Billions of federal education dollars the Trump administration withheld for much of July have started flowing, helping to stabilize planning and programming in school districts nationwide as the new academic year ramps up.
But despite the jubilation that accompanied the funding restoration, many education leaders say damage from the unexpected delays can’t be easily undone—and trust can’t easily be rebuilt.
In Butte County, Calif., dozens of tutors who work with the children of seasonal migrant workers lost their jobs and may not come back. In Sunnyside, Ariz., after-school programs that serve low-income students will start weeks later than planned. In rural Slate Valley, Vt., it’s now too soon before the school year to fill two federally funded interventionist positions.
“We have to be able to have a sustainability plan, and we have no way to build those positions into the local budget” because local voters are unlikely to support higher taxes, said Brooke Olsen-Farrell, superintendent of the 1,200-student Slate Valley district. “Essentially our schools lost personnel as a result of this.”
Beyond the immediate impacts, many school district leaders and others who work with them say they’re growing wary of depending on federal funding during budget planning—even when Congress has approved the allocations and the president has signed them into law.
“The genie’s out of the bottle. These things have happened. Nobody wants to be like, ‘Well, the problem’s over now, let’s move on,’” said Brian Cechnicki, executive director of the New York Association of School Business Officials. “There is a bit of waiting with bated breath for if something like this will happen again and what will it look like.”
Unprecedented federal disruptions have become the norm
Within days of President Donald Trump taking office for his second term, unprecedented funding disruptions became a distressing norm for schools, universities, nonprofits, and other organizations serving K-12 students that depend on federal support. The U.S. Department of Education and other agencies have made policy changes, funding cuts, and contract terminations with little to no notice, often on Friday afternoons.
That was the case for the most recent and largest K-12 education disruption yet. The Trump administration told states after lunchtime on June 30 that nearly $7 billion in funding they were scheduled to receive the next day was under review by the federal Office of Management and Budget, and wouldn’t flow on time. Congress approved the funding—from seven separate grant programs—in March.
States and schools scrambled in the subsequent weeks to gather information, adjust budgets, cancel programming, and reshuffle staffing. Two federal lawsuits challenged the funding freeze as unconstitutional, and lawmakers from both parties urged the administration to reverse it.
By July 25, seemingly in response to the backlash, the Trump administration had announced that all the withheld funding would be unfrozen.
Some district leaders learned about the restored funding just in time to prevent serious problems.
The Mansfield district in Texas was on the verge of using local dollars to cover millions of dollars in planned federal investments when the news arrived, said Michele Trongaard, the 36,000-student district’s associate superintendent for business and finance.
Most state education departments didn’t let any staff members go, and some moved to maintain operations for federally funded programs in hopes that the money would eventually flow.
The Horizon Education Centers, which partners with Ohio school districts to offer academic enrichment before and after school, had planned to wait until Aug. 15 before telling nearly 100 tutors they would be losing their jobs. “I think we’re going to be able to pull everything back and have a good program year,” Dave Smith, Horizon’s executive director, told Cleveland.com.
In states including New York and Oregon, district budgets are due to state agencies by Aug. 1, which gave schools some wiggle room during the budget uncertainty that reigned supreme in July.
And many districts had a larger-than-usual supply of federal formula funds that regulations allow them to carry over from previous years, because since 2020 they had prioritized spending federal pandemic-relief funds with shorter timelines.
Returning to ‘business as usual’ likely isn’t an option for schools
But in some places, a temporary loss of funding amounted to more than a minor blip.
Summer school programs shut down in places like Alachua County, Ala.; Bottineau, N.D.; and Grand Isle, Vt. Classes for adult learners were suspended in Abilene, Texas; Fishersville, Va.; and Oak Hill, W.Va. Programs serving children of seasonal migrant workers in St. Louis and Wenatchee, Wash., suddenly could serve only a fraction of their typical student population.
The genie’s out of the bottle. These things have happened. Nobody wants to be like, ‘Well, the problem’s over now, let’s move on.’
Brian Cechnicki, executive director, New York Association of School Business Officials
The Manatee County schools in Florida froze hiring, canceled most staff travel, and reduced discretionary budgets for all district departments by 1%. The Cincinnati district halted plans to purchase new curriculum materials. The Fort Worth, Texas, district canceled contracts with local nonprofits. State officials in Arizona, Georgia, and Idaho even rushed to chip in funds to help cover schools’ abruptly unfunded short-term expenses.
The federal announcements on July 18 and 25 that funding would flow after all didn’t mean schools could start spending money immediately. Once states receive their grant awards, they still have to distribute them to districts and other recipients.
In California, as of Aug. 1, the Butte County Office of Education still hadn’t received confirmation that it could start spending the previously frozen grant funds, said Travis Souders, the office’s communications officer.
The office, which provides some countywide services and support for local school districts in Butte County and beyond, runs a Mini Corps program that offers tutoring to 8,000 migrant students across Northern California. Many of the tutors employed by the agency were themselves students in the migrant education program, which would have to shut down for the upcoming school year without its expected $8 million from the federal government.
“The way that we can’t help but think about it is, it’s a generational setback,” Souders said. “If you think of the number of students who would have eventually become teachers and have that pathway, that pathway is severed now until that program is reinstated.”
