More Department Discretion, Less Grant Certainty: Seven Proposed EDGAR Changes
The Department’s proposal would expand its discretion to fund, continue, and terminate multiyear awards, add new conditions to State-administered grants, create a new indirect-cost preference, and recast the Department’s equity mandate.
Overview: On August 24, 2026, the U.S. Department of Education published a proposed rule revising the Education Department General Administrative Regulations, commonly known as EDGAR. 91 Fed. Reg. 54,666 (Aug. 24, 2026). Many amendments are technical, but several would alter the federal grant lifecycle. For discretionary grantees, the most immediate changes concern whether multiyear awards are funded up front, whether they continue, and when they may be terminated. Other provisions would add conditions to State-administered formula grants and create new indirect-cost incentives. The proposal would also remove references to “underserved” populations from the discretionary grant selection criteria. Prospective applicants should note another operational change: the Department would no longer be required to publish application notices or annual grant priorities in the Federal Register, shifting primary monitoring to Grants.gov and the Department’s application notices.
Bottom line: The Department is proposing greater discretion over whether, when, and how much multiyear grants are funded and continued, and a clearer route to end awards when priorities change. Other provisions would add conditions to State-administered grants and create a new indirect-cost preference.
1. Discretionary awards could be terminated “for convenience”
What would change. Proposed § 75.901 would state expressly that a discretionary grant may be terminated, in whole or in part, for the convenience of the Secretary or a pass-through entity. The Department relies in part on 2 C.F.R. § 200.340(a)(4), which permits termination under award terms that authorize an agency to end an award when it no longer effectuates program goals or agency priorities. It frames the change as bringing federal assistance into line with the long-standing “termination for convenience” authority used in federal procurement contracts and describes grant agreements as “ultimately contractual.”
The proposed regulatory text also includes “Termination for Convenience” as a standalone item in its list of remedies, without accompanying operative language or a cross-reference. That drafting defect should be corrected if the Department intends the item to have independent significance.
Why it matters. A convenience termination does not require grantee fault. A compliant, high-performing multiyear award could be ended because Department priorities changed, subject to applicable law and the award’s terms. Grants and procurement contracts serve different purposes and operate under different statutes and remedies, so importing a procurement concept into the grant context raises questions the proposal does not answer. The proposal comes amid litigation over the Department’s discontinuation of multiyear education grants. It cites two 2025 Supreme Court decisions, Department of Education v. California and NIH v. American Public Health Association, for its contractual framing. Both arose at the interim-relief stage and addressed jurisdiction; neither established that every question arising from a federal grant is necessarily contractual. A new regulation would not by itself resolve the Department’s statutory authority, the availability of review under the Administrative Procedure Act, or which court may hear a challenge.
Potential comments. A comment could press for prospective and reviewable standards, clear notice, meaningful wind-down protections, treatment of committed costs, consideration of reliance interests, and express preservation of any otherwise available review.
2. Continuation funding would become less predictable
What would change. The proposed revisions to § 75.253 would remove the current priority for continuation awards over new grants, allow the Secretary to consider “all relevant information,” expressly include the original application and prior grantee activity, permit partial, installment, or delayed continuation funding, and allow continuation decisions to be made at any time within the program’s fiscal or appropriation year.
Why it matters. Taken together, the changes would expand the Department’s discretion over whether, when, and how much continuation funding to provide, even when a grantee is meeting performance and administrative requirements. The current rule already requires the Secretary to find that continuation is in the best interest of the Federal Government, but the proposal would remove the existing priority for continuation awards and allow consideration of information beyond grantee performance. Like the termination proposal, this area is the subject of recent litigation over the Department’s reliance on changed priorities and application content. The proposed regulatory text also contains several apparent paragraph-reference errors in § 75.253(e) and (j), including references to paragraphs that address different subjects, making portions of the intended procedure uncertain.
Comments. Comments could seek correction of the cross-references, republication if necessary for meaningful comment, prospective continuation criteria, limits on “all relevant information,” and reviewable standards for partial or delayed funding.
3. “Frontloaded” multiyear funding may offer less security than it appears
What would change. A proposed § 75.252 would set out in EDGAR, for the first time, how the Department may “frontload” a multiyear award, meaning use appropriated funds available for obligation in one fiscal year for future budget periods. The Secretary could frontload part of a project, covering budget periods beyond the first, or the entire project period, and a companion definition would be added at § 77.1(c).
