The U.S. Department of Education (ED) has been actively pursuing a strategy of interagency agreements (IAAs) to redistribute responsibilities for various education programs across federal agencies. This approach, accelerated under the current administration, aims to dismantle what officials describe as federal education bureaucracy, enhance efficiency, and refocus efforts on returning control to states and local entities. Recent announcements highlight shifts particularly impacting higher education, including oversight of foreign funding disclosures and administration of key grant programs.

Interagency agreements represent formal partnerships where one federal agency delegates administrative tasks—such as grant management, technical assistance, and compliance monitoring—to another agency with specialized expertise, while the ED retains statutory oversight. This model has been employed since late 2025, with multiple agreements forging new collaborations primarily with the Departments of Labor (DOL), Health and Human Services (HHS), State, and Interior (DOI). For higher education institutions, these changes could streamline operations in some areas but introduce uncertainties in grant funding, reporting requirements, and program alignment.

The impetus stems from long-standing critiques of federal overreach in education. Proponents argue that specialized agencies can better integrate education programs with workforce development, national security, health services, and tribal affairs. Critics, including education unions and higher education associations, contend that these transfers dilute expertise, risk fragmentation, and circumvent congressional authority needed for major departmental restructuring.

🎓 Recent Announcements: February 2026 Interagency Agreements

On February 23, 2026, the ED unveiled two significant new IAAs, building on prior efforts. The first partners ED with the Department of State to bolster enforcement of Section 117 of the Higher Education Act of 1965 (HEA). This provision mandates that institutions of higher education (IHEs)—public and private nonprofit colleges and universities—report foreign gifts and contracts exceeding $250,000 annually.

Under the agreement, the State Department will manage a dedicated public reporting portal at foreignfundinghighered.gov, review compliance submissions, share data with national security stakeholders, and leverage its expertise in foreign academic admissions and threat assessment. This shift addresses concerns over transparency, as 2025 data revealed over $5.2 billion in foreign funding to U.S. IHEs, with past noncompliance issues at major institutions. ED maintains ultimate oversight, but the portal, developed with technology firm Palantir, promises enhanced accessibility for proactive risk identification.

The second IAA with HHS focuses on K-12 programs like Project SERV (School Emergency Response to Violence), School Safety National Activities, Ready to Learn Programming, Full-Service Community Schools, Promise Neighborhoods, and Statewide Family Engagement Centers. While primarily elementary and secondary, these could indirectly affect higher ed through integrated support services. HHS will handle grant competitions and technical assistance, drawing on its disaster response capabilities.

📋 Earlier 2025 Agreements with Direct Higher Education Ties

The November 18, 2025, announcement introduced six pivotal IAAs, several directly reshaping higher education landscapes:

• Postsecondary Education Partnership (ED-DOL): DOL assumes administration of most HEA-authorized postsecondary grant programs. This includes managing funds, competitions, and technical assistance to align higher ed with workforce needs, addressing labor shortages through credentials, career training, and innovative delivery models. Higher ed institutions may see streamlined integration with DOL's employment programs, potentially boosting job placement outcomes.
• Child Care Access Means Parents in School (CCAMPIS) (ED-HHS): HHS takes over this program supporting on-campus child care for low-income student parents, facilitating their persistence and completion in postsecondary studies.
• Indian Education Partnership (ED-DOI): Encompassing higher ed programs for Native American students, DOI becomes the primary contact, administering grants alongside tribal vocational rehabilitation and career-technical education.
• Foreign Medical Accreditation (ED-HHS): HHS oversees evaluations of foreign medical schools' accreditation comparability to U.S. standards via the National Committee on Foreign Medical Education and Accreditation (NCFMEA).
• International Education and Foreign Language Studies (ED-State): Administration of Fulbright-Hays grants shifts to State, aligning with its Fulbright Program and foreign policy objectives.

These transfers affect dozens of programs, with DOL detailing 50 ED higher ed staff since November to support the transition. Congress approved level funding ($514 million for some affected K-12 grants in FY2026), neither endorsing nor blocking the moves.

For context, Section 117 reporting has evolved: Initial Trump-era rules mandated detailed disclosures on donor restrictions, influencing admissions and scholarships. Noncompliance drew scrutiny, prompting improved filings under subsequent administrations. The new State partnership could intensify enforcement, using visa data for deeper insights.

💼 Implications for Higher Education Institutions and Stakeholders

Higher education leaders must navigate these shifts carefully. Postsecondary grant administration under DOL emphasizes workforce alignment, potentially prioritizing programs yielding quick credentials over traditional degrees. Institutions like community colleges and vocational-focused universities may benefit from DOL's employment integration, while research-heavy IHEs could face reorientation pressures.

Section 117 changes demand robust compliance systems. Universities receiving funds from countries like China, Qatar, or Saudi Arabia—top 2025 donors—must prepare for State's portal and reviews. Enhanced transparency aids national security but risks politicization, as critics fear ideological targeting over genuine threats.

Student parents relying on CCAMPIS grants (serving over 10,000 children annually) will interact with HHS, possibly accessing broader family support. Native-serving institutions gain a tribal-focused liaison via DOI, streamlining aid for underrepresented groups.

Administrators should audit foreign funding disclosures, update grant applications for DOL oversight, and monitor ED communications. Faculty might see opportunities in workforce-aligned research, while job seekers in higher ed can explore evolving roles via platforms like higher ed jobs.

Potential challenges include fragmented guidance—where do IHEs direct queries?—and capacity strains at partner agencies lacking deep education expertise. However, ED oversight aims to mitigate disruptions.

🗣️ Stakeholder Reactions and Broader Perspectives

Administration officials celebrate efficiency gains. Secretary Linda McMahon emphasized breaking bureaucracy to serve students, with partners like State Under Secretary Sarah Rogers highlighting national security and HHS Secretary Robert F. Kennedy Jr. stressing child safety integration.

Higher ed organizations express caution. The American Council on Education supports transparency but questions State's fit for education compliance. Unions like the American Federation of Government Employees decry unlawful dismantling, predicting waste and weakened oversight. Social media buzz from accounts like @NASFAA and @NACAC underscores acceleration of ED wind-down.

Balanced views note benefits: DOL's workforce expertise could enhance employability, per 2025 labor reports showing postsecondary grads in high-demand fields earning 20-30% more. Yet, a New America analysis warns of ideological risks in foreign funding probes.

Photo by Ahmad Hanif on Unsplash

🔮 Future Outlook and Actionable Advice

These IAAs signal ongoing ED contraction, with nine total partnerships and proposals for civil rights to DOJ, loans to Treasury. Personnel shifts lag program transfers, but 50 higher ed staff at DOL foreshadow more. Congress may codify or challenge via appropriations.

For higher ed professionals:

• Review Section 117 compliance using ED's Federal Student Aid Knowledge Center.
• Align grant proposals with DOL workforce priorities for postsecondary funding.
• Monitor tribal education updates via DOI for Native programs.
• Explore child care expansions under HHS for student support services.

Institutions should diversify funding amid uncertainties, invest in compliance tech, and engage policymakers. Job seekers: These changes may spur demand for workforce specialists; check higher ed career advice for navigating shifts.

Share your perspectives in the comments below—how might these transfers affect your institution or career? Visit Rate My Professor to voice experiences or browse university jobs adapting to new realities. For the latest opportunities, explore higher ed jobs and faculty positions.