School districts that collectively enroll roughly 1 in 7 of the nation’s K-12 public school students will begin going without routine federal payments in the coming days as the government shutdown drags on—and fears among districts and advocates are growing that the funding could cease altogether now that the Trump administration has laid off all the staffers who manage it.
More than 1,000 school districts nationwide qualify for the Impact Aid program, which Congress established in 1950 to make up for districts’ lost local property tax revenue in places with nontaxable federal land. Districts that have military bases, tribal lands, national parks, veterans’ hospitals, and other federally owned properties within their boundaries receive monthly payments through the program, which amounts to nearly $1.63 billion a year.
On Friday, the Trump administration sent “reduction in force” notices to all the roughly 15 federal employees who administer the Impact Aid program, as part of layoffs of all but a handful of director-level staffers in the Department of Education’s office of elementary and secondary education, according to current and former department staffers and education advocates.
A federal judge on Wednesday afternoon temporarily halted those layoffs across the federal government, but her order isn’t the final word.
If the federal government ultimately prevails, those workers will remain employed until Dec. 9. But they’re furloughed until the government shutdown ends. It’s not clear whether the administration would walk back the layoffs altogether once Congress agrees to a funding deal, allow affected employees to return only until their 60-day notice period ends, or immediately place them on administrative leave until their last day as Education Department employees.
If the latter scenario happens, the department would have no staffers to send out Impact Aid funds. The department hasn’t specified whether or how it would continue carrying out programs mandated by law.
“It’s like having a football, the coach, and the assistant coaches but not a football team,” said Cherise Imai, the executive director of the National Association of Federally Impacted Schools, the main advocate for Impact Aid dollars.
Some districts rely on Impact Aid for a substantial chunk of their spending. The Todd County district in South Dakota derives nearly 40 percent of its annual operating budget from Impact Aid funds, including 53 percent of its spending on school building infrastructure, 25 percent of special education investments, and 11 percent of food-service-program costs.
More than 90 percent of the district’s students come from low-income families, and more than 1,600 of its 2,100 students live on the Rosebud Lakota Sioux Reservation.
“It definitely is not supplemental funding to us,” said Chad Blotsky, the district’s chief financial officer. “It’s pretty essential.”
The Department of Education didn’t respond to a request for comment on the status of Impact Aid payments during the shutdown or future plans for the program. In a social media post on Oct. 15, Education Secretary Linda McMahon said “no education funding is impacted by the RIF,” but didn’t specify how the department will maintain grant programs without staffing.
Unprecedented layoffs during shutdown threaten future funding
Whenever the threat of a federal government shutdown looms, Impact Aid is always top of mind for education advocates.
That’s because, unlike most federal education funding that goes out well in advance of when districts spend it, Impact Aid payments go out monthly throughout the year, with the exact monthly payment dates varying from one district to the next.
Some districts were expecting a payment as soon as this week that is now on hold until at least after the shutdown ends. The payment schedule is less predictable when Congress has appropriated money via a stopgap “continuing resolution"—as it had for the fiscal year that ended Sept. 30—rather than a final budget.
Districts that rely heavily on Impact Aid have already begun to tighten spending and pause construction projects until the shutdown is resolved.
If payment delays persist, some would likely have to tap into emergency reserves or take out loans to avoid missing payroll obligations.
The Todd County district would have to start cutting culturally responsive programming and mental health services for its primarily Native American student population if its next expected payment of $7.5 million doesn’t flow by December, Blotsky said.
A notice on the Education Department’s Impact Aid page says that once the shutdown ends, the agency will expedite Impact Aid payments to districts that missed theirs, with special attention to those with a “time-sensitive need.” That’s how it’s worked after previous shutdowns.
But unless the Trump administration reverses its reductions in force, or a court prevents it from carrying them out, all the people equipped to process and prioritize districts’ Impact Aid applications will either be on leave or on the verge of departing the agency.
“The program would stop,” Imai said.
That would amount to a more radical policy change for Impact Aid than anything previously endorsed by the Trump administration, considered by Congress, or mentioned in Project 2025, the Heritage Foundation-led conservative policy document guiding much of the Trump administration’s agenda.
The Trump administration’s budget proposal earlier this year maintained level annual funding for the program. A budget bill advancing through the Senate before the shutdown mimicked the Trump allocation for Impact Aid, while a House version included a slight increase of $5 million for the program.
Project 2025, meanwhile, calls for cutting funding for Impact Aid and moving its staff to two other agencies but doesn’t advocate nixing the program altogether.
Program with bipartisan support faces uncertain future
Impact Aid consists of four different sets of funds districts can spend on virtually anything, from salaries to instructional materials.
Basic support payments, the largest of the four, go to districts based on the number of enrolled students who are “federally connected,” which means their parents live or work on federal property or tribal lands or serve in the military.
Federal property payments go to districts with more than 10 percent of their real property value owned by the federal government.
Districts receiving one of those two sets of funds also get extra money for each child with disabilities. And districts with a large number of federally connected students also get payments for improving their school buildings.
The 1,073 districts that receive Impact Aid funding collectively enroll nearly 7.3 million K-12 students, or close to 15 percent of the nation’s public school enrollment. More than 600,000 of those students, including 51,000 who have disabilities, are designated as federally connected.
Federal land makes up single-digit percentages of land in some districts that receive Impact Aid and virtually all of the land in other districts. As a result, some districts get only a few hundred thousand dollars from Impact Aid each year, some get a few million dollars, and a handful get more than $10 million apiece.
Three states—Arizona, New Mexico, and Texas—get more than $100 million each in Impact Aid payments for their schools, according to an analysis by the federally impacted schools association. Another five—California, Montana, New York, South Dakota, and Washington—get between $50 million and $100 million a year. All but two states have Impact Aid districts.
The program has long-standing support from lawmakers across the political spectrum. On Oct. 1, 20 Senate Democrats and six Senate Republicans signed a resolution honoring the 75th anniversary of Impact Aid.
“For the past 75 years, the Impact Aid Program has helped millions of students across our nation access quality public education, regardless of where they reside,” wrote Sen. Mazie Hirono, D-Hawaii, who co-led the resolution.
In a statement to Education Week on Wednesday, Hirono defended the 75-year-old program and urged the department to “reverse these harmful cuts.”
Superintendents who are new to their districts regularly rely on federal Impact Aid staff to help them understand the process for securing the funds, Blotsky said. That knowledge is particularly crucial before January, when district applications for the next rounds of Impact Aid funding are due to the agency.
“With nowhere to turn for answering questions, or even to know if that process is going to be delayed, there’s just a lot of uncertainty,” Blotsky said.
