 national higher education associations joining on. And two big things that the statement did. One, it talked about what is particularly troubling about this administration’s actions. It’s not just that there are funding cuts or there are efforts to disrupt research work, but that it is really a fundamental assault on core academic values and the role of higher education in our society, and calling that out and making it clear that that’s unacceptable under any set of circumstances. But also reaching out to the administration to urge them to move back to what the relationship was, this relationship that frankly has served colleges and universities well but has had far more benefit to our nation as a whole. It’s propelled our research enterprise; it’s powered our economy; it’s put us on top of biomedical research, innovation, technology, as well as advancing our economy and all these other benefits. And to see ourselves—I’ve said this again and again—shooting ourselves in the foot at this stage where our global competition has never been as fierce, it is so counterproductive. It’s so harmful. We know that there is a simple solution to doing this. We’ve proven it over decades, and we ask them to move back toward that model.
That’s really what the statement is. We’ve seen it picked up in a lot of media outlets. We know a lot of the other organizations who joined with us are sharing it with their membership, so the reach is growing. We’re very happy with the response so far, and I think it continues what we’ve seen as this tide of higher education increasingly finding its voice, finding its footing, and responding to, again, things we never really experienced, things we never really in some ways expected, but that have been a challenge. I think it helps in this turning point moment that we are facing as a community writ large, represented by all the people in this meeting as well, to speak up and defend what we know to be valuable and important parts of the higher ed organization, mission.
Sarah Spreitzer: And none of it is really new, Jon. It’s stuff that we’ve already said in our lawsuits regarding the indirect cost issue, in our letters or our statements regarding the efforts to dissolve the Department of Education. It really is a statement repeating what we’ve already said about those various actions, but noting that taken together, it is having this very historic and negative impact on our postsecondary education system.
Jon Fansmith: We talk about these elements as distinct things. We’ll talk about the visa policy; we’ll talk about the research cuts; we’ll talk about the funding cuts. And certainly you could look at those things and say these are individual actions, but they’re really not. And the administration has made it clear in public statements and through their actions as a whole that this is a coordinated effort to really undermine the foundations of the relationship between the federal government and colleges and universities. And that’s new and different and really, really threatening, frankly. And so I think the importance of the statement is not that this represents in some way a break from where we’ve been before but a clear statement of the fact that this is all a bigger movement that we need to respond to as a whole, not just piecemeal.
Mushtaq Gunja: Jon, first of all, thank you to everybody on this call that have given us feedback and they’ve been urging us to do one of these statements. I think it’s been really helpful for us to understand where the community is, so thank you. Jon, how’s the media coverage been? You noted that a few outlets have picked it up. And then any response from the government?
Jon Fansmith: I should have pinged Jon Riskind, our public affairs guru, before I came on. I know that the Associated Press has picked that up, which is wonderful. That’s hundreds of papers across the country. I know the trades have picked it up. We’ve talked with Washington Post, New York Times, a lot of major national media outlets, so I think certainly that’s been in a lot of places. I think that’s only going to grow. We see this a lot of times that it informs coverage of these issues and the coverage tends to multiply on itself the more it spreads into the media ecosystem. So it’s a little bit of planting a flag, and there’s a lot of downstream impact.
Mushtaq Gunja: Sure. And our friend Frank Dooley in the Q&A asks any suggestions on how our members might be able to amplify this letter beyond what we’ve already done and the folks that we’ve already talked to?
Jon Fansmith: Yeah. It’s such a great question, and I would just say share it. Whether it’s through your personal social media channels or at your institution, if they are supportive and wish to share that as well, if that’s an opportunity that’s available to them. Obviously the more people see a unified voice speaking out, the more they amplify that message, the more it’s understood that this is not one campus or one organization who’s pushing back, but this is a broad community representing. like the statement says, millions of students and educators and administrators and librarians and researchers and all of these people, who are huge and important members of their communities and have a voice that is worth emphasizing as much as we can.
Mushtaq Gunja: Speaking of letters, since we last recorded, Secretary McMahon sent a letter to Harvard with ... Sarah, how would you characterize the letter? Steven?
Sarah Spreitzer: Well, it’s interesting. I don’t think the letter has been posted on the Department of Education website. It went out under the secretary’s social media. It was definitely, I think, very angry. There were several words I think in full caps. There was a host of issues that the secretary was raising that I think she believes that Harvard was not being responsive to regarding some of the actions the administration has already taken. It definitely was not a letter I’ve seen from a previous secretary of education.
Mushtaq Gunja: And Steven, what were the contents of the demands that Secretary McMahon asked of Harvard?
