Responding to federal policy shocks: What we learned from nearly 50 higher ed institutions

The second Trump administration has issued more than 150 executive orders since January 20, 2025. Many of those orders carry severe implications for higher education by cutting funding to crucial programs and initiatives while attempting to place restrictions on institutional policies, practices, and academic freedom.

Almost every college and university is scrambling to grapple with these changes—and the most common question we’ve heard from leaders over the past few months has been: “What are other schools doing?” In response, EAB polled almost 50 institutions to gather a snapshot of early responses to four policy shocks that have emerged so far.

Shock #1: Directives to dismantle DEI

Institutions are responding by making necessary adjustments while maintaining job security for staff

The Trump administration has canceled all internal programs related to DEI, cut grants and contracts that focus on social inequality, and asserted that all race-conscious actions within an institution are “illegal DEI.” While it is unclear how the courts will ultimately view the administration’s position, the financial risks of sustaining DEI programs and practices are high. Therefore, we have seen a wave of concern among DEI advocates about the risks of “anticipatory obedience” or pre-compliance.

So, what are institutions actually doing? From our limited sample, we see the following themes:

• Auditing current programs and practices to identify areas of legal risk: 87% of respondents have audited/are auditing programs for race-based practices, 76% for gender-based practices, and 75% for other “identity-based” practices.
• Changing language and terminology: 43% say they have changed DEI-related language on their websites, and 25% say this is in progress.
• Protecting the job security of DEI-related staff: Just 15% have terminated or laid off DEI-focused staff or are in the process of doing so. 19% report transitioning DEI-focused staff to new positions, likely to avoid potential layoffs.

While the “right answer” on this issue will likely vary by state and regional context, we think most institutions can benefit from a few specific actions:

• First, use this as an opportunity to help stakeholders understand why practices under the sometimes-vague umbrella of “DEI” exist and what they accomplish. The more specific we can be about the purpose and outcomes of policies and practices, the easier they are to defend.
• Second, where race-conscious practices exist, consider whether scaling those practices to benefit all students could achieve similar improvements to student success.
• Third, keep DEI-focused leaders and staff on campus informed and engaged in decision-making about the future of their programs in case changes need to be made.
• Fourth, work with your legal counsel on interpreting the law in order to stay in compliance while simultaneously avoiding over-complying.

Shock #2: New restrictions on international students

Institutions are responding by increasing support for international students and staff, but keeping enrollment targets stable (for now)

International students have found themselves entangled in both the Trump administration’s efforts to curtail immigration and efforts to influence policies and practices at higher education institutions. For many, the effects of that entanglement have been shocking. The American Immigration Lawyers Association estimates at least 4,700 international students have had their SEVIS records (official documentation of immigration status) terminated under the Trump administration, though some have been subsequently restored.

Perhaps the most chilling change has been the Department of Homeland Security’s introduction of a one-strike policy: “catch-and-revoke.” This means that the administration will now move to cancel the visa of any student found guilty of an infraction—which could be as small as a traffic violation.

In response, institutional leaders are working to ensure that current and prospective international students and employees are informed and prepared:

• Over half (51%) of poll respondents report having created or are creating resources to help international students, faculty, and staff navigate enhanced visa screening and vetting practices.
• Over 4 in 10 (43%) say that they are educating international community members on federal monitoring of speech and activity.

At the time of our survey, just 23% of respondents reported that they had reduced or were currently working to reduce enrollment targets. However, in light of recent policy changes, such as the Department of State announcing that it will “aggressively revoke visas for Chinese students,” we expect that a larger share of institutions will ultimately downgrade their enrollment projections.

EAB recommends that institutions prepare for fewer in-person international students and potential associated revenue losses. Scenario planning conversations should break down the different forms of value that international students provide to institutions (tuition revenue, diverse perspectives, talent for high-demand fields, etc.) and consider how to offset or sustain each source of value with fewer of those students on campus.

Shock #3: A multi-pronged divestment from scientific research

Institutions are responding by evaluating which projects matter most if the enterprise needs to shrink while maintaining pipeline investments

To date, the administration has canceled or rescinded billions in federal grants and contracts, drastically shrunk (or functionally eliminated) federal agencies, and attempted to reduce multiple agencies’ reimbursement of Facilities and Administrative (F&A) costs to no more than 15%.

