Cabinet-level agency shaping U.S. education policy and funding
Federal student‑loan regulations have changed this week under the One Big Beautiful Bill and court rulings. The Education Department has rolled out new repayment plans, temporary interest‑rate cuts for autopay enrollees, and lifetime borrowing caps for graduate and professional students, while a federal judge has paused the department's narrowed definition of "professional degree," temporarily preserving wider borrowing access for many advanced‑health and other programs. Notices are going out to millions of borrowers who must pick new plans.
Universities UK-led polling shows VCs warn of staff redundancies and reduced outreach as funding pressures bite. Higher education leaders say government funding must better reflect the sector’s value, while student support could be at risk as hardship grants are reconsidered.
The independent coverage shows federal probes and funding threats target diversity, equity and inclusion programs in schools and universities. The government has begun investigations and new restrictions are reshaping how districts deploy DEI initiatives that address racial inequities.
The Education Department has announced a two-year, temporary 1% reduction in interest rates for Direct Loans issued after July 2012, available to autopay borrowers through June 30, 2028. Eligible borrowers on autopay will see the discount automatically, with action required only for new enrollments by Sept. 30, 2026. The policy forms part of a broad overhaul of repayment plans under the One Big Beautiful Bill Act.
Indiana has been granted a waiver to consolidate $50 million in federal education funding into a single pool with fewer restrictions, enabling the state to weight accountability differently and pursue limited school-choice adjustments. The move mirrors similar waivers in Iowa and Louisiana and aims to cut compliance costs while expanding state control. Critics warn it could reduce transparency and shift funds away from vulnerable students.
The administration has moved to transfer civil rights enforcement and special education duties to other federal agencies, framing the changes as reducing bureaucracy. Critics warn the shifts may delay justice for students with disabilities and minority students, while some families pursue discrimination cases elsewhere.
A federal judge blocks the Trump administration's rule redefining qualifying employers for Public Service Loan Forgiveness, while another judge rules the rule is contrary to law. The ruling preserves PSLF benefits for workers in government and nonprofits and prompts Education Department review. The litigation spans multiple states and advocacy groups.
The Education Department has updated its list of degrees eligible for higher student-loan limits, while a federal judge has frozen the department’s definition of a “professional degree,” delaying changes set to take effect July 1 amid ongoing litigation.
The SAVE repayment plan has ended, affecting about 7.5 million borrowers who must choose a new plan within 90 days. New repayment options are in place, including a Repayment Assistance Plan and a Tiered Standard plan. Graduate and parent borrowers face new caps, and auto-pay rate discounts expire by 2028.
Advocates warn that a shift of special education oversight from Education to Health and Human Services and a DOJ memo on Olmstead interpretation signal a broader push to roll back rights for people with disabilities. Critics describe the moves as a return to a medical model and a threat to integrated living and schooling.
OpenAI has proposed that the U.S. government take roughly a 5% stake in the company and has discussed a plan for other leading AI firms to give similar stakes to a government-backed vehicle. The talks have taken place with Trump administration officials and would likely require congressional approval. (Updated Wed, 08 Jul 2026 07:15:26 +0100)