As the first 100 days of office draw near, President Donald J. Trump has issued several executive orders with significant implications for risk and insurance management across various sectors, including higher education. Executive orders 14049, 14050 and 14124 concern tribal colleges and universities as well as Black and Hispanic American students, respectively. They directly affect opportunities based on initiatives for cultural or racial considerations. Executive Order 14201 provides challenging Title IX compliance considerations.
While we remain agnostic to the politics of these decisions, there’s no denying the potential sweeping impact to the most recent order aimed at education reformation – Executive Order 14242 (Improving Education Outcomes by Empowering Parents, States and Communities) signed by our president on March 20, 2025.
Today we offer a view into this executive order that states the “closure of the Department of Education would drastically improve program implementation in higher education.” The below is a summary of this order, emphasizing its purpose and potential impact on risk, liability, compliance, operational exposure and insurance considerations.
Closure of the Department of Education
Date issued: March 20, 2025
This executive order directs the dismantling of the U.S. Department of Education, aiming to decentralize federal control over education and return authority to individual states.
Implications
- Risk and liability: The transfer of educational oversight to states may lead to unique approaches in educational standards and enforcement, potentially increasing legal challenges related to educational equity and civil rights.
- Compliance: Educational institutions must adapt to new state-specific regulations, necessitating updates to compliance programs and policies
- Operational and financial exposure: Schools and universities may experience operational and financial disruptions during the transition period, affecting funding, program continuity and administrative functions.
- Insurance considerations: Insurers can reassess coverage terms for educational institutions, considering potential changes in liability exposures due to varying state regulations and standards. This also could include institutions that have campuses located across several states, as well as those with international campuses.
Possible action steps
- Creation of risk communities and committees: Establish small working groups that operate within proximity to your campuses and the states in which you operate to discuss changes in the moment. The ability to update and inform your business partners on viable changes to:
- Compliance: Changes in regulation could result in ambiguous compliance requirements, increasing the risk of inadvertent non-compliance.
- Liability: Could face heightened liability if federal protections are altered or removed. Focus on prioritizing the institutions policies and procedures that would have the greatest impact.
- Insurance: Shifts in the regulation landscape may require updates to institutional insurance policies to cover new or increased risk.
- Review, renew or engage in risk management, enterprise risk management (ERM) and compliance officers
- Most colleges, whether public or private and regardless of size, would benefit from ensuring they are actively enhancing their risk management and implementing ERM practices.
- Prioritize your institution and state’s specific needs while adapting to ongoing changes. Collaborate closely with local and state entities to stay informed about policy updates and explore potential funding opportunities.
- Reassess and initiate a risk assessment process, including ERM, within each department to identify areas with the highest financial and operational impact. This will help prioritize critical risks and guide the development of effective mitigation strategies.
- Note potential impacts to operations from compromised monies associated with R1 research, grants and funding. It is recommended that institutions conduct a comprehensive inventory of all active research projects and grant funding sources.
- Institutions can assess and document the potential impacts on Title I funding, disability services, federal student loan programs and Pell Grants.
- Review and update business continuity and emergency preparedness. Given potential financial and operational impacts, institutions may consider their readiness to manage and respond to possible disruptions.
Ultimately, we strongly encourage risk professionals to regularly engage your legal counsel to review and interpret evolving regulations, ensuring institutional policies stay compliant. Also, work closely with your insurance brokers to update coverage in line with emerging risks and shifting market conditions. Finally, to the extent possible, provide ongoing education and training sessions for faculty and staff to keep them informed of compliance responsibilities and institutional policy updates.
Disclaimer
WTW hopes you found the general information provided here informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).
