In the architecture of American public education, federal dollars have long served as both scaffolding and safety net. They may not be the foundation—state and local funds hold that weight—but they have kept the structure from cracking where inequities run deep. Now, with mounting political momentum to restrict or reduce federal education funding, states find themselves at a familiar crossroads—this time, without a guide rail.
Federal contributions to K–12 public education typically make up 7% to 10% of district budgets. That support flows through targeted programs: Title I for low-income students, IDEA for students with disabilities, and funds for English language learners. For districts serving students with the greatest needs, these federal streams are vital tributaries that keep the entire system flowing.
In March 2025, Congress passed a Continuing Resolution (CR) to fund the federal government through September, maintaining baseline education support—for now. But other developments signal a more austere future. Proposed legislation introduced in the House—H.R. 369—calls for the elimination of the U.S. Department of Education altogether. Meanwhile, a coalition of 16 states and the District of Columbia is suing the federal government after it abruptly froze access to remaining COVID-19 education relief funds. Plaintiffs argue the action violates federal law and threatens already underserved school communities.
If the federal tide recedes, states must reckon with the shoreline it reveals. Public education funding across the U.S. is a patchwork—deeply uneven, stitched together by local property taxes that tether a child’s academic opportunity to the affluence of their ZIP code. In nearly half of U.S. states, students from low-income families receive fewer dollars in combined local and state funding than their wealthier peers, according to analysis by the Urban Institute.
The consequences are not theoretical. In February 2023, a Pennsylvania court ruled that the state’s education finance system violated constitutional rights, failing to provide students in poor districts with equal access to a quality education. Kentucky is now facing a similar lawsuit brought by students who claim state lawmakers have neglected to update the school funding formula for more than three decades.
Some states, to their credit, have begun to revise their blueprints. Illinois introduced the Evidence-Based Funding Formula in 2017—a method that allocates funds based on specific cost factors shown to improve student outcomes, like smaller class sizes and support for English learners. Nevada and Michigan have taken similar steps to shift away from antiquated models, replacing static formulas with dynamic, weighted systems that respond to student need.
Still, these examples are more exception than rule. Reforming education funding is politically delicate. Adjustments often pit suburban districts against urban and rural communities. Incumbents are wary of being cast as redistributors of local wealth. And yet, as federal support becomes less reliable, states are being drawn—slowly, inevitably—toward policy reckoning.
School budgets negotiated this spring may experience unusual tension. Superintendents and state lawmakers are preparing for contingencies: What happens if federal contributions shrink further next fiscal year? Which programs will be prioritized? What will be sacrificed? While this moment presents budgetary challenges, it also opens a rare policy window. The federal government’s retreat may force states to confront a long-ignored question: Should a child’s chance at a quality education be determined by the tax base they are born into?
How states answer these questions remains to be seen. But as the federal current shifts, statehouses across the country are being asked—some gently, others with urgency—to redraw the lines of fairness, and ensure public education does not remain a promise kept only for some.