Education Department Restructuring Leaves $12 Billion in Grants in Limbo
March 22, 2026 · 2 min read
Arthur Griffin
The ongoing restructuring of the U.S. Department of Education has thrown more than $12 billion in federal school funding into uncertainty, as major grant programs migrate to other agencies with no clear timelines for when competitions will resume.
K-12 programs including Titles I, II, III, and IV are being transferred to the Department of Labor. Community schools and mental health programs are moving to the Department of Health and Human Services. Native American education funding shifts to the Department of the Interior.
Which Programs Are Stalled
The disruptions extend beyond the organizational reshuffling. At least $2.2 billion in competitive grants have been discontinued outright. The Native Hawaiian Education Program and Alaska Native Education Program, each allocated $45 million, have not launched grant competitions since 2023 — meaning two full cycles of funding sit unawarded.
The TRIO program, which provides academic support to low-income and first-generation college students, remains in limbo despite a March 10 letter from 33 senators urging the administration to open the competition. The Child Care Means Parents In School program has been transferred to HHS with no indication of when its next funding round will launch.
States Begin Backfilling
Some states are stepping in to fill the gaps. Connecticut and Illinois have begun allocating state funds to cover programs that federal cuts or delays have disrupted. The administration has also introduced a $15 million Connecting Talent to Opportunity Challenge — a prize-based model that replaces traditional competitive grants with innovation awards.
What School Districts and Education Nonprofits Should Do
Experts recommend three immediate steps. First, develop contingency budgets that assume delayed or reduced federal funding through at least the end of FY2026. Second, document all compliance activities in detail, as federal scrutiny of grant recipients is intensifying. Third, explore state-level funding alternatives, as several states have created bridge programs specifically designed to offset federal disruptions.
Schools and education nonprofits can track the status of transferred programs and emerging alternatives on grantedai.com.