Schools today face unprecedented financial and policy pressures. What should leaders do?
PreK-12 schools today face proposed federal funding cuts, grant withholding fallout and tremendous uncertainty. This series of financial and political pressures is unlike any in recent memory and has left school leaders busy both putting out fires and wondering what’s next.
While there are no simple solutions, you are not without options. Thoughtful strategies like contingency planning, seeking diversified funding sources and collaborating with peer organizations can help you navigate this genuine rough patch and come out stronger on the other side.
Keep reading to learn more.
Schools must navigate federal funding loss, unprecedented changes and uncertainty
School administrators were handed a previously unheard-of obstacle when the Trump administration decided to hold back roughly $7 billion in education grant funding typically disbursed annually on July 1. Although the federal funds were later released, many schools had already been forced to make painful budget cuts that continue to affect students and teachers alike.
Because of the grant withholding, schools didn’t make planned hires or fill open positions. And school leaders were forced to cut or dial back programs like student mental health support or free and reduced lunch, which may not be fully reinstated until the next school year begins.
Schools were also forced to borrow money to make up for the temporary budget shortfall. As a result, districts are on the hook for interest payments on any debt used to bridge the gap between July 1 and the date schools eventually received federal education grant money.
But while the education grant withholding drew the largest headlines, it’s not the only challenge leaders face. Schools are also navigating:
- Proposed budget cuts: The Trump administration is proposing a 15% cut to the 2026 education budget. Congressional Republicans want to go even further, with the House GOP backing a $4.7 billion cut to Title I funding for schools in low-income communities.
- Loss of teacher training grants: Federal grants to train teachers from diverse backgrounds were among those first cut by the administration when it took office. This is expected to hinder teacher recruiting and retention and also make it harder for schools to serve diverse student bodies.
- High H1-B visa fees: In September, the White House also announced it would seek to impose a $100,000 fee on new H1-B visas, severely restricting the ability of schools to seek out qualified teacher or administrative candidates from overseas.
- Special education cuts: Funding cuts for special ed, including laying off nearly all staff members in the Department of Education’s special education office, have affected not just public schools but private institutions as well.
- Immigration enforcement activity: Finally, many schools, especially those serving communities with a large number of immigrant families, are facing an unprecedented level of immigration enforcement actions. These activities have contributed to increased concern among both parents and children regarding potential detainment or deportation.
How can school districts overcome federal education funding cuts and policy uncertainty?
If you are showing up to work every day unsure of how to help your school or district navigate federal funding challenges and uncertainty, take heart. Action steps like budgeting for multiple scenarios, building new partnerships and refocusing on your core mission can alleviate some of the pressure you’re feeling and position your organization to not just survive, but even thrive.
Here are key actions to consider now:
1. Plan for change and map out contingencies
One of the most honest things anyone can say right now is that no one knows what’s going to happen. But that uncertainty doesn’t have to be paralyzing.
To help your organization prepare for a range of fiscal scenarios, create multiple drafts of your budget. Plan for multiple possibilities. Consider what could happen if the proposed education funding cuts do come to pass — but also outline alternative futures so you feel ready to address most major contingencies.
You can also use this work as the foundation for an overall change plan to help your organization establish a vision for how to move forward. Ideally, this strategic plan is a living document that you regularly refer to and update.
2. Document all your spending
With so much federal funding under review, expect that at some point, the Department of Education may want to audit your spending. Stay prepared by documenting where all of your federal funding is going, including details on where it’s spent and how that money impacts students.
Think of this step as an investment in risk mitigation. By documenting now, you’ll be more prepared if an audit does come, and you’ll also be able to approach that scenario with greater confidence.
3. Diversify your funding sources
The uncertainty around federal funding is a good reminder that no organization should rely entirely on one income source. To shore up your school or district’s financial position, start looking for new funding streams.
Whether you’re public or private, you’re not without possibilities. People care. Consider your community members: parents and caregivers, local governments, unions and local businesses are all invested in your students gaining a good education that prepares them to succeed.
Your task is to engage that community. Reach out to parents, PTA leaders, city leaders, local businesses, chamber of commerce, community colleges, nonprofit organizations, teachers or police unions and other individuals or institutions who play a significant role in your community.
Open up a dialogue around partnerships, shared resources or fundraising and see where it leads.
4. Focus on your core mission
Many schools have already made budget cuts and unfortunately, it’s likely that more may be coming. Take time to think carefully about how you can still serve your students to the best of your ability with the resources you do have.
Start having thoughtful conversations with students, parents and caregivers, community leaders and other invested parties to identify which parts of the educational experience you need to protect and what you can set aside. Ask the question: What is essential?
If you are forced to make cuts, this will help you do so in the least damaging, most effective way. Equally important, you’ll be better able to focus on what matters most if and when funding levels increase.
5. Collaborate with other schools or districts
Solidarity is one of the words of the moment. For school leaders, standing together with peer organizations can help blunt some of the pain schools or districts could face if left alone.
Collaborate to bulk-purchase supplies at a discount. Share resources. If you can’t afford to hire a full-time special education or music teacher, what about partnering with another school to split the costs so the teacher can work at both schools part-time?
This sort of collaboration starts with relationships, so talk to your peers about what you’re dealing with. Odds are, they’re in a similar boat.
What else should school leaders do to successfully maneuver through this challenging moment?
As you move to support your school or district through this challenging moment, consider that doing so isn’t just about what you do but how you do it. Here are some of the key mindset and attitude factors to be aware of:
- Acknowledge the unprecedented circumstances: So many of the current challenges have no real historical precedent. Schools are not used to ICE raids or federal grants being abruptly withheld. Be honest about that and then use that honesty to fuel conversations about how you can best serve and protect your students.
- Embrace open communication: Your team knows that times are strange, and so do students, parents and other community members. Lean into that by talking honestly about budget cuts and other challenges so that people understand not just what’s happening but why. Regular communication from your leadership team is essential here, but you may also want to consider bringing in an independent consultant to run focus groups in order to get unguarded feedback.
- Get creative: Most organizations face a certain amount of institutional inertia. But now is a moment to get creative. Challenge your existing processes and practices to identify where you can do things differently or find collaborations with other organizations to leverage shared resources. This is another area where an outside advisor can help — for example, by helping you find new efficiencies that let you redirect funds to more vital work.
- Roll with resistance: Resistance to change is inevitable. That’s okay. When you do hit obstacles, try to have patience with yourself and those around you, and refer back to your change plan to remember that you do have a roadmap here.
How Wipfli can help
Wipfli’s team includes former education professionals who are ready to help you navigate financial challenges, policy changes and uncertainty. Let’s talk about what your school or district is facing and find your path forward. Start a conversation.
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