The Department of Education Transfers Functions to Other Agencies, Moody's Gives Higher Education a Negative Rating for 2026, Approaching Deadline for FIPSE Grant
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November 24, 2025
Leading the News this Week
LAW is celebrating Thanksgiving, which means you will see the next edition of LAW in your inbox on December 1st. Happy Thanksgiving!
The Secretary of Education, Linda McMahon, asked Congress to codify the recent changes she has made to the Department. This would make the transfer of functions from the Department to the Departments of Labor, State, Interior, and Health and Human Services permanent and difficult to undo with the next presidential administration.
News in Higher Education
Moody's Gives Higher Education a Negative Rating for 2026
The ratings agency Moody's predicts a challenging year in 2026 for higher education. The combination of rising institutional economic uncertainty, rising college costs, political pressures, a decline in the high school graduate population, and changes to the student loan system contributes to the negative rating. Moody's estimates a 3.5 percent revenue growth for the higher education sector, a decrease from the 3.8 percent in 2025. This growth is projected to be 2.5 percent for smaller for small public institutions. Expenses, however, are predicted to grow 4.4 percent, an outcome that could chip away at institutions' margins. Analysts predict that institutions may respond by implementing" more early retirement buyouts, workforce cuts, benefit reductions, shared services and mergers."
Approaching Deadline for FIPSE Grant
The Department of Education has opened a grant competition for the Fund for the Improvement of Postsecondary Education (FIPSE) for the FY 2025 competition.
Since FIPSE's funding schedule ends at the end of the calendar year, instead of the end of the fiscal year, September 30th, the Department is able to run a grant competition to spend the Congressionally appropriated funds.
For this competition, the Department is directing $167 million to cover four of its designated areas of need: Artificial Intelligence, Civil Discourse, Accreditation, and Short-Term Programs. As such, there will not be FY25 funding available to cover other programs such as Basic Needs, the Postsecondary Success Grant, or the Rural Postsecondary Education Development program, to name a few.
Read the ACCT Now piece, FIPSE Funding Under the Second Trump Administration for more on how the Trump Administration transformed FIPSE.
Institutions wishing to apply for these funds must know that the deadline is December 3, 2025, a tight turnaround time.
Read the Grant Opportunities section for additional information
Join Us in Advocacy
As a reminder, in this appropriations cycle, ACCT is advocating for members of Congress to fund programs such as Child Care Access Means Parents in School (CCAMPIS) and the Strengthening Institutions Program (SIP). These programs provide much-needed support for students and institutions.
To move forward with our advocacy and communicate with lawmakers the importance of CCAMPIS and SIP, we need your help! We urge you to please share with us how your campuses have benefited from CCAMPIS and SIP at publicpolicy@acct.org.
Also, we call upon you to participate in our Action Campaign and let your member of Congress know the devastating effects should CCAMPIS and SIP no longer exist.
Grant Opportunities
Fund for the Improvement of Postsecondary Education (FIPSE)
The Department of Education opened a new grant opportunity, which features seven priorities that support four areas of need: expanding the use of artificial intelligence (AI), protecting and promoting civil discourse on college and university campuses, encouraging accreditation reform, and building capacity for high-quality short-term programs. For community colleges, the very likely area of relevance may be the short-term programs, specifically, "the Expansion of Existing High-Quality Short-Term Programs priority" meant to support the expansion of existing short-term programs.
The Notice Inviting Applications for the FIPSE competition has been published in the Federal Register. The deadline to apply is December 3, 2025. The Department expects to make awards by December 31, 2025. Click here for additional information.
- December 3, 2025: Fund for the Improvement of Postsecondary Education Due
- December 5, 01:00 PM ET: LAW Live Webinar
- December 11: Preparing for Workforce Pell: Workforce Alignment
- January 13: Preparing for Workforce Pell: Student Outreach
- February 8-11, 2026: National Legislative Summit
Outreach Efforts
Is your institution meeting or hosting an event with federal elected officials?
We created a Congressional Contact Form that will help us track outreach efforts of community college leaders across our membership. By filling out the form, you are better informing ACCT's advocacy efforts and our advocacy team is able to continue those conversations with congressional staff in DC.
ACCT NOW is the go-to resource for issues affecting community colleges. Our new website features original reporting and research, as well as of-the-moment legislative updates. ACCT NOW also includes articles, reports, and research from outside sources that benefit the ACCT community. Read the Latest Articles on ACCT NOW:
Would you Like a Federal Update Session for Your Team?
Both this new presidential administration and new Congress have brought with them a flurry of developments in the federal landscape that can make keeping up a monumental task. ACCT's Government Relations team is here to help by offering a 45-minute to an-hour federal update session to community college leadership teams who are ACCT members. To request a session, fill out this form and please email publicpolicy@acct.org with any questions.
Have a Question?
Contact us with any questions or concerns about public policy and ACCT's advocacy on behalf of two-year colleges and two-year college trustees. ACCT's Latest Action in Washington alerts are sent to interested ACCT members to keep you up to date on important legislative activities that impact community colleges.
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Spread the Word.
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