Navigating funding reforms for K-12 education in 2025 and beyond

K-12 schools are anticipating funding changes over the next several years following the potential restructuring of the federal Department of Education. Although the United States’ new presidential administration has not yet made changes that affect education funding directly, a previous pledge to dismantle the DOE suggests that most federal education funds will be redirected to the states through block grants, while others may be reduced or eliminated.

With more flexible funding opportunities brought to the states, districts may have the opportunity to bolster many of their education priorities, including CCR programs. At the same time, districts may face challenges securing sufficient funds from local sources, potentially leading some states to backfill federal funding gaps with state dollars or by cutting services. Federal support for school choice programs also poses potential challenges to public schools, as competition for funding and enrollment increases.

We’ve compiled many of the essential projections schools should be mindful of heading into 2025 and beyond, and how schools can best navigate the uncertain time ahead. 

Increased funding opportunities

While the future of the DOE remains unknown, the administration has made its top educational priorities clear: career and technical education (CTE), STEM, ECE, and school choice. These initiatives, especially CTE, will most likely be backed by increasing federal and state funds, as demonstrated by the president’s previous term. 

Here’s what schools should know about projected funding opportunities for specific programs:

CTE and CCR

Federal funding for CTE programs will remain steady and likely increase in the next several years, reflecting the administration’s commitment to building a workforce of high-demand jobs in the trades and technical fields. Perkins V, the largest source of federal funding for CTE programs, will either remain intact at the federal level or be diverted to the states to help local governments build CTE programs that meet specific state labor market needs. This underscores the administration’s broader agenda of enabling states to “prepare students for great jobs and careers, supporting project-based learning and schools that offer meaningful work experience.” 

While CTE programs typically spearhead these efforts, CCR programs may be closely aligned and eligible for funding under Perkins V and related federal CTE funds–especially CCR programs that focus on nontraditional careers, project-based learning, and vocational skills. States have already shown support for these initiatives by introducing new CTE-related legislation that could open up new funding pathways for districts with CTE and CCR programs. Backed by state and federal support, districts can remain optimistic about future funding opportunities for their career-oriented education programs.

STEM

The administration’s historical support for STEM programs, particularly those in underserved areas, suggests ongoing funding for STEM programs in the years ahead. New state STEM grants will enable schools to recruit more students to their programs and focus on building skills for high-demand jobs in technical fields, especially those that relate to their state’s specific workforce needs. 

Early childhood education

As large funds like CCDBG and Head Start maintain bipartisan support, it’s unlikely that any drastic changes will occur in federal funding for early childhood education programs. Still, if federal funds are cut or reorganized, schools may need to seek ECE funding through state grants. Some states have chosen to raise taxes to generate more local funds for ECE to offset cuts that would not otherwise be covered by grants or existing local funds. Fortunately, a projected increase in the federal childcare tax credit would make early childhood education more affordable for most families. On a more granular level, schools may also have access to new ECE grants that focus on early exposure to career preparation and STEM. 

Changes in funding sources for school districts

The potential consolidation of federal education funds, including Title I, has left many school leaders uncertain of the ramifications to their already-thin budgets. Although only about 10 percent of school funding comes from federal sources, even a small cut to this source could have a large impact on schools that aren’t easily able to backfill gaps. 

While districts can be optimistic about increased grant opportunities, many will need to diversify their funding sources through taxpayer dollars, local education programs, and private organizations. Community grants that focus on specific education initiatives, such as after-school programs or food security will likely be a top target for public schools in the years ahead. 

Districts may also benefit from pursuing private funding streams through foundations, corporate sponsorships, individual donors, and nonprofit organizations. While these funds may be able to bolster public schools’ general budgets, most private entities provide funds for specific educational purposes–like enhancing STEM programs or improving school infrastructure. 

Increase in school choice 

Aside from the changes in funding sources, districts can expect a dramatic increase in school choice as more public resources are directed towards private institutions and homeschool education. Under the anticipated expansion of school choice programs, districts will face rising competition with private schools as they become more affordable. Federal school choice policies would allocate more funds to state-run vouchers, education savings accounts, and tax credits, which incentivize donations made to organizations that offer scholarships to private schools. Together, these federal and state-backed policies will help families cover the costs of private education including tuition, tutoring, transportation, technology, and more. 

As private education becomes more accessible, districts may see a drop in enrollment, which can negatively impact schools that operate on a per-pupil funding model. Public schools can mitigate enrollment shifts by proactively strengthening their offerings and adopting some of the hallmarks of private education to remain competitive. This could mean advancing specialized programs and extracurriculars, reducing class sizes, and implementing more student-centered learning methods.

Challenges and opportunities for CCR programs

The upcoming changes in federal education funds will bring challenges and opportunities to school districts, requiring leaders to stay informed and agile with their funding strategies. Diversifying funding sources and keeping school-choice enrollment shifts at bay will be the most pressing challenges for districts in the next several years. Targeting local funds and making public school programs more competitive should be a top priority for districts looking to hedge against potential funding and enrollment setbacks. 

As funding for CTE programs remains strong, schools may also be tasked with adapting their CCR programs to align more closely with CTE objectives to access more funding opportunities. This could mean tailoring CCR programs to include more project-based learning, educating students on nontraditional pathways, and introducing career-specific skills in the trades and technical industries. 

Fortunately, more state funding opportunities will make it easier for public schools to navigate federal funding cuts and have more flexibility to fund the programs that matter most to their constituents–including CCR programs. Contact our education specialists to discuss how you navigate new funding opportunities for your CCR programs.