GW Weekly Federal Update (June 18)

Recent Federal Actions

• On June 16, the American Association of Universities (AAU), along with several other higher education associations, filed a lawsuit in the U.S. District Court for the District of Massachusetts challenging the decision of the Department of Defense (DoD) to impose a 15% rate cap on indirect costs for all future grants and ordering that all current grants be renegotiated to the 15% rate or cancelled. On June 17, the court granted a temporary restraining order prohibiting DoD from implementing, instituting, maintaining, or giving effect to the immediately effective portions of the rate cap policy, i.e., those portions implementing a 15% cap for all awards issued on or after June 12, 2025. A hearing on the lawsuit is scheduled for July 2. Similar lawsuits are pending with respect to attempts by the National Science Foundation, National Institutes of Health (NIH), and the Department of Energy to impose a similar 15% cap on indirect costs.
   
• In the June 12 edition of the GW Weekly Federal Update, we reported that the U.S. District Court in Massachusetts allowed a lawsuit filed by several associations and individual researchers challenging NIH’s termination of over $2.4 billion in grants to proceed. On June 16, the court ruled in favor of the plaintiffs in this case and a companion case filed by a number of state attorneys general, ordering that the grants identified by the plaintiffs in the two lawsuits be reinstated. According to media reports of the oral ruling, the court concluded that NIH did not comply with the Administrative Procedure Act, and that the termination of NIH grants that focused on the health of Black communities, women and LGBTQ people was discriminatory. NIH is expected to appeal.
   
• In the June 5 edition of the GW Weekly Federal Update, we reported that the Trump Administration issued a proclamation on new travel restrictions that will affect the ability of citizens of certain countries to enter the U.S. According to media reports, on or about June 14, the Trump Administration identified 36 more countries of concern whose citizens would face visa bans or other restrictions if they do not meet established benchmarks and requirements within 60 days.
   
• On June 16, the Department of Energy (DOE) closed public comment on a series of direct final rules that would rescind several longstanding civil rights protections related to sex, disability, and age discrimination in federally funded education programs. The changes, set to take effect on July 15 unless significant adverse comments are received, include eliminating requirements under Title IX that allow students to try out for sex-separated sports teams when no equivalent team exists, and removing provisions supporting proactive measures to address the underrepresentation of women in STEM fields. The DOE also proposed ending the use of disparate impact analysis under Title VI, rescinding key accessibility requirements under Section 504 of the Rehabilitation Act, and limiting the agency’s authority to enforce protections against age discrimination. Higher education associations, including the American Council on Education, have raised legal and procedural concerns, arguing that the DOE is bypassing the traditional rulemaking process to advance substantive and controversial policy changes.
   
• In the June 12 edition of the GW Weekly Federal Update, we reported that on June 5, the U.S. District Court in Massachusetts issued a temporary restraining order blocking enforcement of the proclamation temporarily preventing international students from entering the country in order to attend Harvard University. During a hearing held on June 16, the court extended the temporary restraining order until sometime next week, at which time the court will issue a full ruling.
   
• In the March 13 edition of the GW Weekly Federal Update, we reported on the arrest of an international student who led pro-Palestinian protests at Columbia University. On June 13, a federal judge declined to order the release of that student, Mahmoud Khalil, from immigration detention, despite finding that his initial arrest and the revocation of his green card were likely unconstitutional. The U.S. District Court in New Jersey ruled that Secretary of State Marco Rubio’s actions appeared to be retaliation for Khalil’s role in organizing protests at Columbia University. However, the court allowed Khalil’s continued detention based on a separate immigration charge, alleging he failed to disclose past employment and organizational affiliations on his green card application—an allegation that has not been blocked by the court.
   
• Federal Budget Updates: On June 16, the Senate Finance Committee released its legislative text as part of the budget reconciliation process. The bill includes several provisions affecting higher education, students and families, charitable giving, and academic medicine. While it aligns with several provisions in the H.R. 1, the Senate proposal also introduces notable departures and revisions.
   
  • Higher Education Tax Provisions: The Senate bill includes a revised tiered endowment tax with lower rates than the House version. It also adopts a narrower student definition that could expand the number of institutions subject to the tax. GW would not be impacted under the current thresholds. The bill broadens what counts as investment income and clarifies eligibility criteria for affected institutions.
     
  • Student and Family Tax Benefits: The proposal would make permanent the tax exclusion for student loan forgiveness due to death or disability, with a new requirement for a work-eligible Social Security number. It would also extend employer-provided student loan repayment benefits, allow 529-to-ABLE account rollovers, and tighten eligibility for education tax credits by requiring valid Social Security numbers.
     
  • Charitable Giving: The Senate bill would allow non-itemizers to deduct up to $1,000 in charitable contributions ($2,000 for joint filers), higher than the House version. It also includes a modest floor on itemized deductions and clarifies rules for corporate charitable giving.
     
  • Medicaid Financing and Academic Medicine: The bill proposes stricter limits on provider taxes and state-directed Medicaid payments, similar to the House version. It also phases down the provider tax “safe harbor” for Medicaid expansion states starting in FY 2031. These changes could significantly affect financing models for academic medical centers and hospitals, including those in D.C.
     
• On June 16, the American Bar Association (ABA) filed a lawsuit against the Trump Administration in the U.S. District Court in the District of Columbia challenging actions taken against various law firms and lawyers, including the termination of security clearances and the denial of access to federal buildings.  The lawsuit seeks to enjoin the Administration from enforcing a federal employment provision against any ABA member or the member’s law firm based on legal organization affiliation or client representation, and to enjoin defendants from initiating attorney conduct and disciplinary proceedings based on those factors.
   
• On June 11, 2025, House Oversight Committee Chair James Comer (R-KY) and Subcommittee on Federal Law Enforcement Chair Clay Higgins (R-LA) opened an investigation into the District of Columbia Attorney General’s recently dismissed lawsuit against three gun stores in Montgomery County, Maryland. The lawmakers allege the case was politically motivated and lacked factual basis, noting that both Maryland State Police and the Bureau of Alcohol, Tobacco, Firearms, and Explosives found no violations of law. A letter sent to D.C. Attorney General Brian Schwalb requests records of communications with outside firms Perkins Coie LLP and Everytown Law. The committee argues the lawsuit amounted to an improper use of legal resources to target lawful firearms businesses and undermine Second Amendment rights.

Resources and Reminders

About this Newsletter

To ensure that students, faculty and staff feel supported and informed about how federal developments affect higher education and GW, the university launched a weekly Federal Update. This newsletter shares timely information, addresses questions and provides resources.