House Passes FY 2026 Spending Package Preserving Education and Research Funding as Senate Showdown Looms

While the substance of the bill reflects a clear congressional rejection of the Trump administration's proposed cuts, Senate floor dynamics driven largely by disputes over Department of Homeland Security funding now pose the biggest risk to avoiding a partial government shutdown.

The House-passed package maintains funding for core education and research priorities and rebuffs several of President Trump's most sweeping proposals, including a 40 percent cut to the National Institutes of Health and a roughly $12 billion reduction to the Department of Education.

Key provisions include:

• Department of Education: The bill provides $79.0 billion in discretionary funding, a $217 million increase over FY 2025 and approximately $12 billion above the administration's request. Congress rejected proposals to eliminate or significantly reduce programs supporting low income and underrepresented students, including Pell Grants, TRIO, GEAR UP, and Federal Supplemental Educational Opportunity Grants.
• Pell Grants: The maximum Pell award would be maintained at $7,395 for the 2026 to 2027 award year, rejecting the administration's proposal to cut the maximum award by more than $1,000 per student.
• National Institutes of Health: NIH would receive $48.7 billion in discretionary funding, an increase of $415 million over FY 2025. While close to flat funding after inflation, this represents a bipartisan rejection of the administration's proposed 40 percent cut and continued congressional support for biomedical research.
• Minority-Serving Institutions: Programs supporting HBCUs, Hispanic Serving Institutions, Tribal Colleges, and MSIs, including Title III and Title V, would receive funding increases across the board, despite the Justice Department's recent claim that these programs are unlawful because they "effectively employ a racial quota."
• Institute of Education Sciences: IES would receive $790 million, far above the administration's $261 million request, signaling continued congressional support for federal education research and data capacity, even after significant staffing and program disruptions last year.
• Office for Civil Rights: OCR funding would be maintained at $140 million, rejecting the administration's proposed $49 million cut, roughly one third of the office's budget.
• Indirect research costs: The package continues to block the administration's proposed 15 percent cap on NIH indirect cost reimbursement rates and includes additional language aimed at preventing changes to negotiated indirect cost rates across relevant Department of Health and Human Services research agencies. Related blocking provisions also appear in other FY 2026 appropriations bills.

At the same time, Congress declined to fully block recent administrative actions affecting the Department of Education's operations. While report language raises concerns about shifting education programs and responsibilities to other agencies, it stops short of prohibiting those moves and instead relies on briefings and oversight requirements, meaning some staffing changes and interagency agreements may still proceed.

One nuance ACE is watching closely involves language that appears to give ED greater flexibility to move funds within the Title III MSI and Title V HSI accounts, but not across other programs as the administration did last year.

Although House passage marked a major step forward, the Senate now faces an increasingly complicated path to final approval. Senate Democrats have indicated they may block consideration of the broader package unless the Department of Homeland Security funding bill is separated out from the rest of the package, citing concerns over ICE operations. Republicans have resisted breaking up the package, and any Senate changes could require the House, currently in recess, to return to Washington.

If lawmakers cannot resolve the impasse quickly, parts of the federal government could still shut down after Jan. 30.