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Cost cuts by the Trump administration are disproportionately affecting America’s schools. Education reporter Liam Knox writes about how this year will be different for students, educators and parents. Plus: The economic consequences of Trump’s attack on the Federal Reserve, the European Union is ready to negotiate on tariffs, and the Japanese fuzzy key chains that are going viral.

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Summer is just about over, and many schools across the country are welcoming students back into classrooms and dorms. They’re also preparing, as much as they can, for their first full academic year under the new administration of Donald Trump—and the tumult that, so far, has defined its education policies.

College campuses, reeling from federal funding cuts, are slashing programs and bracing for more chaos; K-12 schools are making 180-degree reversals on transgender and diversity, equity and inclusion policies; administration officials are pushing for control over classroom content on sex and race; and a greatly diminished Department of Education is hurtling toward willful self-destruction.

Federal funding accounts for only about one-tenth of K-12 budgets nationwide, and curriculum and school governance is overseen almost entirely at the local and state levels. But the Trump administration has begun to flex what muscle it can. Educators were jolted earlier this summer when the administration froze $1 billion in funding for after-school and summer programs supporting low-income students, then quickly reinstated it. And just this past week, Robert F. Kennedy Jr.’s Department of Health and Human Services ordered schools in 40 states to remove “references to gender ideology” in their sex education materials or risk losing tens of millions of dollars in federal funding. It had already eliminated funding to California after the state refused to comply.

It’s not just direct funding cuts that could shake up the semester. In March the administration laid off half the staff at the Education Department, which was already the smallest executive agency by a wide margin. Those cuts have started to manifest for school leaders, students and parents. 

Planning on applying for college financial aid? That could be harder this year: Schools are reporting widespread difficulty with student financial aid forms. Have a discrimination complaint to report? That could take a while to resolve, as the skeletal staff left at the Office for Civil Rights struggles to get through its mountainous backlog of cases. Want to apply for a scholarship geared toward your ethnic community? That’s illegal now, apparently.

The Harvard University campus in Cambridge, Massachusetts. Photographer: Cassandra Klos/Bloomberg

On top of it all, a slew of federal action over alleged race- and sex-based discrimination for programs and policies that, up through this past spring, were largely accepted as legal, has administrators at high schools and colleges mincing words, discontinuing diversity programs and generally looking over their shoulder for signs of trouble. On Aug. 20 the Education Department suspended all new federal funding to five northern Virginia school districts over their transgender student policies. In May the department started an investigation into another Virginia public school over its admissions policies.

The most significant changes are happening at college campuses, where the White House has been exerting pressure to extract large fines and policy reforms. Those tactics—including freezing billions of dollars in research grants and cracking down on international student visas—have hit universities’ bottom lines hard. Dozens of schools face investigations over discrimination claims.

At campuses across the country, offices that provide services for minority students have been gutted, and research labs are scrambling to replace reduced or suspended grant funding. Programs that attract foreign students could see empty seats in lecture halls and labs as the government’s visa crackdown is projected to reduce international enrollment by anywhere from 30% to 40%, according to Nafsa: Association of International Educators.

To adapt to the new landscape, colleges are considering fundamental changes, some of which could begin this year. They’re taking out enormous loans, eliminating degree programs, laying off staff and changing their admissions and enrollment priorities. Last week, Cornell University warned students of immediate spending cuts as it struggles to cope without more than $1 billion in frozen federal funding.

Brendan Cantwell, a professor at Michigan State University who studies the political economy of higher education, says restrategizing goes beyond the current budget. Schools are likely rethinking their entire long-term fiscal plans, wary of the weight that federal dollars carry.

“A lot of universities’ infrastructure is predicated on the understanding that they’re major federal contractors and that the government’s interest in contracting with them is fairly stable and constant,” Cantwell says. “That relationship is broken.”

So the back-to-school season might feel even more stressful than usual, according to Mark Moody, an independent college counselor with almost three decades of experience. “Anyone who says this is a normal year is bonkers,” he says.

In Brief

Going Viral

A new heyday for Monchhichi. Photograph: Shutterstock

When Australian influencer Sam Todd traveled to Tokyo earlier this year to shop the city’s famed vintage clothing scene, she had a personal sidequest—to find a fuzzy Monchhichi key chain to dangle off one of her many designer handbags. After some unsuccessful hunting, she finally “hit the Monchhichi jackpot” at a toy store in the touristy Harajuku neighborhood, capturing the gleeful discovery in a TikTok video, which has since racked up more than 300,000 views. The store had implemented a purchase limit on the popular plush accessories, but Todd managed to snag double by having her boyfriend stock up too.

Sure, the characters are also for sale back home, but for more than twice the price and with far fewer options. “It was so nice to finally be able to find it,” says Todd, 30. “The popularity has just been growing and growing, and so everybody wants to get one.”

Shoppers like Todd are breathing new life into Japan’s Monchhichi brand, which is undergoing a demand surge rivaling that of the toy’s original heyday in the 1970s and ’80s. Sales of Monchhichi—fuzzy stuffed animals with monkey bodies and childlike faces—more than doubled in the year ended February 2025, to ¥4.6 billion ($31 million), according to the creator and license owner, Sekiguchi Co.

Read more from Momoka Yokoyama and Yui Hasebe’s story on stuffies for grown-ups: Monchhichi Makes a Comeback Amid Labubu Craze

Punitive Tariffs

50%
That’s the tariff President Trump imposed on Indian goods to punish the country for buying Russian oil, upending a decades-long push by the US government to forge closer ties with New Delhi. The new tariffs took effect at 12:01 a.m. in Washington on Wednesday, doubling the existing 25% duty on Indian exports.

Purge in Beijing

“Xi seems intent on keeping allies and rivals alike guessing about succession, perhaps right up until the last moment.”
Neil Thomas
Fellow at the Asia Society Policy Institute
President Xi Jinping is unleashing China’s biggest purge of military leaders since Mao.

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