Maybe you can incorporate a washer and dryer under a counter in a mini kitchen. Turn the laundry into a bathroom and put the kitchen near the backyard where the bedroom is and remove the wall between old BR and FR.

We're actually building though a university construction program and they all kind of work together. I was sure I'd be labeled even more stupid if I said instructor!

There is a big laundry room on the main floor of the house. This entire basement space is "extra".

Depends where you live and what use you plan for your basement, we are in mid construction and our basement will be a income generating place, so we we designed it to have a large 1 bedroom apartment, shared laundry and space for a guest bedroom, your picture of the plan is not very clear. I think it is good advice from Pyramid, talk to someone other than your contractor maybe the person who did the plans.

Since we can't see the entire floor plan it's hard to say, but if it's all 100% extra space it depends on whether or not you want this to possibly be a granny space or income generating. If so I like the idea of swapping the bathroom and laundry areas or maybe putting the two back to back and moving the bedroom.

To be brutally honest it looks like it was designed by a student so I'm not surprised to hear it came from a university. The laundry is huge for an extra laundry room and the bathroom is small and the water heater is right in the middle of the room so you'll never be able to re-design around it without re-routing the plumbing. Why is there a huge hallway in front of the bathroom? Is something is going on to the right of the bathroom to make that necessary? At first blush it needs a complete re-do. Any good architect/Interior designer could sketch something better on a napkin over dinner.

It truly is 100% extra space. To the right of that small bathroom is a garage. The basement is my husband's and I'm trying to help find suggestions because he is unhappy with how it's coming together. It's a walkout, we live in a rural area. Ha, wasn't designed by a student but the professor. The cost to us for the build is a donation plus materials, a huge savings.

oh, water heater and hvac have been moved to the storage space at the back.

Here's a pic showing the garage and stairs.

Update: I truly appreciate the few of you who gave a suggestion! Figured it all out after talking to our building director.