ED Proposes Revisions to Grant Regulations
September 01, 2026
The U.S. Department of Education (ED) issued a on August 24th that would make it easier for the agency to terminate or discontinue discretionary grants and further cement administration policies in regulations. While most of the proposed revisions focus on competitive grants administered by the Department of Education, several provisions could also have significant consequences for formula funding streams. Because of their potential impact on districts nationwide, we believe it is important for superintendents to be aware of these proposed changes.
ED proposes a new provision that would require grantees to ensure their practices around recruitment, hiring, admissions, promotions, and compensation are merit- and qualification-based, and do not take into consideration race, color, national origin, sex, religion, or “proxies thereof.” In addition, grantees must ensure that employment, project participation, and admission is not conditioned on statements of support for or opposition to certain political views, and that they have policies in place to protect free speech, inquiry, and press. These same changes are also proposed for discretionary grants.
A proposed revision also adds “Executive Orders” to the list of requirements that formula fund grantees must comply with in exchange for receiving federal funds. Significantly, this means federal agencies would have greater enforcement authority regarding policies that may be outlined in Executive Orders but not incorporated into law or regulations. Currently, Executive Orders are not law nor do they require immediate action by grantees or subgrantees. If this rule were to be finalized, it would require grantees to immediately comply with Executive Orders and could create instability in the federal grants process as policies change from one administration to another. For example, under the Biden administration, Title IX was interpreted to prohibit discrimination based on gender identity, including discrimination against transgender students, but, in 2025, President Trump issued an Executive Order on “gender ideology” which states that “it is the policy of the United States to recognize two sexes, male and female.” Therefore, if this rule were in place, all districts would have had to begin making immediate changes upon the signing of that Executive Order instead of waiting for further guidance from ED or their state educational agency, etc. Admittedly, this may be subject to litigation if implemented, or further Executive Orders could bring about litigation, but that only increases the potential confusion around what must be implemented and when.
The proposed rule also seeks to revise several sections around the continuation and termination of competitive grants. Those revisions would provide ED broader authority to terminate or discontinue funding at the Secretary’s discretion and “for convenience.” Like some of the proposed revisions to the Uniform Grants Guidance, these proposals would introduce greater uncertainty into the grant continuation process. Other proposed changes impacting competitive grants include altering the process for posting grant funding notices and priorities (those notices would only be posted on grants.gov moving forward, as opposed to the Federal Register as well), allowing the Secretary to provide competitive preference to grant applicants that propose to charge a lower indirect cost rate than their negotiated one, modifying some of the evidence definitions to align them with the statutory definitions under the Elementary and Secondary Education Act, and adding a new definition for “evidence framework.”
The through September 23rd and ܲAVƵwill be submitting comments opposing these proposed changes.
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