Steven Bloom: That’s a good question. To pick up on Sarah’s point, it was a remarkable letter about how she claimed Harvard was failing to advance its mission as an educational institution and to be welcoming to students of all backgrounds and to protect Jewish students from antisemitism on campus. In fact, actually, now that I think about it, they didn’t even really mention antisemitism. There was very little in the letter about that, which has been one of the main justifications of the government on its efforts to go after Harvard. They were talking about lots of other things. I know we put the letter in the chat. But as Sarah noted, it’s a pretty astonishing letter to come from a secretary of education.
Sarah Spreitzer: And the other thing was it basically said Harvard will not be allowed to take any future federal funding. And it was interesting coming from a secretary of education because so far the hold on the federal funding has been on the funding coming from the research agencies, from the National Institutes of Health and NSF. And so for was the secretary of education to send this letter about a whole of a government effort, I found that very interesting.
Steven Bloom: It’s interesting, and I don’t know, maybe you guys have thoughts about this. They have thankfully not, the department has not yet used the nuclear option, which is to yank Title IV funding, and that’s from Harvard or access to its students having access to Title IV funding. That really would be a major ratcheting up of the attack on Harvard.
Jon Fansmith: Well, and I think it’s worth reiterating because we’ve almost gotten to this place where we accept the idea that the federal government can unilaterally just suspend funding, and related to this, the department, or the task force, I should say, announced they’re suspending another, what? $450 million of funding that the federal government owes Harvard that has been awarded to Harvard and should be provided to Harvard. That’s not how this works. You can take away Title IV funding if you go through the process the law dictates that shows that the institution has done things serious and meaningful harms to students. Violations of their obligations under the law. And you’ve demonstrated that, you’ve documented that, you’ve proven that, and more importantly the institution has refused to address that in a meaningful way. None of those things have happened in this case, despite the things Secretary McMahon put in her letter, despite the demands placed on Harvard, very few of which had to do with anything where Harvard violates the law, that this task force has put forward. They haven’t documented violations of law. They haven’t taken those to investigation. They haven’t proven in any meaningful way that Harvard has done anything improper, much less illegal, but they are still suspending the funding.
So you’re right, the nuclear option is Title IV eligibility. Even for an institution with the resources Harvard has, that would be a substantial blow. It also would be patently illegal, and this is the heart of Harvard’s case. The actions the federal government have been taking, they do not have the legal authority to do it. In fact, they contradict decades if not centuries of American precedent and law. Maybe I’ll leave it at that. Steven, your reaction when Mushtaq started asking about the letter, just shaking your head, was probably as elegant a summary of what that letter means and the merits of that letter as we’re going to get to in this discussion.
Mushtaq Gunja: Just a couple notes. First, thank you for the couple of folks that put Harvard’s response in the chat because I think it’s instructive, and we know that Harvard’s in active litigation with the administration. I’ll just note that the letter from Secretary McMahon is not one that I would have counseled if I were in White House counsel. I would not have counseled that McMahon send that letter because I think it really makes Harvard’s case for animus for the tying of funding to things that are not related to antisemitism, Steven, which is the theoretical hook here. But I’m not giving the Trump administration... Or they’re not taking my advice, I suppose. Jon, I agree with you that the actions here, the ties, both on the research cuts and certainly on any nuclear option would be, as you say, patently illegal and contrary to hundreds of years’ worth of government action. And yet, Jon, Steven, Sarah, one of the things that we hear come up in the chat all the time, and certainly I feel this too, yes, that seems right, and yet the administration is doing these things anyway.
Steven Bloom: Yeah. It’s astonishing. I know it’s not this issue, but the threat to revoke Harvard’s tax exemption by the president himself. There’s a law that actually prevents that and imposes a fine and imprisonment up to five years, passed after President Nixon’s terms and misuse of the IRS, and so, yes, it doesn’t seem like they seem all of that focused on complying with the law, which is just really, really troubling.
Mushtaq Gunja: Just a quick segue on that question, Steven. Have we heard anything more since the Truth Social post on trying to pull the tax-exempt status for Harvard and potentially maybe for a whole set of other institutions? Have we heard anything more in terms of enforcement?
Steven Bloom: Not that I’m aware of. Part of it, normally this process is an internal process within the IRS, and the IRS wouldn’t necessarily disclose that, and I don’t imagine Harvard would either, so it could be that something is moving forward and yet we’re not aware of it yet publicly.
Mushtaq Gunja: I’m sorry, Jon. You were about to say something.
Jon Fansmith: No, I’m noticing in the chat too, people are talking about the law hasn’t stopped them yet, and I feel like we should just put this in the show notes at the start of the slide. Part of what the administration is doing is pushing things they know will lose in courts and they are losing in courts. There’s over 240, I think, lawsuits that have been filed against this administration. In most of those cases, administration actions have been blocked. Part of the reason they do this, somebody was talking about internally, their discussions are this is an administration that is not litigation-averse, is because of they are trying to force change even in the absence of law. If you show that you are willing to attack your adversaries, force them to pay legal costs, force them to take reputational damage, you will incentivize others not to follow those actions, not to do the same things, maybe bend to your will.
