Scholarships, Attendance, and Finances: Universities Navigate New Federal Funding Policies

Throughout the country, universities that receive federal funding have had a shock to the system. As of 2025, President Trump has started to cut the Department of Education to a minimal size.¹ The Department of Education was first created in 1979 by President Jimmy Carter and has provided federal funding to education since.² On March 20, 2025, President Trump signed an executive order for Department of Education Secretary Linda McMahon to “take all necessary steps to facilitate the closure of the Department of Education and return authority over education to the States and local communities.”³ The attempted closure of the Department of Education and successful shrinking of the staff is in accordance with the new administration’s attempts to limit federal spending and put the power back to the states.⁴ In order for this executive order to completely shut down the department, it must have congressional approval.⁵ Likely the Department of Education will be shrunk to its core, leaving just federal Pell grants, Title I funding, and funding for children with disabilities.⁶

While the Department will likely remain, even if minuscule in size, there have been current questions regarding federal funding for schools, especially in terms of the ability to provide scholarships. Universities, especially public universities that receive substantial federal funding, are likely looking at budget cuts for this upcoming year. Many universities have frozen hiring as federal cuts loom in the distance.⁷

In terms of scholarships, these funding cuts could affect universities’ abilities to provide scholarships to both undergraduate and graduate students. With these financial restrictions, it remains unclear what the next year of education will look like and how it will affect students being newly admitted into colleges and post-graduate programs. In particular, many universities, including our local SUNY University at Buffalo, face questions about reduced funding as research-based institutions.⁸ With research-based programs being cut by federal funding, this puts a question on how schools in this situation will organize their finances. As of February 15, 2025, the University of Buffalo anticipates a loss of $47 million of ”indirect costs” for research funding.⁹

Students and universities face uncertainty, specifically when it comes to amateur athletics. Looking at our local University at Buffalo, in 2023, the university spent a little over $40 million on operating expenses for their athletics department.¹⁰ The department was determined to have generated a little under $40 million in revenue leaving a half a million deficit.¹¹ According to the NCAA financial report in 2023, UB’s largest spending category within athletics was athletic student aid.¹² UB spent a total of $8,707,093 on student athletic aid, which included scholarships for tuition, summer school, and other attendance expenses.¹³ These large numbers of athletic aid pose an important question: how will next year shake out for athletes receiving scholarships? If scholarships are limited due to federal funding restrictions, will this affect their ability to attend Universities such as UB?

How federal funding changes will affect universities and the incoming class of students remains unclear. However, what is clear is that this is a new era of education for both funding on the federal level and how universities make financial adjustments accordingly.

1. https://www.nbcnews.com/politics/white-house/trump-signs-executive-order-dismantle-education-department-white-house-rcna197251 ↩︎
2. Id. ↩︎
3. https://www.npr.org/2025/03/19/nx-s1-5333861/trump-executive-action-education-department ↩︎
4. https://www.whitehouse.gov/articles/2025/03/on-education-president-trump-knows-we-can-do-better/ ↩︎
5. https://www.nbcnews.com/politics/trump-administration/education-department-trump-what-is-next-student-loans-fafsa-rcna197302 ↩︎
6. Id. ↩︎
7. https://abcnews.go.com/Technology/wireStory/universities-freezing-hiring-trump-threatens-federal-funding-119761758 ↩︎
8. https://www.wbfo.org/local/2025-02-14/university-at-buffalo-blasts-federal-order-limiting-research-grant-reimbursements ↩︎
9. https://www.ubspectrum.com/article/2025/02/ub-researchers-would-lose-millions-to-trump-funding-cuts-gillibrand-kennedy-warn ↩︎
10. https://www.ubspectrum.com/article/2024/03/ub-athletics-budget-2023-takeaways-deficit ↩︎
11. Id. ↩︎
12. Id. ↩︎
13. Id. ↩︎

image credits: https://ubbulls.com/news/2025/3/11/general-ub-athletics-looks-to-secure-naming-rights-for-stadium-and-arena