July brought new levels of uncertainty and ambiguity for K-12 leaders. On July 4, sweeping changes to K-12 education (including the expansion of private school choice and major cuts to food benefits and Medicaid) were passed under the newly enacted One Big Beautiful Bill Act. At the same time, school districts nationwide were grappling with the news that the federal government would withhold over $6 billion in previously appropriated federal funds that states expected to receive to supplement services supporting migrant education, educator professional development, services for multilingual learners, academic enrichment, and before- and after-school programs.
The withholding of these appropriated K-12 federal funds was both unexpected and unprecedented. State and district education leaders shared reports of disrupted summer programming and planning for the 2025–26 school year. Republican and Democrat congressional leaders expressed their concern over the withheld funding, and two lawsuits were filed in opposition. The Office of Management and Budget (OMB) and the Department of Education (ED) defended the move as necessary programmatic reviews to ensure compliance with federal laws.
But just as suddenly, the federal government decided to release the funds. On July 18, $1.4 billion of federal funding supporting before- and after-school programs were released, and on July 25, OMB and ED announced that the remaining $5 billion of federal funds would be released to states shortly after.
While state and district education leaders are likely breathing a sigh of relief, they must once again adjust their upcoming school year plans. Unfortunately, this volatility in federal funding for K-12 education is not an isolated incident. Federal grants for teacher preparation and school-based mental health services have been cancelled. The extensions granted to states and districts for spending their remaining pandemic-relief funds were abruptly cancelled and then reinstated, at least temporarily, due to a court order. TNTP has heard from CFOs, superintendents, and board members reporting the emotional toll such destabilizing shifts have taken on leaders’ morale and planning confidence. These changes all beg the question: how can K-12 system leaders plan and prepare excellent learning experiences for their students in the face of uncertainty and ambiguity?
Charting a way forward in unpredictable times
While federal funding makes up a relatively small portion of a school district’s budget, the past month in particular serves as a reminder that policy and funding moves at the federal level can have immediate impacts on how school districts operate and how our young people are served by their public systems.
Despite the disruptions, leaders at the state and district levels have the greatest influence over the direction of those systems, and they can and should exercise their authority to provide students with excellent K-12 experiences.
State and school district leaders should consider the following strategies and guidelines as they make plans during uncertain times:
- Understand the scope and implementation authority of federal policy developments, and layer in state and local requirements. What does the federal policy mandate, and what is left to state or local discretion? Keep student success at the center of every decision, while identifying opportunities to remain flexible and compliant.
- Map out your system’s flexible versus restricted funds. Which funds are earmarked for specific programming, and which can be repurposed in times of need? Conducting a fund flexibility and liquidity review can help ensure leaders are ready to respond quickly when conditions shift.
- Examine underutilized or low-impact spending using available data on cost effectiveness and student outcomes. Consider whether centralizing certain contracts could yield both efficiency and equity gains, or whether certain initiatives can be redesigned, paused, or phased out.
- Review your current funding streams through the lens of resilience. In this moment, innovative problem-solving could open up new opportunities. Can the school system layer or “stack” federal, state, and philanthropic dollars to protect its highest-priority initiatives? Are there cost-sharing models, regional service cooperatives, or coalition partnerships that could stabilize essential programs? For remaining ESSER funds, the obligation deadline was Sept. 30, 2024, though districts have until March 2026 to fully liquidate those funds. Now is the time to align any unspent dollars with your most critical priorities.
State and district leader expertise, along with the input and expertise of the communities they serve, is essential for K-12 systems to lead with resilience during this period of federal policy volatility. TNTP recently hosted two webinars in which state, district, and advocacy leaders delved into K-12 budgets and federal funding uncertainty. If you missed them, check out the recordings of our Beyond the Paycheck and Leading Through Uncertainty webinars.
Reach out to TNTP to learn about our partnerships with state and school district leaders to collectively work toward a nation where all young people and communities can thrive.