I think the threat of that wanes over time as you see the courts pushing back. It’s hard to see. We are still relatively early into this administration. The momentum definitely seems to be with the administration, and a lot of what we talk about is how we’re reacting to what they are doing. That said, I’ve been somewhat encouraged—maybe people don’t share this, I understand—by how the courts have actually acted very responsively to force the limits of the laws. And absolutely there are cases, around deportations and others, where the administration has pushed past those boundaries. I would say we haven’t seen the end of those discussions or the court’s influence yet. There will be give and take, but there are limits to this, and I do think to a certain extent we are seeing the rule of law enforced, not as quickly, not as effectively, maybe not as comprehensively as we’d like, but it is happening.
Sarah Spreitzer: I think it’s also the multi-pronged nature of what is happening. And so you have something that you’re taking to court because you don’t agree with the policy. You don’t agree that a grant is being terminated because of the executive order on DEI. But when that is at the court, at the same time, the agencies such as the National Science Foundation may announce an overall change to the prioritization of grants. That’s slightly different than saying that your grant is being terminated based on the executive order on DEI, but the result is the same. You’re still seeing these grants being terminated, but each of these actions is going to spawn its own lawsuits. And so it’s not that the lawsuits aren’t stopping the actions, but the ultimate goals of shrinking the overall size of the federal government and trying to force certain behavior is happening on so many different levels, it’s hard to point to one case to say this will ultimately change everything and everything will go back to normal.
Mushtaq Gunja: I want to keep us moving just because we have still so much to get to though. Certainly we could spend a lot of time talking about what the courts have been doing and the number of TROs that have been imposed. In fact, we’ll circle back to that because I think there are some pockets here of good news. One last question. Steven, maybe this is to you. On this question of antisemitism, I know that ACE and AJC have been working on a statement. Steven, do you want to talk a little bit about that?
Steven Bloom: Sure. AJC, the American Jewish Committee, is one of the leading Jewish organizations in the United States. We have a long history of working with AJC and Hillel International. With the two organizations we have co-sponsored two summits on antisemitism, one in spring of 2022 and then one last September of 2024. The planning actually for that one began well before 10/7, and so we have a deep partnership with them, with AJC in particular. Given the attention that the issue of antisemitism has taken on with the administration as well as in Congress, we issued a joint statement with AJC, AAU, and several other higher ed associations, basically restating our concern and opposition to antisemitism, the need to protect Jewish students as well as all students on campus from hate, but also discussing real concern about federal overreach, particularly in the research area, and that a lot of the cuts to federal research dollars aren’t helping to protect Jewish students.
And I think it was an important joint statement with AJC. It was issued right before the recent hearing of the House Ed and Workforce Committee with a number of institutions, the presidents of three institutions. And that committee, House Ed and Workforce, really had a number of high-profile hearings last Congress. And they have really been the source of most of the congressional hearings on antisemitism. The really unfortunate part is that it’s a really complicated and difficult issue and it requires a nuanced response working with individual institutions, and we haven’t seen the attention to that, best practices and how institutions are really trying to address this in a meaningful way, from House Ed and Workforce.
Mushtaq Gunja: Thanks, Steven. You’ll see we created a page with all the relevant links and letters. It’s farther up in the chat, but please do go visit if you want to grab any of the materials that are referenced here. Let’s move on to funding. There’s a lot happening there, and maybe we can just start with reconciliation. So a few categories of questions here. So where are we on the negotiations? What’s the substance of what we’re talking about, especially as it relates to education? Timing, prognosis, and then what are we doing about it? So Jon, maybe I’ll kick it to you first and then Sarah, maybe you can fill in too.
Sarah Spreitzer: Well, I’d say maybe Jon should start with just a quick explanation of what reconciliation is and why we’ve been spending a lot of time on it.
Jon Fansmith: Yeah. Although honestly, if those of you watching haven’t heard us talk about reconciliation at this point, it’s probably just because you’re tuning us out. But the reconciliation process very simply is a congressional procedure that allows legislation to move through both chambers of Congress with simple majority votes. And the importance of that is really in the Senate where their filibuster rules have always protected the minority from being able to have legislation essentially forced through that chamber. There’s lots of particular rules that will influence what an ultimate bill looks like. It was intended to help Congress essentially reduce spending. It hasn’t really been used that way by Congress. It’s been used in the first few years of the Biden administration to pass the Inflation Reduction Act. Was used in the first few years of the first Trump administration to pass the 2017 Trump tax cuts. It was used in the first few years of the Obama administration to pass the Affordable Care Act. Common theme: big, expensive, massive policy changes, lots of spending. These are bills that were very partisan that would not move through the normal legislative process.
