State education officials nationwide say the U.S. Department of Education is blocking access to tens of millions of dollars meant for K-12 schools—an issue exacerbated by the Trump administration’s aggressive recent efforts to slash the federal agency’s workforce.
The problems have affected at least seven states. In court filings this week, education officials in California, New York, and Illinois said the federal government has failed to reimburse funds for school district expenses since early March—transactions that are typically routine. Kansas, Kentucky, Missouri, and Utah have experienced similar issues in recent weeks, representatives for their respective education agencies told Education Week.
The money in question comes from the relatively small sliver of leftover pandemic relief funds school districts and states have allocated and are waiting to “liquidate,” or spend. The delays are affecting programs including ESSER (pandemic relief for public schools), EANS (pandemic relief for private schools), and GEER (pandemic relief for state governors to spend on education). Also affected are remaining funds from the Homeless Children and Youth assistance program, approved as part of the American Rescue Plan in 2021.
In Illinois, education officials are waiting on roughly $8 million to cover district expenses like “transportation for homeless children, adaptive technology for students with disabilities, certification for teachers of English learners, and after school tutoring to address learning loss,” said Lindsay Record, a spokesperson for the state board of education.
“Impacted school districts may have to stop services paid for by these grants if funding does not flow,” Record told Education Week on March 26.
In Kansas, some literacy training programs for teachers may have to halt if the federal government doesn’t soon fulfill the state’s reimbursement request for $630,000 in ESSER and EANS funds, said Denise Kahler, a spokesperson for the Kansas education department.
“We cannot continue to carry a deficit budget indefinitely,” Kahler wrote.
California is waiting on $7 million from the federal government that is now weeks late, said Tony Thurmond, the state’s education chief, in a court filing on March 24. The state doesn’t have the money to help school districts follow a new requirement from the Trump administration to send cash to contractors and vendors before the federal government supplies reimbursement, Thurmond said.
“The new policy has forced the [California Department of Education] into a catch-22 situation,” Thurmond said.
Missouri is waiting on $5.6 million to reimburse public and private schools and to cover a state contract. Kentucky has $4.7 million in limbo, encompassing expenses for 19 districts.
Utah, meanwhile, has begun receiving ESSER and EANS funds after a delay. But the state hasn’t heard back from the department since early February about its own request for late liquidation of pandemic relief funds, putting $2 million for a school district and $536,000 for a state contract in jeopardy, said Ryan Bartlett, spokesperson for the Utah State Board of Education.
The U.S. Department of Education told state leaders earlier this month that recent staffing cuts affected employees overseeing pandemic relief funding for schools. “I understand the importance of states receiving requested reimbursements in a timely manner and staff are working to provide an update to states on what to expect,” Hayley Sanon, principal deputy assistant secretary in the department’s office of elementary and secondary education, wrote in a March 14 letter.
Sanon also wrote that “critical functions for elementary and secondary education will not be impacted by these cuts.”
A spokesperson for the department didn’t respond to requests for comment in time for publication.
Lingering pandemic relief funds now come with extra strings attached
In March 2021, Congress approved a massive economic stimulus package that included $130 billion in one-time funds for schools. Over the next 3 1/2 years, districts allocated the vast majority of those dollars to a variety of expenses from intensive tutoring to building renovations. The deadline for committing that money to expenses was Sept. 30, 2024, and the deadline for actually spending—or liquidating—most of it was Jan. 30.
But in many states, districts had a small amount of money left over that they had already agreed to spend on contracts that ended after the liquidation deadline had passed. The U.S. Department of Education, in 2024 and 2025, has granted “late liquidation” extensions for ESSER, EANS, and HCY to many states on behalf of their districts.
Then in February, the Trump administration abruptly announced a change affecting federal funding programs that had reached the late liquidation stage. Instead of simply entering the online federal grant portal and clicking to submit a funding request that’s typically fulfilled within a few days, recipients now need to submit receipts and wait for approval from a department staffer before accessing their money.
That change, including an unexplained switch to a new email address states had to use to submit reimbursement requests, prompted a round of confusion, Thurmond said in the court filing, which was among documents filed as part of a lawsuit 21 state attorneys general are pursuing over the elimination of nearly half of the U.S. Department of Education’s staff.
But the funding woes kicked into a higher gear, state leaders say, around the time the Trump administration announced the massive reduction in force at the Education Department. Most staffers in the agency office that was working with states on pandemic relief funds lost their jobs.
Illinois submitted requests for federal reimbursement on March 5 and 7 that still hadn’t been fulfilled as of March 26, Record said. Those reimbursements are typically processed within a few days.
Some state education agencies said they’ve heard that the department is processing reimbursement requests for the earlier rounds of pandemic relief funds before moving onto the more recent sets of pending reimbursements.
The ongoing funding disruptions may violate existing federal policy, said Julia Martin, legislative director for the Bruman Group, an education law firm that represents states and school districts.
U.S. Treasury Department agreements with states spell out the reimbursement process the federal government must follow when sending out grant money, typically specifying that states should receive education disbursements within a day. The federal Cash Management Improvement Act, meanwhile, says the federal government must pay interest if it delays payments to a grant recipient.
“I’m not sure there’s a plan to pay that out,” Martin said.
Federal funding for schools has been thrown into chaos in recent months
The current funding issues with pandemic relief funds aren’t universal. Spokespeople for 11 state education departments—including Colorado, Georgia, Idaho, Louisiana, and Rhode Island—told Education Week they haven’t experienced any recent delays in getting reimbursed for pandemic relief fund expenditures.
The disruptions appear to be a product of staffing challenges at the department, rather than an effort to penalize a particular group of states, Martin said. For instance, the problems are affecting small states and large states, as well as states with leaders from both parties.
Even so, the disruption marks the latest in a mounting pile of funding woes the K-12 landscape has experienced since President Donald Trump took office in January.
Thousands of school districts are still dealing with the fallout from abruptly terminated federal grants for priorities like teacher-preparation programs, principal training efforts, local food purchasing, electric school buses, and building upgrades.
On the day the Trump administration announced a massive round of layoffs at the U.S. Department of Education, Alabama state officials were briefly locked out of a payment system they use to pull down federal funds. Other states have experienced similar brief outages in the weeks since then, Martin said.
School finance officers are on edge about future disruptions, including to crucial streams of federal funding that so far haven’t been affected, said Kathleen Ehling, assistant commissioner for New Jersey’s education department.
“I am concerned that this confusion will result in impacts to NJDOE’s ability to draw down crucial funding, including but not limited to Title I funding, school and district staffing, and supplemental funding for disadvantaged groups,” Ehling wrote in a March 24 court filing.
