Three States Seek Waivers to Restructure Federal Education Grant Funds

Louisiana, Iowa, and Alabama are pursuing or have received approval for federal waivers that would allow them to combine multiple federal education program funds into pooled, state-directed accounts — a structural shift that could alter how grant money reaches schools and education nonprofits.

What the ESSA Waivers Would Change

Under the Every Student Succeeds Act, states can request flexibility in how they spend certain federal education dollars, how they assess students, and how they hold schools accountable. The three states are requesting authority to consolidate funds from multiple categorical federal programs into broader state-managed pools, giving state education agencies greater discretion over allocation.

This model moves away from the traditional structure where Congress directs funds to specific programs — like Title I support for disadvantaged students — with detailed spending requirements. Under a pooled approach, states could redistribute funds across priorities they determine locally, potentially redirecting money that currently flows through specific grant competitions.

A Broader Shift in Federal Grant Policy

The state waiver requests come alongside a wider federal effort to reshape education grant rules. The Trump administration has been moving from executive orders toward formal regulatory processes to implement policy changes in education funding. Routine grant competitions, including those supporting Native Hawaiian and Alaska Native education programs, have not launched on their normal schedules.

The Department of Education under Secretary Linda McMahon has also signaled openness to block-grant approaches that give states more control. For education vendors, nonprofits, and school districts that depend on categorical federal grants, the combined effect of state pooling waivers and delayed federal competitions creates meaningful planning uncertainty.

What Education Organizations Should Monitor

Organizations receiving federal education funds — or subgrants from state agencies — should track waiver activity in their state through the Department of Education's ESSA portal. States beyond the initial three may pursue similar flexibility, particularly as the administration signals receptivity to consolidated funding models.

Organizations whose contracts or programs depend on targeted grants like Title I should assess their vulnerability to potential redistribution and begin diversifying their funding base. Education grant seekers tracking policy shifts can find state-level analysis on grantedai.com.

For a deeper look at how ESSA waiver activity could reshape education grants nationwide, in-depth analysis is available on the Granted blog.