So this is being used primarily, the original motivation was to extend a lot of those 2017 tax cuts, but also to provide an opportunity for the Trump administration to have some of their campaign promises and their legislative priorities addressed. We are getting the details of what exactly that looks like based on the bills that are being reported out by the committees that are responsible for producing pieces of the overall reconciliation bill. And right now, this is all happening in the House. Last week we saw the House Education and Workforce Committee proposals, which let me just be very clear, are incredibly concerning. If you have not looked at the summary we have up on our website, the letter we sent to the Education and Workforce Committee, I would strongly recommend you do that. The things they are proposing would result in $351 billion in cuts to programs in education and workforce. Almost all of that comes on the backs of basically student loan borrowers and low-income students.
There is a proposal that would change Pell eligibility that if enacted would kick about one out of every seven Pell Grant recipients out of the program right now. There are programs that will make it far costlier for students to borrow loans and cut off access to federal loans to other students, especially in graduate education. There’s a risk-sharing proposal that would cost colleges and universities $1.8 billion a year in payments they need to send back to the federal government based on the performance of their students after they leave the institution in repayment. There is thing after thing after thing, terrible for low-income students across this bill, and I haven’t even gotten to Steven’s portions of it, where all of this harm is further magnified by additional cuts. So Steven, you want to tell us what happened this week that compounded our concerns about this approach?
Steven Bloom: Sure.
Sarah Spreitzer: I think Steven should take the question first though. Why is the Ways and Means committee meeting at 1:00 AM and that should open your explanation-
Steven Bloom: Apparently they have a Starbucks coffee outlet actually in the Ways and Means hearing room, so that maybe explains it. But apparently they didn’t even pass Energy and Commerce, which we’re going to talk about in a minute. They had a markup for two days, as opposed to Ways and Means, which was only a day and a half. So they’re pikers actually. So Jon laid out the really deeply troubling and damaging cuts that came out of Ed and Workforce that are going to be incorporated into the House reconciliation bill. And there’s a lot in there on tax. To be honest about it, it pales in comparison in terms of actual dollars at stake for higher education, but it’s still really troubling.
But first, just let me say, there were some things that weren’t in the tax package coming out of Ways and Means that were good in the sense that in 2017, for instance, in the tax reform bill, they tried to repeal the tuition reduction provision that is so beneficial to graduate students. That did not get included in this bill, and it also did not include a lot of the other provisions, higher ed tax credits, et cetera that are important to students and families. So that’s a small slice of good news, I guess. But there was a lot in the bill that is really troubling.
I would begin with the endowment tax, which maybe you’ve seen that much in the news lately. The so-called endowment tax that was initially enacted in 2017, it’s a 1.4% excise tax that applies to at least in 2023, according to the IRS, 56 schools paid it. And what they did in this particular version of that Ways and Means package is they expanded it enormously. They took the 1.4 excise tax and created a four-tier system that for schools with a certain range of endowment per student, so anywhere between $500,000 to $750,000, it’s still the 1.4%, and then 7% for institutions with endowment value of $750,000 to $1.25 million per student, 14% for $1.25 million to less than $2 million, and then 21%, which is the same as the corporate tax rate—Mushtaq’s eyes are widening on that one—for schools with endowments per student of $2 million or more.
And then they did some other things. They would exclude international students and undocumented students from the calculation of students for how you calculate whether you are covered by the tax, and there’s a religious exemption. So some religious schools, like Notre Dame and maybe Hillsdale College and some other institutions, potentially would be excluded from the tax. And then they’ll add some pieces of how you calculate the tax and assets that are subject to it. In addition to that, and certainly happy to answer questions, there were other things that were added. One related to the fun topic, unrelated business income tax, UBIT. That would now apply to royalty income from any sale or licensing of the institution’s name or logo. And then finally, the big one is... This is a provision that would apply to all tax-exempt organizations. It really would authorize the secretary of treasury to yank the tax-exempts status for organizations where the treasury secretary claims that they are terrorist-supporting organizations. This one is really troubling, and the way it’s written is really problematic and would apply to all tax-exempt organizations, not just higher ed.
Now we have a pretty robust webpage on our website on tax reform. We will be updating that to reflect what’s in the tax package from Ways and Means. So that’s going to undergo some change in the next day or so. Particularly the grassroots contact Congress letters. There are going to be some changes to that. In addition, we will post a summary of the key tax provisions that came out of the Ways and Means Committee that are important to higher education.