Many Butte County education staffers who were facing down unemployment likely worry that the same thing could happen again, Souders said.
“I don’t think there’s a situation where it’s going to be business as usual, because it’s already not,” he said.
Uncertainty is a primary effect of the funding freeze
Even when districts get access to the expected federal funding that was withheld for weeks, many now believe they have to prepare for similar disruptions to keep happening.
Hours after the Trump administration announced it would reinstate all the money it had frozen, Education Secretary Linda McMahon told a gathering of governors that the federal government was “well satisfied” with the spending review it conducted, and that something similar likely wouldn’t happen again next year.
But when Colorado Gov. Jared Polis asked for reassurance of clearer communication from the department going forward, McMahon declined to give it.
“No guarantees from me that we’ll eliminate all the communication gaps that do happen,” McMahon said.
Meanwhile, Russell Vought, Trump’s director of the federal Office of Management and Budget, has repeatedly said he believes the administration has the authority to withhold funds approved by Congress if it doesn’t agree with the allocation. Numerous courts and federal watchdogs have ruled that the Trump administration’s unilateral holding back of funding violates federal law and the U.S. Constitution—but Vought has said the administration plans to continue them across the government.
“These are programs that, as an administration, we don’t support,” Vought said of the seven frozen education grant programs in an interview with CBS on July 27.
The Trump administration has several paths it could take to further disrupt these funding streams. It could propose clawing back unspent funds from these programs as part of a package of education funding “rescissions” it reportedly plans to ask Congress to consider in the coming weeks. Last month, Congress approved rescinding $9 billion of current foreign-aid and public-media funding, marking the first time lawmakers approved a president’s rescissions proposal since the Clinton administration.
Pursuing a similar effort for these formula funds for education could be a tougher political lift, though.
“I think it’s very hard for the administration to tell Republican senators, we’re giving in to your request for funding, and then ask them to vote to go ahead and approve to rescind the funding,” said Sarah Abernathy, executive director of the Committee for Education Funding, a nonprofit advocacy coalition.
Still, she said, the administration could make that move anytime between now and June 30, 2026.
Alternatively, the White House could double down on lobbying lawmakers to eliminate or consolidate these programs in the next federal fiscal year, for which Congress is supposed to pass a budget by Oct. 1. All seven of the funding streams the Trump administration temporarily cut off are also slated for elimination in the White House budget proposal that would take effect for the 2026-27 school year.
A Senate committee last week approved its own budget that preserves level funding for all of the programs Trump wanted to cut—but the bill still needs to pass the full Senate, and a confrontation may be brewing with the House, whose Republican leaders have indicated they may be more sympathetic to Trump’s proposed cuts.
In Austin, Texas, leaders of the 73,000-student school district have told more than 100 staff members their positions will be cut at the end of the 2025-26 school year or even sooner.
While the federal funding that’s now flowing “provides short-term stability, it also requires us to plan thoughtfully for the future as we anticipate potential funding reductions in upcoming years,” Superintendent Matias Segura told families in late July.
Federal funding is no longer predictable and reliable
Generally, school districts get 8-10 percent of their budgets from federal sources. The rest comes from state investments and local tax revenue.
But in the last half-century, federal funding has largely been geared toward helping ensure high-need students—including those from low-income families and those with disabilities—can access the same educational opportunities as their peers. As a result, some states and districts depend on federal funding far more than others.
Federal funding makes up more than 10 percent of annual revenue for nearly a quarter of the nation’s 13,000 public school districts, a previous Education Week analysis of federal spending data from the 2019-20 school year found.
At the state level, public schools’ dependence on federal funding ranges from nearly 19 percent in Arizona and North Dakota to less than 6 percent in Connecticut and New Jersey, according to an analysis of 2021-22 school year data published this month by Education Resource Strategies, a consulting firm.
Catherine Pozniak, a school finance consultant who served as assistant state superintendent of education in Louisiana from 2017 to 2020, typically likens federal funding to savings bonds—predictable and reliable. That analogy no longer works, she said.
The Trump administration’s pattern of funding disruption “just makes it harder to get people to spend money well,” Pozniak said. “It sort of feeds [districts’] tendency to say, ‘let’s just hold onto this in case we need to have this money stretch out to next year.’”
Back in Slate Valley, Vt., district leaders have spent far more time than usual on contingency planning for what they now see as the likely scenario that titles II-A and IV-A—which fund professional development and academic enrichment—are on their way out.
That means saving as much money as they can from the grant funds that were just unfrozen so they can extend current employees for at least one more school year, said Olsen-Farrell, the district’s superintendent.
“We are planning as if we may not have $2.7 million in federal funds that we rely on as a small, rural high-need school district that already has spending challenges,” she said.
Many districts combine funds from a variety of federal and state funding streams to pay for priorities like staffing, curriculum, and technology. If some of those funding streams disappear, some districts could have no choice but to make sweeping cuts, even if partial funding remains, said Cechnicki from the New York school business officials association.
States may try to fill the gaps by ramping up education investments and bolstering reserve funds for districts to use in emergencies.
But given their own fiscal constraints, “I don’t think that there is a non-federal government partner that [districts affected by the funding freeze] haven’t considered who can step in,” said Abernathy, from the Committee for Education Funding. “That just means there’s going to be fewer education services provided.”