From closing the U.S. Department of Education to the impact on special education, the predictability of federal funding, the federal budget, the E-Rate, disparate impact theory and systemic racism, the federal choice tax credit, and Title IX, here is an update on how changes in policy and law in Washington, D.C. will impact students and schools.
What’s the end game with closing the U.S. Department of Education?
It is easier to tear things down than it is to build them.
In April 2026, The New Yorker profiled U.S. Secretary of Education Linda McMahon in an article titled, “How Professional Wrestling Prepared Linda McMahon for Trump’s Cabinet.”
Among other things, the article says that even if McMahon can’t actually shut down the department, it may be enough “to neuter the department for any future Democratic President.”
“It’s like bombing the Iranian nuclear program last summer,” Rick Hess, a senior fellow at the American Enterprise Institute, told The New Yorker. “It sets them back three years, four years. The next Democratic Administration would have to spend significant time and energy rebuilding.”
Interagency agreement will shape the provision of special education moving forward
McMahon is “breaking up” the department through a series of interagency agreements — 14 to date.
On June 16, 2026, the department announced an interagency agreement with the U.S. Department of Health and Human Services “to support the administration of the Office of Special Education and Rehabilitative Services (OSERS) and with the Department of Justice to bolster the Office for Civil Rights’ enforcement of federal civil rights laws,” according to McMahon.
According to a fact sheet, the agreement includes:
(1) ensuring that all children with disabilities have available to them a free appropriate public education that emphasizes special education and related services designed to meet their individual needs and prepare them for further education, employment and independent living;
(2) ensuring the rights of infants, toddlers, children, youth and adults with disabilities and their families are fully protected; and
(3) advancing employment outcomes for individuals with disabilities to maximize their independence and integration into the community and competitive labor market.
McMahon sent this letter to parents of students with disabilities. “IDEA predates the Department of Education and will continue to exist long after,” she says.
Regarding the interagency agreement with the Department of Justice on civil rights laws, the release says “the enforcement of federal civil rights laws will continue without interruption, and ED will retain all statutory authorities and functions.”
You can read more about these two new agreements, along with other programs that have been handed off to other departments, in this article from the Associated Press.
And while McMahon and the Trump administration have said these changes are in response to parents’ rights, “some parents and advocates warn a process that has largely been stalled since President Donald Trump took office will see only more chaos and roadblocks,” according to another article from the AP.
Will federal dollars flow on July 1?
Last summer, there was chaos when federal dollars totaling $186 million in North Carolina and nearly $7 billion nationally that typically are dispersed on July 1 were held up.
After a remarkable bipartisan outcry, the funding delays resolved, but districts are more nervous now about the predictability of federal funding.
Since then, according to Education Week, Congress has made it more clear that federal dollars “for programs like Title I (for low-income students) and the Individuals with Disabilities Education Act (for special education) must begin their trip from the U.S. Treasury to states and ultimately to districts no later than July 1.”
Education Week reports: “The U.S. Department of Education in recent weeks has delivered preliminary funding allocation tables whose absence at this time last year foreshadowed the eventual disruptions. The agency has repeatedly assured districts and state leaders that this year’s July 1 installment of federal funding for schools — more than $20 billion in total — will flow to states on time, through the same grant portal as in previous years.”
Eventually, the department has said it will hand off the distribution of federal funding to the U.S. Department of Labor, but the timeline on that remains unclear at this point.
What’s happening in Congress with the federal budget?
EducationCounsel, a mission-based education consulting firm that combines experience in policy, strategy, law, and advocacy to drive significant improvements in the U.S. education system, is doing an incredible job tracking the Fiscal Year 2027 appropriations process in Congress, including a table that allows you to compare the current final FY26 funding levels, the proposed FY27 funding levels in the House bill, a column comparing the two, and the FY27 funding levels proposed by Trump.
Among other things, that document shows that the proposed FY27 budget would completely eliminate funding for Title III (English Language Acquisition) and Migrant Education, totaling nearly $1.3 billion. Similar cuts were included in Trump’s FY 2026 proposal, but Congress ended up rejecting those cuts.
EdNC will continue tracking any federal shifts concerning access to education for all students.
What is the E-Rate, and why is it being reviewed?
The Federal Communications Commission (FCC) says the E-Rate program, which provides federal funding to subsidize broadband internet access for schools and libraries, is currently undergoing a “top-to-bottom evaluation,” according to this announcement.
Part of that evaluation includes a review that the FCC previewed on June 3, 2026, “to empower parents and better protect children” when using networks and services subsidized by the program by ensuring the program “is used for educational purposes, while also strengthening E-Rate program integrity and streamlining program administration to support learning opportunities.”
This document describes the scope of the proposed review, which includes:
whether the program should be narrowed or reoriented to meet the policy goals Congress intended;
whether the program advances student learning outcomes and better protects the online safety of children, including by limiting screen time;
whether the networks are being used for educational purposes;
whether existing requirements sufficiently protect children from inappropriate and harmful content when using school and library computers;
as well as legal and policy considerations for assessing children’s screen time and protecting children and empowering parents, guardians, and teachers in decision-making involving children’s access to E-Rate funded networks and services.
— Excerpted from the document
The FCC will meet on June 25 to vote on the draft Notice of Proposed Rulemaking. If approved, then the public will have a chance to weigh in.
According to EducationCounsel, the program serves “more than 164,000 schools and 22,000 libraries.”