Jon Fansmith: I want to pick up on where Steven stopped. Sorry to jump in here, Mushtaq. But we will also, as Steven was talking about tools we will make available on the ACE website, by tomorrow morning at the latest, we will have what we call a contact Congress feature. That allows any members or actually anyone across higher education to use a template letter to their congressional representatives, their senators, and their member of Congress. And it can be tailored; it can be personalized to your institution or your personal circumstances. It will allow you to weigh in on what we are seeing in the House, the things that, again, we are very, very concerned about. So I’d encourage folks to look at that. A lot of the resources Steven mentioned, not just in the tax space but in the education space will be available there as well. I know the producers will put those up. Some of these are waiting to go live, so keep an eye out for it. Check the page again.
One of the reasons it’s really important to weigh in at this moment. Yes, the House’s plan currently is to consider their bill on Tuesday. I think we understand the dynamics in the House. Things will change based on some of these discussions, battles between moderates and hardliners, conservatives in the House. How leadership will manage these different tensions will change the outline bill, but it’s not going to look good for us at the end of that process.
There is a lot of focus... I saw some folks in the chat talking about this. The battle is in the Senate. The Senate is not under the same instructions the House is. They do not have to find cuts at the level the House instructions require. By all accounts, the Senate is not as interested in the dramatic levels of cuts, imposing the kinds of harm that we see in the House bill. What is really important in this moment, and especially if you have members on any of the relevant committees, is to let them know what this might mean for you and your campus. This is the time. The Senate needs as much support in countering what the House is sending over because there is a chance that this will change, but we also know that right now the Senate’s talking about skipping the committee process, going directly to the floor, and amending the House bill on the floor. That limits the amount of time to make your voices heard.
So yes, the bill is not in the Senate yet, but this is absolutely the time to reach out to your senators and make it clear that a vote for what the House has done is a vote to take away aid from millions of low-income students. It is a vote to impose punitive taxes on colleges and universities that will strip away research and scholarship funding. This is as clear and black and white a case of bad policy, harmful policy being advanced, and it’s certainly the time to push back. If you’ve never done it before, we make it super easy. Send a letter to your senators. Let them know that this is something you’re worried about.
Steven Bloom: And to pick up on Jon’s point, if past is prologue, we can look back to 2017 just as an example of how things can change. The bill that came out of the Ways and Means Committee in 2017 was very bad for higher education, and it underwent enormous change when it went to the Senate. All of the provisions really directed at students, the grad student tuition remission repeal was removed and basically everything. And so the only thing of major import in ‘17 was the enactment of the endowment tax. And so this bill is going to undergo major revisions. And you all are going to be instrumental in helping us push back about what’s been proposed by the House and do our best to try and get the really problematic things stripped out.
Sarah Spreitzer: And I think it’s important to remember that this isn’t a bill that might be tabled for later. This is happening right now. The White House is pushing this very hard to move. Congress would like to get this off the table so that they could turn to other work this year. So it’s going to move, and I think that’s the pressure that members are feeling, and that’s why it’s important to really weigh in right now because this isn’t a conversation we’re going to be having in the fall. This is a conversation that’s happening right now.
Mushtaq Gunja: Just one plug for personalizing those letters. The form letter is really important and we should do that. But I think the beauty of the template letter is really that it does give you an opportunity to be able to personalize with examples and impacts at your institution. I just continue to believe that Republicans in Congress right now don’t like higher ed writ large. I’m not sure that they dislike the institutions that are in their congressional districts and the students that are in those districts too. This thing is moving fast, as Sarah says, and I’m not sure that they quite appreciate the impacts that this will have on our students. So doing anything you can to talk about the numbers, the stories, that can be really important and really powerful in a world in which maybe the House is just moving too fast.
I think they might think that every institution’s Harvard, but they’re not. We have thousands of institutions across higher education that are really educating lots and lots of middle- and low-income students, so we just need to make those stories come to life. A couple of just nitty-gritty questions on what’s included in this House bill. Impacts on Title III and Title V, do we know what’s happening there in this bill?
Jon Fansmith: They’re not addressed in this bill. I will say institutions that are Title III and Title V recipients tend to also be disproportionate percentage of their students are eligible for other federal aid programs like Pell Grants. The scaling back of Parent PLUS loans, we know that especially at Minority Serving Institutions, given the disparities in familial wealth between those and Predominantly White Institutions, student enrollment bias, those will have a big impact. So there is a lot that is harmful that is not targeted at Title III and Title V but will really impact those institutions disproportionately relative to other institutional types. The concerns are real in that area. Yeah.
Mushtaq Gunja: I don’t know that it would show up in this House reconciliation bill, but is there any movement on eliminating the Department of Education or moving FSA or any of the things that we know would need to be at least partially done through statute?
