WASHINGTON – School districts nationwide are in a new state of financial limbo after the U.S. Department of Education missed a key deadline to allocate billions of dollars for programs supporting underserved children.
The agency hasn’t released roughly $6.2 billion across five federal programs, including awards meant to help states support migrant students and English-language learning, advocates say.
The money on hold represents more than a tenth of federal education funding for all states and territories, according to the Learning Policy Institute, an independent education research nonprofit. The policy change has impacted more than $400 million in education funding for schools in New York state, researchers estimated. In California, that number is over $800 million; in Texas, it’s roughly $660 million.
Typically, the allocations are made available to states and districts on July 1 each year. That timeline is important so that schools can budget for summer programs and the upcoming academic year.
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But a notice sent to congressional staff on June 30 and reviewed by USA TODAY warned lawmakers that states wouldn’t be getting their funding estimates on time. The money, the notice said, is under review due to the recent change in presidential administrations, and “decisions have not yet been made concerning submissions and awards for this upcoming academic year.”
“The Department remains committed to ensuring taxpayer resources are spent in accordance with the President’s priorities and the Department’s statutory responsibilities,” wrote Brandy Brown, a top Education Department official.
Asked about the funding pause, an Education Department spokesperson referred USA TODAY to the White House Office of Management and Budget. OMB spokespeople did not respond to requests for comment.
School funding advocates, including Carissa Moffat Miller, the chief executive officer at the Council of Chief State School Officers, were alarmed by the delay.
“These funds were approved by Congress and signed into law by President Trump in March,” Miller said in a statement. “Schools need these funds to hire key staff and educate students this summer and in the upcoming school year.”
States sue to restore school mental health grants
The new financial concerns for school leaders came as a coalition of states launched a legal battle to restore a separate stream of federal funding for schools.
In April, the Trump administration discontinued roughly $1 billion in grants meant to bolster the number of counselors and psychologists in schools. At the time, the Education Department argued the grants violated civil rights laws by incorporating diversity, equity and inclusion, or DEI. Grantees who had their contracts discontinued could appeal the decision.
Read more: Trump administration discontinues $1 billion in school mental health grants
New York State Attorney General Letitia James, a Democrat, called the reversal unconstitutional and ideologically driven.
“By cutting funding for these lifesaving youth mental health programs, the Department of Education is abandoning our children when they need us most,” she said in a statement.
Zachary Schermele is an education reporter for USA TODAY. You can reach him by email at zschermele@usatoday.com. Follow him on X at @ZachSchermele and Bluesky at @zachschermele.bsky.social.
This article originally appeared on USA TODAY: Billions in federal school funding on hold
