This week’s Federal Update covers Congressional and Executive activities of interest in Washington, D.C.
Congressional Branch Activities of Interest
Floor Activity
While the House and Senate were both originally scheduled for recess this week, both chambers were in session to continue work on their reconciliation legislation. On July 1, the Senate passed its version of the One Big Beautiful Bill Act (H.R. 1) by a vote of 51-50. Vice President JD Vance cast the tie-breaking vote. Republican Senators Susan Collins (ME), Rand Paul (KY), and Thom Tillis (NC) joined all Democrats voting against the bill. On July 3, the House approved the Senate-passed version of the reconciliation bill, 218-214, sending it to President Trump’s desk for signature. Republican Representatives Thomas Massie (KY) and Brian Fitzpatrick (PA) joined all Democrats voting in opposition.
The $3.4 trillion package extends many 2017 ‘Tax Cuts and Jobs Act’ tax cuts, provides $156 billion to the Department of Defense, and $132.6 billion to the Department of Homeland Security. Within the education title of the bill:
- the Grad PLUS loan program is eliminated after July 1, 2026. The legislation caps lifetime federal loans for graduate students at $100,000 and for professional students at $200,000;
- removal of Pell Grant eligibility for students receiving non-Title IV external grant aid up to or exceeding the cost of attendance;
- blocks federal loans for undergraduate programs where former students earn less than the typical high school graduate in their state, and for graduate programs where former students earn less than the typical bachelor’s degree holder in their field and state; and
- includes funds to address the Pell Grant shortfall.
As part of the tax title, the legislation expands the existing endowment tax on private institutions to a three-tiered system:
| Student-Adjusted Endowment | Excise Tax Rate |
| $500,000 - $749,999 | 1.4% (current rate) |
| $750,000 - $1,999,999 | 4% |
| $2,000,000+ | 8% |
The final bill removed a provision in the House bill that would have excluded religious colleges from being subject to the endowment tax. The legislation exempts schools from the excise tax on endowments if they have fewer than 3,000 students.
Executive Branch Activities of Interest
Department of Defense Announces Implementation of 15% Facilities & Administrative Costs Cap
On June 30, the Joint Task Force to Combat Anti-Semitism notified Harvard University that the Office for Civil Rights at the Department of Health and Human Services has found the university in “violent violation” of Title VI of the Civil Rights Act. The task force’s letter noted that “failure to institute adequate changes immediately will result in the loss of all federal financial resources and continue to affect Harvard’s relationship with the federal government.”
Judicial Branch Activities of Interest
Joint Task Force on Antisemitism Sends Letter to Harvard
Eleven universities and one university system joined the American Council on Education (ACE), the Association of American Universities (AAU), and the Association of Public and Land Grant Universities (APLU) to file a lawsuit to block the implementation of the Department of Defense’s (DOD) implementation of a 15% cap on facilities and administrative (F&A) costs on new awards to universities. On June 17, the U.S. District Court judge granted a temporary restraining order in the case. The order covers all institutions in all states nationwide and prohibits the DOD from implementing the rate cap policy while the case is ongoing.
Proposed Rule on International Students “Duration of Status”
On June 27, the Department of Homeland Security U.S. Immigration and Customs Enforcement submitted a proposed rule to the Office of Management and Budget to end “duration of status.” Text is not yet available but the published title, “Establishing a Fixed Time Period of Admission and an Extension of Stay Procedure for Nonimmigrant Academic Students, Exchange Visitors, and Representatives of Foreign Information Media,” matches the title of the rule first proposed by the Trump administration in 2020.