Sarah Spreitzer: No. And part of that, Mushtaq, is because you can’t actually do policy on a reconciliation bill; it has to have a budgetary impact. So you might make the argument that dissolving the Department of Education would have an overall impact on the budget, but that’s a bridge too far. It has to be decided by the Senate parliamentarian if it has a budgetary impact.
Jon Fansmith: And remember, most of the programs, certainly in the higher ed space, but most of the programs generally at the Department of Education, are statutorily authorized. So even getting rid of the department, if you’re the parliamentarian or the budget office in the Congress, you’re saying, well, you change the administrative structure, that’s a few senior positions, but otherwise you still need program staff to administer these programs. You’re not changing really the cost of anything in that regard. So it’s really a policy, not a funding issue.
Sarah Spreitzer: Another reason that you don’t see immigration policy riding on a reconciliation bill, because it would be much easier to pass with a simple majority, but the Senate parliamentarian has never allowed that.
Steven Bloom: Well, and there are probably pieces of the proposal now that’s being written in the House that are going to be challenged under what we call the Byrd Rule that’s named after the late Senator Robert Byrd that in the Senate that is applicable to a reconciliation bill, that basically the principle is that any provisions have to have a budgetary impact, either spend money or raise money through a tax provision. And so there will be provisions, and we could probably make some guesses about some of those that are just been marked up and produced by the relevant House committees, that are going to be challenged under the Byrd rule.
Jon Fansmith: Yeah. And can I just say one thing about the Byrd Rule too because I find it funny? I would love to do an entire episode on the Byrd Rule and the parliamentary process here, but my favorite...
Sarah Spreitzer: God, no.
Jon Fansmith: I know. Nobody wants to do that. But my favorite description was somebody said the parliamentarian’s job is essentially to hold a seance with a senator who died 15 years ago and figure out what he means.
Sarah Spreitzer: That’s a good description.
Jon Fansmith: It’s a great quote, right?
Sarah Spreitzer: Yeah.
Jon Fansmith: I didn’t want to pass up an opportunity to reuse that, so thanks.
Sarah Spreitzer: That’s good.
Steven Bloom: One other piece, and I don’t know, Mushtaq, if you were going to mention it, that’s in reconciliation is Medicaid. We did a letter on Medicaid. And the reason that’s really important for higher education, one, there are about, in 2023, I think data shows that 3.4 million students are enrolled in Medicaid. Now all of those students are Pell students. Not all Pell students are Medicaid enrollees. So it provides health insurance to the lowest-income students. Also, the changes in Medicaid are going to likely impact in a very significant way state budgets. And that is in a bankshot going to probably harm public higher education because the states pay for a few big things—Medicaid, K-12, prisons and higher education. And in that contest, historically, we’ve lost. And so if the states get saddled with more Medicaid costs, they’re going to make cuts, probably both on the Medicaid side but also us too. And then finally academic medicine, where we treat patients as well as train our future health professionals, they’re going to be hurt too. And so we sent a letter about that and are really worried about it as well.
Mushtaq Gunja: Thanks, Steven. It doesn’t feel like it’s higher ed related, but I think the impacts to higher ed could be realized. One last question because I do want to move us on, but a couple of folks in the Q&A asked a really important question. For an institution that is located in a blue part of the country where the representatives are likely to vote against whatever bill emerges anyway, what should they do? Do we have places where they should be sending letters, should be pushing here?
Jon Fansmith: So I’ll say, there is certainly value in reaching out to Congress writ large in terms of saying as somebody who cares about these issues here. I think my colleagues will back me up that members of Congress tend to give far more weight to constituents. So I can understand the challenge of making your voice heard when you don’t have Republican members in the reconciliation process. That said, just because Democrats are primarily sidelined in the reconciliation process doesn’t mean that making sure they hear from colleges and universities about the importance of these proposals, what they might mean for them, doesn’t have value. We are constantly in a discussion about the value and importance of higher education, and even among members of Congress who are generally supportive of the mission of colleges and universities, they’re also weighing that against considerations of the value of lots of other programs that are important to them. And so there is real value generally, but especially in these moments where in particular higher education is being targeted, about reinforcing what it is we do, what the economic impact of what we do is, what the social mission of what we do is, and why that’s important. So yeah, you are a little bit sidelined in terms of a direct impact, but that doesn’t mean your voice isn’t valuable.
Steven Bloom: Yeah. And certainly students and alumni who may be from places outside of the states where an institution is located, if you want to share it with them, they can be advocates too.
Mushtaq Gunja: And Jon, the template letter is not up yet but will be up soon. Is that right? If I heard that correctly?
Jon Fansmith: It will definitely be up by tomorrow morning, possibly as soon as this afternoon. And we would have loved to have had it to link live. I think one of our producers put the template link up so people would have the link when it is fully functional. But yeah, absolutely, very soon. We are just, as you can imagine, rushing to get a lot of things over the finish line as new things keep happening.
