By Christina Fernandez, Grants Development Consultant
On February 3, 2026, Congress finalized the Fiscal Year 2026 budget for the U.S. Department of Education, approving approximately $79 billion in discretionary funding. This level exceeds the Administration’s original request of $66.7 billion and aligns closely with FY2024 funding levels. At a glance, this signals stability across key education programs including school improvement, special education, career and technical education, and institutional aid. However, a closer review reveals more targeted adjustments that reflect evolving federal priorities. For grant professionals and education leaders, understanding both the stability and the nuance within this budget is essential to navigating the current funding landscape and identifying opportunities in the year ahead.
K-12 Funding
Title I funding, a cornerstone of federal support for low-income students, remains largely unchanged, preserving over $6.4 billion for Basic Grants and just over $5.28 billion for Targeted and EFIG allocations. This stability reflects its entrenched role in federal education policy and its broad bipartisan support. A degree of predictability is essential for this funding stream, as districts heavily rely on these funds for planning school-wide programs and targeted support for their students. Similarly, 21st Century Community Learning Centers, Student Support and Academic Enrichment Grants (Title IV-A), English Language Acquisition (Title III), and several Innovation and Improvement programs (including Charter Schools, Magnet Schools, SEED, and Arts in Education) held steady.
The formula funds that saw the largest increase were Grants to States for special education (IDEA- B) and Rural Education (Title V-B), having an overall increase. The largest increase was for IDEA Part B funding bucket, which increased by $980 million, bringing the new total for state grants to $15.2 billion (a 6.9% jump). The REAP program saw a modest increase of $5 million. These increases align with broader federal interests surrounding special education and prioritizing rural students, suggesting continued opportunity for applicants serving these populations.
However, not all programs saw growth. The Education Innovation and Research (EIR) program experienced a 9% reduction ($24 million). For grant seekers, this likely translates to increased competition or a continued preference for mid-phase and expansion grants over early-stage pilots.
One of the most notable developments in FY2026 is the return of congressionally directed spending (earmarks) in K–12 education. Their absence in FY2025 was the result of a compromise in the long-term continuing resolution, which funded the government through September 30, 2025, and forced the Department to prioritize formula-driven and competitive national grants over local projects. These funds highlight localized priorities and provide insight into emerging trends. The top funding themes included:
- STEM and STEAM Education — $21.97M
- Career and Workforce Development — $13.67M
- Arts and Music Education — $7.35M
- Literacy and Civics Education — $7.31M
- Out-of-School and Afterschool Programs — $6.46M
Geographically, Maryland received the highest level of K–12 earmark funding, followed by New York, Hawaii, and Rhode Island, with a three-way tie among Alaska, New Jersey, and New Mexico. About $100 million went towards directed spending projects.
Higher Education Funding
In higher education, the FY2026 budget reflects measured growth across most programs, particularly those authorized under Title III of the Higher Education Act (HEA). Most notably, Minority-Serving Institution (MSI) programs saw increases of at least 1.2%, and TCUs saw an increase of 3.8% (for a new total of $53.8 million). This is notable given earlier signals that suggested potential reductions in statutory higher education programs. Another area in which Tribally controlled institutions saw an increase in funding was through the Tribally Controlled Postsecondary Career and Technical Education Program. A total of $14 million is available for this program, which is meant to support these institutions so that they can provide workforce pathways to their students.
However, not all programs experienced growth. The Strengthening Institutions Program (SIP)—a key Title III, Part A initiative—saw an 8.92% decrease (for a new total of $102 million) , potentially limiting new awards or reducing award sizes for eligible institutions.
A more dramatic shift occurred within the Fund for the Improvement of Postsecondary Education (FIPSE). The HBCU, TCU, and MSI Research and Development Infrastructure Grants program was reduced by $35 million (70%). While significant, this reduction aligns with the program’s original design as a pilot initiative, meaning fluctuations were anticipated. Additionally, many FIPSE programs do not operate on annual competition cycles, so year-to-year funding levels often reflect timing rather than long-term policy changes.
Another notable adjustment is the $50 million reduction for Howard University Hospital, which reflects the end of prior supplemental funding for capital construction rather than a withdrawal of ongoing support.
As in K–12, earmarks returned to higher education funding, with South Carolina receiving the largest share, followed by Kansas, Maine, Michigan, and New York. The top funding trends for higher education projects included;
- Equipment and infrastructure- $97.7M
- STEM and Technical Education - $51M
- Workforce and Career Training- $39.1M
- Health and Nursing Education - $23M
- Other/ General Higher Education Improvements- $8.6M
A total of $224.4 million was dedicated to earmarks, which is half of what they received when they were funded in FY24. Earmarks represent both opportunity and competition, as they can bring new funding opportunities for some while also redirecting dollars away from competitive grant pools.
Looking Ahead: FY2027 Budget Request and Emerging Priorities
While FY2026 implementation is still underway, the Administration has begun to request a FY2027 budget for the Department of Education. They have proposed $75.7 billion, which is a decrease from FY2026 enacted levels. While presidential budget requests are not binding, they provide important insight into future priorities that may shape upcoming grant competitions.
The request introduces a new initiative referred to as the Make Education Great Again (MEGA) Grants Program, which is requesting a $2 billion investment. The MEGA program is meant to consolidate and replace 17 existing formula and competitive K–12 grant programs) with the overall goal being to streamline federal support and empower states to determine their needs. We see a similar theme in special education funding. The FY2027 request includes a $538 million increase for IDEA Grants to States, but it also proposes consolidating six separate IDEA programs into that larger funding stream. While this would expand overall funding for special education at the state level, it also reflects a broader effort to simplify federal program structures and shift decision-making authority closer to state entities.
Funding for career and technical education and adult education programs are not included within the Department of Education’s proposed budget. Instead, funding has been requested under the Department of Labor to reflect their evolving interagency partnership. This is an area of concern given that the FY26 appropriations language was very clear in that Department of Education cannot transfer its core responsibilities to other federal agencies without explicit approval. Additionally, there is broader concern that distributing responsibilities across multiple agencies could introduce inefficiencies, increase administrative costs, and delay the delivery of funds to states and local recipients.
In higher education, the FY2027 request signals more substantial changes. It calls for the elimination of several longstanding programs, including the Strengthening Institutions Program (SIP), the Minority Science and Engineering Improvement Program, International Education and Foreign Language Studies programs, the Federal TRIO programs, and the Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP). Overall, the Administration has proposed approximately $697 million for higher education programs, with the majority of funding concentrated within Title III of the Higher Education Act.
Throughout the entire request, there is one reoccurring theme: returning education to the states. This has already been a competitive preference priority in several Department of Education grant programs and can expect it will continue to be throughout this administration. For grant professionals, this shift may require a more strategic focus on aligning with state-level priorities and strengthening partnerships at the state and regional level.
While administrations can propose budgets and signal priorities, Congress ultimately controls federal appropriations. Significant structural changes to the Department of Education—or dramatic shifts in funding—would require legislative action. As a result, most changes in the near term are likely to be incremental rather than transformative. For K–12 districts, higher education institutions, and grant professionals alike, the current landscape underscores the importance of aligning proposals with demonstrated federal priorities, monitoring competition cycles, and leveraging both formula and discretionary funding streams. Those who can interpret not just the numbers—but the intent behind them—will be best positioned to compete effectively in the year ahead.