The Latest Updates
on Federal Education Grants
By Steven A. Spillan, Esq., CGMS,
The Bruman Group, PLLC

2025 was certainly an interesting year for federal education grants, starting with the current administration’s goal of closing the U.S. Department of Education (ED). Between multiple reductions in force (RIFs), various funding freezes, grant terminations, grant discontinuations, withholding of funds, and the longest federal government shutdown in U.S. history, federal education program administrators faced a challenging year. 

Operational Shift

ED cannot be closed without congressional approval. However, in its efforts to close ED, or at least minimize its federal footprint, the administration has entered into multiple interagency agreements with other federal agencies to shift day-to-day operations of various federal programs. This includes tasking the U.S. Department of Labor with administering career and technical education and adult education programs and delegating staff to the Treasury Department to address federal student loans. Rumor has it that ED next plans to transfer special education program administration to the Department of Health and Human Services (HHS). While some of these agreements have been challenged in federal court, and more lawsuits will likely follow, ED is still receiving funding from Congress and must maintain responsibility over those funds until Congress says otherwise.

Reductions in Force (RIFs)

ED has also laid off thousands of employees since the beginning of the year through RIFs. After an initial round of RIFs reduced the agency’s workforce by nearly 50% in February, the administration sent RIF notices to more employees in October while the federal government was shut down. Though the final approved funding bill to reopen the government reinstated the RIFs that occurred during the shutdown, and the initial RIFs were challenged in federal court, many former ED employees have already moved on to other employment opportunities.

Award Distribution Uncertainty

ED has also taken action throughout the year to review competitive and formula education grants to ensure they are aligned with administration policies. These reviews have resulted in the delayed distribution of certain K-12 formula funds and the termination or discontinuation of hundreds of discretionary grants, including funds awarded to increase mental health supports and professionals in schools, grants supporting deaf/blind programs, and teacher preparation funds. A key concern raised by the administration in terminating grants has been that funds are being used to support diversity, equity, and inclusion (DEI) activities, which ED views as contrary to federal law. Lawsuits have been filed against many of these grant terminations, with some being temporarily reinstated, but ED plans to review grants on an ongoing basis, which may lead to further cancellations. 

PRWORA Guidance

The administration also released guidance over the summer changing the implementation of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), which limits the participation of individuals without documented immigration status in many federal benefits programs. Under the prior, longstanding interpretation of PRWORA, requirements for immigration status verification did not apply to K-12 education, Head Start, Adult Education, and other programs. However, guidance issued by ED, HHS, and other agencies this summer introduced a new interpretation stating that some education programs do not fall under the umbrella of basic education as defined in Plyler v. Doe, which is exempt from PRWORA requirements. Based on the new interpretation, program administrators would be required to verify immigration status of participants in some education programs, like postsecondary career and technical education programs. The new interpretation is the subject of multiple lawsuits, and a preliminary injunction was granted for states that are parties to those lawsuits, pausing implementation of the new requirements for those states. The administration is challenging those injunctions as it hopes to move forward on enforcement.

Looking Ahead

All of this is to say that the landscape of federal education grants is in flux, and grantees and subrecipients need to stay actively informed as the Trump administration moves forward with its agenda in 2026 and beyond. As such, grantees and subrecipients must keep an eye out for press releases and guidance from ED, stay in touch with advocacy groups monitoring agency actions, and begin familiarizing themselves with procedures for the other federal agencies involved in the interagency agreements. Staying informed is the best way to handle additional changes that may be heading down the pipeline. 

Steven A. Spillan, Esq., CGMS, is a partner at The Bruman Group, PLLC, a Washington, D.C.-based law firm specializing in education, workforce and grants management.