The U.S. Department of Education on Tuesday touted its decision to give Iowa more control over spending federal education dollars—but the specifics of the newly approved flexibility fall far short of the Trump administration’s stated goal of converting most federal education funding to block grants.
During a Jan. 7 press conference at Broadway Elementary School in Denison, Iowa, Education Secretary Linda McMahon announced that she’s using her legal waiver authority to allow Iowa’s education agency to combine a small portion of the funds it receives from four separate federal grant programs into a single block grant. (See below for McMahon’s letter granting this waiver.)
McMahon framed the decision as “a groundbreaking first step that gives state leaders more control over federal education dollars.” McKenzie Snow, the director of Iowa’s state department of education, said the waiver will allow the state to cover the costs of a literacy initiative with a single funding stream, rather than combining eight smaller sets of funds that each carry different requirements.
The waiver approval appears to mark the first time since the 2015 passage of the Every Student Succeeds Act that the federal government has used its authority under that law to allow a state to consolidate funding.
But, in contrast with proposals the state put forward roughly a year ago, the new federal approval touches only 5% of Iowa’s overall allocation of federal education funds, the part that’s set aside for the state education agency. The bulk of federal dollars that flow to school districts each year—$900 million worth—will retain their current structure and spending and reporting requirements.
This announcement could signal an acknowledgment from the department that its legal authority to flatten discrete funding programs and implement unrestricted block grants without congressional approval is limited, said Anne Hyslop, the director of policy development for the nonprofit advocacy group All4Ed, and a former senior policy adviser at the Education Department who helped implement the Every Student Succeeds Act.
It also foreshadows an uphill battle for other states aiming to convert federal education funding to block grants, including Indiana, which submitted a request for that flexibility, along with relief from certain school accountability requirements, in October.
“It could be very challenging from a political standpoint to give Indiana a bunch of flexibility that they told Iowa no to,” Hyslop said.
That doesn’t necessarily mean Iowa and other states are giving up on pursuing broader discretion to invest federal education dollars, though.
Separate from the waiver approval, McMahon also simultaneously announced she’s approved Iowa to join 10 other states currently participating in the department’s Ed-Flex program, which gives state education agencies the authority to waive certain spending regulations for individual districts.
Hypothetically, Iowa’s education agency could aggressively use that authority to let school districts effectively convert their own allocations of federal dollars into block grants, said Catherine Pozniak, an education funding consultant and former assistant superintendent of education in Louisiana.
That would represent a departure from how states have used that program in the past. But, noted Pozniak: “Who is going to stop them?”
Consolidation of Iowa’s federal funds will be limited in scope
The Trump administration has been pushing to dramatically shrink the federal footprint in K-12 education, including by simplifying disparate sets of federal funds into a single funding stream.
But lawmakers so far haven’t endorsed the education block-grant concept, instead retaining separate grant programs for education priorities like professional development, English-learner services, academic enrichment, and before- and after-school programming.
McMahon last July began urging states to use the department’s established mechanism for seeking waivers from federal education law to bypass restrictions on how specific sets of federal dollars for school districts can be spent.
Prior to last summer, Iowa officials signaled that they wanted McMahon to let them spend all of the state’s federal education money for school districts without the restrictions tied to specific programs. But Iowa’s formal request in September ended up being more modest.
Federal law sets aside 5 percent of the total statewide allocation for Titles II, III-A, IV-A, and IV-B for the state education agency. Out of that set-aside, 80 percent is reserved for “state activities,” including support and technical assistance for school districts. The remaining 20 percent is for administrative costs.
In Iowa, the 5-percent set-aside amounts to:
- $803,749 for Title II-A, which funds professional development;
- $225,527 for Title III-A, which pays for English-learner services;
- $397,492 for Title IV-A, which covers academic enrichment and student support; and
- $380,891 for Title IV-B, which funds before- and after-school programs.
With the newly granted waiver, the state can now use its discretion to invest all of those dollars as it sees fit, as long as all of the spending falls within the requirements of at least one of the individual programs.
That could be beneficial to the state in the long run, said Pozniak, who often advises states to get creative with their state activities dollars.
Hyslop, on the other hand, worries that the state could use the flexibility to stop dedicating specific state-level investments to staffing and programs that serve English learners as required under Title III.
“Title III is specifically focused on one population of students that has additional needs,” Hyslop said. In her view, Iowa “didn’t do a good enough job of justifying why they even needed this more limited waiver.”
Obscure department mechanism offers a potential alternative to funding changes
In addition to approving Iowa’s waiver request, the department also allowed the state to join 10 others currently participating in the Ed-Flex program, which gives states the authority to waive certain federal spending requirements for school districts on a case-by-case basis.
States certified for Ed-Flex collectively approve hundreds of requests a year from districts seeking more time to carry over unspent federal funds from previous years or more flexibility on spending certain subsets of bigger grants.
The 10 states currently participating are Delaware, Georgia, Indiana, Kansas, Massachusetts, North Carolina, Pennsylvania, Texas, Vermont, and Wisconsin. Iowa is the first state to gain the distinction since McMahon became secretary.
Ed-Flex works best when federal monitors ensure that states are using it to reduce unnecessary red tape, rather than to circumvent necessary regulations, Hyslop said. “I do question this department’s ability to monitor and exercise oversight,” she said.
She envisions more states potentially following the Iowa roadmap—and the department’s stated recommendation for joining Ed-Flex. Twelve Republican state education chiefs wrote to McMahon last January endorsing the conversion of federal education investments to block grants.
So far, aside from Iowa, only Indiana and Oklahoma have formally requested to consolidate funds. Kansas requested a waiver related to school accountability but isn’t seeking permission for any funding changes. Oklahoma’s education agency, then led by Ryan Walters, had also sought to administer state assessments multiple times a year, and to eliminate the requirement that the standardized test receive federal approval.
In the immediate future, Hyslop doesn’t see the newly announced flexibility for Iowa as transformative.
“ESSA already did so much of the work to return education to the states,” she said.
