Funding for Fiscal Year 2026 has been nothing short of controversial. Starting in May 2025, President Trump unveiled his budget, which proposed a series of budget cuts to programs that community colleges leverage to deliver high-quality education and services to their students, and thus contribute to persistence and program completion.

In the summer, the House and Senate Appropriations Committees each voted on their competing visions of higher education funding. While the Senate proposed to level fund most programs of interest to community colleges, the House sought to decrease or eliminate funding for many of these programs. Take a look at ACCT’s deep dive into both the Senate and House appropriations proposals from summer 2025.

At the end of the fiscal year, September 30, 2025, with appropriations work still incomplete and no continuing resolution, a measure that funds the government using the previous fiscal year’s funding levels, the federal government entered a 43-day government shutdown. The Continuing Resolution that reopened the government extended funding until January 30, 2026.

Now, with this deadline approaching, lawmakers have been steadily voting in their chambers on the remaining appropriations bills. Within the final set of four appropriations bills bundled together in what is called a minibus, lies the agreed-upon Labor, Health and Human Services, Education, and Related Agencies (LHHS) appropriations bill. In this negotiated piece of legislation, both Senate and House appropriators have agreed to direct $78.79 billion and $13.46 billion in discretionary funding to the Departments of Education and Labor, respectively. This reflects a 1 percent decrease in funding for the Department of Education and a 7.8 percent decrease for the Department of Labor.

Highlights of the LHHS Appropriations Bill

Increases funding for:

• Strengthening Tribally Controlled Colleges and Universities (TCCUs)
• Strengthening Alaska Native and Native Hawaiian-serving Institutions (ANNHIs)
• Strengthening Historically Black Colleges and Universities (HBCUs)
• Strengthening Predominantly Black Institutions (PBIs)
• Strengthening Asian American- and Native American Pacific Islander-serving Institutions (AANAPISIs)
• Strengthening Native American-Serving Nontribal Institutions (NASNTIs)
• Developing Hispanic-Serving Institutions (HSIs)
• Head Start

Level funds:

• Maximum Pell
• Federal Work Study (FWS)
• Supplemental Educational Opportunity Grant (SEOG)
• TRIO
• Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP)
• Child Care Access Means Parents in School (CCAMPIS)
• Postsecondary Student Success Grant (PSSG)
• Basic Needs
• Career and Technical Education (CTE) State Grants
• Adult Education State Grants
• Strengthening Community College Training Grants (SCCTG)
• Apprenticeships

Reduces funding for:

• Strengthening Institutions Program (SIP)

The takeaway from evaluating funding at the programmatic level is that the final LHHS overall took the shape of the original Senate proposal, in that programs would not suffer funding eliminations. While this is a victory in better ensuring the permanence of these programs, it must be noted that the Strengthening Institutions Program (SIP) is set to face a $10 million reduction, double the amount both the House and Senate originally proposed. This cut would be in addition to the $10 million decrease SIP saw in FY 24. For community colleges serving low-income populations, the reduction of SIP funding would limit their ability to invest in projects that align with increased performance outcomes. Take a look at Strengthening Institutions Program (SIP) – For America’s Economic Edge and Student Success from Coast to Coast and through the Heartland for more on how SIP contributes to institutional and student success.

Furthermore, even with level funding for maximum Pell, ACCT continues advocating for at least a $200 increase to the maximum Pell award to avoid the ultimate loss in purchasing power of the Pell grant due to the rising costs of living and inflation. Please view Table 1.0 below for additional information on funding at the programmatic level.

ACCT wishes to take the opportunity to thank you for your advocacy with members of Congress in both parties at last year’s National Legislative Summit and throughout the year. The bipartisan House-Senate negotiated bill rejected proposals to eliminate key programs for community colleges, and instead protected and strengthened nearly every single ACCT funding priority. This is a major victory in a difficult funding environment, and it did not happen by accident. Every congressional meeting you had, email you sent, call you made, and congressional visit you hosted on campus made a difference.”

Mandated Grant Competitions

In 2025, the higher education community learned that seeing new grant competitions is not guaranteed by the Trump administration. For instance, on September 10, 2025, the Trump administration announced that it would terminate Congressionally appropriated discretionary funding for new awards for FY 25 and non-competing continuations for Minority Serving Institutions (MSIs) programs, with the justification that, according to the Trump administration, these grants are racially and ethnically discriminatory. The administration then reprogrammed these funds to grants it deemed non-discriminatory. This action was despite May’s Presidential budget request to increase funding for these MSI programs.

The FY 2026 LHHS appropriations bill does offer bill-strengthening language meant to ensure the Administration’s actions align with Congressional intent. As such, SCCTG, PSSG, and CCAMPIS are examples of programs in which appropriators inserted legislative text requiring the Departments of Education and Labor to hold new grant competitions by September for key Community College Programs.

Next Steps 

The House is considering a package including the LHHS bipartisan and bicameral agreement. While there is opposition to an unrelated Department of Homeland Security bill in the minibus, members of Congress hope to pass theLHHS bill in the House, then the Senate, before the January 30 deadline.

Genesis Santiago is the Senior Government Relations Associate at ACCT