The Trump administration is proposing to give itself greater authority to cut off education grants and reduce the size of multiyear awards after its efforts to end in-progress grants have repeatedly run into legal trouble.
The U.S. Department of Education issued a new set of proposed regulations for grantmaking this week that would codify tactics it’s used over the past year and a half to terminate more than $2 billion in multiyear competitive grants and enforce presidential executive orders on grant recipients.
The new rules would also cut off some avenues for grantees to appeal the loss of their funding and end requirements that the department publish grant competition notices in the Federal Register, where agencies routinely post new rule proposals and public notices.
They also include some of the language the administration has used to prohibit what it considers to be diversity, equity, and inclusion initiatives to grantmaking regulations.
The rules are only a proposal at this point. The department is accepting public comments on them through Sept. 23 and says it plans to finalize the regulations late this year.
The proposal “would make it easier to take the actions that they have already taken,” said Julia Martin, the director of policy and government affairs at the Bruman Group, a law firm that works with state education departments and schools, with a focus on federal grants.
The Education Department says the proposal will save money, boost consistency among federal agencies, clarify the secretary of education’s authority to cut off or reduce grants, and “ensure merit practices and high standards for all grants.”
Courts have repeatedly found grant terminations unlawful
The Trump administration ran into legal trouble as soon as it began ending in-progress grants last year, shortly after taking office.
Judges at first restored some canceled awards before the Supreme Court limited courts’ ability to do that. But even afterward, multiple judges continued to determine the department hadn’t cut off grants in a legally defensible way.
In April 2025, for example, hundreds of recipients of federal funds to expand school mental health services received the same notice stating their multiyear projects, begun during the Biden administration, were “inconsistent” with the federal government’s “best interests.” The notices told grantees they wouldn’t receive the next year’s funding to carry on their five-year projects.
A Seattle-based federal judge last fall found the termination notices invalid because they didn’t provide individualized explanations for ending each grant and because the Education Department didn’t inform grant recipients it had set new policy priorities for funding.
Under the proposed rules, the Education Department would:
- Have no obligation to provide continued funding for multiyear grants;
- Be able to reduce subsequent years’ funding if grantees have unspent funds; and
- Have the ability to end grants “for convenience”—essentially, when the agency decides it’s in its best interests to cut off an award.
“The proposed changes would ensure that the department retain ongoing programmatic discretion after an award is made, consistent with law, to terminate a discretionary award for convenience,” the department’s notice in Federal Register says.
One mechanism for grantees to receive another year of funding for ongoing projects would be to receive a determination from the education secretary “that continuation of the project is in the best interest of the federal government.”
If a grantee received reduced funding in subsequent years, it wouldn’t be considered a “withholding” under federal regulations. As a result, the grantee wouldn’t be able to pursue an administrative appeal of the decision.
The proposed regulations address many of the mechanisms funding recipients have successfully used to challenge grant terminations in court, Martin said.
“Assuming that these changes go through, grantees would no longer be able to litigate under” regulations that give the department limited latitude to cancel awards, Martin said. “The rules would favor the administration.”
The proposed regulations would also require that states distributing formula funds to school districts, such as Title I for disadvantaged students, follow presidential executive orders in addition to federal laws and regulations.
However, some of Trump’s executive orders—such as one threatening to withhold federal funds from schools that allow transgender girls to join girls’ athletic teams—conflict with state laws in much of the country.
Executive orders on their own aren’t legally binding, but including them in regulations—which do carry legal weight—changes the legal calculus for states, Martin said.
Still, she said, it could be tough for the administration to require that formula-funding recipients follow executive orders because Congress has very specific terms for those programs laid out in law.
The Education Department said that new requirement was simply to fix an inconsistency with rules that require recipients of competitive grants to follow executive orders.
Trump admin. tries multiple avenues to ‘see what sticks’
The Education Department’s new regulations come less than three months after the White House Office of Management and Budget proposed new regulations affecting grantmaking across most of the federal government, which would give political appointees new power to intervene in ongoing awards and end them early.
Congress, however, could temporarily block the administration from finalizing those regulations as part of a bill to keep the government funded past Sept. 30, the end of the current fiscal year.
The Education Department’s newly proposed regulations are aligned with the OMB’s, Martin said, and offer the Trump administration an alternative mechanism to achieve the same aims.
“The administration tends to try to do things multiple ways and see what sticks, knowing that many of these policies and changes in rules are going to go to court,” she said.
What should grant recipients do?
Where does all this leave Education Department grant recipients?
Martin stresses that these new regulations aren’t yet finalized and could still change. Litigation challenging them is also likely, she said.
She advises grantees to pay careful attention to what the rules are at the time they receive grants and agree to the terms.
They should carefully document their spending decisions under those rules and the reasoning, Martin said, “so that if there are any questions, they can point back to their thinking.”
