The developments could affect colleges and universities that receive federal grants through the two agencies, including how institutions compete for awards, manage grant funding and comply with federal requirements.
The Education Department published a proposed rule Aug. 24 that would revise provisions governing the administration of its federal grants. The proposal would amend the Education Department General Administrative Regulations, known as EDGAR, as well as related provisions governing federal financial assistance. Public comments are due Sept. 23.
The same day, the comment period closed on NSF's proposed Guidance on Financial Assistance, which would replace the agency's current Proposal and Award Policies and Procedures Guide as the primary source of guidance for NSF proposals and awards. NSF published the draft guidance June 24 and accepted comments through Aug. 24.
Both efforts follow a broader proposed revision to the federal government's Uniform Guidance, the rules established in 2 CFR Part 200 that govern administrative requirements, cost principles and audit requirements for federal awards.
The Office of Management and Budget's proposed changes would apply across federal agencies. The Education Department and NSF proposals would apply the changes within their own grantmaking systems. The American Council on Education said Aug. 27 that the agencies are moving ahead with provisions that reflect the pending OMB proposal, even though the governmentwide rulemaking has not been finalized.
For higher education, one of the most significant changes in the Education Department proposal concerns the continuation of multiyear grants.
Under the proposal, the department would have greater discretion over whether and how much funding to provide in subsequent years of a multiyear award. The proposal also would allow the department to terminate discretionary grants for convenience, in addition to existing authorities to terminate awards for specified reasons.
The proposed changes would also allow the Education Department to consider whether an applicant voluntarily accepts a lower indirect-cost rate than its federally negotiated rate when awarding discretionary grants.
That provision could affect institutions' decisions about how they structure grant proposals. Indirect costs help institutions cover expenses associated with administering and supporting federally funded projects that cannot be readily assigned to a specific award.
The department's proposal comes after a separate federal effort to limit indirect-cost reimbursements for research grants. The EDU Ledger previously reported on the financial implications of proposed federal cuts to university research funding, including efforts to impose a 15% cap on indirect-cost rates.
NSF's proposed guidance addresses the administration of the agency's grants and cooperative agreements and incorporates changes associated with federal research policy, financial assistance requirements and the Uniform Guidance.
The agency has already issued supplemental policy notices to its existing grant guidance as federal requirements have changed. NSF's current policy materials include provisions addressing research security training, foreign financial disclosures and responsible and ethical conduct of research.
The proposed replacement guidance would therefore arrive as universities are already adjusting to changes in NSF's research policies.
The proposals also reflect a broader effort by the administration to change the government's approach to federal grantmaking.
The proposed OMB revisions would alter the governmentwide framework governing federal financial assistance, while agency-specific rules determine how those requirements are applied to individual grant programs. ACE and other higher education organizations have raised concerns about agencies adopting provisions based on the OMB proposal before the governmentwide rulemaking is complete.
ACE submitted comments on NSF's proposed guidance and urged the agency to pause changes that incorporate provisions from the pending OMB rulemaking, according to the association's Aug. 27 update.
For universities, the changes mean that federal grant administration could look different depending on which agency is providing the funding, even as agencies move toward a common governmentwide framework.
That distinction matters for research institutions that manage awards from multiple federal agencies. Changes to indirect-cost treatment, continuation funding, reporting requirements and research-security obligations can affect not only grant administrators but also the researchers and academic programs supported by those awards.
The Education Department's proposed rule is open for public comment through Sept. 23. NSF's comment period on its proposed Guidance on Financial Assistance closed Aug. 24. The broader OMB rulemaking remains pending.
The changes are therefore not yet final. But for colleges and universities that depend on federal grants, the Aug. 24 proposals mark another step toward a different set of rules governing how federal money reaches — and remains with — higher education institutions.
