The Trump administration is signaling that it may defy Congress and withhold billions of dollars in federal formula grants that school districts and states expect to start receiving on July 1—including funding that supports vulnerable students and ensures compliance with federal law.
With the start of a new school year just weeks away, states including North Dakota, Ohio, Virginia, and Vermont, have begun warning districts that they may see delays in key funding—or, in the worst-case scenario, that they may not receive portions of their expected federal allocations at all. Districts are scrambling to develop contingency plans and bracing to implement cuts if expected federal funding suddenly falls short.
“Almost all of our support positions—whether it be interventionists, school-based clinicians, student support personnel—that support our neediest students are almost all paid for by federal funds,” said Brooke Olsen-Farrell, superintendent of the 1,250-student Slate Valley district in Vermont. “We don’t have the ability to absorb that locally. It is a huge concern for us.”
The growing anxiety over disrupted federal education funding centers on four programs worth a combined $5 billion: Title I-C for migrant education, Title II for professional development, Title III for English learners, and Title IV-B for before- and after-school programs.
The White House budget proposal published last month calls for eliminating all four programs beginning in the 2026-27 school year. But education officials nationwide worry that the administration could proceed with those cuts for the 2025-26 school year, before Congress has weighed in.
For all four programs, states haven’t received routine funding allocation estimates from the federal government that typically arrive between March and May—nor any confirmation from federal officials that the funds are still forthcoming.
A department webpage with state-by-state spending tables lists the four programs—as well as grants that support civics and literacy instruction—with a footnote that says the department “is currently finalizing funding decisions for FY 2025 and remains committed to meeting its statutory responsibilities and stewarding taxpayer resources responsibly.”
During a Senate hearing on Wednesday, Sen. Tammy Baldwin, D-Wis., asked Russell Vought, the director of the federal Office of Management and Budget, whether the administration intends to hold back K-12 education funding due to states next week and instead propose a “rescissions package,” asking Congress for permission to cancel the previously appropriated funds.
Vought did not rule out that possibility. He replied, in effect, that the administration hasn’t decided.
“We are considering multi-year funding. It’s underway with a programmatic review. But again, it is multi-year funding, and no decision has been made with regard to whether they will be a part of any particular rescissions package,” Vought said.
Meanwhile, the administration has also reportedly considered a broader freeze on federal formula funds to punish individual states like California that don’t align with Trump’s policy priorities. Those four formula programs could be at risk in those states, along with bigger allocations like Title I-A for students from low-income households and the Individuals with Disabilities Education Act for special education.
Spokespeople for the Education Department and the Office of Management and Budget didn’t respond to detailed questions from Education Week in time for publication. Emails to the offices of Congressional appropriations committee chairs—Sen. Susan Collins, R-Maine, and Rep. Tom Cole, R-Okla.—also went unanswered.
As July 1 draws near, business as usual seems less and less likely, said Mary C. Wall, the former assistant deputy secretary of P-12 education at the U.S. Department of Education from 2023 through this past January.
“The department has all that it needs right now to be able to administer these dollars,” Wall said. “I believe that we are barreling toward a significant reduction of services for students and families if the money is not delivered on time.”
Several federal funding streams are on the verge of being late
The federal fiscal year begins Oct. 1, but for most education programs, half the upcoming year’s allocated funding flows to states each year on July 1.
Congress still hasn’t agreed on a final budget for the current fiscal year, even though it’s almost over. Instead, lawmakers in March approved a continuing resolution bill that broadly carries over funding levels from the previous fiscal year.
That means states and schools have been expecting for months that funding levels for key federal programs would closely mirror last year’s numbers. Thousands of school districts and nearly 30 states have already locked in their own budgets for the upcoming fiscal year.
“We have two positions right now that we’ve advertised for, but we’re not filling,” said Olsen-Farrell, whose district could lose $200,000, or $160 per student, if the administration holds back the four formula grants currently in doubt. “We’re kind of just waiting and seeing. If this goes on too long, we’re just not going to find anybody anyway.”
President Donald Trump and key administration officials insist the Constitution gives the executive branch the authority to withhold spending approved by Congress. They’ve repeatedly exercised that authority across the federal government in the last five months, including pulling back billions of dollars already awarded for school construction projects, tutoring programs, teacher-preparation efforts, education research, student mental health services, library initiatives, and after-school programming. Court rulings have temporarily halted several of those actions.
OMB’s Vought, who wrote a large portion of the conservative policy document Project 2025, in recent weeks has previewed the administration’s plans to escalate its spending reduction strategy by pursuing “pocket rescissions”—essentially, running out the clock on the fiscal year without spending all the funds Congress set aside for particular programs.
Applying that strategy to education funding could force states—including those led by Republicans—to make tough decisions about whether to backfill funding gaps or leave school districts to make up the difference.
