Navigating the U.S. Department of Education Shake-up
On April 3, more than 150 ed-tech leaders gathered to discuss the recent changes taking place in the U.S. Department of Education and the potential impact on districts and ed-tech companies. The session included a briefing on potential changes at the federal level as well as a peer-to-peer conversation regarding how the level of uncertainty and the potential changes are affecting ed-tech organizations.
Peer-to-Peer Insights from the Session
- With many districts feeling uncertainty regarding federal funding, 53% of ed-tech leaders indicated that their district customers are "in a holding pattern" regarding purchasing decisions, while roughly a quarter (28%) indicated that districts have already begun making spending cuts. Fewer ed-tech leaders reported that their districts are in a use-it-or-lose-it mindset (6%) or business as usual (10%). Fortunately, most districts are still communicating with vendors during this period, with only 3% of ed-tech leaders indicating that their district contacts were not reachable.
- Despite recent executive orders, most ed-tech companies are unlikely to make changes (45%) or have decided not to make changes (15% to their product in order to comply with federal or state-level policy. Meanwhile, 20% have made changes or are likely to make changes (20%).
- Ed-tech companies seem more likely to adjust their go-to-market strategy to address federal and state policy rather than adjust their products. Most companies have already made changes (28%) to their GTM or are likely to make changes (34%). About a quarter (28%) are unlikely to make changes, while another 10% do not plan to change their GTM.
- The current environment and market uncertainty is taking a toll on employee morale and motivation. Most ed-tech leaders indicated that the situation is having a negative impact (62%) or significantly negative impact (13%) on morale and motivation. A quarter of ed-tech leaders said that employee morale and motivation have not yet been impacted.

Key Facts Regarding the Department of Education Shake-Up
The U.S. Dept. of Education Cannot Be Eliminated by the President
This would require an act of Congress, but it is unlikely to occur based on the current composition of the Senate. However, the DoE could be significantly weakened due to staffing cuts.
Title I and IDEA Would Remain Intact Regardless of the Fate of the DoE
A president cannot eliminate such offices or programs within the DoE without an act of Congress. These programs have bipartisan support among Congress and their constituents and are unlikely to be eliminated. There are early indications that the President’s budget recommendations will include level funding for Title I and potential increases for IDEA.
Congress Controls Spending, Not the President
The Constitution dictates that Congress has the power to set budgets and control government spending. This is one of the main reasons why changes to key education programs will be difficult for the administration to enact.
Moving Title I or IDEA to Another Department Via Block Grants Seems Unlikely
There has been some discussion about moving these programs to other departments, such as the Department of Health and Human Services, and reducing federal government involvement by distributing funds via block grants to the states. Such moves would require an act of Congress, and seem unlikely for the reasons mentioned above. If these changes were to occur, it could create delays in disbursements as these new processes are created. However, this scenario is unlikely to occur.
The President Cannot Dictate What is Taught in Schools
Federal law is explicit in prohibiting the federal government from withholding funds in order to undermine local control and academic freedom. Prior attempts have been struck down by the courts. However, if the Administration is determined to press its agenda, we could see it target what it labels as civil rights violations—particularly those related to conservative policies on race and gender. These disputes could likely end up in lengthy court battles, which may have at least a temporary impact on funding for the districts or states in question.
The President Can Legally Withhold Funds from States Only Temporarily
Federal law states that a president can withhold funds for only 45 days, after which those funds must be released unless Congress decides to approve the particular withholding. The current administration seems to be challenging this law with the cancellation of remaining Education Stabilization Fund extensions, as well as the threats to withhold funding to states who fail to certify that they will eliminate DEIB practices. It’s not yet clear how the courts might intervene in these situations. Several states are already considering legal action.
Uncertainty Regarding Federal Funding Will Likely Cause District Purchasing Delays
In broad strokes, federal funding accounts for about 11% of K-12 funding sources, with the remainder roughly split between state and local governments. (This is not counting pandemic-related funds). It’s important to keep in mind that these percentages vary widely depending on location and demographics. For most districts, the 11% of their budget coming from the federal government has a meaningful impact on their purchasing decisions.
Funding Uncertainty May Affect Some Products and Services More than Others
Core instructional materials, student information systems, and summative and benchmark assessment products may see limited impact. Supplemental and intervention programs, tutoring, afterschool learning, SEL programs, and teacher training may face purchasing delays from districts due to federal funding uncertainty.
UPCOMING WEBINAR
Leadership During Uncertainty
Join us for another Collective Conversation, as we host a follow-up discussion regarding the ongoing changes at the federal level, and how they impact districts and ed-tech companies.
Thursday, May 1
1:00 PM EDT / 10:00 AM PDT
About Our Collective Conversations
These sessions are designed to be highly interactive, fostering an engaged dialog among participants. Seats are limited and we ask that attendees commit to active participation during the session.
Please note: We will be recording these sessions and will be making the recording available to all registrants.
Resources
FAQs: The US Department of Education and the Trump administration
Brookings Institution
Can Trump Do That? Which Actions on Education Are Legal, and Which Ones Aren’t
Education Week
A guide to what the U.S. Education Department does (and doesn't) do
Nation Public Radio (WBUR)
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