Frank Boyd
Frank Boyd is Vice President of the Higher Education Practice at McAllister & Quinn. Frank brings 26 years of experience in higher education as a faculty member and academic administrator.
The FY26 appropriations bill sustains major higher education programs despite proposed cuts
In January I had planned to write a recap of 2025, but my colleagues at McAllister & Quinn agreed that higher education was not waiting on yet another year-in-review. Without a doubt, summarizing the events of 2025 requires covering a wide array of issues and events, including Executive Orders (EOs), policy announcements and subsequent reversals, legislative responses, court cases, etc.[1] A full accounting of 2025 would also require a review of higher education’s response, and I’m certain that another such summary is not needed.
Let’s look to the future, instead. Kierkegaard famously observed that “life can only be understood backwards; but it must be lived forwards.” Rather than contribute to the “infoxication” [2] of readers with another retrospective, this essay concentrates on two issues that promise to be important for 2026 and [3] The first is the cluster of political and legal issues regarding the executive branch’s discretionary authority over congressionally appropriated funds. How did Congress’ reaction to the Trump administration manifest itself in the 2026 budget? Second, the appropriations process—in conjunction with recent judicial rulings — raises additional questions about “diversity, equity, and inclusion” (DEI) initiatives. What is likely to happen in the near-term?
Budget and appropriations for FY2026 (and beyond)
Let’s start with what we might infer from the FY26 budget process that provides insight into the funding for landscape for higher education. President Trump released his full budget proposal for FY26 in May 2025, and the Republican-led Congress passed the One Big Beautiful Bill that included mandatory spending under reconciliation. But it wasn’t until January and early February 2026 that the House and Senate passed eleven of the twelve appropriations bills under “regular order” (minus the Department of Homeland Security.
[1] There exist some really good resources for those interested in a detailed tracking of 2025, foremost among them is the excellent digest of information from 2025 from the American Council on Education (ACE). The National Association of Independent Colleges and Universities (NAICU) also has useful resources.
[2] Infoxication is a term coined by the Spanish physicist Alfons Cornella to describe the information overload that’s secondary to our digital age.
[3] A number of other issues also will be important to watch, among them (but not limited to): the administration’s employment of Title VI to address anti-semitism; restructuring of accreditation in higher education; and negotiated rulemaking at the Department of Education.
As the following table starkly illustrates, a bipartisan coalition in the House and Senate forcefully rejected some of President Trump’s budget proposals from May 2025.
FY 2026 Funding Comparison (Discretionary Budget)
Agency | Trump Budget Request | House Appropriation | Senate Appropriation | Final Enacted (2026) |
NIH | $27.9 Billion | $48.5 Billion | $48.7 Billion | $48.7 Billion |
NSF | $3.9 Billion | $7.0 Billion | $9.0 Billion | $9.0 Billion |
DoED | $66.7 Billion | $75.1 Billion | $79.0 Billion | $79.0 Billion |
NEH | $0 (Elimination) | $186 Million | $207 Million | $207 Million |
The details are telling. Congress has not eliminated the NEH as proposed in the president’s budget and instead kept funding stable. Further, the deep cuts proposed by the president to the NIH (40.6%) and the NSF (57%) have been rejected in favor of a minor increase for the NIH (0.9%) and a slight reduction for the NSF (3%).
In addition to rejecting the president’s budget proposals for higher education, Congress added report language to the bills that provide bipartisan guidance on how and when the funds will be spent. The report language will restrict the executive branch’s ability to deviate from the intended purpose of the appropriated funds. Some examples of the report language include:
[4] The Department of Homeland Security (DHS) operated under a Continuing Resolution (CR) until February 13, when Congress failed to pass an appropriations bill or another CR. At the time of this writing, there is a partial government shutdown for the agencies that are part of DHS.
I would be remiss to mention that report language from Congress does not always translate into action from the agencies they are directing. Members of the House and Senate seem more focused on the implementation of the appropriations bills, and over the next fiscal year, we will be tracking how Congress will be enforcing their report language.
So, what does the FY26 experience mean for higher education and for the FY27 process that has already begun? Most obviously, the FY26 budget provides clear evidence that a bipartisan majority of Congress does not share some of President Trump’s priorities with regard to higher education. The Department of Education hasn’t been eliminated, and many of the policies promulgated during the yearlong continuing resolution have been reversed or strongly modified by report language that accompanied the appropriations bills, e.g. indirect cost rate recovery and expenditures for some ED programs.
