This week’s Federal Update covers Congressional and Executive activities of interest in Washington, D.C.
Congressional Branch Activities of Interest
Floor Activity
The House and Senate are both in session this week. On Thursday, the House passed an amended version of its reconciliation bill by a vote of 215-214, with two Republicans joining Democrats to vote against the bill. The final bill came together in the early hours of Thursday morning, with the Rules Committee conducting a markup over 22 hours, enabling Republicans to finalize their text. The measure now heads to the Senate.
The Senate continues consideration of nominations this week.
Reconciliation
As described above, the House has passed the One Big Beautiful Bill Act (H.R. 1). The final House-passed bill combines recommendations from 11 House committees that were instructed to find a minimum amount of savings or spend a maximum amount of money to implement their policies under the fiscal 2025 budget resolution. As reported in prior newsletters, the final House-passed bill contains, among other provisions:
- elimination of subsidized student loans;
- lowering of student loan borrowing limits;
- elimination of Grad PLUS loans;
- creation of an institutional risk-sharing scheme for unpaid student loans;
- funding to address the Pell Grant shortfall;
- restrictions to Public Service Loan Forgiveness for physician residents;
- expansion of the existing endowment tax on private institutions with an exemption for religious institutions;
- elimination of the non-public research income limitation exemption under the unrelated business income tax (UBIT); and
- permanent codification of the student loan repayment provision of employer-provided education assistance (Section 127).
Hearings
On May 20, the Senate Appropriations Subcommittee on Labor, Health and Human Services, and Education heard testimony from Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. about the President’s FY26 budget request for HHS. Parts of the hearing focused on research cuts at the NIH, the NIH proposal to cap indirect costs at 15%, and proposals to reorganize the agency. Watch the hearing here.
On May 21, the Senate Health, Education, Labor, and Pensions Committee held a hearing on “The State of Higher Education.” During the hearing, Indiana Senator Jim Banks asked Taylor University President Dr. Michael Lindsay about the “moral rot” infecting higher education and what motivates diversity, equity, and inclusion efforts on college campuses. Watch the hearing here.
On May 21, the Senate Judiciary Committee held a nomination hearing for Joseph Edlow, the nominee for Director of the US Citizenship and Immigration Services (USCIS). During this hearing, Senator Mike Lee (R-UT) asked a question about the use of Optional Practical Training (OPT) and what Edlow would do if confirmed to "fix that issue". Edlow stated he would like to see a "regulatory and subregulatory program that would allow us to remove the ability for employment authorization for F-1 students beyond the time they are in school." Watch the hearing here.
On May 21, the House Appropriations Subcommittee on Labor, Health and Human Services, Education held a hearing on the FY26 budget request with Department of Education Secretary Linda McMahon. Secretary McMahon outlined her “final mission to wind down the Department of Education responsibly, cut waste, and give education back to states, parents, and educators.” Watch the hearing here.
On May 21, the House Committee on Education and Workforce’s Subcommittee on Higher Education and Workforce Development held a hearing titled, "Restoring Excellence: The Case Against DEI." See the hearing here.
On May 21, the House Committee on Education and Workforce’s Subcommittee on Higher Education and Workforce Development held a hearing titled, "Restoring Excellence: The Case Against DEI." See the hearing here.
Legislation
No Loan Forgiveness for Terrorists Act (S.1845) - Introduced by Indiana Senator Jim Banks, the bill would prohibit students from receiving credit through the Public Service Loan Forgiveness (PSLF) program while working at organizations that engage in the following activities:
- Aiding or abetting violations of federal immigration laws
- Materially supporting terrorism
- Materially supporting the castration or mutilation of children
- Aiding and abetting illegal discrimination
- Violating State tort laws, including against trespassing and disorderly conduct
Read the press release here.
Executive Branch Activities of Interest
Department of Homeland Security (DHS) Terminates Harvard’s Ability to Enroll International Students
The Trump administration has terminated Harvard’s Student and Exchange Visitor (SEVP) program certification. Without SEVP certification, Harvard can no longer enroll foreign students, and existing foreign students must transfer or lose their legal status. According to a press release from DHS Secretary Kristi Noem, “this administration is holding Harvard accountable for fostering violence, antisemitism, and coordinating with the Chinese Communist Party on its campus. It is a privilege, not a right, for universities to enroll foreign students and benefit from their higher tuition payments to help pad their multibillion-dollar endowments. Harvard had plenty of opportunity to do the right thing. It refused. They have lost their Student and Exchange Visitor Program certification as a result of their failure to adhere to the law. Let this serve as a warning to all universities and academic institutions across the country.” The Trump administration has terminated Harvard’s Student and Exchange Visitor (SEVP) program certification. Without SEVP certification, Harvard can no longer enroll foreign students, and existing foreign students must transfer or lose their legal status. According to a press release from DHS Secretary Kristi Noem, “this administration is holding Harvard accountable for fostering violence, antisemitism, and coordinating with the Chinese Communist Party on its campus. It is a privilege, not a right, for universities to enroll foreign students and benefit from their higher tuition payments to help pad their multibillion-dollar endowments. Harvard had plenty of opportunity to do the right thing. It refused. They have lost their Student and Exchange Visitor Program certification as a result of their failure to adhere to the law. Let this serve as a warning to all universities and academic institutions across the country.”
Read the full release here.
Department of Defense Memo Announces Plan to Cap Facilities and Administrative Costs at 15%
A memo from the Department of Defense (DOD) indicates the intention of the Department to implement a 15% indirect cost rate cap on all new awards to universities. The memo states the policy will go into effect 21 days from the date of the memo, which would be June 4. The memo also announces plans to renegotiate the rate of existing awards by no later than June 13. DOD states if awards cannot be renegotiated, they will be cancelled.
National Science Foundation (NSF) Pauses Implementation of 15% Cap on Facilities and Administrative Costs
NSF announced that it is pausing implementation of its new policy (NSF 25-034) capping indirect costs at 15% through June 13, 2025. New NSF awards and associated subawards issued during this pause will not implement the 15% cap but will include a term applying the cap for the entirety of the award if there is a court decision permitting application of the policy. See the announcement from NSF here.
Department of Commerce Rescinds Most Recent Tech Hubs Awards, Announces New Competition
The Department of Commerce announced that it is rescinding approximately $210 million in grants made to six Tech Hubs in January due to concerns about the process used to select the recipients, and that it is reopening the competition with updated requirements. The awards ranged from $22-$48 million each and were part of the Tech Hubs Program established by the 2022 CHIPS and Science Act.
The department announced that it will publish a new notice of funding opportunity (NOFO) soon. The new NOFO will add requirements for applicants “to present information on how this project will be a bargain to taxpayers” and to “remove references to policy priorities of the previous administration.” The department noted that the six Tech Hubs that received the awards in January will need to compete again but will receive “heightened consideration.” In 2023, Indiana’s Heartland BioWorks was designated as one of the Department of Commerce’s inaugural Tech Hubs. IU is a partner of the Heartland BioWorks project.
DOJ Establishes Civil Rights Fraud Initiative
The Department of Justice announced that it has established the Civil Rights Fraud Initiative, “which will utilize the False Claims Act to investigate and, as appropriate, pursue claims against any recipient of federal funds that knowingly violates federal civil rights laws.” According to Attorney General Pam Bondi, the initiative will target institutions that “allow anti-Semitism and promote divisive DEI policies.”
A memo from Deputy Attorney General Todd Blanche noted that a university could violate the False Claims Act if it “allows men to intrude into women’s bathrooms or requires women to compete against men in athletic competitions.”