Education Department proposes rule letting the secretary terminate grants 'for convenience'
The Department of Education published a proposed rule that would let the secretary terminate discretionary grants for convenience, give competitive preference to applicants proposing to charge lower indirect costs than their negotiated rate, and require states and subgrantees to comply with executive orders.
What happened
The Education Department published the proposed rule in the Federal Register on Monday, August 24, 2026, amending the Education Department General Administrative Regulations. It would revise Sec. 75.901 to give 'clear notice to all recipients of the Department's ability to terminate discretionary awards for convenience', adding 'For convenience of the Secretary or pass-through entity' to the grounds for termination; add a new Sec. 75.228 to 'allow the Secretary to provide competitive preference to applicants who propose to charge lower indirect costs than their negotiated rate'; and revise Sec. 76.700 so that a state and a subgrantee 'shall comply with' applicable statutes, regulations, Executive orders and approved applications. The department said the preference would provide 'greater flexibility to ensure that Federal funds are directed toward the activities and outcomes most central to a program's purpose'. Comments are due on or before September 23, 2026, and the department 'intends to finalize these regulations in late 2026'.
Why it matters
The proposal adds termination for the secretary's convenience to the grounds on which a discretionary grant may be ended, and adds compliance with executive orders to what states and subgrantees must satisfy to keep their funding. That attaches a political condition to money Congress has already appropriated, written into the regulation rather than negotiated award by award.