Why it matters. Frontloading can sound protective, because obligating money for later years up front appears to insulate a project from future appropriation shortfalls. The proposal, however, separates obligating the funds from being allowed to use them. Even a fully frontloaded grantee could draw only the amount approved for the current budget year, and access to the rest would stay subject to the same annual review that governs continuation, including the Secretary’s determination that continuation serves the best interest of the Federal Government. The proposal does not spell out the legal status of frontloaded but undrawn funds, when they might be restricted or deobligated, or the standards for choosing which awards are frontloaded. Grantees and subrecipients that hire staff, sign contracts, or plan services on the strength of a large “awarded” figure could face significant reliance and wind-down costs if later access is denied.
Potential comments. Comments could ask the Department to explain the legal and accounting status of frontloaded funds, to announce the standards for when frontloading is used, and to confirm that any denial of access carries notice, written reasons, and review at least equal to what applies to a termination or noncontinuation.
4. Executive orders would become an express Part 76 grant condition
What would change. Current § 76.700 requires a State and its subgrantees to comply with the State plan, applicable statutes and regulations, and approved applications. The proposal would add Executive orders to that list. The Department describes the omission as an oversight from the 2024 EDGAR revisions and says the change would conform Part 76 to § 75.700, the corresponding direct-grant provision.
Why it matters. Part 76 governs major State-administered programs, including Title I, IDEA Part B, and Perkins. Adding Executive orders to § 76.700 would create an express regulatory hook extending through States to subgrantees. Existing award terms and incorporated application assurances already reach some applicable Executive-order requirements, but Part 76 does not currently state a categorical Executive-order duty.
The 2024 history also complicates the Department’s “oversight” explanation. The 2024 NPRM tied the addition of Executive orders to § 75.700 to former § 75.708(d)(2), which was a subgrant flow-down provision. The final rule simultaneously replaced that provision’s specific Executive-order language with “applicable law” and left § 76.700 unchanged. That record does not prove the omission was intentional, but it does not substantiate the present characterization of the omission as an oversight.
The federalism issue. The word “applicable” cannot make every current or future Executive order automatically binding on education grantees. A condition must be lawfully authorized, relevant to the funded program, and communicated with adequate notice. The Department of Education Organization Act also provides that establishing the Department must not increase federal authority over education or diminish State and local responsibility. It bars construing program provisions to authorize federal control over curriculum, instruction, administration, or personnel, except to the extent authorized by law. 20 U.S.C. § 3403(a)–(b). This is not a categorical prohibition, but it requires the Department to identify the independent authority supporting any condition that reaches those subjects.
Potential comments. A strong comment should ask the Department to identify the program-specific statutory authority for the new Part 76 condition, define the limits of “applicable,” and explain the incremental effect beyond existing award terms and assurances.
5. New conditions would reach personnel, admissions, and speech policies
What would change. Proposed § 76.500(f) would require grantees to base hiring, admissions, promotions, and compensation practices under the grant on “merit and qualification,” subject to exceptions; prohibit certain compelled statements concerning political views as a condition of employment, admission, or project participation; and, where applicable, require policies protecting freedom of speech, inquiry, and press as specified in § 75.500(a)–(e). Through proposed § 76.700, States and subgrantees would be required to comply with § 76.500.
Why it matters. The Department frames the provision as advancing merit, ability, and rigor. The proposal does not define “proxies,” however, even though that term is central to the personnel and admissions restriction. Read broadly, it could reach neutral criteria that merely correlate with protected characteristics. The text refers to an “appropriate exception” and gives religious organizations and organizations engaged in remedial action as examples, but it does not define the scope of those exceptions. That uncertainty could deter practices current law permits or, in some circumstances, requires.
The parallel Part 75 and Part 76 provisions also use different wording without explaining whether the differences are substantive. For State educational agencies, the provision raises immediate questions about monitoring obligations across local educational agencies and other subrecipients.
As applied to educational institutions, schools, and school systems, the provision’s direct regulation of hiring, admissions, compensation, compelled statements, and institutional policies also raises substantial questions under 20 U.S.C. § 3403(b). Program-specific statutes and federal civil rights laws may authorize particular conditions, but general EDGAR rulemaking authority or a policy preference may not be sufficient.