Mushtaq Gunja: Absolutely. Can we just spend maybe a couple of minutes on the skinny budget? So separate from this, the Trump administration’s proposed their own skinny budget, which is not a full budget document but is a statement of... I don’t even know how to describe it. Statement of principles. Some very top-line numbers. Sarah, Jon, Steven, what’s included there, and what do we need to worry about?
Sarah Spreitzer: Well, a lot of it, and this is for the discretionary funding that Congress passes every year, a lot of it is really seeking to codify the cuts that we’ve been seeing coming out of the administration and some of the restructuring that they’ve already been doing through the reduction in force actions. So for example, it would zero out USAID, which is an agency where the administration has already taken steps to close down that agency. It makes deep cuts to the Department of Education, I’ll let Jon talk about that, but obviously in support of these efforts to ultimately dissolve the Department of Ed. For the research agencies, extremely deep cuts. So the National Institutes of Health would be cut by around 40%. There would also be this large restructuring, which I think they’re already going about through the RIFs, where they would move some centers or some institutes within NIH and CDC and other pieces within HHS into a new office called the Make America Healthy Again office. And in fact, Secretary Robert Kennedy Jr. was on the Hill yesterday testifying before House Appropriations about this and talking about the MAHA focus of the budget.
It would also cut the National Science Foundation by more than 50%, which is especially upsetting given the increased authorization levels that we had just seen Congress pass in the CHIPS and Science Act. And it would really decimate the education directorate within the National Science Foundation, as well as ending a lot of the broadening participation activities that we’ve already seen grants being terminated under for not following the DEI executive order. So not a big surprise. And again, this is a starting conversation with Congress. One of the interesting things about RFK Jr’s testimony yesterday in the House was Democrats tried to bring up the termination of grants and some of the cuts made under 2025. And the Republicans kept saying, "2025 is done. We’ve dealt with that. Even though the administration is actively cutting that funding, we’re now looking at FY 26.” And I would say that in regards to FY 26, the Republicans did express some concerns regarding the deep cuts that were being proposed.
Jon Fansmith: Yeah. And certainly in the Education Department, the administration’s proposal is to eliminate the department. I think, interestingly enough, there are funds in the reconciliation bill to improve staffing in some areas of the department. So I don’t want to say that the rhetoric of the administration is belied by their actions, but we’ve talked a lot about the actual likelihood of the Department of Education going away. Even if programs leaving the Department of Education, there’s at least some tacit acknowledgement by the administration that they understand the realities they’re facing.
That said, beyond that good news about the continued existence of the Department of Education, everything else in the skinny budget is pretty uniformly awful. There are proposals to fully eliminate the Supplemental Educational Opportunity Grant program. It’s about $900 billion of grant funding to students, money they don’t need to repay for financial aid. The Work-Study program, historically a very bipartisanly popular program, is facing almost a billion-dollar cut, reducing it very significantly. Eliminating things like CCAMPIS, which I saw mentioned in the chat. Child Care Access Means Parents in School. I always get the acronym messed up. But essentially a relatively small program that helps colleges and universities provide childcare for student-parents.
Really across the board, pretty massive reductions in the overall discretionary amounts. Now, one of the things I will say, and Sarah outlined how big these cuts are at the research agencies, there’s proposals to eliminate TRIO and GEAR UP in the skinny budget. Almost instantaneously when the skinny budget was released, you heard from a lot of Republicans about concerns they had. Probably most prominently, Susan Collins, who is the senator for Maine and the chair of the Senate Appropriations Committee, said, I’m paraphrasing, but said, “This is not acceptable.” She specifically called out scientific research and TRIO and financial aid as areas where she is not supportive of making massive cuts. That’s a pretty powerful voice to publicly say this isn’t going to happen.
I’ll also say, someone in the chat, when Mushtaq you were struggling for a way to describe the skinny budget, called it a wishlist. That’s probably pretty accurate. This is the administration’s wishlist. They haven’t been subtle. They want to slash and burn and reduce. That said, Congress has a say, and just like your point about a lot of members of Congress might talk about colleges and universities as Harvard, they don’t see that in their own district. A lot of members of Congress may want to cut federal spending, but when they hear from people in their district about what that supports, the programs their constituents benefit from, it looks a little bit different about supporting that.
So obviously scary, obviously ominous, but if presidential budget requests were always enacted, we’d have a whole list of things from the Biden administration that would look very different than what we saw, and from every previous administration as well. So worth paying attention to, obviously concerning, but at this point, a whole lot of process before we actually see any of these proposals considered, much less enacted.