For R1 and R2 institutions, these measures present an existential crisis that could drastically change the quantity and types of research that they can feasibly conduct, which has led most respondents surveyed at R1s and R2s (n=16) to begin planning for reductions in federal research funding:

• 69% have evaluated or are evaluating the impact of F&A caps on current research projects and programs
• 63% are identifying alternative revenue streams to support research
• 56% have conducted or are conducting an internal assessment to identify mission-critical research projects or programs
• 56% have decided or are deciding which specific institutional funds will be reallocated to sustain mission-critical research, should federal funding decrease

Even so, at the time this survey was conducted, our poll results indicate that few R1 and R2 institutions are taking proactive steps to scale back pipeline investments in graduate education or application volume. For example, just 25% of respondents at R1s and R2s have reduced/paused or are pausing/reducing doctoral/graduate student admissions. Additionally, only 25% have paused/stopped or are pausing/stopping grant applications containing language related to race, gender, sexual orientation, and other DEI-related terms. And even fewer (13%) are pausing/stopping grant applications to “high-risk” research areas (e.g., climate resilience, sustainability, green/alternate energy).

While there is no readily apparent substitute that can match the scale of federal research funding, industry partnerships are an important component of a diversified funding strategy, especially as institutions conduct more applied research. This will require leaders not only to identify and pitch best-fit industry partners on the benefits of collaboration but also to invest in the internal organizational structures and capabilities needed for ongoing relationship management and growth.

Shock #4: Budget proposals to drastically reshape federal student aid

Institutions are responding by lobbying against potentially catastrophic changes while preparing for the reality of less financial aid

Two recent budget proposals have raised anxiety about the future of financial aid and college affordability to new heights. The House Reconciliation Budget proposal includes a drastic overhaul to student aid programs, including changes to Pell Grant eligibility criteria and the elimination of both subsidized loans and Grad PLUS loans. In addition, the House proposal includes the introduction of risk-sharing agreements that would require institutions to pay back a share of the unpaid debt accumulated by their graduates.

Meanwhile, the Education Department’s Fiscal Year 2026 Budget Request proposes shrinking Federal Work Study funding by more than 75% and eliminates a range of other longstanding student aid programs, including Federal Supplemental Education Opportunity Grants and TRIO programs. It also proposes lowering the maximum Pell Grant by over 20% for the 2026-2027 award year.

As expected, leaders participating in our poll are taking a stand against these funding threats. Two-thirds (67%) of respondents noted that they have lobbied/are lobbying state and federal legislators to protect student financial aid appropriations.

However, many respondents are still preparing for budget proposals to be enacted:

• 39% are considering establishing a new campaign or altering an existing one to secure alternative funding for student aid, and 29% are currently in the process of doing so
• Additionally, 21% of respondents have explored/are exploring alternatives to traditional student loan structures, and another 35% are considering this action

The good news is that while the House Committee on Education and the Workforce was required to find $330 billion in savings when formulating their budget proposal, the Senate Committee on Health, Education, Labor, and Pensions has been charged with finding a much smaller sum in savings (at least $1 billion). Therefore, the worst-case scenario is far from a foregone conclusion, and if implemented, many of the proposed changes will include three-year exemptions for those enrolled in programs before July 1, 2026.

Next steps to take in response to policy shocks

Poll results indicate that while institutional leaders are preparing for a broad array of disruptions due to federal policy shocks, many have been hesitant to react too quickly or too drastically. This initial hesitation has put institutions in a position to make smart, strategic choices as the policy landscape continues to unfold.

However, waiting for some of these issues to unfold will leave institutions flat-footed if larger changes become necessary. Therefore, we recommend that leaders take the following steps to position their institution for success:

To continue to make informed decisions in today’s political landscape, education leaders can access EAB’s latest policy research on our Federal Policy Navigation Suite for Education Leaders, which includes policy primers, expert services, and insights on how federal policy changes will impact the education sector.

Survey methodology

EAB conducted a confidential survey of over 50 higher education leaders (n=53) to assess how the sector is responding to federal funding threats. Responses were collected for approximately six weeks from March to April. The survey included respondents from over 20 states, with 55% from private institutions and 45% from public institutions. In terms of research classification, 25% of the respondents were from R1 institutions, 8% were from R2 institutions, and 15% were from Research Colleges and Universities. Respondents included cabinet-level leaders such as presidents, chiefs of staff, chief business officers, and vice presidents of enrollment management, among others.