Public Policy Update - July 23, 2025
ED Temporarily Reverses Pandemic Fund Liquidation Date
On June 25, the U.S. Department of Education (ED) lifted its March 28 liquidation date for obligations under the Education Stabilization Fund, including all programs funded by the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) and American Rescue Plan (ARP) acts. ED has notified all states that they may continue funding contracts and agreements that secured pandemic relief extensions prior to the Trump Administration's March 28 directive—at least until a lawsuit filed by 16 Democratic-led states and the District of Columbia is resolved in court, or until McMahon is permitted to enforce ED’s March 28 directive nationwide. Currently, there is an injunction that prohibits ED from applying its directive to the 16 states involved in the lawsuit. The announcement states that “the Department has decided to address these fairness and uniformity problems in this interim period by returning non-plaintiff states to the liquidation process in place prior to the issuance of the March 28 letter.”
To learn more, go here.
ED Announces Soldner as Acting NCES Commissioner
On July 7, the U.S. Department of Education (ED) announced that Dr. Matthew Soldner will serve as the Acting Commissioner of the National Center for Education Statistics (NCES). Dr. Soldner had held the position of Acting Director of the Institute of Education Sciences (IES). In this new position, he will oversee staff from NCES and IES to ensure that all NCES reports and materials are accessible and meaningful to researchers, educators, education leaders, and other stakeholders. In addition, he will lead the continued planning and implementation of the 2026 National Assessment of Educational Progress (NAEP) testing. Dr. Soldner’s past research interests center on the application of rigorous evidence to inform and enhance education policy and practice, as well as the design, implementation, and evaluation of initiatives aimed at improving post-secondary and workforce outcomes.
Read the press announcement here.
Federal Funding Debate in Full Swing
With the One Big Beautiful Bill Act (HR 1) complete, Congress turned its focus back to annual spending and successfully passed a partisan rescission package that cuts $9 billion of federal funding from current Fiscal Year (FY) 2025 foreign aid and public broadcasting budgets. The rescission process is a rarely used partisan budget tool that cuts funding from already approved federal agency budgets when the White House makes the request and Congress approves. Much like the budget reconciliation process used to pass HR 1, it does not fall under traditional legislative rules which require a 60-vote margin in the Senate. After yesterday’s success, and in line with the Administration’s goal of drastically reducing the federal footprint, Office of Management and Budget (OMB) Director Russ Vought expressed a desire to send more rescission packages to Congress. Meanwhile, House and Senate appropriators continue to develop and finalize FY 2026 appropriations bills that must be completed by September 30. In the House, Appropriations Committee Chair Tom Cole (R-OK) released allocations for all 12 FY 2026 bills and noted that the overall total reflects a $45 billion cut below current FY 2025 spending. Specific to the House, Labor, Health and Human Services, Education and Related Agencies (Labor-H) bill the House proposed cut is seven percent. The details of how the cut will impact specific Labor-H programs, including education and disability programs, will remain unclear until the House subcommittee marks up a bill in early September. The Senate has not indicated timing on its Labor-H bill. Regarding the Commerce, Justice, Science (CJS) bill which funds key programs at the Department of Justice as well as the National Science Foundation, in separate moves, both the House and the Senate ignored the President’s request to cut those budgets and have provided around $9 billion more than the current year’s appropriation respectively. Both the House and the Senate have said they would like to pass the majority of their spending bills before the end of July, an aggressive timeline given the limited days each body has left to conduct business this month.
Read the Senate and House actions on the rescission package here.
Read the House FY 2026 top line allocations here.
Withholding of ED Funds Prompts Swift Responses
The June 30 decision by Secretary of Education McMahon to abruptly withhold over $7 billion in federal education funding which traditionally supports after-school programs, English instruction for nonnative speakers, teacher training, arts and science curricula, afterschool/summer school, and adult education has garnered blowback from stakeholders and Congress. The timing of the McMahons’ actions on July 1 came just as districts typically begin their new fiscal year, placing annual budgets in jeopardy while also leaving summer programming in doubt. Congressional Democrats were first to demand the release of funds last week, and this week a much broader response emerged. On July 14, the Rhode Island Attorney General led 24 states and the District of Columbia to sue the U.S. Department of Education over the abrupt pause. The suit contends that the funding freeze violates the Constitution and multiple federal laws. Republicans responded on July 16 when 10 Senators wrote and urged the Office of Management and Budget Director Vought and the Administration to release the education funds as required by law noting, ”The decision to withhold this funding is contrary to President Trump’s goal of returning K-12 education to the states…Withholding this funding denies states and communities the opportunity to pursue localized initiatives to support students and their families.” Most recently, 600 nonpartisan local, state, and national organizations representing communities, school districts, educators, families, and learners across every state and D.C. wrote and requested McMahon and Vought to immediately release the funds. Summarizing the impact across educational spheres they said, “Withholding these funds sabotages the education and wellbeing of learners in all districts and all states in our country, regardless of their political affiliation or representation.” Today, OMB announced that it will release the $1.3 billion in funding meant for after-school and summer programming with “guardrails” to ensure funds comply with current executive orders. Those guardrails have not yet been made public. Further updates will be shared next week.
Read the court filing here.
Read the Republican letter here.
Read the advocacy letter here.
The Learning Policy Institute has published an analysis of the impact ED’s decision to withhold funds has on each state. To view the LPI analysis, go here.
