As much as President Donald Trump has vied to end federal purview over education, his administration’s efforts to cut spending across other sectors may impact funding for education.
Republican members of Congress are now considering spending reductions on Medicaid, which could leave states to pick up additional costs. Increases in state spending on Medicaid have historically hurt discretionary funding for higher education, according to Brookings.
“Higher education is known as the balancing wheel of state budgets,” says Thomas Harnisch, vice president for Government Relations for the State Higher Education Executive Officers Association. “If states have to direct a considerable amount of more resources to Medicaid or other programs, that could really affect the amount of revenue for higher education.”
SHEEO’s January analysis of the most pressing policy issues colleges and universities should be monitoring in the coming year preceded the litany of executive orders Trump issued around higher education. In his first four weeks in office, his administration threatened a federal funding freeze to nonprofit institutions, halted National Institute of Health spending on university research and slashed millions in Department of Education funding.
“Certainly, a lot has changed in the last few weeks in ways that we may not have anticipated when we wrote the report,” says Thomas Harnisch, vice president for Government Relations at SHEEO.
Federal higher ed policy will demand a lot more attention from campus leaders as the Trump administration moves to cut federal spending sharply and shrink or shut down the Department of Education, Harnish predicts.
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What issues are top of mind for state higher education executive officers?
State funding for public colleges and universities—particularly for financial aid programs—will require the most aggressive advocacy, said the 49 state higher education executive officers who responded to SHEEO’s 2025 survey in November. Their responses were submitted following Trump’s election victory.
“There was a lot of uncertainty about how changes in Washington could affect efforts to devolve responsibilities to states and how or whether those would be funded” Harnisch says.
Speculation on Trump’s policies aside, state budgets were already expected to shrink in fiscal year 2025 following the end of emergency COVID funding, leaving some states with deficits that threaten higher education, the report reads. Budget allocations for colleges and universities across Arizona, Louisiana and California are looking particularly painful.
The top 10 policy issues, as ranked by the survey, are:
| Rank | Issue | Fluctuation from last year |
| 1 | State operating support for public colleges and universities | +1 |
| 2 | Economic and workforce developments | -1 |
| 3 | State funding for financial aid programs | +2 |
| 4 | Higher education’s value proposition | -1 |
| 5 | College completion and student success | +2 |
| 6 | College affordability | -2 |
| 7 | Enrollment declines | +1 |
| 8 | Public perception of higher education | -2 |
| 9 | FAFSA completion | +2 |
| 10 (tie) | Adult and non-traditional student success | none |
| 10 (tie) | Student transfer pathways | Newly added policy issue to survey |