Even though the appropriations process for FY26 is still not over, the FY27 budget process has begun. There will be continued political and legal wrangling over what legal scholars are calling Appropriations Presidentialism. Politically, there are an increasing number of Republican legislators who are joining their Democratic colleagues to assert their charge under Article I of The Constitution. It is also very likely that the Supreme Court will take a case this term that challenges the constitutionality of the Impoundment Control Act of 1974, and in doing so will rule on a president’s authority to withhold or reallocate appropriated funds.
Perhaps most importantly for the short term, the report language in the appropriations bills should limit discretionary action by the executive branch for the rest of FY26, thereby providing more stability and reducing the uncertainty that prevailed in 2025. As budgeting for FY27 gets underway, the more prescriptive report language might also provide some clues regarding the policy direction the Democrats might assume if they successfully retake the majority in the House.
How does the FY26 appropriations process related to debates over DEI?
In late 2025, Secretary McMahon reaffirmed the administration’s position that many programs that reference race or ethnicity are unlawful. The appropriations passed by Congress and President Trump in the Consolidated Appropriations Act, 2026, seem to be at odds with that position. Funding is provided for programs that explicitly serve minority serving institutions (MSIs), including HBCUs, Hispanic Serving Institutions (HSIs), and Tribal Colleges. Further, grants from Title V (for HSIs) and Title III are funded with report language that requires the $500 million to be allocated to the Title V and/or Title III programs. In March of last year I posted a thought piece on some of the early EOs by President Trump aimed at dismantling diversity, equity, and inclusion (DEI) initiatives.
This funding, which became law with President Trump’s signature, does not seem consistent with the administrative changes of 2025: federal agencies eliminated DEI offices, terminated grants with a perceived DEI component, and rescinded affirmative action guidelines for federal contractors. In response, colleges and universities eliminated DEI-related offices, renamed or eliminated programs, and scrubbed their websites of language that would draw scrutiny.
Some measures continue to work their way through the federal courts, and only last month the Trump administration declined to appeal the federal court ruling by Judge Stephanie Gallagher in August 2025. In her ruling, Judge Gallagher blocked ED from requiring colleges to eradicate all race-based curriculum and diversity, equity, and inclusion (DEI) programs. The administration’s decision to not appeal the ruling means that the lower court’s order stands, signaling a major blow to the administration’s DEI agenda. Conversely, a February 2026 ruling by the 4th US Circuit Court of Appeals handed President Trump a victory by vacating a preliminary injunction that had previously blocked his executive orders aimed at eliminating diversity, equity, and inclusion (DEI) programs. The court narrowly ruled that challenging groups lacked standing or a likelihood of success on the merits, which in the short term allows the termination of federal DEI offices.
The administration’s DEI efforts have largely focused on race and ethnicity, which paradoxically has catalyzed a conversation about class in the US. For example, in the last few years elite institutions have dramatically increased the number of Pell-eligible students who are admitted. And when the federal government abruptly ended a number of TRIO grants—a program designed to support lower students of low socioeconomic status—they argued that the program’s emphasis on “underserved” students was a civil rights violation. The federal courts disagreed and issued a preliminary injunction, beginning what is likely a long series of judicial filings. At the core of the ruling (and the underlying debate) is the administration’s argument that some higher education programs are using class as a proxy for race or ethnicity. Interestingly, the administration seems to be making an argument based on the intersectionality of race and class, a concept that they have roundly rebuked.
Over the next year, higher education leaders will scrutinize further the complicated relationship between the bipartisan federal appropriations for these programs and judicial rulings on the broader issues.
Conclusion
At higher education conferences in late 2025 and early 2026, nearly every speaker began their remarks with a lamentation on the events of the past year and encouragement to cast our gaze to the future. Søren Kierkegaard would be pleased. The budget process for FY26 has provided a much-needed psychic boost for leaders in higher education, and there will be much to discuss in the coming months about the “new normal” that is emerging in higher education. There is a palpable sense among leaders in higher education that the uncertainty of 2025 has reached its zenith, and the new landscape will become clearer in the coming months. Of particular interest will be the campaign discourse in advance of the midterm elections this fall.