Proposed Department of Education Grant Rules could impact federal education funding

On August 24, the U.S. Department of Education (ED) published proposed changes to the Education Department General Administrative Regulations (EDGAR) that would make substantial changes to the rules governing how the ED awards, manages, continues, and terminates federal education grants.

The proposed changes would update ED’s regulations to align with changes to the Office of Management and Budget’s (OMB) Uniform Guidance and apply to both discretionary grants and state-administered formula grant programs. If finalized, the rules could have significant implications for federal grant recipients, including states, local educational agencies, nonprofit and community-based organizations, and other entities that receive federal education funding.

On September 2, the President signed H.R. 6500, the “Continuing Appropriations and Extensions Act, 2027,” into law, which delays the implementation of the OMB rule until at least December 11, 2026.

This update to EDGAR is particularly relevant for afterschool and summer learning programs that receive federal funding through programs such as 21st Century Community Learning Centers (21st CCLC), Title I, Title IV-A of the Every Student Succeeds Act (ESSA), Full-Service Community Schools, and other federal education investments.

Proposed provisions and what they could mean for grant recipients

Eliminating Federal Register Notice Requirements | Section 75.100

The proposed rule would eliminate the requirement that the secretary publish grant application notices in the Federal Register, the daily journal of the federal government.

Publication in the Federal Register creates a permanent record with a fixed citation that anyone can access without registering, and that can be used to verify what an agency did and when. For grant competitions, that record is what documents eligibility, priorities, and selection criteria at the time a competition ran, and makes those terms comparable across years.

Transparency matters here because grant application notices set the terms of competition. Eligibility, priorities, and selection criteria determine who can apply and how applications are scored. A permanent, publicly accessible record of those terms allows applicants, researchers, and Congress to see how program priorities have shifted over time and to hold ED to the criteria it published.

Selection Criteria and “Underserved Populations” | Section 75.210

The proposed rule would revise the general selection criteria used to evaluate applications for discretionary grants. Among other changes, the proposal would revise language throughout the section, including referring to grant participants as the ‘‘target population’’ and removing references to “underserved populations.” ED also aims to add new review factors related to employment and career outcomes, family and community engagement, coordination with partners and other investments, merit-based hiring and admission practices, evidence standards for evaluations, and strategies for scaling projects. Of note, ESSA uses the term “underserved” in Title II, Title IV-A, and several other sections to denote how funding should be directed.

These changes to selection criteria could affect how applicants develop and frame proposals for future ED grant competitions.

Lower Indirect Costs | Section 75.228

If enacted, the proposed rule would allow the secretary to provide competitive preference to applicants who propose to charge lower indirect costs than their negotiated rate. ED says this change would give it greater flexibility to direct federal funds toward the core activities and outcomes of grant programs.

Continuation Awards | Section 75.253

As written, the rule would broaden the secretary’s discretion in making determinations about whether a multi-year project receives continued funding and the amount of a continuation award. ED would be able to consider information from the original grant application and previous grantee activities when making continuation decisions.

Grant Termination Authority | Section 75.901

The proposed rule would state explicitly that ED may terminate a discretionary grant award "for convenience," "in part or its entirety," or pursuant to additional terms and conditions included in the federal award. This would give ED clear authority to end an award mid-cycle when it determines the project no longer aligns with agency priorities.

For afterschool and summer learning programs, which often rely on stable, multi-year federal funding to hire staff, maintain partnerships, and serve students consistently, expanded termination authority could create additional uncertainty around the stability of grant funding.

Executive Orders and Merit Practices for State-Administered Grants | Section 76.500 and Section 76.700

The proposed changes would require state-administered formula grantees under Part 76 to comply with executive orders in addition to applicable statutes, regulations, and approved applications.

The rule would also add requirements related to “merit practices” and high standards in grantee hiring practices. For programs administered through state and local education systems, these changes could add new compliance considerations for organizations receiving federal education funds.

Next steps and how to weigh in

ED’s proposed EDGAR changes are part of a broader effort to update federal grant regulations and align ED’s requirements with changes to OMB's Uniform Guidance. The proposal includes a range of technical and administrative changes, but several provisions could affect how federal education grants are awarded, continued, managed, and terminated.

It is important to note that this is a draft proposal and does not carry the force of law until public comments are reviewed and a final rule is published. ED plans to finalize the regulations in late 2026.

The public comment period is open through September 23, 2026. Organizations that receive federal education grants, as well as other interested parties, should review the proposed rule and consider how the changes could affect their programs, funding, and operations. The Afterschool Alliance will submit comments and will share our comment letter in an upcoming blog.