As Initial Assessment of the New Law and Regulatory Revisions in Higher Education Continues
Congress, the Courts, and the Department of Education Continue to Move Forward on Other Issues
Overview
With enactment of the major revisions to portions of the Higher Education Act of 1965, as amended, included in the Budget Reconciliation megabill (www.congress.gov/bill/119th-congress/house-bill/1/text) now almost a week old, the higher education community is starting to peel back the layers of both the new law and beginning to assess its potential impact. This process includes not only initial interpretations of how the new policy will impact the entire higher education community (students, institutions, employers, and all other interested parties), but also considerable questions regarding both the timelines and processes for implementation of the changes moving forward.
At the same time, the proprietary sector of higher education is also currently undertaking a similar review and assessment process based upon updated interpretative guidance (www.federalregister.gov/documents/2025/07/07/2025-12554/classification-of-revenue-under-title-iv) published in the Federal Register last Wednesday.
The preliminary assessment on these important issues was shared with the community on Monday’s CSPEN webinar, but the ongoing analysis, feedback, and implementation process on these two important issues will remain front and center for the foreseeable future. However, that is not all that the community must remain on top of. Here is a summary of key legislative, regulatory, and judicial actions taking place that also are important to our community.
Megabill 2.0
As noted above, the ink is barely dry, and the assessment process has only just begun on the new statutory revisions included in the new megabill and Congress is already contemplating a SECOND Budget Reconciliation bill to be considered this fall/winter. As was shared with our community on the most recent webinars over the past couple of weeks, the President and the Republican Party have already noted that they are willing to consider the development of a second bill focused on not only technical corrections and clean up to the just enacted law, but also the consideration/re-consideration of provisions from the House and Senate proposals that were omitted from the first bill. This opens the ability for the GOP to revisit issues which were not addressed in the first bill due to either differences within the party, differences between the House and Senate, issues removed by the Senate Parliamentarian or for other reasons. While nothing is official, it is a very real possibility that there
could be a second bill ahead.
Senate Confirmation Process
CSPEN continues to monitor the Senate’s floor schedule, awaiting announcements regarding efforts to bring several key Trump Department of Education nominees to the full Senate for final votes on their appointment to key positions within the Department’s leadership. It is anticipated that prior to the August recess which begins on, the Senate will hold floor deliberations on Under Secretary nominee Nicholas Kent and Deputy Secretary nominee Penny Schwinn.
SCOTUS Decision
Yesterday, the U.S. Supreme Court lifted a judge’s order preventing the administration from conducting layoffs at 19 agencies for the time being. Notably, the U.S. Department of Education WAS NOT on the list. CSPEN is not entirely certain what impact, if any, this will have on the Department, but the comings and goings of staff continue to be a sensitive issue as the Department seeks to address key issues like student loan repayment, oversight and enforcement, and other key Department functions.
PSLF Federal Negotiated Rulemaking
As also shared by CSPEN via both email and Monday’s webinar, the U.S. Department of Education and a group of non-federal negotiators seeing to reach consensus on a package of revisions to the Public Service Loan Forgiveness regulations, came close, but ultimately unable to reach consensus. In a press release (www.ed.gov/about/news/press-release/us-department-of-education-concludes-negotiated-rulemaking-session-restore-public-service-loan-forgiveness) issued by the Department, Acting Under Secretary James Bergeron noted:
“While the committee was not able to reach consensus, I’m proud that the committee members representing institutions of higher education, veterans, taxpayers, borrowers, and the business community have helped fulfill one of President Trump’s promises to ensure that PSLF does not subsidize organizations that are breaking the law. The Department thanks the committee members for their dedication and hard work on this critical issue.”
Without consensus achieved, the Department has the authority to develop its own proposals, informed by the negotiations, on issues related to PSLF requirements regarding the definition of a qualifying employer excludes organizations that engage in activities that have a substantial illegal purpose.
CSPEN hosted Mary Lyn Hammer and April Boyd on Monday’s webinar who provided a summary of the three-day negotiations, key changes to the Department’s initial proposal that we hope will be maintained in the Notice of Proposed Rulemaking (NPRM) seeking public comment on changes to the regulations, and ultimately promulgation of regulatory changes we anticipate will be completed prior to November 1, 2025 for implementation July 1, 2026, and work that will be done in anticipation of the NPRM comment phase to come.
