Final Spending Bill Protects Student Aid Funding
With the clock ticking toward the expiration of current federal funding on January 30, leadership in the House and Senate Appropriations Committees released a four-bill package for final FY 2026 spending that provides level funding for the federal student aid programs.
For the award year beginning July 1, 2026, the bill provides for a Pell Grant maximum of $7,395, and continued level funding for Supplemental Educational Opportunity Grants (SEOG) and Federal Work-Study (FWS), with funding levels specified in law. The TRIO and GEAR UP programs are also level funded.
Congressional leaders have indicated that the House is expected to pass the bill this week, with the Senate expected to follow suit the week of January 26.
The negotiated package rejects earlier proposals by President Trump and the House Appropriations Committee to slash funding for the federal student aid programs. While the student aid programs have not been part of the proposal to dismantle the Department of Education, the president’s budget for FY 2026 proposed to drastically cut the Pell Grant maximum, eliminate SEOG, and deeply cut FWS. The final spending bill does not reflect these proposed cuts.
The bill also rejects the reallocation of higher education program funds experienced at the end of FY 2025 and provides small increases for some programs for minority-serving institutions for the 2026-27 award year. At the end of FY 2025, the administration reallocated funds from the Minority-Serving Institutions grants, Teacher Quality Partnership grants and International Education programs and redistributed them to a one-time increase for Historically Black Colleges and Universities. Following that reallocation, the Department sent those programs to be managed at the Department of Labor (DOL) through an Interagency Agreement. All these programs are funded in the final FY 2026 bill.
Other notable funding includes specific resources for congressionally approved programs under the Fund for the Improvement of Postsecondary Education (FIPSE), such as Basic Needs Grants, Postsecondary Student Success Grants, Centers for Excellence for Veteran Student Success, and others. The FIPSE grants recently awarded by the administration for use of Artificial Intelligence in the classroom, Civil Discourse on College Campuses, Accreditation Reform, and Short-term Pell were not funded by Congress. FIPSE also includes $224 million for higher education earmarks.
Despite attempts by the administration to dismantle the ED by reducing the workforce, defunding programs, and transferring program management to other agencies, Congress authored a spending bill that, if passed, will ensure the department has the appropriate staffing to administer programs, fund all education programs, and inhibit transfer authority with mandated reporting to committees for the inter-agency agreements recently set between ED, DOL and the Department of Health and Human Services.
To ensure programs are funded based on congressional intent the legislative text includes specific program funding levels rather than just account totals, and the explanatory statement serves as a conference report referenced in bill language so that the funding tables cannot be ignored. The tightening of the language ensures no unintended flexibility for the administration and reinforces the congressional power of the purse.
In addition to protecting ED funding, the bill provides increased funding for the National Institutes of Health and includes language blocking any change to the 2024 negotiated rates for indirect cost reimbursement.
The four-bill package includes Defense, Labor-Health and Human Services-Education, Transportation-Housing and Urban Development, and Homeland Security.
For more information, please contact:
Stephanie Giesecke