Proposed OMB changes to federal grant rule could impact afterschool and summer learning programs

On May 29, 2026, the Office of Management and Budget (OMB) released proposed revisions to the Guidance for Federal Financial Assistance that would make significant changes to the “uniform guidance” that governs federal grant management and the use of federal funds. These proposed changes apply to federal grant-making agencies, including the Department of Education, the Department of Labor, the Department of Health and Human Services, the Department of Agriculture, and the National Science Foundation.

OMB's proposed rule would affect how nearly every federal grant dollar is awarded, managed, and potentially terminated. Federal grant recipients, such as state, local, and Tribal governments, as well as nonprofit and community-based organizations, could be impacted. This is particularly relevant for afterschool and summer learning programs that receive funding through programs like 21st Century Community Learning Centers (21st CCLC), Title IV-A of the Every Student Succeeds Act (ESSA), the Child Care Development Block Grant, Full-Service Community Schools, AmeriCorps, and other federal education and workforce investments.

If adopted, these revisions would integrate the Administration’s policy priorities into the terms and conditions of federal awards, including restrictions on diversity, equity, and inclusion (DEI) activities. It would also extend agencies’ authority to terminate awards prior to their scheduled end date and codify certain OMB guidance as binding regulation.

Proposed provisions and what they could mean for grant recipients

DEI-Related Restrictions | Section 200.218, Section 200.30

If enacted, there would be new restrictions on the use of federal funds for activities related to diversity, equity, and inclusion (DEI) and what the Administration describes as gender ideology. Grant recipients would be prohibited from using federal funds for activities that "fund, promote, encourage, subsidize, or facilitate” diversity, equity, and inclusion practices “that violate any applicable federal anti-discrimination laws.” 

Issue Advocacy Restrictions | Section 200.450

While federal funds are already subject to lobbying restrictions, this draft rule would broaden those limits to cover issue advocacy and public messaging on social, political, and public policy matters unrelated to a grant's purpose. Organizations would be prohibited from using federal grant funds for campaigns or communications that support or oppose positions outside the objectives or performance requirements of the award. The proposal would also bar the use of federal funds to influence state government officials, agencies, or policymaking on matters unrelated to the grant.

The draft regulation may also raise First Amendment considerations due to its restrictions on advocacy and public messaging. Because the prohibition on "issue advocacy" is broad and undefined, organizations may face uncertainty about how the restriction would be interpreted and applied and what types of communications may be permitted. This uncertainty could lead some organizations to take a more cautious approach to public engagement and, in some cases, may discourage participation in speech that may be otherwise protected.

This is particularly significant for 501(c)(3) organizations, which are permitted to engage in certain advocacy activities and often play an important role in informing policymakers and mobilizing community stakeholders. While lobbying requires asking for a specific amount of funding or advancing legislation, issue advocacy more simply focuses on being able to discuss what activities matter to individuals, communities, and organizations. For summer and afterschool providers, advocacy is often an important tool for educating policymakers and the public about the role programs play in supporting student achievement, workforce participation, youth development, and community well-being. Providers frequently share data, elevate the experiences of families and youth, and advocate for policies that expand access to programs offering academic enrichment, arts and STEM experiences, and health and wellness activities.

Termination Authority | Section 200.340 and Merit Review | Section 200.205

As written, the rule would allow the Administration to terminate and suspend grant awards mid-cycle if they no longer advance Federal “agency priorities or the national interest.” For afterschool and summer learning programs, which often rely on stable, multi-year funding to hire staff, maintain partnerships, and serve students consistently, this added uncertainty could make it harder to plan ahead and sustain services in communities that depend on them most.

Under the proposal, political appointees working in agencies would be required to approve grant awards to ensure they align with federal law, agency priorities, as well as broader policy principles such as advancing the President’s priorities.

Conferences | Section 200.432 and Membership Costs | Section 200.454

OMB proposes to tighten the rule on conference spending by requiring prior approval from the federal agency before grant funds can be used to attend a conference, with that approval included in the award’s terms and conditions.

If finalized, the guidance would prohibit the use of federal funds to pay for memberships in organizations whose primary purpose is lobbying or issue advocacy. It would also require grantees to obtain approval from the federal grant-making agency for memberships in other organizations, and such memberships must be necessary to fulfill award requirements. This would mark a significant departure from current regulations.

Next steps and how to weigh in

If enacted, the Office of Management and Budget’s proposed rule would reshape federal grant award conditions, compliance expectations, subrecipient oversight, and agencies' authority to terminate grants. It is important to note that this is a draft proposal and does not carry the force of law until public comments are reviewed and a final rule is published. Organizations that receive federal grants or any other interested parties should review the proposed rule and assess how these changes may affect their operations and funding. The 45-day public comment period is currently open and runs through July 13. The Afterschool Alliance will submit comments and will share our comment letter in an upcoming blog.