The next step in eliminating the use of disparate impact theory
Trump signed an executive order in April 2025 titled, “Restoring Equality of Opportunity and Meritocracy,” accompanied by this additional information, which will impact education and all other federal agencies.
According to a manual (which this administration has taken down) from the U.S. Department of Justice’s Office of Civil Rights about the Civil Rights Act of 1964, disparate impact theory ensures “that public funds, to which all taxpayers of all races contribute, not be spent in any fashion which encourages, entrenches, subsidizes, or results in racial discrimination.”
In calling for the enactment of the Civil Rights Act, according to the Department of Justice, President John F. Kennedy stated:
Simple justice requires that public funds, to which all taxpayers of all races contribute, not be spent in any fashion which encourages, entrenches, subsidizes, or results in racial discrimination. Direct discrimination by Federal, State, or local governments is prohibited by the Constitution. But indirect discrimination, through the use of Federal funds, is just as invidious; and it should not be necessary to resort to the courts to prevent each individual violation.
Trump’s executive order makes it the policy of the United States to eliminate the use of disparate impact theory as far as legally possible.
The order says: “A bedrock principle of the United States is that all citizens are treated equally under the law. This principle guarantees equality of opportunity, not equal outcomes. … It encourages meritocracy and a colorblind society, not race- or sex-based favoritism. Adherence to this principle is essential to creating opportunity, encouraging achievement, and sustaining the American Dream.”
According to a new resource released by EducationCounsel:
The Trump Administration, through its Office of Management and Budget (“OMB”), is proposing sweeping, government-wide changes to requirements and restrictions related to federal funding, with public comments due here by 7/13/26. If finalized, these changes would prohibit recipients and subrecipients of federal grants and other forms of federal financial assistance from using those funds to cover costs associated with a wide range of topics the Administration disfavors, including, among other things, unlawful diversity, equity, inclusion (and accessibility) efforts, “disparate impact liability,” and gender-related issues. OMB’s proposal would also significantly change the processes that all federal agencies use to make, monitor, suspend, and terminate awards. These changes would apply to many forms of federal financial assistance across sectors but will likely have stark effects on education, research, and nonprofit recipients.
The new federal choice tax credit and launch of Workforce Pell
The U.S. Department of the Treasury has revealed some new details about the federal school choice tax credit that will offer people in participating states up to a $1,700 annual refund for donations made to qualifying “scholarship granting organizations.” A document released by the department reiterates that donations supporting public school students will be eligible for the tax credit, but doesn’t fully explain applicable expenses.
North Carolina opted into the federal tax credit program, called the “Education Freedom Tax Credit,” earlier this month following the override of Gov. Josh Stein’s veto.
The Treasury Department has said that full guidance for the program will be released by the end of September.
“We need to put more public dollars into our public schools, and I will continue to do everything I can to provide more support for public school kids,” Gov. Josh Stein said in a statement after the veto override. “I see potential opportunities for public school students to benefit from this program.”
EdNC will also continue reporting on the launch and rollout of Workforce Pell, which the Hechinger Report is calling “the biggest expansion of federal scholarship money in 50 years.”
In May, the NCWorks Commission voted to approve a policy establishing North Carolina’s Workforce Pell Grant eligibility requirements and application process ahead of the program’s expected launch on July 1. In North Carolina, roughly 4% of short-term workforce training programs are expected to qualify, which is lower than leaders initially expected. However, national leaders have said that while eligibility and accountability requirements are fairly stringent, they expect guidelines to loosen as the financial aid program is iterated.
On June 23, North Carolina opened applications for Workforce Pell.
You can view all of EdNC’s reporting on Workforce Pell here.
Title IX challenges in NC districts
Title IX is the landmark federal civil rights law that prohibits sex-based discrimination in schools and create equal opportunities in sports and other education programs for all students.
While June is celebrated in North Carolina and elsewhere as Pride month, “honoring the contributions of lesbian, gay, bisexual, transgender, and queer people and highlighting the need for a safer and fairer world,” for the second year, the U.S. Department of Education has recognized June as “Title IX Month” to honor the 54th anniversary of the Educational Amendments of 1972, signed into law on June 23, 1972, according to this press release.
No person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance.
— The 37 words of Title IX
Title IX has figured prominently in gender identity politics nationally under both the Biden and Trump administrations.
As part of its Title IX Month initiatives, the department’s Office for Civil Rights (OCR) opened investigations into Buncombe County Schools and Cabarrus County Schools, alleging that the districts violate Title IX “by allowing males in girls-only intimate facilities,” based on reports that transgender students are being allowed to use bathrooms and locker rooms that align with their gender identity.
Here is the letter that was sent to Cabarrus County Schools.
According to the press release, the department and the U.S. Department of Justice have created a Title IX Special Investigations Team “consisting of expert attorneys and investigators to ensure consistent investigations and expeditious enforcement for Title IX violations.”
On Feb. 5, 2025, President Donald Trump Trump signed an executive order titled, “Keeping Men out of Women’s Sports.”
Education Week is tracking the hundreds of investigations that have been opened by the Trump Administration.
The U.S. Supreme Court is expected to rule this month on whether states may ban transgender athletes access to sports teams.
Politico notes: “Still in play are Trump administration lawsuits seeking to yank federal funding from states with protections for transgender students, ballot measures in battleground states seeking to bar transgender athletes, and the potential for rulemaking on Title IX from the Education Department to further codify the president’s executive orders defining sex and restricting trans sports participation.”
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