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Federal Policy Watch

Welcome to Federal Policy Watch, a regular blog series from OAESA designed to keep our members informed about federal decisions that directly impact PreK-8 education. These updates are provided by OAESA’s Federal Relations Representative, Dr. Nick Neiderhouse, and will highlight key policy developments, funding decisions, and national conversations shaping the work of school leaders. Our goal is to ensure you have timely, relevant information to navigate the shifting federal landscape with confidence and clarity.

Federal Relations Update -- July 2026

FY27 Pre-K–12 Appropriations

House

  • Congress continues to move the FY27 appropriations process forward, with both positive and negative developments.
  • The House Appropriations Committee approved its FY27 Labor-HHS-Education funding bill on a 34–28 party-line vote.
  • Positive Developments:
    • The committee rejected the White House proposal to consolidate numerous education programs into a block grant.
    • The committee provided modest funding increases for several education programs, including:
      • IDEA State Grants (+$35 Million)
      • Charter Schools (+$60 Million)
      • Head Start and Early Childhood Education (+$10 Million)
      • GEAR UP (+$6 Million)
      • TRIO (+$6 Million)
      • Impact Aid (+$5 Million)
      • Indian Education (+$4 Million)
    • While the increases remain limited, they are symbolically meaningful.
    • The committee also rejected the White House budget request to eliminate Student Academic Enrichment State Grants (Title IV-A ) and After-School Learning Activities (Title IV-B).
  • Negative Developments:
    • The committee cut Title I Grants to LEAs funding by approximately 10% (-$1.89 Billion).
    • The committee also eliminated funding for:
      • Professional Development State Grants-Title II-Part A (-$2.19 Billion)
      • English Language Acquisition Grants-Title III (-$890 Million)
      • Preschool Development Grants (-$315 Million)
      • Teacher and School Leader Incentive Grants (-$60 Million)
      • Full-Service Community Schools (-$150 Million)
    • These reductions remain deeply concerning and present challenges ahead.

Senate

  • The Senate continues to draft its version of the FY27 appropriations bill.
  • While no funding numbers have been released, early indications out of the committee are not encouraging.
  • Last year, Appropriations Committee Chairwoman Susan Collins (R-ME) and Ranking Democrat Patty Murray (D-WA) worked closely together on a bill that preserved education program funding and garnered bipartisan support.
  • This year, they do not appear to be on the same page on funding priorities or levels, including education.
  • Congress will likely require one or more Continuing Resolutions (CRs) to prevent a government shutdown when the fiscal year begins on October 1.
  • A final FY27 funding bill isn’t expected to be completed until a lame duck session after the November mid-term elections.

Action Alerts: FY27 Federal Education Funding (see charts at the bottom of this post)

  • Given the appropriations situation, NAESP is sending out two Action Alerts: 1) for the full House and 2) for the Senate Appropriations Committee
  • House Alert
  • Senate Committee Alert
    • As the Senate Appropriations Committee finalizes its FY27 funding recommendations, contact your Senate Appropriators using this email template and urge them to protect and strengthen federal Pre-K–12 education investments.
    • Sent to members in states with senators on the Appropriations Committee
      • If your Senator is not on the Senate Appropriations committee, you will not be able to complete the Senate Appropriations Action Alert.

FY26 Formula Funds

  • The Department of Education intends to release FY26 formula funds on schedule on July 1.
    • The Department of Education is making changes to its grants management system, which could result in technical glitches that could affect certain programs or states but all appears to be proceeding smoothly.
    • The second tranche of funding will go out on October 1.
  • The Department of Education learned important lessons about the local consequences of even temporary delays based on the formula funding they withheld for weeks last summer.

Special Education Transition to HHS

  • Since her confirmation hearing, Secretary McMahon has expressed interest in moving special education programs to the Department of Health and Human Services.
  • In June, Secretary McMahon announced that move in the latest of a series of “Interagency Agreements” that has shifted program operations out of the Department of Education to other cabinet agencies.
    • Special education was the last major K–12 program still housed within the Department of Education.
    • The administration will move special education activities to HHS.
    • Special education is not going to the Department of Labor where the other main K-12 programs are being sent.
  • There is bipartisan concern in Congress about this move.
    • Senate HELP Committee Chairman Bill Cassidy (R-LA) and Senate Appropriations Committee Chairwoman Susan Collins (R-ME) have signaled their disfavor with it.
    • The entire Senate Democratic caucus sent a letter to Secretary McMahon demanding the move be immediately reversed because it violates the 2004 IDEA statute.
    • Disability advocates are strongly opposed to the move because they believe IDEA is an education law and not a disability law. They also have concerns with HHS Secretary Robert F. Kennedy Jr. overseeing the program because of past comments about disabilities and autism.
  • The transition is not expected to take effect until next year - July 2027.

State Screen Time and Online Safety Legislation

  • The House swiftly passed the Kids Internet and Digital Safety (KIDS) Act.
    • The bill would:
      • Require online platforms and device manufacturers to strengthen safety features and parental controls.
      • Establish new age verification requirements.
      • Require AI chatbots to disclose to minors that they are interacting with artificial intelligence.
    • Senator Ted Cruz is developing separate Senate legislation known as the Kids Online Safety Act (KOSA) which is focused on online child safety.
    • Congress continues to move quickly in response to growing public concern about children's online safety.

FCC and E-Rate

  • The Federal Communications Commission (FCC) plans to conduct a comprehensive review of the E-Rate program, examining both its original design and long-term implementation.
  • The review will evaluate:
    • How the program distributes funding.
    • Whether higher-poverty schools continue to receive appropriate support.
    • The program's long-term future.
  • There is concern that this comprehensive review is part of a FCC plan to sunset the program.
    • Eliminating E-Rate would significantly reduce schools' abilities to provide essential 21st-century connectivity and technology services.
    • The FCC will open a formal comment period in the near future to get public input on these issues. NAESP will submit comments and will encourage affiliates and members to do likewise.

Department of Labor

  • President Trump nominated Keith Sonderling to serve as Secretary of Labor.
  • Sonderling has served as Acting Secretary following the departure of Lori Chavez-DeRemer and has led the department during her absence.

Federal Relations Archived Updates:

Questions can be directed to OAESA Federal Relations Coordinator: Dr. Nick Neiderhouse at nneiderhouse@rossfordschools.org

FY 27 Key Programs
FY 27 IDEA Funding
FY27-Other-Programs-Funding
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