Despite ongoing efforts to transfer program responsibilities to other agencies, the U.S. Department of Education will continue to send billions of formula dollars for the current school year through its own online payments system this fall, the agency confirmed Monday.
Congress in February approved more than $12.5 billion for K-12 schools to flow to states on Oct. 1, including $10.8 billion through the Title I formula grant for schools serving low-income students and $1.7 billion through Title II for teacher professional development.
In a statement to Education Week, the department confirmed that those funds will go through the department’s existing G5 grants system, rather than through a portal run by the Department of Labor, where the Trump administration has moved most K-12 programs.
Competitive education grants, meanwhile, will be awarded by the agencies outside of Education where those programs have been transferred, a department spokesperson confirmed.
“We look forward to continuing our partnership with DOL and demonstrating the efficiency and effectiveness of our partnership to Congress and the American people,” wrote Savannah Newhouse, the Education Department’s press secretary, in a statement on Monday.
The assurance that the payments due to states on Oct. 1 will flow the same way as those that came July 1 comes weeks after the education agency sent dozens of its K-12 program staffers to work from other agencies’ buildings—the latest step in implementing a slew of “interagency agreements” that shift responsibility for managing education programs to the departments of Health and Human Services, Interior, Justice, Labor, State, and the Treasury.
The Council of Chief State School Officers, a membership organization for state education agency leaders, cheered the news that formula funding procedures will stay the same this fall, after months of speculation that big changes could be in store. The department had previously said “no decision had been made” about transitioning to the Labor system in time for Oct. 1.
“CCSSO and its members appreciate the U.S. Department of Education listening to feedback from state members and ensuring formula funds are sent through G5 on October 1,” wrote Carissa Moffat Miller, the organization’s CEO, in a statement to Education Week. “We will continue to work with the Department on a successful transition to new financial systems for future fiscal years.”
Communication of the decision appears to have been scattered. Spokespeople for several state education agencies told Education Week that as of Monday, they had received only verbal—not written—confirmation from the department that Oct. 1 funds would arrive in G5. Some state agencies had only heard the G5 announcement from a CCSSO dispatch. And the Georgia education department hasn’t yet received any notification, a spokesperson for the agency said Monday afternoon.
Still, the news comes as a relief to agency leaders who were concerned that abruptly transitioning to a new grants system would cause hiccups for states and school districts trying to access the money, said Amanda Peterson, North Dakota’s deputy superintendent of education.
“The decision to continue using G5 on Oct. 1 helps ensure continuity for school districts and allows us to plan thoughtfully for any future transition,” Peterson wrote in an email to Education Week on Monday.
A broader transition continues as formula funding stays put for now
Federal formula funding for K-12 education—including Titles I-IV, the Individuals with Disabilities Education Act, and the Rural Education Achievement Program—flows each year to state education agencies in two installments: one sent on July 1 and the other on Oct. 1. States then distribute the money to schools.
The Education Department previously announced to states in April that the July 1 installment would arrive in the same grant portal states had previously used. This year’s July 1 round included $8.2 billion for Title I and $500 million for Title II.
At the time, the agency said it hadn’t decided whether the same would be true for Oct. 1.
The department’s efforts to transition funding delivery to grants platforms managed by the Department of Labor have been rocky at times. Numerous state agencies reported experiencing weeks or even months of delays accessing formula funds for career-and-technical education last fall, the first time the department sent that money through the Department of Labor’s grants system.
The next round of CTE funds, by contrast, appears to have flowed to states through the Labor system without issue earlier this summer.
The same was true for the July 1 K-12 formula funding delivery through the Education Department’s G5 system, which state agencies have been using for years. That was a relief for educators across the country after the previous July, when the White House Office of Management and Budget abruptly withheld nearly $7 billion in formula funding, only to release all the money weeks later following bipartisan backlash.
The Education Department’s decision to keep existing systems in place for the rest of the current fiscal year’s funding suggests the transition may be more complex than officials have asserted at times.
“Given the lack of information and technical assistance provided to this point, it seems like the right choice to keep funds in G5 during this midyear allocation,” said Julia Martin, the policy director for the Bruman Group, an education law firm that represents states and school districts. “Still, federal agencies will need to carefully consider and address the many technical implementation questions and concerns before moving the funds in order for the shift to work at all smoothly.”
Education Department staffers “have been telling leadership at the Education Department for months that the Labor Department’s grant system is not capable of administering federal education funding of all types, not just Title dollars,” said Rachel Gittleman, the president of the union that represents Education Department staff.
Some state agencies that haven’t yet drawn down funds from other agencies’ systems may get the opportunity in the coming months as those agencies begin awarding new grants through dozens of Education Department programs. Several of the competitive grant solicitations said they’d prioritize applications from state education agencies, in keeping with the second Trump administration’s motto of “returning education to the states.”
That could mean more friction is on the horizon, according to Gittleman.
“Requiring states and grantees to use multiple platforms to receive federal education funding—and requiring staff to learn multiple pieces of software to do their jobs—is the very definition of inefficiency and waste,” she said.