Potential comments. Comments could request a definition of “proxies,” a clear evidentiary standard, safe harbors for compliance with existing civil-rights requirements, consistent Part 75 and Part 76 wording, and specific statutory authority for each prong of the proposed condition.
6. A new competitive preference would pressure indirect-cost recovery
What would change. Proposed § 75.228 would allow the Secretary to give a competitive preference to applicants that voluntarily elect to charge less in indirect costs. The provision addresses applicants with negotiated rates, applicants using the de minimis rate, and applicants with approved cost-allocation plans. An applicant’s election generally would apply for the life of the grant. Under one modeled scenario, the Department estimates an annual shift of approximately $45 million from indirect to direct costs.
Why it matters. The preference would reward applicants that can afford to forgo reimbursement, a measure of financial capacity rather than program quality, and could disadvantage State agencies and others that cannot subsidize administration from unrestricted funds. Voluntary under-recovery is not itself an audit violation. The compliance risk arises if an applicant later attempts to recover the forgone costs through direct charges, another federal award, or matching or cost sharing. Proposed § 75.228(g) would expressly prohibit those uses. The larger concern is structural: organizations may erode the administrative capacity they need to manage grants effectively in order to remain competitive.
7. Removing “underserved” and reframing the Department’s equal-access mission
What would change. Beyond the provision-by-provision amendments, the proposal would rewrite the discretionary-grant selection criteria in § 75.210, removing the references to “underserved” populations that the 2024 EDGAR revisions added and replacing them with the more general phrase “target population.” The Department also invokes Section 427 of the General Education Provisions Act (GEPA) to support the new merit conditions in §§ 75.500(f) and 76.500(f).
Why it matters. These moves sit uneasily with the statutes the Department administers. The Department of Education Organization Act declares that a core purpose of the Department is “ensuring access to equal educational opportunity for every individual,” and its findings recognize a continuing need to ensure equal access to high-quality educational opportunities for all Americans. 20 U.S.C. §§ 3401–3402. Removing “underserved” from the selection criteria eliminates an express focus on populations that may face barriers to the equal access Congress made part of the Department’s mission.
The GEPA citation is also selective. Section 427, titled “Equity for students, teachers, and other program beneficiaries,” states a purpose of helping the Department “ensure equal access to education and to promote educational excellence,” and its operative requirement directs each covered, non-individual applicant to identify and address barriers to equitable access and participation. 20 U.S.C. § 1228a. The preamble quotes the “educational excellence” and “high standards” language while omitting the equal-access half of the same purpose and the barrier-removal requirement at the provision’s core. Read in full, § 427 is an equity provision, so citing it to justify a merit condition while passing over its barrier-removal command presents an incomplete account of the statute.
Potential comments. Comments could ask the Department to reconcile the removal of “underserved” with the equal-access purposes of the Department of Education Organization Act and GEPA § 427, to quote § 427 in full rather than in part, and to explain how the more general “target population” terminology will preserve meaningful consideration of barriers to equal access.
The comment record matters.
The Department has asked commenters to identify the specific regulatory sections they address. General opposition will carry less weight than program-specific evidence showing how a proposal would operate in practice.
Effective comments should:
identify the exact proposed section and the requested change;
quantify implementation, systems, training, monitoring, and reliance costs;
explain program-specific statutory limits and interactions with existing assurances or award terms;
provide concrete examples involving current grants and subgrantee relationships; and
propose limiting language, procedural safeguards, or less disruptive alternatives.
Discretionary grant recipients, State educational agencies, local educational agencies, institutions of higher education, nonprofit grantees, associations, and other entities that administer or rely on federal education funds should evaluate the proposal now. Even organizations that do not intend to submit an individual comment may wish to contribute operational examples to an association or multistate submission.
Comments are due September 23, 2026.
Submit comments through Regulations.gov using Docket ID ED-2026-OPEPD-2542.
How Sligo Law Group can help.
The proposed revisions are likely to have significant impacts on states, districts, schools, and other education-related organizations. Sligo Law Group assists education agencies, institutions, associations, and grantees with evaluating proposed federal requirements, developing program-specific comment strategies, coordinating coalition submissions, and drafting comments for the administrative record.
The information provided in this post is for informational purposes only. For an analysis of this proposed rule would affect your agency or organization, please contact us at contact@sligolawgroup.com.