Last week, the Senate Appropriations Committee hosted Secretary McMahon to discuss the President’s FY2027 Budget Proposal. Secretary McMahon, facing bipartisan skepticism, defended her vision of educational renewal and returning education to the states. The House Appropriations Committee is scheduled to hold a markup of their FY2027 budget for Labor, Health and Human Services, Education, and Related Agencies on June 5 (Subcommittee) and June 9 (Full Committee); the Chair and Ranking Member of the Senate Appropriations Committee released General Guidance on appropriations requests, and aims to complete markup of all 12 spending bills by the end of June.

Last week, Congress continued to hear testimony about the President’s FY2027 Budget Proposal. This Tuesday, the Senate Appropriations Committee, Subcommittee on Labor, Health and Human Services, Education, and Related Agencies, will review the budget request for the Department of Education and hear from Secretary McMahon. Expect questions related to the transfer of significant functions out of the Department, efforts to overhaul large swaths of federal student assistance programs, and continued concern about how and when funding (both title and discretionary) will reach states.

On Monday, April 20, 2026, the U.S. Department of Education issued a Notice of Proposed Rulemaking (NPRM) focused on “earnings accountability” that would expand federal oversight to nearly all Title IV-eligible programs and introduce new compliance obligations for institutions, and have immediate and material implications for institutional operations, program viability, and student disclosures. In short, the NPRM introduces a new earnings premium standard, impacts direct loan eligibility, includes an expansion of STATS reporting, contains a new administrative threshold capacity requirement, requires additional student disclosures, and contains limited opportunities for institutions to challenge the data the Department will use to make eligibility determinations.

Budget season is underway—House and Senate Budget and Appropriations committees began hearing testimony on the President's FY2027 budget request, with the House set to mark up its Labor, HHS, and Education spending bill on June 5 and 9. A hearing specifically on the Department of Education's budget has not yet been publicly scheduled.

While Congress remained in recess, the House Education and Workforce Committee advanced committee reports on seven bills amending the Child Care and Development Block Grant Act of 1990, introducing enhanced fraud prevention measures, new provider accountability requirements, and triennial state performance reviews. The reports position the bills for House floor consideration as part of a broader Republican push on child care oversight.

With Congress on Spring Break, the administration released its FY2027 Budget Proposal—which assumes continued dismantling of the Department through IAAs, consolidation or elimination of numerous discretionary grant programs, and the creation of a new "Make Education Great Again" (MEGA) block grant program. Congress rejected analogous proposals in FY2026, but the budget signals the administration's intent to press forward administratively even without legislative approval.

On March 19, 2026, the Department of Education announced an interagency agreement with the U.S. Department of Treasury to transfer all student loan functions—and potentially all FSA functions—under a loosely defined three-phase approach in which Treasury, not ED, will identify the "future state" of non-default loan servicing and assess the "programmatic and policy requirements" governing student aid eligibility. Many of the responsibilities identified in the IAA are specifically and exclusively assigned to ED by statute, and the agreement does not identify the legal authority under which ED may transfer them—raising significant concerns for borrowers and institutions already navigating an uncertain federal student loan landscape.

The administration announced it would move remaining Department of Education staff out of the LBJ headquarters building—which has served as the Department's home for 40 years—in the latest step of its effort to dissolve the agency without Congressional approval. Ranking Member Bobby Scott objected, noting the move is not a bureaucratic reduction but a symbolic and operational step in a broader effort to diminish the federal role in ensuring equal access to education.

A House Judiciary Subcommittee convened a hearing directly aimed at revisiting Plyler v. Doe—the 1982 Supreme Court decision guaranteeing K–12 public education access regardless of immigration status—with at least six states having introduced legislation designed to challenge or lay groundwork for overturning the precedent. The hearing reflects meaningful support among House majority members for undermining a foundational access guarantee in public education, with consequences well beyond immigration policy.

The Senate HELP Committee continued its scrutiny of foreign financial relationships with American universities, raising concerns that foreign governments—particularly China—may exploit university partnerships and research funding to gain access to sensitive technologies and intellectual property. The hearing came weeks after the Department launched its new HEA Section 117 reporting portal and transferred administration of the program to the State Department.

