What recent federal policy changes could mean for community colleges

Community colleges are the backbone of higher education for millions of students—offering affordable, accessible, and career-aligned pathways to success. In 2025, however, these institutions face a shifting federal policy environment that could significantly reshape how they operate and serve students.

With the return of the Trump administration, the first months of 2025 have brought a wave of executive orders, agency directives, and policy reversals. These changes span civil rights enforcement, immigration protections, federal financial aid, and workforce funding. While some policies are still evolving, the early signals are clear: community colleges will need to navigate a dramatically different federal landscape, often without clear guidance and with more scrutiny than ever.

Here’s what community colleges need to know about the latest federal policy changes and how they might affect students and operations.

1. DEI and Civil Rights: A Shifting Landscape

Community colleges have long championed access and opportunity for students from diverse backgrounds. But in 2025, the landscape around diversity, equity, and inclusion (DEI) is shifting fast. With heightened political and legal scrutiny, colleges must carefully rethink how they support students while staying compliant with new federal rules.

• Elimination of race-based practices: On February 14, 2025, the Department of Education ordered institutions to eliminate all race-based practices—including in hiring, financial aid, and student life—by February 28. Even indirect proxies for race could trigger investigations or jeopardize federal funding.
• Cuts to DEI-related grants: The Trump administration directed federal agencies to reduce DEI-related grants “to the maximum extent allowed by law.” As a result, agencies like the National Science Foundation are now reviewing thousands of awards. For community colleges, this could mean losing support for programs focused on student belonging, faculty development, culturally responsive pedagogy, and academic support for underrepresented students.
• Redefinition of sex in federal data: In January 2025, a new executive order redefined biological sex as strictly male or female based on birth characteristics. Changes to how gender identity is tracked in federal education data have already started—likely removing nonbinary options from forms and databases.
• Rescission of Equity Action Plan requirements: Federal agencies are no longer required to release annual Equity Action Plans, ending efforts like the Department of Education’s 2024 plan—which aimed to simplify the FAFSA, expand Pell Grants, support HBCUs, and promote college equity—thereby weakening accountability and reducing incentives for future equity-focused investment.

At the same time, the national conversation around DEI has become more polarized. Some states are restricting or even banning DEI programs, while others continue to invest heavily in equity initiatives. Community colleges in both environments must carefully consider how they frame and deliver support programs, especially when targeted at specific populations.

The good news? Equity work remains both legal and essential. Colleges can shift toward strategies that still close gaps without running afoul of federal guidance, such as using income, ZIP code, or first-gen status as criteria for support. The focus should remain on outcomes like belonging, retention, and degree completion.

Bottom line: Building inclusive campuses isn’t going away, but the rules are changing. Colleges must revise their strategies to remain compliant while continuing to serve the students who need the most support.

To learn more, see EAB’s primer on federal changes to DEI and civil rights protocols

 2. Immigration Policies and Their Impact on Enrollment

Federal immigration policy is also shifting rapidly, and while much attention has been paid to four-year institutions, community colleges are deeply impacted, too. These institutions often serve as the first point of contact for many immigrant families, especially in regions with large newcomer populations.

Community colleges provide not only education but also language programs, workforce training, and trusted support services. They’re often where immigrant students and families first seek guidance on navigating U.S. systems—making federal changes particularly consequential.

Key developments include:

• School-based enforcement: On January 21, 2025, DHS rescinded the Obama-era “protected areas” policy, allowing immigration enforcement in schools. While officials still need a warrant to enter non-public areas, this change may increase fear among undocumented students and families.
• Detention risks: The Laken Riley Act, signed in January 2025, requires federal detention of undocumented individuals accused of certain crimes—even before a conviction. This could result in the sudden disruption of a student’s education if they are accused of a crime.
• Stricter visa screening: A new executive order reinstated enhanced screening for all visa applicants, including F-1 student visas. Applicants may face delays due to social media checks, increased documentation, and slower processing times.
• Student visa limits: The administration may reintroduce fixed visa terms (2–4 years) and shorten grace periods, raising uncertainty for students in longer academic programs.

These changes could dampen international enrollment and create new legal and emotional stress for undocumented students. Colleges should be proactive in offering legal resources, financial guidance, and mental health support. Messaging must be clear, empathetic, and easy to access across departments.

Bottom line: Immigration policy may seem outside the scope of college operations, but its impacts are immediate and real. Colleges should build institutional capacity to support affected students and communicate consistently across teams.

Learn more about how EAB’s Strategic Research Advisory Services can help your college prepare for federal changes

 3. Questions about federal financial aid loom

While no immediate changes have gone into effect, the administration has signaled significant shifts ahead, including the bold executive order to dissolve the U.S. Department of Education (ED). For community colleges, which serve large numbers of Pell-eligible and financially vulnerable students, even the perception of instability in the aid system can create confusion, disrupt enrollment decisions, and jeopardize long-term planning. Though Congress would ultimately need to approve the elimination of ED, the political pressure and budgetary threats alone could impact how quickly or reliably financial aid is administered and expanded.

Here’s what community college leaders, staff, and students should keep in mind as these conversations unfold:

• Threats to eliminate or shrink the Department of Education: President Trump and several key allies have renewed calls to eliminate the ED, arguing that states should have more control over education. While legally complex and unlikely to happen overnight, this proposal introduces uncertainty about the future of federal student aid programs that are essential to community colleges.
• Potential reorganization of financial aid administration: If ED is dissolved, and as it already begins to downsize, administration of Pell Grants, FAFSA processing, and student loan servicing could be transferred to other federal agencies, disrupting established systems and potentially delaying aid delivery. NASFAA has stressed that financial aid distribution needs to be both “predictable and reliable” to best service American families.
• Pell Grant expansion at risk: The Biden administration’s rescinded 2024 Equity Action Plan included efforts to double the maximum Pell Grant by 2029. Those initiatives are now on hold, and any momentum behind expanding Pell—particularly for short-term training through Workforce Pell—could be stalled.
• Reconciliation bill could threaten aid programs: In March, Congress passed a Continuing Resolution funding the Department of Education through September 2025, allocating $79.1 billion overall and $24.6 billion for student aid without specifying exact amounts for programs like Pell Grants, FSEOG, Work-Study, or TRIO. This lack of detail gives the Trump administration discretion to withhold or reallocate funds, especially as these programs face additional uncertainty from a proposed Executive Order to dismantle the Department of Education and a projected $2.7 billion Pell Grant shortfall. Although Pell Grants have historically received bipartisan support, recent GOP proposals to cap awards and shift funding priorities put multiple aid programs at risk for cuts or restructuring.

Bottom line: The road ahead is uncertain, but community colleges can prepare by staying informed, advocating for their students, and reinforcing their role as a trusted resource for navigating financial aid.

Final Takeaway

As federal policies continue to evolve, community colleges must stay informed, flexible, and mission aligned. Whether reimagining DEI strategies, supporting immigrant students, or expanding workforce training, institutions will need to balance compliance with their deep-rooted commitment to access and student success.

The challenges ahead are real—but so are the opportunities. By staying engaged with policymakers, partnering with communities, and advocating for students, community colleges can help shape a future that expands opportunity and prepares students for what’s next.

EAB’s Strategic Advisory Resources team has created a collection of policy primers and offers strategic planning support, scenario planning exercises, and pulse checks of how your peer institutions are navigating the current enrollment landscape. To learn more about Strategic Advisory Services and the other services and tools available to our community college partners, request to speak with a member of our team.