Numerous states are experiencing or anticipating budget deficits, including Florida, which could lose an additional $17 million from Title I-C, $124 million from Title II, $56 million from Title III, and $72 million from Title IV-B.
The Council of Chief State School Officers, which represents state education agencies nationwide, and AASA, the School Superintendents Association, are urging the administration to supply full funding nationwide for fiscal year 2025.
“These funds are critical for schools to serve students in the 2025-2026 school year,” Carissa Moffat Miller, the group’s chief executive officer, wrote in a statement shared with Education Week. “Without them, school districts across the country will face budget cuts that impact students.”
District leaders warn of cuts to student supports
Sweeping cuts to schools’ formula funding are likely to prompt vigorous bipartisan backlash and possible legal action.
Federal law requires school districts to provide adequate education opportunities to all English learners, regardless of how much those services cost. Earlier this year, Trump signed an executive order declaring the administration’s view that people in America should speak English as the nation’s “official language.”
Eliminating Title III funding would mean schools and states nationwide have to collectively find $890 million from other sources, or make cuts that risk violating the law.
Similarly, abrupt cuts to Title I-C, which amounts to $376 million in annual funding nationwide, would set back academic progress for students from families whose jobs in fisheries, food processing, and other transient industries require them to move from state to state throughout the year, said Francisco Garcia, the executive director of the Interstate Migrant Education Council, a coalition of states that serve migrant students.
“We’re trying to avoid an interruption in their education, and this definitely creates a huge interruption,” said Garcia, who served from 1998 to 2006 as the director of migrant education at the U.S. Department of Education.
Title II grants for “supporting effective instruction” annually total more than $2.2 billion nationwide. Even a small amount can make a big difference, said Rodney Simpson, assistant superintendent of the 1,300-student Fort Putnam district in rural Indiana, which gets $40,000 in Title II funds, or $30 per student.
“Our teachers always want to go and learn more and bring back what they learned to help their position,” Simpson said. “Title II would be a big deal if we didn’t get that funding.”
After-school programs that rely almost exclusively on a share of $1.3 billion in annual Title IV-B funding are confronting the prospect of shutting down.
The Fort Worth school district uses Title IV-B funding to operate 10 after-school sites at middle and high school campuses. If this year’s federal funding doesn’t show up by Aug. 29, all of the high school programs would grind to a halt, and middle school programming could only continue on a limited basis with local funds, said Miguel Garcia, who oversees the district’s federally funded enrichment programs.
This time of year is already hectic for Garcia and his colleagues as they spend the district’s summer break figuring out how many students will have access to each site, how many staff members they need, and where they’ll get supplies from. Now their meeting agendas have a new item: sustainability planning, both in the short and long term.
Garcia’s team firmly believes their programs help students improve their grades and get more engaged during the school day.
“The investment in this program is so low compared to the benefits that are going to be received from it,” he said.
Districts could struggle even if federal funds do eventually show up
State education agencies envision logistical problems even if funding arrives just a few days past the July 1 deadline.
Districts would have less time to hire workers, sign contracts, and request timely reimbursements for expenses to be covered with federal dollars, said Dale Wetzel, a spokesperson for the North Dakota department of public instruction.
Other state agencies are urging districts, as well as private schools that receive federal funds, to plan for contingencies that rely on rollover federal funds from the previous year.
“A delay in the awards would add confusion and uncertainty to what is typically a transparent and routine part of every district’s planning process,” said Denise Kahler, spokesperson for the Kansas department of education.
Some states are taking preventative steps to soften the blow. Illinois, for instance, approved a $100 million fund in case various federal funding streams don’t materialize on schedule. State lawmakers also expanded the state treasurer’s authority to borrow additional money in extenuating circumstances.
But in places like California that haven’t yet finalized state budgets, districts now have to craft their own budgets with both state and federal dollars up in the air.
The Government Accountability Office, an independent watchdog, is investigating more than three dozen instances of potentially illegal spending decisions by the Trump administration, and has already said two of those instances—freezing funding for electric vehicles and moving to close an agency that supports libraries and museums—violated the federal law that permits the president to withhold spending only with approval from Congress.
But the administration is prepared to test the assertion that the executive branch can unilaterally make federal spending decisions by “deferring” as many as 200 separate programs across the federal government, the Washington Post reported on June 25.
A spending freeze on that scale could lead to a cascade of lawsuits that overwhelm the federal courts, Wall said.
In the meantime, she said, these moves would run counter to the administration’s stated goal of scaling back federal involvement in K-12 education.
“The damage potential is quite high, and in many ways the administration is sowing confusion that is effectuating its intended outcome, which is to reduce the spending anyway,” she said. “It’s really going to have the net effect of curtailing the very ability that states have to run their own education systems.”