Federal spending is in the spotlight this year like never before, as the Trump administration has bypassed Congress and held up billions of dollars lawmakers had already approved for education.
Lawmakers on Capitol Hill are currently staring down a Sept. 30 deadline to fund the federal government for the new fiscal year, avert a shutdown, and appropriate funding for programs—a core function for Congress as prescribed by the U.S. Constitution.
That’s a tall task for a legislative body that has rarely met budget deadlines in recent years. As the new school year begins, school districts are bracing for more disruption of the federal funding status quo.
The outcome of the current budget negotiations in Congress is one factor that will determine the extent to which that status quo is upended in the coming months and years. Here’s a guide to what might happen in the next few weeks, and why it matters for K-12 education.
Which year’s budget is Congress currently debating?
Lawmakers began work in July on the federal budget for fiscal year 2026, which runs from this coming Oct. 1 through Sept. 30, 2026.
How will funding for the current school year be affected by these budget talks?
Allocations for most federal education programs in the upcoming federal budget would take effect for the 2026-27 school year. That’s because most federal investments in education are “forward-funded,” which means school districts get access to most of the money in the fiscal year after they’re appropriated.
But a House version of the budget under consideration includes language for “rescinding” more than $2 billion of funding Congress allocated during the current fiscal year. Schools are expecting that money—including nearly $1 billion nationwide for Title I—to begin flowing on Oct. 1.
If Congress agrees to roll back its previously approved investment, schools would get less money for the school year that’s just starting than the federal government told them earlier this year to expect.
What needs to happen before the federal budget is finalized?
The Senate and the House each need to pass their own appropriations bills, including the one that funds education. The House budget needs a simple majority to advance; Senate rules require 60 votes to approve budget legislation.
Then they’ll reconcile the differences before sending the final version to President Donald Trump’s desk.
At least that’s how the modern budget process, designed by Congress in 1974, is supposed to work. In reality, the decisions are often delayed and wrapped into massive last-minute spending packages rather than orderly legislation.
Lawmakers can also break out and vote on chunks of the full budget if some parts are more likely to garner broad approval than others.
What has the Senate done so far on education?
The Senate published its budget bill for education (as well as for the Labor and Health and Human Services departments) on July 31. The bill maintains level funding for most K-12 education programs and includes modest increases for Title I and the Individuals with Disabilities Education Act. It rejects the vast majority of the Trump administration’s budget proposals for education, including its pitch for billions of dollars of cuts and grant program consolidations.
It also includes new requirements for the Education Department to send funds to states and schools on time; maintain staffing necessary to execute tasks required by law; and prohibit the department from offloading core functions to other agencies—a response to the Trump administration’s recent school formula funding freeze and Education Department staff reductions.
The Senate appropriations committee, chaired by Sen. Susan Collins, R-Maine, voted 26-3 on July 31 to approve the budget bill, teeing it up for a full Senate vote in the coming weeks. Fourteen Republicans and 12 Democrats supported the measure.
What has the House done so far on education?
The House is moving more slowly on appropriations than the Senate. Members began circulating the budget bill for education on Sept. 1, and a subcommittee advanced it the following night for consideration by the full appropriations committee later in September.
The bill hews much closer to the Trump administration’s budget proposal than the Senate version does, though it also differs in key areas. The House bill proposes scaling back future Title I investments by $3.5 billion, trimming $30 million from annual funding for special education, and nixing grant programs worth billions of dollars for English-learner services and schools that serve as community hubs.
The House bill does not, however, include a block grant to states that Trump is seeking as a replacement for more than a dozen individual funding streams. It also softens the Trump administration’s proposal to slash more than two-thirds of the federal allocation for education research, instead reducing investment in the Institute of Education Sciences by roughly $50 million year over year.
What happens if Congress doesn’t agree on a budget in time?
The deadline for Congress to fund the government is Sept. 30 at 11:59 p.m.—the end of the current fiscal year. In the preceding days, if lawmakers fear they won’t be able to pass a full budget, they could instead pass a “continuing resolution”—maintaining current funding levels for a specified period of time, essentially extending the budget deadline. Continuing resolutions have become commonplace in recent years.