Two new interagency agreements announced February 23, 2026—one delegating Section 117 foreign gift reporting and enforcement to the State Department, another transferring family engagement and school safety grant programs to HHS—bring ED's total to nine IAAs shifting 118 federal education programs out of the Department. Both agreements are internally contradictory, appear to exceed ED's statutory authority, and introduce new layers of administrative complexity for states, districts, and institutions that currently look to a single agency for program guidance, oversight, and funding.

The Senate passed the Children and Teens' Online Privacy Protection Act by unanimous consent, blocking collection of personal data from anyone under 17 without consent and limiting targeted advertising to minors—while the House companion bill was pulled from markup as staff-level bipartisan negotiations reached "substantial progress." The bills are part of a larger legislative push to update and improve online safety protections for students and youth.

Federal civil rights laws governing DEI in education have not changed—the Department's interpretation of those laws has, and institutions should approach compliance decisions accordingly. While certain enforcement tools, including the February 2025 Dear Colleague Letter and related certification requirements, are no longer operative following successful legal challenges, the underlying policy interpretations remain in effect and the Department continues to pursue enforcement through grant decisions, OCR investigations, and emerging mechanisms including proposed SAM certification revisions.

The President's 1-hour-47-minute State of the Union address largely bypassed education policy, offering no substantive education agenda for the coming year beyond brief references to parents' rights and gender identity. Congress, meanwhile, introduced a package of bills increasing oversight and accountability for child care block grants and held hearings on CTE and AI in schools.

Congress was on recess last week; the notable development was a letter from Senators Warren, Sanders, Murray, and Baldwin calling on GAO to open an investigation into the Department's use of interagency agreements to transfer grant programs to other federal agencies without congressional approval. The Senators expressed concern that the transfers delayed crucial funding, created administrative inefficiencies, increased costs, and compromised technical assistance quality for states and grantees.

Sligo Law Group, Lawyers for Good Government, and the DC Law Collective filed a federal lawsuit on behalf of more than 140 career federal employees, alleging the Trump administration used reduction-in-force procedures to carry out politically motivated terminations while denying employees constitutional due process protections. The complaint details how agencies manipulated competitive area structures to target specific individuals, publicly stigmatized employees without providing an opportunity to respond, and funneled appeals into an MSPB process rendered effectively non-functional by an administrative backlog of over 18,750 pending cases.

With appropriations largely settled, Congress resumed its focus on education, youth, and workforce issues, introducing proposals on K–12 school safety, foster youth housing and legal services, higher education affordability, and WIOA flexibility. Committee hearings examined literacy instruction, education-related civil rights issues, child care fraud, and foreign influence in nonprofits.

The Office of Personnel Management released two proposed rules that would transfer adjudication of suitability determinations and all reduction-in-force appeals from the Merit Systems Protection Board to OPM itself—eliminating independent review of the agency's own employment actions. The RIF rule goes further by sharply limiting the grounds employees can raise, shifting the burden of proof onto the employee, eliminating judicial review, and giving the politically-appointed OPM Director unchecked authority to intervene in any appeal decision.

On February 4, the President signed H.R. 7148 into law, funding the Department of Education at approximately $79 billion through FY2026—a Congressional rejection of the administration's proposed deep cuts, though the law does not include significant new guardrails against the Department's ongoing restructuring efforts. Congress has until February 10 to negotiate separate DHS funding as part of the same legislative package.

OPM's Final Rule on "Schedule Policy/Career" strips Civil Service Reform Act job protections from tens of thousands of career employees in positions the President deems "confidential, policy-determining, policy-making, or policy advocating"—allowing termination without cause, notice, or appeal, and reassigning whistleblower retaliation investigations from the independent Office of Special Counsel to agencies themselves. The Rule is part of a multi-front effort to bring all executive branch employment decisions under political appointee control, and in response to over 40,000 public comments—94% opposed—the administration asserted that any congressional limits on the President's hiring and firing authority are unconstitutional.