Staying current on federal funding for schools can be a bit like a game of whack-a-mole, with confusing updates being announced seemingly weekly. Reg Leichty, Founding Partner of Foresight Law & Policy, a firm that helps translate complex education policy and funding developments into actionable strategies, shared his insight on the state of the funding union at the recent Tech & Learning Ed Exec Summit.
Here is an overview of the current and future education policy and funding landscape as of August 19, 2025, including budget impacts, legislative outlooks, and implications for education technology companies.
Federal Education Funding and Policy
Leichty noted that while federal education funding and policy debates will likely be tumultuous in the near future, overall, directly appropriated federal spending for programs authorized by the Every Student Succeeds Act (ESSA) and the Individuals with Disabilities Education Act (IDEA) is not likely to decline significantly. Modest, new opportunities may be available for edtech, particularly in areas such as AI, career and technical education (CTE), and workforce education, but companies will have to actively seek out these.
Leichty also emphasized that taking the time to understand the education policy landscape—at the federal, state, and local levels—can powerfully inform business and school district planning. Becoming an advocate for public education and edtech is one way to learn more about policy and make a difference for students. To stay informed, you can:
- Subscribe to federal education policy updates and newsletters from organizations, such as Foresight, which publishes a weekly update, that cover education politics and policy.
- Follow legislative updates from professional associations and advocacy groups.
- Regularly check the websites of the U.S. Department of Education and state-level education agencies.
- Stay connected with education journalists and policy experts on platforms such as LinkedIn for real-time developments.
Key Legislative and Funding Highlights
Leichty's presentation detailed several key areas with significant implications for schools and their partners:
One Big Beautiful Bill Act (OBBA/P.L.119-21): This act includes an estimated $1 trillion in Medicaid cuts over 10 years, which could cause significant local budget strain. For edtech, this might lead to a slowdown or delay in special education and assistive technology purchases. The act also launches private school tax credits in January 2027, which could expand the demand for services such as tutoring, online learning, and supplemental services.
FY25 Funding Delays: A delay in releasing nearly $7 billion in frozen state and district grants for FY25, which was later lifted by the Trump administration, caused significant disruption, including contract cancellations and staff layoffs. To prepare for future delays, companies should maintain flexible timelines and diversify customer funding sources.
FY26 Federal Education Appropriations: A Senate committee bill maintained about $79 billion in funding for FY26, rejecting a requested White House cut of 15.6%. While core formula programs such as ESSA Title I and IDEA, state grants are expected to be stable, competitive grants may see reductions. A government shutdown on October 1 is possible due to the political difficulty of completing the budget process.
Children's Privacy Legislation: Leichty outlined two key bills:
- Kids Online Safety Act (KOSA/S.1748): This act would impose a "duty of care" on online platforms likely to be used by minors to mitigate harm. Products with social features may need new safety tools and parental controls, and covered entities may need to revise contracts with local education agencies (LEAs).
- Children & Teens' Online Privacy Protection Act (COPPA 2.0/S.836): This bill would extend privacy protections to individuals under 17, ban targeted ads to kids and teens, and require an "eraser button" for data deletion. This could lead to limitations on ad-revenue models and require new consent workflows.
E-rate and Cybersecurity: A Supreme Court decision in June 2025 upheld the constitutionality of the Universal Service Fund, which provides ongoing support for E-rate. This ensures stability for federal broadband funding for schools for now. Leichty also mentioned a new $200 million cybersecurity pilot program that may inform the modernization of E-rate's eligible cybersecurity investments.
Trump Administration AI Initiatives: The White House's interest in AI and education is evident in several executive orders and action plans. While no new dedicated funding for AI exists, this interest may help preserve tech-related funds like ESSA Title IV and E-rate. Ed tech companies are advised to let this focus inform their sales strategies.
In a complex and often unpredictable environment, Leichty's presentation provided a clear guide for navigating the intersection of policy and education. The key takeaways for schools and their partners are the expectation of stable core federal funding, potential state and local budget stress from Medicaid and SNAP cuts, the emergence of a new market due to private school scholarships, the necessity of new compliance measures for children's privacy, and the strategic importance of aligning with the White House's focus on AI and workforce development. By staying informed and proactive, education leaders and technology providers can adapt to these changes and continue to support students effectively.