If lawmakers fail to agree on a budget or a plan to extend the deadline, the federal government will shut down. Top House lawmakers from both parties have already privately discussed extending the deadline with a stopgap measure through November or December, Politico reported.
If they’ve already passed portions of the budget, that could lead to a partial shutdown, in which some agencies have new funding to continue operating while others don’t.
On education, the House and Senate’s competing appropriations bills were very far apart as of early September.
What’s happened in recent years?
Last year at this time, Congress failed to pass a full budget. Instead, lawmakers approved a continuing resolution to maintain current funding levels until late December. As that date approached, they still hadn’t agreed on a final budget, so lawmakers approved another continuing resolution for three months. Then in March, they did the same thing again, extending the previous fiscal year’s budget levels through the Sept. 30 end of the current fiscal year.
That means the federal budget for the 2025 fiscal year was largely the same as the one for the previous fiscal year. If the same thing happens for the 2026 fiscal year, Congress will have essentially punted on enacting President Trump’s budget priorities.
In the 21st century, Congress has virtually never finalized the entire federal budget in time for the new fiscal year to begin. An analysis by the Peterson Foundation found that the federal government has been funded by continuing resolutions for increasingly large chunks of the fiscal year, including the entirety of 2025.
The most recent time lawmakers got close to following the formal appropriations process was in 2019, when Congress enacted five of the 12 appropriations bills before Sept. 30, and resolved the remainder of the budget by the following February. That process wasn’t without headaches, though—a December budget standoff over funding for Trump’s border wall led to the longest federal government shutdown in American history. No federal government shutdowns have happened since then.
What is impoundment, what are rescissions, and how do those fit in?
Impoundment occurs when the executive branch withholds or redirects spending approved by Congress without following procedures in federal law that require giving lawmakers 45 days of notice and the opportunity to approve or reject the changes.
President Trump and other administration officials have argued that the federal impoundment law, approved in the 1970s to rein in President Richard Nixon’s unilateral spending moves, is unconstitutional.
Trump’s second administration has moved aggressively, in education and other areas, to cancel billions of dollars in previously awarded federal grants; abruptly withhold formula funding allocated by Congress; and change funding regulations and procedures without notice.
Many lawmakers, including most Democrats and a small contingent of Republicans, have publicly pushed back on funding changes Congress hasn’t had a chance to approve or reject, arguing that they undermine the bipartisan appropriations process that’s currently underway.
The Trump administration threw another wrench into that process on Aug. 28, when it sent Congress a proposal to rescind $4.9 billion lawmakers already approved in March for foreign aid. Russell Vought, director of the federal Office of Management and Budget, has called this move the first salvo in what could be a series of “pocket rescissions,” because the now-frozen funding will expire on Sept. 30 even if Congress doesn’t approve the proposal by then.
The Government Accountability Office, the independent watchdog charged with enforcing federal impoundment law, says pocket rescissions are illegal. A handful of Republican senators have said the same in recent days. Democrats have threatened to withhold cooperation on approving a new federal budget unless they get assurances the Trump administration will commit to enacting Congress’ spending decisions.
But top Republicans on Capitol Hill have said they’re inclined to let the courts evaluate whether the Trump administration’s funding changes are breaking the law.
Will the U.S. Supreme Court weigh in on whether the Trump administration can unilaterally cancel spending approved by Congress?
Not for a while.
Several cases challenging Trump’s allegedly illegal impoundments have been winding their way through the courts but appear unlikely to reach the Supreme Court until next year at the earliest.
A federal court ruled in August that the GAO, the watchdog agency, is the only entity with standing to pursue a lawsuit over impoundment.
That office so far this year has issued non-binding decisions that five separate Trump administration funding changes—including cuts to grants for school modernization, Head Start early childhood education, and library and museum services—violated impoundment law. More than 30 additional investigations are underway.
The GAO’s top official, Comptroller General Gene Dodaro, has called suing Trump over impoundment a “last resort” he hasn’t ruled out. The only previous president to face a lawsuit from the comptroller general over impoundment was Gerald Ford, in 1975.
Dodaro was appointed to the role by President Obama. His 15-year term ends in December. President Trump will be tasked with appointing his replacement, who must secure Senate confirmation as well.
