GW Federal Update (April 23)

Key Takeaways

• We previously shared that the U.S. Court of Appeals for the First Circuit affirmed the decision of the District Court in a case challenging the National Institutes of Health’s (NIH) imposition of a 15 percent cap on indirect costs, concluding among other reasons that NIH’s attempt to impose a 15 percent cap violated both the congressionally enacted appropriations rider and the duly adopted agency regulations. NIH had until April 7 to request Supreme Court review of the case, but it failed to do so, which ends the case. As a result, the cap has been permanently blocked, and institutions of higher education can continue using negotiated indirect cost rates.
   
• Recently, a Massachusetts federal court granted plaintiffs a preliminary injunction in a case challenging the Department of Education’s required reporting of higher education admissions data to include undergraduate and graduate applicant data by race and sex, and that the preliminary injunction applies to public institutions of higher education within the 17 states who filed the lawsuit. At a court hearing, a number of higher education associations, including the Association of American Universities, sought similar relief, arguing that “the threat of irreparable harm is real” if institutions were required to comply with the expanded data requirements.

Recent Federal Actions

Diversity, Equity and Inclusion

• On April 10, the Department of Justice announced that it had entered into a settlement agreement with IBM resolving an investigation DOJ launched against IBM under the False Claims Act regarding IBM’s alleged noncompliance with DEI-related anti-discrimination requirements in IBM’s federal contracts. According to the DOJ press release, IBM allegedly took race, color, national origin, or sex into account when making employment decisions, including by using a diversity modifier that tied bonus compensation to achieving demographic targets; altered interview criteria based on race or sex through the use of “diverse interview slates” and other related employment practices in connection with identifying “diverse” candidates for hiring, transfer, or promotion; and developed race and sex demographic goals for business units and took race and sex into account when making employment decisions to achieve progress toward those demographic goals. DOJ also alleged that IBM offered certain training, partnerships, mentoring, leadership development programs and educational opportunities only to certain employees, with eligibility, participation, access or admission limited on the basis of race or sex.  Under the settlement, IBM agreed to pay the government $17,077,043. IBM also undertook “voluntary remedial measures” such as the “termination and/or modification of various programs and practices at issue.”  According to the press release, the settlement is the first resolution reached under the Civil Rights Fraud Initiative that began in May 2025, which we reported on in the January 15 edition of the GW Federal Update, and it reflects the Trump Administration’s continued focus on pursuing actions against entities it believes maintain DEI programs that are inconsistent with its view of the law.

Department of Education 

• In the April 9 edition of the GW Federal Update, we reported that on April 3, a Massachusetts federal court granted plaintiffs a preliminary injunction in a case challenging the Department of Education’s required reporting of higher education admissions data to include undergraduate and graduate applicant data by race and sex, and that the preliminary injunction applies to public institutions of higher education within the 17 states who filed the lawsuit. At a court hearing held on April 13, a number of higher education associations, including the Association of American Universities, sought similar relief, arguing that “the threat of irreparable harm is real” if institutions were required to comply with the expanded data requirements: “There’s the burden of completing the survey, given the timing and the rollout issues. And then there’s the enforcement risk, or the risk of enforcement or fines based on inadequate or missing data, once that has been submitted.” The court extended the injunction as to all parties until April 24.
   
• ED released its third and final set of regulations related to the One Big Beautiful Bill Act for public comment on April 17. The proposal fleshes out a new accountability metric designed to test the return on investment of each degree program at more than 4,000 colleges and universities. (The previous two—for which public comment has already closed—outlined new graduate student loan caps and an expansion of the Pell Grant for short-term job training programs.) The comment period closes on May 20.

Research and Grantmaking

• In the January 15 edition of the GW Federal Update, we reported that on January 5, the U.S. Court of Appeals for the First Circuit affirmed the decision of the District Court in a case challenging the National Institutes of Health’s (NIH) imposition of a 15 percent cap on indirect costs, concluding among other reasons that NIH’s attempt to impose a 15 percent cap violated both the congressionally enacted appropriations rider and the duly adopted agency regulations. NIH had until April 7 to request Supreme Court review of the case, but it failed to do so, which ends the case. As a result, the cap has been permanently blocked, and institutions of higher education can continue using negotiated indirect cost rates.

Athletics

• In the April 9 edition of the GW Federal Update, we reported that the Senate Health, Education, Labor, and Pension Committee held a hearing on March 26 to address the challenges of the current college sports system, including on whether student-athletes should be classified as employees with collective bargaining rights. In a letter to the Committee dated April 8, the American Council on Education, on behalf of itself and five other higher education associations, advised among other things that “treating student-athletes as employees under the NLRA or the FLSA has deeply troubling implications for the continued viability of intercollegiate athletics, and would be potentially devastating for many of America’s institutions of higher education, as well as for future generations of aspiring collegiate athletes who risk losing the opportunity to have an intercollegiate athletics experience.” 

Other Higher Education Institutions

• Harvard University: In the March 26 edition of the GW Federal Update, we reported that the Department of Justice (DOJ) filed a lawsuit on March 20 against Harvard, alleging among other things that it violated students' civil rights under Title VI by "its intentional conduct and its deliberate indifference to discriminatory harassment of Jewish and Israeli students and creation of a hostile educational environment since October 7, 2023, up to the present day." In a motion filed on April 13, Harvard asked the judge assigned to hear the DOJ lawsuit to transfer the case to judge Allison Burroughs, who ruled in favor of Harvard in the case Harvard brought against the Trump Administration challenging the Administration’s freezing of federal funding over similar allegations made by the Administration. In support of its motion, Harvard contended that the cases are related: The “Government now seeks a do-over and brings this case resting on the same unfounded allegations and seeking the same unconstitutional result: termination of Harvard’s federal funding.” 
   
• University of Pennsylvania: In the April 9 edition of the GW Federal Update, we reported that a Pennsylvania federal court required Penn to comply by May 1 with an EEOC subpoena seeking among other information the names and contact information of Jewish faculty and staff, student employees, and those employees who are members of on-campus Jewish groups, as part of the EEOC’s investigation of Penn regarding alleged religious, national origin, and race-based harassment of Penn employees. On April 13, Penn asked the district court to stay its ruling while it pursues an appeal, arguing that Penn would face “irreparable injury absent a stay.” 
   
• Yale University: Yale recently released a wide-ranging faculty report calling on the institution—and higher education broadly—to reckon honestly with a crisis of public confidence, proposing 20 recommendations that touch everything from tuition and admissions to grade inflation and classroom phone policies. The report, issued April 10 by the Committee on Trust in Higher Education, was written by a panel of 10 professors. It arrives at a moment of acute pressure on elite universities, as federal funding threats, campus speech controversies, and skyrocketing tuition have eroded the public standing of institutions like Yale.

Resources

GW is committed to supporting our students, faculty and staff through federal changes. Curated resources are available for staying informed and safe, in addition to FAQs addressing the most common topics on students' minds, including interactions with external law enforcement and supporting international community members.

About this Newsletter

GW publishes this weekly Federal Update to inform students, faculty and staff about how developments in the federal government affect higher education generally and the University. This newsletter includes timely information, answers to questions from GW community members, and resources for support.