Mushtaq Gunja: Since we’re talking about scientific research, can I just move us there and where we are on the ongoing indirect cost cuts or caps at 15%? What’s the latest there? What’s the state of our TROs? What are the state of the lawsuits? What’s happened?
Sarah Spreitzer: So I think there’s a couple of things going on regarding the indirect cost rates, Mushtaq. We saw an effort by the administration early on to try and impose this 15% cap to our indirect cost rates at the National Institutes of Health for any existing or any NIH grants going forward. That was followed by another statement of policy in which they were going to cap the indirect cost rate at Department of Energy for any grants, again, existing or going forward. We’ve now seen it happen at the National Science Foundation, however just for future grants. So that is all being decided by the courts. Our rates are negotiated through either the Office of Naval Research or Health and Human Services. It applies to all of our federal grants with a few exceptions. These are the individual agencies saying it will be our agency policy going forward that we’re going to cap this. The courts have stopped that action. But that’s not the only place to change the indirect cost system or the method that we come up with our indirect cost rates.
And so while the court cases are going on, we also understand that the White House Office of Management and Budget, OMB, is planning to issue a new policy around indirect cost rates through a notice and comment in the Federal Register, which we will be able to comment on. And so they’re likely going to do that, which would then apply across the federal government, not at individual agencies. And then we also know that congressional appropriators are also looking very closely at this issue, especially given that dollars are likely going to be constrained that they can put toward scientific research. Is there something they can do on the indirect cost side?
So the court cases have been very successful, I think, in stopping any sudden action that would really have very major implications for our institutions in performing federal research. But that doesn’t mean that this issue is just going away. And I think that the administration has a real interest in looking overall at how to constrain costs through the indirect cost rate function. And then also I think Congress is going to be looking at it through the appropriations lens, and that is still to be seen.
Mushtaq Gunja: The last couple of minutes that we have here, can I ask about a couple of issues? One, I understand that there is going to be a hearing on DEI in the House. I think that’s next week, Jon. Is that right? What do we know about that?
Jon Fansmith: Yeah. We don’t know a whole lot, and I’m finding the Education and Workforce Subcommittee on Higher Education and the Workforce, and Workforce Development, I should say, will be holding a hearing, which is entitled “Restoring Excellence: The Case Against DEI.” The chairman of the subcommittee, Representative Burgess Owens, held a hearing last year on DEI as well. The witnesses were predominantly critics of the value of diversity initiatives on college campuses. We expect that will be the same this year. They have not announced the witnesses publicly for that hearing. Again, I don’t know for sure because there’s not that much information out about the hearing, but certainly expect to see in a lot of ways a very similar hearing to what we saw last year.
There is a different hearing happening on the Senate side in the Health, Education, Labor and Pensions Committee. They will be holding a hearing on the state of higher education and improving success for students. Again, not entirely clear. They haven’t announced their witnesses for that. Important, the tone of the Senate hearings, by and large, has been a lot different than what we’ve seen from the House. In part that reflects the Senate, tends to be more moderate generally, but Senator Cassidy has always been, in his time as ranking member and now as chair, a person who’s been very policy-focused rather than the rhetorical levels we see reflected a lot in the House committee. So we will see what that hearing looks like. Certainly DEI remains a particularly divisive issue in the House committee. That will probably be a lot of fireworks. The Senate committee hearing I think is probably the more interesting one to watch in a lot of ways, and we’ll see which direction it goes. All of this, of course, occurring with the backdrop of reconciliation. So lots of things on the table for members to discuss.
And I know we are at time right now, but I have been, probably visibly to all of you watching this, checking the chat. And one of the things I really wanted to raise up that I both appreciate and want to make sure everyone who may not be watching the chat as closely is following, is that a lot of you are talking about your experiences reaching out to your members of Congress, the impact it’s had. And I want to say some accounts of people who worked in congressional offices, logging calls, logging emails, logging social media mentions. That’s not apocryphal; that’s not rumor; that is what practice is.
Members of Congress care very much about how the public views different issues, even if it’s not an issue they’re on the committee for, even if it’s not an issue they necessarily know or care a lot about. If they start to hear from the public on any issue, they will track the direction of those comments, and that absolutely plays a part in how they vote. So logging those in, raising your voice up, it really does matter. And I know we talk about this all the time. I talk about this all the time. This is the moment where those voices are needed. So great. I appreciate everyone encouraging each other to do that. It is meaningful. It is important. It does make a difference. Even if it feels like you’re just one voice, you are part of a lot of other voices that raise this issue for folks.
I’ll also thank you, as I always do. There were so many questions, both in the Q&A, folks are dropping things into the chat, so we appreciate you taking the time to join us today. There is a lot going on. A lot of it’s really important. We appreciate your support. We’re looking forward to your activity, and we’ll do whatever we can to support you as much as you support us. So thanks for joining us.
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